Exhibit 4.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of August 15, 2003, by and between QLT Inc., a British Columbia
company (the "Company"), and UBS Securities LLC and the other Initial Purchasers
named in the Purchase Agreement referred to below (collectively, the "Initial
Purchasers") pursuant to that certain Purchase Agreement, dated August 12, 2003
(the "Purchase Agreement") among the Company and the Initial Purchasers.
In order to induce the Initial Purchasers to enter into the Purchase
Agreement, the Company has agreed to provide the registration rights set forth
in this Agreement. The execution of this Agreement is a condition to the closing
under the Purchase Agreement.
The Company agrees with the Initial Purchasers (i) for their benefit as
Initial Purchasers and (ii) for the benefit of the beneficial owners (including
the Initial Purchasers) from time to time of the Notes (as defined herein) and
the beneficial owners from time to time of the Underlying Common Shares (as
defined herein) issued upon conversion of the Notes (each of the foregoing a
"Holder" and together the "Holders"), as follows:
Section 1. Definitions. Capitalized terms used herein without
definition shall have the respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:
"Affiliate" means with respect to any specified person, an "affiliate,"
as defined in Rule 144, of such person.
"Amendment Effectiveness Deadline Date" has the meaning set forth in
Section 2(d) hereof.
"Applicable Conversion Price" means, as of any date of determination,
$1,000 principal amount at maturity of Notes divided by the Conversion Rate then
in effect as of the date of determination or, if no Notes are then outstanding,
the Conversion Rate that would be in effect were Notes then outstanding.
"Business Day" means each day on which the New York Stock Exchange is
open for trading.
"Common Shares" means the common shares, without par value, of the
Company and any other share of capital as may constitute "Common Shares" for
purposes of the Indenture, including the Underlying Common Shares.
"Conversion Rate" has the meaning assigned to such term in the
Indenture.
"Damages Accrual Period" has the meaning set forth in Section 2(e)
hereof.
"Damages Payment Date" means each interest payment date under the
Indenture in the case of Notes, and each March 15 and September 15 in the case
of the Underlying Common Shares.
"Effectiveness Deadline Date" has the meaning set forth in Section 2(a)
hereof.
"Effectiveness Period" means a period (subject to extension pursuant to
Section 3(i) hereof) that terminates when there are no Registrable Securities
outstanding.
"Event" has the meaning set forth in Section 2(e) hereof.
"Event Date" has the meaning set forth in Section 2(e) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"Filing Deadline Date" has the meaning set forth in Section 2(a)
hereof.
"Form F-3" means Form F-3 under the Securities Act.
"Form S-1" means Form S-1 under the Securities Act.
"Form S-3" means Form S-3 under the Securities Act.
"Holder" has the meaning set forth in the preamble hereto.
"Indenture" means the Indenture, dated as of August 15, 2003, between
the Company and the Trustee, pursuant to which the Notes are being issued.
"Initial Purchasers" has the meaning set forth in the preamble hereto.
"Initial Shelf Registration Statement" has the meaning set forth in
Section 2(a) hereof.
"Issue Date" means the first date of original issuance of the Notes.
"judgment currency" has the meaning set forth in Section 9(n).
"liquidated damages" has the meaning set forth in Section 2(e).
"Liquidated Damages Amount" has the meaning set forth in Section 2(e)
hereof.
"Managing Underwriters" has the meaning set forth in Section 8(a)
hereof.
"Material Event" has the meaning set forth in Section 3(i) hereof.
"NASD Rules" has the meaning set forth in Section 3(s) hereof.
"Notes" means the 3% Convertible Senior Notes due 2023 of the Company
to be purchased pursuant to the Purchase Agreement.
"Notice and Questionnaire" means a written notice and questionnaire
delivered to the Company containing substantially the information called for by
the Selling Securityholder
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Notice and Questionnaire attached as Annex A to the Offering Memorandum dated
August 12, 2003 relating to the Notes.
"Notice Holder" means, on any date, any Holder that has delivered a
Notice and Questionnaire to the Company on or prior to such date, so long as all
of such Holder's Registrable Securities that have been registered for resale
pursuant to a Notice and Questionnaire have not been sold in accordance with a
Shelf Registration Statement.
"Prospectus" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 415 promulgated under the
Securities Act), as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all materials incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
"Purchase Agreement" has the meaning set forth in the preamble hereof.
"rate(s) of exchange" has the meaning set forth in Section 9(n).
"Record Holder" means (i) with respect to any Damages Payment Date
relating to any Notes as to which any Liquidated Damages Amount has accrued, the
Notice Holder that was a holder of record of such Note at the close of business
on the record date with respect to the interest payment date under the Indenture
on which such Damages Payment Date shall occur and (ii) with respect to any
Damages Payment Date relating to the Underlying Common Shares as to which any
Liquidated Damages Amount has accrued, a Notice Holder that was the registered
holder of such Underlying Common Shares at the close of business on the date
that is fourteen (14) days prior to such Damages Payment Date.
"Registrable Securities" means the Notes until such Notes have been
converted into the Underlying Common Shares and, at all times the Underlying
Common Shares and any securities into or for which such Underlying Common Shares
have been converted, and any security issued with respect thereto upon any stock
dividend, split or similar event until, in the case of any such security, the
earliest of (w) the date on which such security has been effectively registered
under the Securities Act and disposed of in accordance with the Registration
Statement relating thereto; (x) the date that is two (2) years after the later
of (1) the Issue Date and (2) the last date that the Company or any of its
Affiliates was the owner of such Notes (or any predecessor thereto); (y) the
date on which such security may be resold without restriction pursuant to Rule
144(k) or any successor provision thereto; or (z) the date such security has
been publicly sold pursuant to Rule 144 or any successor provision thereto.
"Registration Expenses" has the meaning set forth in Section 5 hereof.
"Registration Statement" means any registration statement of the
Company that covers any of the Registrable Securities pursuant to the provisions
of this Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits and
all materials incorporated by reference or deemed to be incorporated by
reference in such registration statement.
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"Rule 144" means Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
"Rule 144A" means Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
"Shelf Registration Statement" means the Initial Shelf Registration
Statement and any Subsequent Shelf Registration Statement.
"Subsequent Shelf Registration Statement" has the meaning set forth in
Section 2(b) hereof.
"Subsequent Shelf Registration Statement Effectiveness Deadline Date"
has the meaning set forth in Section 2(d) hereof.
"Suspension Notice" has the meaning set forth in Section 3(i) hereof.
"Suspension Period" has the meaning set forth in Section 3(i) hereof.
"TIA" means the Trust Indenture Act of 1939, as amended.
"Trustee" means Bank of New York, the trustee under the Indenture.
"Underlying Common Shares" means the Common Shares into which the Notes
are convertible or issued upon any such conversion.
Section 2. Shelf Registration. (a) The Company shall prepare and file
or cause to be prepared and filed with the SEC, as soon as practicable but in
any event by the date (the "Filing Deadline Date") that is ninety (90) days
after the Issue Date, a Registration Statement for an offering to be made on a
delayed or continuous basis pursuant to Rule 415 of the Securities Act
registering the resale from time to time by Holders thereof of all of the
Registrable Securities (or, if registration of Registrable Securities not held
by Notice Holders is not permitted by the rules and regulations of the SEC, then
registering all Registrable Securities held by Notice Holders) (the "Initial
Shelf Registration Statement"). The Initial Shelf Registration Statement shall
be on Form S-1 or Form S-3 or another appropriate form permitting registration
of such Registrable Securities for resale by such Holders in accordance with the
reasonable methods of distribution elected by the Holders (including Form F-3,
in accordance with the SEC's Multi-Jurisdictional Disclosure System), approved
by the Company, and set forth in the Initial Shelf Registration Statement. The
Company shall use its reasonable best efforts to cause the Initial Shelf
Registration Statement to be declared effective under the Securities Act as
promptly as is practicable but in any event by the date (the "Effectiveness
Deadline Date") that is one hundred eighty (180) days after the Issue Date, and
to keep the Initial Shelf Registration Statement (or any Subsequent Shelf
Registration Statement) continuously effective under the Securities Act
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until the expiration of the Effectiveness Period. At the time the Initial Shelf
Registration Statement is declared effective under the Securities Act, each
Holder that became a Notice Holder prior to the date of such effectiveness shall
be named as a selling securityholder in the Initial Shelf Registration Statement
and the related Prospectus in such a manner as to permit such Holder to deliver
such Prospectus to purchasers of Registrable Securities in accordance with
applicable law.
(b) If the Initial Shelf Registration Statement or any Subsequent Shelf
Registration Statement ceases to be effective for any reason at any time during
the Effectiveness Period, the Company shall use its reasonable best efforts to
obtain the prompt withdrawal of any order suspending the effectiveness thereof,
and in any event shall within thirty (30) days of such cessation of
effectiveness amend the Shelf Registration Statement in a manner reasonably
expected to obtain the withdrawal of the order suspending the effectiveness
thereof, or file an additional Shelf Registration Statement covering all of the
securities that as of the date of such filing are Registrable Securities (or, if
registration of Registrable Securities not held by Notice Holders is not
permitted by the rules and regulations of the SEC, then registering all
Registrable Securities held by Notice Holders as of such date) (a "Subsequent
Shelf Registration Statement"). If a Subsequent Shelf Registration Statement is
filed, the Company shall use its reasonable best efforts to cause the Subsequent
Shelf Registration Statement to become effective as promptly as is practicable
after such filing, but in no event later than the Subsequent Shelf Registration
Statement Effectiveness Deadline, and to keep such Shelf Registration Statement
(or subsequent Shelf Registration Statement) continuously effective until the
end of the Effectiveness Period.
(c) The Company shall supplement and amend any Shelf Registration
Statement if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement,
if required by the Securities Act or as reasonably requested by the Initial
Purchasers or by the Trustee on behalf of the Holders of the Registrable
Securities covered by such Shelf Registration Statement.
(d) (i) Each Holder of Registrable Securities agrees that if such
Holder wishes to sell Registrable Securities pursuant to a Shelf Registration
Statement and related Prospectus, it will do so only in accordance with this
Section 2(d) and Section 3(i). Each Holder of Registrable Securities wishing to
sell Registrable Securities pursuant to a Shelf Registration Statement and
related Prospectus agrees to deliver a completed and executed Notice and
Questionnaire to the Company prior to any attempted or actual distribution of
Registrable Securities under a Shelf Registration Statement. Any Holder that
does not become a Notice Holder by completion and delivery, as provided herein,
of the Notice and Questionnaire shall not be entitled to receive any liquidated
damages pursuant to Section 2(e). With respect to any Holder who delivers a
completed and executed Notice and Questionnaire on or after the date the Initial
Shelf Registration Statement is declared effective under the Securities Act, the
Company shall, as promptly as practicable after the date a Notice and
Questionnaire is delivered, and in any event, subject to clause (B) below,
within the later of (x) five (5) Business Days after such date or (y) five (5)
Business Days after the expiration of any Suspension Period (1) in effect when
the Notice and Questionnaire is delivered or (2) put into effect within five (5)
Business Days of such delivery date,
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(A) if required by applicable law, file with the SEC a
supplement to the related Prospectus or a post-effective amendment to the Shelf
Registration Statement or a Subsequent Shelf Registration Statement and any
necessary supplement or amendment to any document incorporated therein by
reference to the applicable Shelf Registration Statement and file any other
required document with the SEC so that the Holder delivering such Notice and
Questionnaire is named as a selling securityholder in a Shelf Registration
Statement and the related Prospectus in such a manner as to permit such Holder
to deliver such Prospectus to purchasers of the Registrable Securities in
accordance with applicable law; provided, however, that if a post-effective
amendment or a Subsequent Shelf Registration Statement is required by the rules
and regulations of the SEC in order to permit resales by Holders submitting
Notice and Questionnaires on or after the date of effectiveness of the Initial
Shelf Registration Statement, the Company shall not be required to file more
than one (1) post-effective amendment or Subsequent Shelf Registration Statement
for such purpose in any thirty (30) day period;
(B) if the Company shall file a post-effective amendment to
the Shelf Registration Statement or file a Subsequent Shelf Registration
Statement, it shall use its reasonable best efforts to cause such post-effective
amendment or Subsequent Shelf Registration Statement, as the case may be, to be
declared effective under the Securities Act as promptly as is practicable, but
in any event by the date (the "Amendment Effectiveness Deadline Date" in the
case of a post-effective amendment or the "Subsequent Shelf Registration
Statement Effectiveness Deadline Date" in the case of a Subsequent Shelf
Registration Statement) that is thirty (30) days after the date such
post-effective amendment or Subsequent Shelf Registration Statement, as the case
may be, is required by this Section 2(d) to be filed;
(C) the Company shall provide such Holder a reasonable number
of copies of any documents filed pursuant to Section 2(d)(i)(A) and Section
2(d)(i)(B);
(D) the Company shall notify such Holder as promptly as
practicable after the effectiveness under the Securities Act of any
post-effective amendment or Subsequent Shelf Registration Statement filed
pursuant to Section 2(d)(i)(A) and Section 2(d)(i)(B);
(E) if a Notice and Questionnaire is delivered during a
Suspension Period, or a Suspension Period is put into effect within five (5)
Business Days after such delivery date, the Company shall so inform the Holder
delivering such Notice and Questionnaire and shall take the actions set forth in
clauses (A), (B), (C) and (D) above within five (5) Business Days after
expiration of the Suspension Period in accordance with Section 3(i); and
(F) if under applicable law, the Company has more than one
option as to the type or manner of making any such filing, the Company shall
make the required filing or filings in the manner or of a type that is
reasonably expected to result in the earliest availability of a Prospectus for
effecting resales of Registrable Securities.
(ii) Notwithstanding anything contained herein to the contrary, the
Company shall be under no obligation to name any Holder that is not a Notice
Holder as a selling securityholder in any Shelf Registration Statement or
related Prospectus; provided, however, that any Holder that becomes a Notice
Holder pursuant to the provisions of this Section 2(d) (whether or not such
Holder was a Notice Holder at the time the Shelf Registration Statement was
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declared effective under the Securities Act) shall be named as a selling
securityholder in a Shelf Registration Statement or related Prospectus in
accordance with the requirements of this Section 2(d).
(e) The parties hereto agree that the Holders of Registrable Securities
will suffer damages, and that it would not be feasible to ascertain the extent
of such damages with precision, if (i) the Initial Shelf Registration Statement
has not been filed on or prior to the Filing Deadline Date, (ii) the Initial
Shelf Registration Statement has not been declared effective under the
Securities Act on or prior to the Effectiveness Deadline Date, (iii) either a
supplement to a prospectus, a post-effective amendment or a Subsequent Shelf
Registration Statement is required to be filed and fails to be filed within the
prescribed period set forth in Section 2(d) (the applicable date being an
"Additional Filing Deadline Date") or in the case of a post-effective amendment
or a Subsequent Shelf Registration Statement, such post-effective amendment or
Subsequent Registration Statement is not declared effective under the Securities
Act by the SEC by the Amendment Effectiveness Deadline Date or the Subsequent
Shelf Registration Statement Effectiveness Deadline Date, as the case may be,
(iv) the Initial Shelf Registration Statement or any Subsequent Registration
Statement is filed and declared effective under the Securities Act but shall
thereafter cease to be effective (without being succeeded immediately by a new
registration statement filed and declared effective under the Securities Act) or
usable for the offer and sale of Registrable Securities for a period of time
(including any Suspension Period) which shall exceed thirty (30) days in the
aggregate in any three (3) month period or seventy five (75) days in the
aggregate in any twelve (12) month period or (v) the Initial Registration
Statement and the related Prospectus, at the time the Initial Registration
Statement shall be declared effective under the Securities Act, fail to name
each Holder that became a Notice Holder prior to the date of such effectiveness
as a selling securityholder in such a manner as to permit such Holder to deliver
such Prospectus to purchasers of Registrable Securities in accordance with
applicable law (each of the events of a type described in any of the foregoing
clauses (i) through (v) are individually referred to herein as an "Event," and
the Filing Deadline Date in the case of clause (i), the Effectiveness Deadline
Date in the case of clause (ii), the Additional Filing Deadline Date, the
Amendment Effectiveness Deadline Date or the Subsequent Shelf Registration
Statement Effectiveness Deadline Date, as the case may be, in the case of clause
(iii), the date on which the duration of the ineffectiveness or unusability of
the Shelf Registration Statement in any period exceeds the number of days
permitted by clause (iv) hereof in the case of clause (iv), and the date the
Initial Registration Statement shall be declared effective under the Securities
Act in the case of clause (v), being referred to herein as an "Event Date").
Events shall be deemed to continue until the following dates with respect to the
respective types of Events: (A) the date the Initial Shelf Registration
Statement is filed in the case of an Event of the type described in clause (i);
(B) the date the Initial Shelf Registration Statement is declared effective
under the Securities Act in the case of an Event of the type described in clause
(ii); (C) the date a prospectus supplement or a post-effective amendment to the
Initial Shelf Registration Statement or Subsequent Shelf Registration Statement,
whichever is required, is filed or declared effective under the Securities Act,
as the case may be, in the case of an Event of the type described in clause
(iii); (D) the date the Initial Shelf Registration Statement or the Subsequent
Shelf Registration Statement, as the case may be, becomes effective or usable
again, or the date another Subsequent Shelf Registration Statement is filed
pursuant to Section 2(b) and declared effective by the SEC, in the case of an
Event of the type described in clause (iv); or (E) the date a
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prospectus supplement to the Initial Shelf Registration Statement is filed with
the SEC or a Subsequent Shelf Registration Statement, or a post-effective
amendment to the Initial Shelf Registration Statement, is declared effective
under the Securities Act, which prospectus supplement, Subsequent Shelf
Registration Statement or post-effective amendment names as selling
securityholders, in such a manner as to permit them to deliver the related
Prospectus to purchasers of Registrable Securities in accordance with applicable
law, all Holders entitled as herein provided to be so named.
Accordingly, commencing on (and including) any Event Date and ending on
(but excluding) the next date on which there are no Events that have occurred
and are continuing (a "Damages Accrual Period"), the Company agrees to pay, as
liquidated damages ("liquidated damages") and not as a penalty, an amount (the
"Liquidated Damages Amount") at the rate described below, payable periodically
on each Damages Payment Date to Record Holders, to the extent of, for each such
Damages Payment Date, accrued and unpaid Liquidated Damages Amount to (but
excluding) such Damages Payment Date (or, if the Damages Accrual Period shall
have ended prior to such Damages Payment Date, the date of the end of the
Damages Accrual Period); provided that any Liquidated Damages Amount accrued
with respect to any Note or portion thereof called for redemption on a
redemption date or converted into Underlying Common Shares on a conversion date
prior to the Damages Payment Date, shall, in any such event, be paid instead to
the Holder who submitted such Note or portion thereof for redemption or
conversion on the applicable redemption date or conversion date, as the case may
be, on such date (or promptly following the conversion date, in the case of
conversion). The Liquidated Damages Amount shall accrue at a rate per annum
equal to one quarter of one percent (0.25%) for the first ninety (90) day period
from the Event Date, increasing with respect to each subsequent ninety (90) day
period thereafter by an additional one quarter of one percent (0.25%), up to a
maximum rate per year of one half of one percent (0.50%), of (i) the aggregate
principal amount of the Notes held by such Record Holders or, without
duplication, (ii) in the case of Notes that have been converted into Underlying
Common Shares, the Applicable Conversion Price of such Underlying Common Shares,
as the case may be. Notwithstanding the foregoing, no Liquidated Damages Amounts
shall accrue as to any Registrable Security from and after the earlier of (x)
the date such security is no longer a Registrable Security and (y) expiration of
the Effectiveness Period. The rate of accrual of the Liquidated Damages Amount
with respect to any period shall not exceed the rate provided for in this
paragraph notwithstanding the occurrence of multiple concurrent Events.
Following the cure of all Events requiring the payment by the Company of
Liquidated Damages Amounts to the Holders of Registrable Securities pursuant to
this Section, the accrual of Liquidated Damages Amounts shall cease (without in
any way limiting the effect of any subsequent Event requiring the payment of
Liquidated Damages Amount by the Company).
The Trustee shall be entitled, on behalf of Holders of Notes, to seek
any available remedy for the enforcement of this Agreement, including for the
payment of any Liquidated Damages Amount.
All of the Company's obligations set forth in this Section 2(e) that
are outstanding with respect to any Registrable Security at the time such
security ceases to be a Registrable Security
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shall survive until such time as all such obligations with respect to such
security have been satisfied in full (notwithstanding termination of this
Agreement pursuant to Section 9(m)).
The parties hereto agree that the liquidated damages provided for in
this Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure of a
Shelf Registration Statement to be filed, declared effective under the
Securities Act, amended or replaced to include the names of all Notice Holders
or available for effecting resales of Registrable Securities in accordance with
the provisions hereof.
Section 3. Registration Procedures. In connection with the registration
obligations of the Company under Section 2 hereof, the Company shall:
(a) Prepare and file with the SEC a Shelf Registration Statement or
Shelf Registration Statements on Form S-1 or Form S-3 or any other appropriate
form under the Securities Act available for the sale of the Registrable
Securities by the Holders thereof in accordance with the intended method or
methods of distribution thereof (including Form F-3, in accordance with the
SEC's Multi-Jurisdictional Disclosure System), and use its reasonable best
efforts to cause each such Shelf Registration Statement to become effective and
remain effective as provided herein; provided that before filing any Shelf
Registration Statement or Prospectus or any amendments or supplements thereto
with the SEC, the Company shall furnish to any Holder upon written request, and
to the Initial Purchasers and counsel for the Initial Purchasers, copies of all
such documents proposed to be filed and use its reasonable best efforts to
reflect in each such document when so filed with the SEC such comments as the
Initial Purchasers or such counsel reasonably shall propose within three (3)
Business Days of the delivery of such copies to the Initial Purchasers and such
counsel.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Shelf Registration Statement as may be necessary to keep such
Shelf Registration Statement or Subsequent Shelf Registration Statement
continuously effective until the expiration of the Effectiveness Period; cause
the related Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 (or any similar
provisions then in force) under the Securities Act; and use its reasonable best
efforts to comply with the provisions of the Securities Act applicable to it
with respect to the disposition of all securities covered by such Shelf
Registration Statement during the Effectiveness Period in accordance with the
intended methods of disposition by the sellers thereof set forth in such Shelf
Registration Statement as so amended or such Prospectus as so supplemented.
(c) As promptly as practicable give notice to the Notice Holders,
Initial Purchasers and counsel for the Initial Purchasers (i) when any
Prospectus, Prospectus supplement, Shelf Registration Statement or
post-effective amendment to a Shelf Registration Statement has been filed with
the SEC and, with respect to a Shelf Registration Statement or any
post-effective amendment or when the same has been declared effective under the
Securities Act, (ii) of any request, following the effectiveness of a Shelf
Registration Statement under the Securities Act, by the SEC or any other federal
or state governmental authority for amendments or supplements to such Shelf
Registration Statement or the related Prospectus or for additional information,
(iii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of any Shelf
Registration Statement or the initiation or threatening
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of any proceedings for that purpose, (iv) of the receipt by the Company or its
legal counsel of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, (v) after the effective date of any Shelf
Registration Statement filed pursuant to this Agreement of the occurrence of
(but not the nature of or details concerning) a Material Event and (vi) of the
determination by the Company that a post-effective amendment to a Shelf
Registration Statement or a Subsequent Shelf Registration Statement will be
filed with the SEC, which notice may, at the discretion of the Company (or as
required pursuant to Section 3(i)), state that it constitutes a Suspension
Notice, in which event the provisions of Section 3(i) shall apply.
(d) Use its reasonable best efforts to prevent the issuance of, and, if
issued, to obtain the withdrawal of any order suspending the effectiveness of a
Shelf Registration Statement or obtain the lifting of any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction in which they have been qualified for
sale, in either case at the earliest possible moment, and provide prompt notice
to each Notice Holder and the Initial Purchasers of the withdrawal of any such
order.
(e) If requested by the Initial Purchasers or any Notice Holder, as
promptly as practicable incorporate in a Prospectus supplement or a
post-effective amendment to a Shelf Registration Statement such information as
the Initial Purchasers, such Notice Holder or counsel for the Initial Purchasers
shall determine to be required to be included therein by applicable law and make
any required filings of such Prospectus supplement or such post-effective
amendment; provided that the Company shall not be required to take any actions
under this Section 3(e) that, in the written opinion of counsel for the Company,
are not in compliance with applicable law.
(f) As promptly as practicable furnish to each Notice Holder and to the
Initial Purchasers and counsel for the Initial Purchasers, without charge, at
least one (1) conformed copy of any Shelf Registration Statement and any
amendment thereto (including financial statements but excluding schedules) and,
if requested in writing to the Company by such Notice Holder, such counsel or
the Initial Purchasers, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits.
(g) During the Effectiveness Period, deliver to each Notice Holder and
to the Initial Purchasers and counsel for the Initial Purchasers, in connection
with any sale of Registrable Securities pursuant to a Shelf Registration
Statement, without charge, as many copies of the Prospectus or Prospectuses
relating to such Registrable Securities (including each preliminary prospectus)
and any amendment or supplement thereto as such Notice Holder or the Initial
Purchasers may reasonably request; and the Company hereby consents (except
during such periods that a Suspension Notice is outstanding and has not been
revoked) to the use of such Prospectus or each amendment or supplement thereto
by each Notice Holder, in connection with any offering and sale of the
Registrable Securities covered by such Prospectus or any amendment or supplement
thereto in the manner set forth therein.
(h) Prior to any public offering of the Registrable Securities pursuant
to a Shelf Registration Statement, use its reasonable best efforts to register
or qualify or cooperate with the Notice Holders in connection with the
registration or qualification (or exemption from such
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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 Notice Holder reasonably requests in writing (which request may be
included in the Notice and Questionnaire); prior to any public offering of the
Registrable Securities pursuant to a Shelf Registration Statement, use its
reasonable best efforts to keep each such registration or qualification (or
exemption therefrom) effective during the Effectiveness Period in connection
with such Notice Holder's offer and sale of Registrable Securities pursuant to
such registration or qualification (or exemption therefrom) and do any and all
other acts or things reasonably necessary or advisable to enable the disposition
in such jurisdictions of such Registrable Securities in the manner set forth in
the relevant Shelf Registration Statement and the related Prospectus; provided
that the Company will not be required to (i) qualify generally to do business in
any jurisdiction where it is not then so qualified or (ii) take any action that
would subject it to general service of process in suits or to taxation in any
such jurisdiction where it is not then so subject.
(i) Upon (A) the issuance by the SEC of a stop order suspending the
effectiveness of any Shelf Registration Statement or the initiation of
proceedings with respect to any Shelf Registration Statement under Section 8(d)
or 8(e) of the Securities Act, (B) the occurrence of any event or the existence
of any fact as a result of which any Shelf Registration Statement shall 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 not
misleading, or any Prospectus shall contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or (C) the occurrence or existence of any pending
corporate development (a "Material Event") that, in the reasonable discretion of
the Company, makes it appropriate to suspend the availability of any Shelf
Registration Statement and the related Prospectus, (i) in the case of clause (B)
or (C) above, subject to the next sentence, as promptly as practicable, prepare
and file, if necessary pursuant to applicable law, a post-effective amendment to
such Shelf Registration Statement or a supplement to the related Prospectus or
any document incorporated therein by reference or file any other required
document that would be incorporated by reference into such Shelf Registration
Statement and Prospectus so that such Shelf Registration Statement does 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
not misleading, and such Prospectus does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that the Company may rely on
information provided by each Notice Holder with respect to such Notice Holder),
as thereafter delivered to the purchasers of the Registrable Securities being
sold thereunder, and, in the case of a post-effective amendment to a Shelf
Registration Statement, subject to the next sentence, use its reasonable best
efforts to cause it to be declared effective under the Securities Act as
promptly as is practicable, and (ii) give notice to the Notice Holders, Initial
Purchasers and counsel for the Initial Purchasers that the availability of the
Shelf Registration Statement is suspended (a "Suspension Notice") and, upon
receipt of any Suspension Notice, each Notice Holder agrees not to sell any
Registrable Securities pursuant to such Shelf Registration Statement until such
Notice Holder's receipt of copies of the supplemented or amended Prospectus
provided for in clause (i) above, or until it is advised in writing by the
Company that the Prospectus may be used, and has received copies of any
additional or supplemental filings that are incorporated or deemed
11
incorporated by reference in such Prospectus. The Company will use its
reasonable best efforts to ensure that the use of the Prospectus may be resumed
(x) in the case of clause (A) above, as promptly as is practicable, (y) in the
case of clause (B) above, as soon as, in the reasonable judgment of the Company,
the Shelf Registration Statement does 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 not misleading and the Prospectus
does not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and (z) in the
case of clause (C) above, as soon as, in the reasonable discretion of the
Company, such suspension is no longer appropriate. The period during which the
availability of the Shelf Registration Statement and any Prospectus may be
suspended (the "Suspension Period") without the Company incurring any obligation
to pay liquidated damages pursuant to Section 2(e) shall not exceed thirty (30)
days in any three (3) month period and an aggregate of seventy five (75) days in
any twelve (12) month period. The Effectiveness Period shall be extended by the
number of days from and including the date of the giving of the Suspension
Notice to and including the date on which the Notice Holder received copies of
the supplemented or amended Prospectus provided in clause (i) above, or the date
on which it is advised in writing by the Company that the Prospectus may be
used, and has received copies of any additional or supplemental filings that are
incorporated or deemed incorporated by reference in such Prospectus.
(j) Make available for inspection during normal business hours by
representatives for the Notice Holders of such Registrable Securities and any
underwriters participating in any disposition pursuant to any Shelf Registration
Statement and any broker-dealers, attorneys and accountants retained by such
Notice Holders or any such underwriters, all relevant financial and other
records and pertinent corporate documents and properties of the Company and its
subsidiaries, and cause the appropriate officers, directors and employees of the
Company and its subsidiaries to make available for inspection during normal
business hours all relevant information reasonably requested by such
representatives for the Notice Holders, or any such underwriters,
broker-dealers, attorneys or accountants in connection with such disposition, in
each case as is customary for similar "due diligence" examinations; provided,
however, that such persons shall, at the Company's request, first agree in
writing with the Company that any information that is reasonably and in good
faith designated by the Company in writing as confidential at the time of
delivery of such information shall be kept confidential by such persons and
shall be used solely for the purposes of exercising rights under this Agreement,
unless (i) disclosure of such information is required by court or administrative
order or is necessary to respond to inquiries of governmental or regulatory
authorities, (ii) disclosure of such information is required by law (including
any disclosure requirements pursuant to federal securities laws in connection
with the filing of any Shelf Registration Statement or the use of any Prospectus
referred to in this Agreement) or necessary to defend or prosecute a claim
brought against or by any such persons (e.g., to establish a "due diligence"
defense), (iii) such information becomes generally available to the public other
than as a result of a disclosure or failure to safeguard by any such person or
(iv) such information becomes available to any such person from a source other
than the Company and such source is not bound by a confidentiality agreement or
is not otherwise under a duty of trust to the Company; provided further, that
the foregoing inspection
12
and information gathering shall, to the greatest extent possible, be coordinated
on behalf of all the Notice Holders and the other parties entitled thereto by
the counsel referred to in Section 5.
(k) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earnings statements (which need
not be audited) satisfying the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder (or any similar rule promulgated under the Securities
Act) no later than forty five (45) days after the end of any twelve (12) month
period (or ninety (90) days after the end of any twelve (12) month period if
such period is a fiscal year) commencing on the first day of the first fiscal
quarter of the Company commencing after the effective date of a Shelf
Registration Statement, which statements shall cover such twelve (12) month
periods.
(l) Cooperate with each Notice Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
sold pursuant to a Shelf Registration Statement, which certificates shall not
bear any restrictive legends, and cause such Registrable Securities to be in
such denominations as are permitted by the Indenture and registered in such
names as such Notice Holder may request in writing at least two (2) Business
Days prior to any sale of such Registrable Securities.
(m) Provide a CUSIP number for all Registrable Securities covered by a
Shelf Registration Statement not later than the effective date of the Initial
Shelf Registration Statement and provide the Trustee and the transfer agent for
the Common Shares with certificates for the Registrable Securities that are in a
form eligible for deposit with The Depository Trust Company.
(n) Cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc.
(o) Upon (i) the filing of the Initial Registration Statement and (ii)
the effectiveness of the Initial Registration Statement, announce the same, in
each case by release to PR Business Newswire.
(p) Take all actions and enter into such customary agreements
(including, if requested, an underwriting agreement in customary form) as are
necessary, or reasonably requested by the holders of a majority of the
Registrable Securities being sold, in order to expedite or facilitate
disposition of such Registrable Securities; and in such connection, whