EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
by and between
Q-MED, INC.
and
XXXXX PARTNERS III, L.P.,
XXXXX PARTNERS INTERNATIONAL III, L.P.
and
XXXXX EMPLOYEE FUND III, L.P.
Dated as of December 18, 1997
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made as of December 18, 1997, by
and between Q-Med, Inc. a Delaware corporation (the "COMPANY") and Xxxxx
Partners III, L.P. ("XXXXX"), Xxxxx Partners International III, L.P. and
Xxxxx Employee Fund III, L.P. (the "INVESTORS").
W I T N E S S E T H :
WHEREAS, simultaneously herewith, the Company and the Investors are
entering into a Note Purchase Agreement (the "PURCHASE AGREEMENT"), pursuant to
which the Company is issuing, and the Investors are purchasing 8% convertible
subordinated notes of the Company due December 18, 2002, in the aggregate
principal amount of $2,000,000 (the "Notes"); and
WHEREAS, the execution and delivery of this Agreement is a condition to
the closing of the Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and obligations hereinafter set forth, the parties hereto hereby agree
as follows:
1. CERTAIN DEFINITIONS.
As used in this Agreement, the following terms shall have the meanings
ascribed to them below:
"AFFILIATE" means (i) with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person or (ii) with respect to any
individual, shall also mean the spouse, sibling, child, step-child, grandchild,
niece, nephew or parent of such Person, or the spouse thereof.
"COMMON STOCK" means the Common Stock, $.001 par value per share, of the
Company and any equity securities issued or issuable with respect to the Common
Stock in connection with a reclassification, recapitalization, merger,
consolidation or other reorganization.
"COMMON STOCK EQUIVALENTS" means the securities convertible into, or
exchangeable or exercisable for, shares of Common Stock.
CONVERSION SHARES" means the shares of Common Stock or other equity
securities issued or issuable upon conversion of the Notes.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, or
any similar Federal statute, and the rules and regulations of the SEC
thereunder, as the same shall be in effect at the time. Reference to a
particular section of the Exchange Act shall include a reference to the
comparable section, if any, of any such similar statue.
"HOLDER" or "HOLDERS" means the Investors and any party who shall
hereafter acquire and hold Registrable Securities.
"PERSON" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivisions thereof.
"REGISTRABLE SECURITIES" means any (i) Conversion Shares owned by the
Investors, and (ii) shares of Common Stock issued or issuable, directly or
indirectly, with respect to the Common Stock referenced in clause (i) above by
way of stock dividend, stock split or combination of shares. As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when (i) a registration statement with respect to the sale of such
securities shall have been declared effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement, or (ii) such securities shall have been sold (other than in a
privately negotiated sale) pursuant to Rule 144 (or any successor provision)
under the Securities Act.
"REQUISITE PERCENTAGE OF OUTSTANDING HOLDERS" means the Holders of
Registrable Securities who, assuming conversion of all of the then outstanding
Notes into Conversion Shares, would hold 50.1% or more of the total Conversion
Shares that would then be outstanding.
"REQUISITE PERCENTAGE OF PARTICIPATING HOLDERS" means Holders of
Registrable Securities participating in the registration who, assuming
conversion of all then outstanding Notes into Conversion Shares, would hold a
majority of the total Conversion Shares that would then be held by all Holders
participating in the registration.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
2. REGISTRATION RIGHTS.
2.1. DEMAND REGISTRATIONS.
(a) REQUEST FOR REGISTRATION. Subject to Section 2.1(d), at any time
and from time to time after the date hereof, one or more Holders of Registrable
Securities representing the Requisite Percentage of Outstanding Holders shall
have the right to require the Company to file a registration statement under the
Securities Act covering all
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or any part of their respective Registrable Securities (but, if the anticipated
offering price is less than $1,000,000, not less than 25% of the Registrable
Securities owned by them assuming conversion of all the then outstanding Notes),
by delivering a written request therefor to the Company specifying the number of
Registrable Securities to be included in such registration by such Holder(s) and
the intended method of distribution thereof. All such requests pursuant to this
Section 2.1(a) are referred to herein as "DEMAND REGISTRATION Requests," and the
registrations so requested are referred to herein as "DEMAND REGISTRATIONS"
(with respect to any Demand Registration, the Holder(s) making such demand for
registration being referred to as the "INITIATING HOLDER"). As promptly as
practicable, but no later than 15 days after receipt of a Demand Registration
Request, the Company shall give written notice (the "DEMAND EXERCISE NOTICE") of
such Demand Registration Request to all Holders of record of Registrable
Securities.
(b) REGISTRATION OF OTHER SECURITIES. The Company shall include in a
Demand Registration (i) the Registrable Securities of the Initiating Holder and
(ii) the Registrable Securities of any other Holder which shall have made a
written request to the Company for inclusion thereof in such registration (which
request shall specify the maximum number of Registrable Securities intended to
be disposed of by such Holder(s)) within 30 days after the receipt of the Demand
Exercise Notice.
(c) REGISTRATION. The Company shall, as expeditiously as possible
following a Demand Registration Request, use its best efforts to (i) effect such
registration under the Securities Act (including, without limitation, by means
of a shelf registration pursuant to Rule 415 under the Securities Act if so
requested and if the Company is then eligible to use such a registration) of the
Registrable Securities which the Company has been so requested to register, for
distribution in accordance with such intended method of distribution, and (ii)
if requested by the Initiating Holder, obtain acceleration of the effective date
of the registration statement relating to such registration.
(d) LIMITATIONS ON REQUESTED REGISTRATIONS. The rights of Holders of
Registrable Securities to request Demand Registrations pursuant to Section
2.1(a) are subject to the following limitations: (i) the Company shall not be
obligated to effect a Demand Registration within six months after the effective
date of any other registration of securities (other than pursuant to a
registration on Form S-4 or S-8 or any successor or similar form which is then
in effect), and (ii) in no event shall the Company be required to effect more
than one Demand Registration pursuant to this Section 2.1.
(e) CUTBACKS. If the managing underwriter of any underwritten
offering shall advise the Holders participating in a Demand Registration that
the Registrable Securities covered by the registration statement cannot be sold
in such offering within a price range acceptable to the Requisite Percentage of
Participating Holders, then the Holders representing the Requisite Percentage of
Participating Holders shall have the right to notify the Company in writing that
they have determined that the registration
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statement be abandoned or withdrawn, in which event the Company shall abandon or
withdraw such registration statement. If the managing underwriter of any
underwritten offering shall advise the Company in writing that, in its opinion,
the number of securities requested to be included in a Demand Registration
exceeds the number which can be sold in such offering within a price range
acceptable to the Requisite Percentage of Participating Holders, the Company
will include in such registration, to the extent of the number which the Company
is so advised can be sold in such offering, Registrable Securities requested to
be included in such registration, pro rata among the Holders requesting such
registration in accordance with the number of Conversion Shares held by and
issuable upon conversion of Registrable Securities to each such Holder so
requested to be registered.
(f) SELECTION OF UNDERWRITERS. The managing underwriter or
underwriters of each underwritten offering of the Registrable Securities so to
be registered shall be selected by the Requisite Percentage of Participating
Holders (and shall be reasonably acceptable to the Company).
(g) POSTPONEMENT. The Company shall be entitled once to postpone for
a reasonable period of time (but not to exceed 90 days) the filing of any
registration statement required to be prepared and filed by it pursuant to this
Section 2.1 if a nationally recognized investment bank (which investment bank
shall be selected by and mutually agreeable to both an investment bank selected
by the Company and an investment bank selected by the Requisite Percentage of
Participating Holders) shall advise the Company in writing that, in its opinion,
the Company is unable to effect an underwritten offering due to then currently
prevailing market conditions or due to circumstances affecting the financial
condition, business or operations of the Company. Promptly (but in no event more
than 30 days) after receipt of such opinion, the Company shall give the
participating Holders written notice of its determination to postpone the filing
of any registration statement, and an approximation of the anticipated delay. If
the Company shall so postpone the filing of a registration statement, the
participating Holders representing the Requisite Percentage of Participating
Holders shall have the right to withdraw the request for registration by giving
written notice to the Company within 20 days after receipt of the notice of
postponement and, in the event of such withdrawal, such request shall not be
counted toward the number of Demand Registrations (including for purposes of
paragraph (d) of this Section 2.1).
2.2. PIGGYBACK REGISTRATIONS.
(a) PIGGYBACK REGISTRATIONS. If, at any time, the Company proposes
or is required to register any of its equity securities or securities
convertible or exchangeable for equity securities under the Securities Act
(other than pursuant to (i) registrations on such form or similar form(s) solely
for registration of securities in connection with an employee benefit plan or
dividend reinvestment plan or a merger, consolidation or
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acquisition or (ii) a Demand Registration under Section 2.1) on a registration
statement on Form S-1, Form S-2 or Form S-3 (or an equivalent general
registration form then in effect), whether or not for its own account, the
Company shall give prompt written notice of its intention to do so to each of
the Holders of record of Registrable Securities. Upon the written request of any
Holder, made within 15 days following the receipt of any such written notice
(which request shall specify the maximum number of Registrable Securities
intended to be disposed of by such Holder and the intended method of
distribution thereof), the Company shall use its best efforts to cause all such
Registrable Securities, the Holders of which have so requested the registration
thereof, to be registered under the Securities Act (with the securities which
the Company at the time proposes to register) to permit the sale or other
disposition by the Holders (in accordance with the intended method of
distribution thereof) of the Registrable Securities to be so registered. There
is no limitation on the number of such piggyback registrations pursuant to the
preceding sentence which the Company is obligated to effect. No registration
effected under this Section 2.2(a) shall relieve the Company of its obligations
to effect Demand Registrations.
(b) ABANDONMENT OR DELAY. If, at any time after giving written
notice of its intention to register any equity securities and prior to the
effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such equity securities, the Company may, at its election,
give written notice of such determination to all Holders of record of
Registrable Securities and (i) in the case of a determination not to register,
shall be relieved of its obligation to register any Registrable Securities in
connection with such abandoned registration, without prejudice, however, to the
rights of Holders under Section 2.1, and (ii) in the case of a determination to
delay such registration of its equity securities, shall be permitted to delay
the registration of such Registrable Securities for the same period as the delay
in registering such other equity securities.
(c) HOLDER'S RIGHT TO WITHDRAW. Any Holder shall have the right to
withdraw its request for inclusion of its Registrable Securities in any
registration statement pursuant to this Section 2.2 by giving written notice to
the Company of its request to withdraw; PROVIDED, HOWEVER, that (i) such request
must be made in writing prior to the earlier of the execution of the
underwriting agreement or the execution of the custody agreement with respect to
such registration, (ii) such withdrawal shall be irrevocable and, after making
such withdrawal, a Holder shall no longer have any right to include Registrable
Securities in the registration as to which such withdrawal was made and (iii)
after making such withdrawal, the Company shall be deemed to have effected a
Demand Registration, provided that such withdrawal was not as a result of (a)
any stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court, (b) the Company's postponement pursuant to Section
2.1(g), (c) the Company's failure to comply with any of its obligations under
this Agreement, or (d) the inability to sell the Registrable Securities within a
price range acceptable to the Initiating
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Holder, and further provided, that the Company shall not be deemed to have
effected a Demand Registration if the Initiating Holder chooses to pay the
Expenses in connection with such registration.
(d) CUTBACKS. If the managing underwriter of any underwritten
offering shall inform the Company by letter of its belief that the number of
Registrable Securities requested to be included in a registration under this
Section 2.2 would materially adversely affect such offering, then the Company
will include in such registration, FIRST, the securities proposed by the Company
to be sold for its own account and, SECOND, the Registrable Securities and all
other securities of the Company to be included in such registration to the
extent of the number and type, if any, which the Company is so advised can be
sold in (or during the time of) such offering, pro rata among the Holders
participating in such offering in accordance with the number of Conversion
Shares held by and issuable upon conversion of Registrable Securities to each
such Holder, but in no event shall the number of Registrable Securities in the
offering represent less than 33-1/3% of all securities being offered in the
offering.
2.3. REGISTRATION PROCEDURES. If and whenever the Company is required by
the provisions of this Agreement to use its best efforts to effect or cause the
registration of any Registrable Securities under the Securities Act as provided
in this Agreement, the Company shall, as expeditiously as possible:
(a) prepare and file with the SEC a registration statement on an
appropriate registration form of the SEC for the disposition of such Registrable
Securities in accordance with the intended method of disposition thereof, which
form (i) shall be selected by the Company and (ii) shall, in the case of a shelf
registration, be available for the sale of the Registrable Securities by the
selling Holders thereof and such registration statement shall comply as to form
in all material respects with the requirements of the applicable form and
include all financial statements required by the SEC to be filed therewith, and
the Company shall use its best efforts to cause such registration statement to
become effective (provided, however, that before filing a registration statement
or prospectus or any amendments or supplements thereto, or comparable statements
under securities or blue sky laws of any jurisdiction, the Company will furnish
to one counsel for the Holders participating in the planned offering (selected
by the Requisite Percentage of Participating Holders) and the underwriters, if
any, copies of all such documents proposed to be filed (including all exhibits
thereto), which documents will be subject to the reasonable review and, in the
case of a registration pursuant to Section 2.1, reasonable comment of such
counsel, and the Company shall not file any registration statement or amendment
thereto or any prospectus or supplement thereto pursuant to Section 2.1 to which
the holders of a majority of the Registrable Securities covered by such
registration statement or the underwriters, if any, shall reasonably object in
writing);
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(b) 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 keep such registration statement effective for such period
(which shall not be required to exceed 150 days in the case of a registration
pursuant to Section 2.1 or 120 days in the case of a registration pursuant to
Section 2.2) as any seller of Registrable Securities pursuant to such
registration statement shall request and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of all Registrable
Securities covered by such registration statement in accordance with the
intended methods of disposition by the seller or sellers thereof set forth in
such registration statement;
(c) furnish, without charge, to each seller of such Registrable
Securities and each underwriter, if any, of the securities covered by such
registration statement such number of copies of such registration statement,
each amendment and supplement thereto (in each case including all exhibits), and
the prospectus included in such registration statement (including each
preliminary prospectus) in conformity with the requirements of the Securities
Act, and other documents, as such seller and underwriter may reasonably request
in order to facilitate the public sale or other disposition of the Registrable
Securities owned by such seller (the Company hereby consenting to the use in
accordance with applicable law of each such registration statement (or amendment
or post-effective amendment thereto) and each such prospectus (or preliminary
prospectus or supplement thereto) by each such seller of Registrable Securities
and the underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such registration statement or prospectus);
(d) use its best efforts to register or qualify the Registrable
Securities covered by such registration statement under such other securities or
"blue sky" laws of such jurisdictions as any sellers of Registrable Securities
or any managing underwriter, if any, shall reasonably request in writing, and do
any and all other acts and things which may be reasonably necessary or advisable
to enable such sellers or underwriter, if any, to consummate the disposition of
the Registrable Securities in such jurisdictions, except that in no event shall
the Company be required to qualify to do business as a foreign corporation in
any jurisdiction where it would not, but for the requirements of this paragraph
(d), be required to be so qualified, to subject itself to taxation in any such
jurisdiction or to consent to general service of process in any such
jurisdiction;
(e) promptly notify each Holder selling Registrable Securities
covered by such registration statement and each managing underwriter, if any:
(i) when the registration statement, any pre-effective amendment, the prospectus
or any prospectus supplement related thereto or post-effective amendment to the
registration statement has been filed and, with respect to the registration
statement or any post-effective amendment, when the same has become effective;
(ii) of any request by the SEC or state securities authority for amendments or
supplements to the registration statement or the
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prospectus related thereto or for additional information; (iii) of the issuance
by the SEC of any stop order suspending the effectiveness of the registration
statement or the initiation of any proceedings for that purpose; (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of any Registrable Securities for sale under the securities or
blue sky laws of any jurisdiction or the initiation of any proceeding for such
purpose; (v) of the existence of any fact of which the Company becomes aware
which results in the registration statement, the prospectus related thereto or
any document incorporated therein by reference containing an untrue statement of
a material fact or omitting to state a material fact required to be stated
therein or necessary to make any statement therein not misleading; and (vi) if
at any time the representations and warranties contemplated by Section 3 below
cease to be true and correct in all material respects; and, if the notification
relates to an event described in clause (v), the Company shall promptly prepare
and furnish to each such seller and each underwriter, if any, a reasonable
number of copies of a prospectus supplemented or amended so that, as thereafter
delivered to the purchasers of such Registrable 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 in the light of the circumstances under which they were made not
misleading;
(f) comply with all applicable rules and regulations of the SEC, and
make generally available to its security holders, as soon as reasonably
practicable after the effective date of the registration statement (and in any
event within 16 months thereafter), an earnings statement (which need not be
audited) covering the period of at least twelve consecutive months beginning
with the first day of the Company's first calendar quarter after the effective
date of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(g) (i) cause all such Registrable Securities covered by such
registration statement to be listed on the principal securities exchange on
which similar securities issued by the Company are then listed (if any), if the
listing of such Registrable Securities is then permitted under the rules of such
exchange, or (ii) if no similar securities are then so listed, to either cause
all such Registrable Securities to be listed on a national securities exchange
or to secure designation of all such Registrable Securities as a National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ")
"national market system security" within the meaning of Rule 11Aa2-1 of the SEC
or, failing that, secure NASDAQ authorization for such shares and, without
limiting the generality of the foregoing, take all actions that may be required
by the Company as the issuer of such Registrable Securities in order to
facilitate the managing underwriter's arranging for the registration of at least
two market makers as such with respect to such shares with the National
Association of Securities Dealers, Inc. (the "NASD");
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(h) provide and cause to be maintained a transfer agent and
registrar for all such Registrable Securities covered by such registration
statement not later than the effective date of such registration statement;
(i) enter into such customary agreements (including, if applicable,
an underwriting agreement) and take such other actions as the Requisite
Percentage of Participating Holders shall reasonably request in order to
expedite or facilitate the disposition of such Registrable Securities;
(j) obtain an opinion from the Company's counsel and a "cold
comfort" letter from the Company's independent public accountants in customary
form and covering such matters as are customarily covered by such opinions and
"cold comfort" letters delivered to underwriters in underwritten public
offerings, which opinion and letter shall be reasonably satisfactory to the
underwriters, if any, participating in such offering, and furnish to each Holder
participating in the offering and to each underwriter, if any, a copy of such
opinion and letter addressed to such Holder (in the case of the opinion) and
underwriter (in the case of the opinion and the "cold comfort" letter);
(k) deliver promptly to counsel for the selling Holders
participating in the offering and each underwriter, if any, copies of all
correspondence between the Commission and the Company, its counsel or auditors
and any memoranda relating to discussions with the Commission or its staff with
respect to the registration statement, other than those portions of any such
memoranda which contain information subject to attorney-client privilege with
respect to the Company, and, upon receipt of such confidentiality agreements as
the Company may reasonably request, make reasonably available for inspection by
any seller of such Registrable Securities covered by such registration
statement, by any underwriter, if any, participating in any disposition to be
effected pursuant to such registration statement and by any attorney, accountant
or other agent retained by any such seller or any such underwriter, all
pertinent financial and other records, pertinent corporate documents and
properties of the Company, and cause all of the Company's officers, directors
and employees to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such registration
statement;
(l) use its best efforts to promptly obtain the withdrawal of any
order suspending the effectiveness of the registration statement;
(m) provide a CUSIP number for all Registrable Securities, not later
than the effective date of the registration statement;
(n) make reasonably available its employees and personnel and
otherwise provide reasonable assistance to the underwriters (taking into account
the needs of the Company's businesses and the requirements of the marketing
process) in the marketing of Registrable Securities in any underwritten
offering;
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(o) promptly prior to the filing of any document which is to be
incorporated by reference into the registration statement or the prospectus
(after the initial filing of such registration statement) provide copies of such
document to counsel for the selling holders of Registrable Securities and to
each managing underwriter, if any, and make the Company's representatives
reasonably available for discussion of such document and make such changes in
such document concerning the selling holders prior to the filing thereof as
counsel for such selling holders or underwriters may reasonably request;
(p) furnish to each Holder participating in the offering and the
managing underwriter, without charge, at least one signed copy of the
registration statement and any amendments thereto, including financial
statements and schedules, all documents incorporated therein by reference and
all exhibits (including those incorporated by reference);
(q) cooperate with the selling Holders of Registrable Securities and
the managing underwriter, if any, to facilitate the timely preparation and
delivery of certificates not bearing any restrictive legends representing the
Registrable Securities to be sold, and cause such Registrable Securities to be
issued in such denominations and registered in such names in accordance with the
underwriting agreement prior to any sale of Registrable Securities to the
underwriters or, if not an underwritten offering, in accordance with the
instructions of the selling holders of Registrable Securities at least three
business days prior to any sale of Registrable Securities;
(r) take all such other commercially reasonable actions as are
necessary or advisable in order to expedite or facilitate the disposition of
such Registrable Securities.
The Company may require as a condition precedent to the Company's
obligations under this Section 2.3 that each seller of Registrable Securities as
to which any registration is being effected furnish the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request provided that such information shall be
used only in connection with such registration.
Each Holder of Registrable Securities agrees that upon receipt of
any notice from the Company of the happening of any event of the kind described
in clause (v) of paragraph (e) of this Section 2.3, such Holder will discontinue
such Holder's disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such Holder's receipt of
the copies of the supplemented or amended prospectus contemplated by paragraph
(e) of this Section 2.3 and, if so directed by the Company, will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies,
then in such Holder's possession of the prospectus covering such
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Registrable Securities that was in effect at the time of receipt of such notice.
In the event the Company shall give any such notice, the applicable period
mentioned in paragraph (b) of this Section 2.3 shall be extended by the number
of days during such period from and including the date of the giving of such
notice to and including the date when each seller of any Registrable Securities
covered by such registration statement shall have received the copies of the
supplemented or amended prospectus contemplated by paragraph (e) of this Section
2.3.
If any such registration statement or comparable statement under
"blue sky" laws 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 (i)
the insertion therein of language, in form and substance satisfactory to such
Holder and the Company, to the effect that the holding by such Holder of such
securities is not to be construed as a recommendation by such Holder of the
investment quality of the Company's securities covered thereby and that such
holding does not imply that such Holder will assist in meeting any future
financial requirements of the Company, or (ii) in the event that such reference
to such Holder by name or otherwise is not in the judgment of the Company, as
advised by counsel, required by the Securities Act or any similar federal
statute or any state "blue sky" or securities law then in force, the deletion of
the reference to such Holder.
2.4. REGISTRATION EXPENSES.
(a) "Expenses" shall mean any and all fees and expenses incident to
the Company's performance of or compliance with this Article 2, including,
without limitation: (i) SEC, stock exchange or NASD registration, listing and
filing fees and all listing fees and fees with respect to the inclusion of
securities in NASDAQ, (ii) fees and expenses of compliance with state securities
or "blue sky" laws and in connection with the preparation of a "blue sky"
survey, including without limitation, reasonable fees and expenses of blue sky
counsel, (iii) printing and copying expenses, (iv) messenger and delivery
expenses, (v) expenses incurred in connection with any road show, (vi) fees and
disbursements of counsel for the Company, (vii) with respect to each
registration, the reasonable fees and disbursements of one counsel for the
selling Holder(s) (selected by the Requisite Percentage of Participating
Holders), (viii) fees and disbursements of all independent public accountants
(including the expenses of any audit and/or "cold comfort" letter) and fees and
expenses of other persons, including special experts, retained by the Company,
(ix) fees and expenses payable to the investment banks referred to in Section
2.1(g) and (x) any other fees and disbursements of underwriters, if any,
customarily paid by issuers or sellers of securities (collectively, "EXPENSES").
(b) The Company shall pay all Expenses with respect to any Demand
Registration whether or not it becomes effective or remains effective for the
period
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contemplated by Section 2.3(b) and with respect to any registration under
Section 2.2 whether or not it becomes or remains effective.
(c) Notwithstanding the foregoing, (x) the provisions of this
Section 2.4 shall be deemed amended to the extent necessary to cause these
expense provisions to comply with "blue sky" laws of each state in which the
offering is made and (y) in connection with any registration hereunder, each
Holder of Registrable Securities being registered shall pay all underwriting
discounts and commissions, PRO RATA in accordance with the number of shares sold
in the offering by such Holder, and (z) the Company shall, in the case of all
registrations under this Article 2, be responsible for all its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties).
2.5. CERTAIN LIMITATIONS ON REGISTRATION RIGHTS. In the case of any
registration under Section 2.1 pursuant to an underwritten offering, or in the
case of a registration under Section 2.2 if the Company has determined to enter
into an underwriting agreement in connection therewith, all securities to be
included in such registration shall be subject to an underwriting agreement and
no Person may participate in such registration unless such Person agrees to sell
such Person's securities on the basis provided therein and completes and
executes all reasonable questionnaires and other documents (including custody
agreements and powers of attorney) which must be executed in connection
therewith, and provides such other information to the Company or the underwriter
as may be necessary to register such Person's securities.
2.6. LIMITATIONS ON SALE OR DISTRIBUTION OF OTHER SECURITIES.
(a) To the extent requested in writing by a managing underwriter, if
any, of any registration effected pursuant to Section 2.1, each Holder of
Registrable Securities agrees not to sell, transfer or otherwise dispose of,
including any sale pursuant to Rule 144 under the Securities Act, any Common
Stock, or any other equity security of the Company or any security convertible
into or exchangeable or exercisable for any equity security of the Company
(other than as part of such underwritten public offering) during the time period
reasonably requested by the managing underwriter, not to exceed 90 days (and the
Company hereby also so agrees (except that the Company may effect any sale or
distribution of any such securities pursuant to a registration on Form S-4 (if
reasonably acceptable to such managing underwriter) or Form S-8, or any
successor or similar form which is then in effect or upon the conversion,
exchange or exercise of any then outstanding Common Stock Equivalent) to use its
reasonable best efforts to cause each holder of any equity security or any
security convertible into or exchangeable or exercisable for any equity security
of the Company purchased from the Company at any time other than in a public
offering so to agree). Each managing underwriter shall be entitled to rely on
the agreements of each Holder of Registrable Securities set forth in this
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Section 2.6(a) and shall be a third party beneficiary of the provisions of this
Section 2.6(a).
(b) The Company hereby agrees that, if it shall previously have
received a request for registration pursuant to Section 2.1 or 2.2, and if such
previous registration shall not have been withdrawn or abandoned, the Company
shall not sell, transfer, or otherwise dispose of, any Common Stock, or any
other equity security of the Company or any security convertible into or
exchangeable or exercisable for any equity security of the Company (other than
as part of such underwritten public offering, a registration on Form S-4 or Form
S-8 or any successor or similar form which is then in effect or upon the
conversion, exchange or exercise of any then outstanding Common Stock
Equivalents), until a period of 90 days shall have elapsed from the effective
date of such previous registration; and the Company shall so provide in any
registration rights agreements hereafter entered into with respect to any of its
securities.
2.7. NO REQUIRED SALE. Nothing in this Agreement shall be deemed to
create an independent obligation on the part of any Holder to sell any
Registrable Securities pursuant to any effective registration statement.
2.8. INDEMNIFICATION.
(a) In the event of any registration of any securities of the
Company under the Securities Act pursuant to this Article 2, the Company will,
and hereby does, indemnify and hold harmless, to the fullest extent permitted by
law, each Holder of Registrable Securities, its directors, officers, affiliates,
employees, stockholders, members and partners (and the directors, officers,
affiliates, employees, stockholders, members and partners thereof), each other
Person who participates as an underwriter or a Qualified Independent
Underwriter, if any, in the offering or sale of such securities, each officer,
director, employee, stockholder, member or partner of such underwriter or
Qualified Independent Underwriter, and each other Person, if any, who controls
such seller or any such underwriter within the meaning of the Securities Act,
against any and all losses, claims, damages or liabilities, joint or several,
actions or proceedings (whether commenced or threatened) in respect thereof
("CLAIMS") and expenses (including reasonable fees of counsel and any amounts
paid in any settlement effected with the Company's consent, which consent shall
not be unreasonably withheld or delayed) to which each such indemnified party
may become subject under the Securities Act or otherwise, insofar as such Claims
or expenses arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in any registration statement
under which such securities were registered under the Securities Act, together
with the documents incorporated by therein or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or (ii) any untrue statement or
alleged untrue statement of a material fact contained in any preliminary, final
or summary prospectus or
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any amendment or supplement thereto, together with the documents incorporated by
reference therein, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; PROVIDED, HOWEVER, that the Company shall not be liable to
any such indemnified party in any such case to the extent such Claim or expense
arises out of or is based upon any untrue statement or alleged untrue statement
of a material fact or omission or alleged omission of a material fact made in
such registration statement or amendment thereof or supplement thereto or in any
such prospectus or any preliminary, final or summary prospectus in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of such indemnified party specifically for use therein. Such indemnity
and reimbursement of expenses shall remain in full force and effect regardless
of any investigation made by as on behalf of such indemnified party and shall
survive the transfer of such securities by such seller.
(b) Each Holder of Registrable Securities that are included in the
securities as to which any registration under Section 2.1 or 2.2 is being
effected (and, if the Company requires as a condition to including any
Registrable Securities in any registration statement filed in accordance with
Section 2.1 or 2.2, any underwriter and Qualified Independent Underwriter, if
any) shall, severally and not jointly, indemnify and hold harmless (in the same
manner and to the same extent as set forth in paragraph (a) of this Section 2.8)
to the extent permitted by law the Company, its officers and directors, each
Person controlling the Company within the meaning of the Securities Act and all
other prospective sellers and their directors, officers, general and limited
partners and respective controlling Persons with respect to any untrue statement
or alleged untrue statement of any material fact in, or omission or alleged
omission of any material fact from, such registration statement, any
preliminary, final or summary prospectus contained therein, or any amendment or
supplement thereto, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company or its representatives by or on behalf of
such Holder or underwriter or Qualified Independent Underwriter, if any,
specifically for use therein and reimburse such indemnified party for any legal
or other expenses reasonably incurred in connection with investigating or
defending any such Claim as such expenses are incurred; PROVIDED, HOWEVER, that
the aggregate amount which any such Holder shall be required to pay pursuant to
this Section 2.8(b) and Sections 2.8(c) and (e) shall in no case be greater than
the amount of the net proceeds received by such person upon the sale of the
Registrable Securities pursuant to the registration statement giving rise to
such claim. Such indemnity and reimbursement of expenses shall remain in full
force and effect regardless of any investigation made by or on behalf of such
indemnified party and shall survive the transfer of such securities by such
Holder.
(c) Indemnification similar to that specified in the preceding
paragraphs (a) and (b) of this Section 2.8 (with appropriate modifications)
shall be given
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by the Company and each seller of Registrable Securities with respect to any
required registration or other qualification of securities under any state
securities and "blue sky" laws.
(d) Any person entitled to indemnification under this Agreement
shall notify promptly the indemnifying party in writing of the commencement of
any action or proceeding with respect to which a claim for indemnification may
be made pursuant to this Section 2.8, but the failure of any indemnified party
to provide such notice shall not relieve the indemnifying party of its
obligations under the preceding paragraphs of this Section 2.8, except to the
extent the indemnifying party is materially prejudiced thereby and shall not
relieve the indemnifying party from any liability which it may have to any
indemnified party otherwise than under this Article 2. In case any action or
proceeding is brought against an indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, unless in the reasonable opinion of outside
counsel to the indemnified party a conflict of interest between such indemnified
and indemnifying parties may exist in respect of such claim, to assume the
defense thereof jointly with any other indemnifying party similarly notified, to
the extent that it chooses, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party that it so chooses, the indemnifying party shall not be liable
to such indemnified party for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation; PROVIDED, HOWEVER, that (i) if the
indemnifying party fails to take reasonable steps necessary to defend diligently
the action or proceeding within 20 days after receiving notice from such
indemnified party that the indemnified party believes it has failed to do so; or
(ii) if such indemnified party who is a defendant in any action or proceeding
which is also brought against the indemnifying party reasonably shall have
concluded that there may be one or more legal defenses available to such
indemnified party which are not available to the indemnifying party; or (iii) if
representation of both parties by the same counsel is otherwise inappropriate
under applicable standards of professional conduct, then, in any such case, the
indemnified party shall have the right to assume or continue its own defense as
set forth above (but with no more than one firm of counsel for all indemnified
parties in each jurisdiction who shall be approved by the Requisite Percentage
of Participating Holders in such registration in respect of which such
indemnification is sought), and the indemnifying party shall be liable for any
expenses therefor. No indemnifying party shall, without the written consent of
the indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (A) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (B) does not include a statement
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as to or an admission of fault, culpability or a failure to act, by or on behalf
of any indemnified party.
(e) If for any reason the foregoing indemnity is unavailable or is
insufficient to hold harmless an indemnified party under Sections 2.8(a), (b) or
(c), then each indemnifying party shall contribute to the amount paid or payable
by such indemnified party as a result of any Claim 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 hand, with respect to such
offering of securities. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or the indemnified party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. If, however, the
allocation provided in the second preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative faults but also the relative benefits of the
indemnifying party and the indemnified party as well as any other relevant
equitable considerations. The parties hereto agree that it would not be just and
equitable if contributions pursuant to this Section 2.8(e) were to be 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 preceding sentences
of this Section 2.8(e). The amount paid or payable in respect of any Claim shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such Claim.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. Notwithstanding
anything in this Section 2.8(e) to the contrary, no indemnifying party (other
than the Company) shall be required pursuant to this Section 2.8(e) to
contribute any amount in excess of the net proceeds received by such
indemnifying party from the sale of Registrable Securities in the offering to
which the losses, claims, damages or liabilities of the indemnified parties
relate, less the amount of any indemnification payment made by such indemnifying
party pursuant to Sections 2.8(b) and (c).
(f) The indemnity agreements contained herein shall be in addition
to any other rights to indemnification or contribution which any indemnified
party may have pursuant to law or contract and shall remain operative and in
full force and effect regardless of any investigation made or omitted by or on
behalf of any indemnified party and shall survive the transfer of the
Registrable Securities by any such party.
(g) The indemnification and contribution required by this Section
2.8 shall be made by periodic payments of the amount thereof during the course
of the
- 16 -
investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
3. UNDERWRITTEN OFFERINGS.
3.1. REQUESTED UNDERWRITTEN OFFERINGS. If requested by the underwriters
for any underwritten offering by the Holders pursuant to a registration
requested under Section 2.1, the Company shall enter into a customary
underwriting agreement with the underwriters. Such underwriting agreement shall
be satisfactory in form and substance to the Requisite Percentage of
Participating Holders and shall contain such representations and warranties by,
and such other agreements on the part of, the Company and such other terms as
are generally included in the standard underwriting agreement of such
underwriters, including, without limitation, indemnities and contribution
agreements. Any Holder participating in the offering shall be a party to such
underwriting agreement and may, at its option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such Holder and that any or all of the conditions precedent
to the obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of such Holder; PROVIDED, HOWEVER, that
the Company shall not be required to make any representations or warranties with
respect to written information specifically provided by a selling Holder for
inclusion in the registration statement. Such underwriting agreement shall also
contain such representations and warranties by the participating Holders as are
customary in agreements of that type.
3.2. PIGGYBACK UNDERWRITTEN OFFERINGS. In the case of a registration
pursuant to Section 2.2 hereof, if the Company shall have determined to enter
into an underwriting agreement in connection therewith, all of the Holders'
Registrable Securities to be included in such registration shall be subject to
such underwriting agreement. Any Holder participating in such registration may,
at its option, require that any or all of the representations and warranties by,
and the other agreements on the part of, the Company to and for the benefit of
such underwriters shall also be made to and for the benefit of such Holder and
that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to the
obligations of such Holder. Such underwriting agreement shall also contain such
representations and warranties by the participating Holders as are customary in
agreements of that type.
4. GENERAL.
4.1. ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Company agrees
that it shall not effect or permit to occur any combination or subdivision of
shares which would adversely affect the ability of the Holder of any Registrable
Securities to include such
- 17 -
Registrable Securities in any registration contemplated by this Agreement or the
marketability of such Registrable Securities in any such registration.
4.2. RULE 144. If the Company shall have filed a registration statement
pursuant to the requirements of Section 12 of the Exchange Act or a registration
statement pursuant to the requirements of the Securities Act in respect of the
Common Stock or securities of the Company convertible into or exchangeable or
exercisable for Common Stock, the Company covenants that (i) so long as it
remains subject to the reporting provisions of the Exchange Act, it will timely
file the reports required to be filed by it under the Securities Act or the
Exchange Act (including, but not limited to, the reports under Sections 13 and
15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 under
the Securities Act), and (ii) will take such further action as any Holder of
Registrable Securities 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 within the limitation of the exemptions
provided by (A) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (B) any similar rule or regulation hereafter adopted by
the Commission. Upon the request of any Holder of Registrable Securities, the
Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
4.3. AMENDMENTS AND WAIVERS. This Agreement may be amended, modified,
supplemented or waived only upon the written agreement of the Company, Xxxxx and
the holders of not less than a majority of the shares of Registrable Securities
(treating all of the Notes as having been converted at the conversion price then
in effect).
4.4. NOTICES. Except as otherwise provided in this Agreement, all
notices, requests, consents and other communications hereunder to any party
shall be deemed to be sufficient if contained in a written instrument delivered
in person or by telecopy, nationally recognized overnight courier or first class
registered or certified mail, return receipt requested, postage prepaid,
addressed to such party at the address set forth below or such other address as
may hereafter be designated in writing by such party to the other parties:
(i) if to the Company, to:
Q-Med, Inc.
000 Xxxxx Xxxx Xxxxx
Xxxxxxxx Xxxxxx, Xxx Xxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxx
with a copy to:
Xxxxxx & Xxxxxxxxx LLP
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000 Xxx Xxxxxxx Xxxx
Xxxxxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
(ii) if to the Investors to the address set forth below their
names on the signature pages hereto.
All such notices, requests, consents and other communications shall be deemed to
have been given when received.
4.5. NO INCONSISTENT AGREEMENTS. The Company represents and warrants that
without the prior written consent of Xxxxx, it will not, on or after the date of
this Agreement, (a) grant any registration rights in respect of the Company's
securities, except pursuant to an amendment to this Agreement and (b) enter into
any agreement with respect to its securities which is inconsistent with the
rights granted in this Agreement or otherwise conflicts with the provisions
hereof, other than any lock-up agreement with the underwriters in connection
with any registered offering effected hereunder, pursuant to which the Company
shall agree not to register for sale, and the Company shall agree not to sell or
otherwise dispose of, Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, for a specified period following
the registered offering.
4.6. MISCELLANEOUS.
(a) This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and the respective successors, personal
representatives and assigns of the parties hereto, whether so expressed or not.
If any Person shall acquire from any Holder more than 50% of such Holder's
Registrable Securities, in any manner, whether by sale, operation of law or
otherwise, such transferee shall promptly notify the Company and such
Registrable Securities acquired from such Holder shall be held subject to all of
the terms of this Agreement, and by taking and holding such Registrable
Securities such Person shall be entitled to receive the benefits of and be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement. If the Company shall so request, any
such successor or assign shall agree in writing to acquire and hold the
Registrable Securities acquired from such Holder subject to all of the terms
hereof. If any Holder shall acquire additional Registrable Securities, such
Registrable Securities shall be subject to all of the terms, and entitled to all
the benefits, of this Agreement. No Person other than a Holder shall be entitled
to any benefits under this Agreement, except as otherwise expressly provided
herein. In all events, this Agreement and all rights hereunder shall be
assignable by a Holder that is a limited or general partnership to its partners
in connection with the distribution of Registrable Securities held by the Holder
to its partners.
- 19 -
(b) This Agreement (with the documents referred to herein or
delivered pursuant hereto) embodies the entire agreement and understanding
between the parties hereto and supersedes all prior agreements and
understandings relating to the subject matter hereof.
(c) This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of New York without giving effect to
the conflicts of law principles thereof.
(d) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof. All section
references are to this Agreement unless otherwise expressly provided.
(e) This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.
(f) Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
(g) The parties hereto acknowledge that there would be no adequate
remedy at law if any party fails to perform any of its obligations hereunder,
and accordingly agree that each party, in addition to any other remedy to which
it may be entitled at law or in equity, shall be entitled to injunctive relief,
including specific performance, to enforce such obligations without the posting
of any bond, and, if any action should be brought in equity to enforce any of
the provisions of this Agreement, none of the parties hereto shall raise the
defense that there is an adequate remedy at law.
(h) Each party hereto shall do and perform or cause to be done and
performed all such further acts and things and shall execute and deliver all
such other agreements, certificates, instruments, and documents as any other
party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
- 20 -
IN WITNESS WHEREOF, the undersigned have executed this Registration
Rights Agreement as of the date set forth above.
Q-MED, INC.
By: /s/XXXXXXX X. XXX
--------------------------------------------
Name: Xxxxxxx X. Xxx
Title: President
THE INVESTORS:
XXXXX PARTNERS III, L.P.
By: /s/XXXXX X. XXXXXX
--------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: General Partner of Claudius, L.L.C.
Address: General Partner
XXXXX PARTNERS INTERNATIONAL III, L.P.
By: /s/XXXXX X. XXXXXX
--------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: General Partner of Claudius, L.L.C.
Address: General Partner
XXXXX EMPLOYEE FUND III, L.P.
By: /s/XXXXX X. XXXXXX
--------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: General Partner
Address:
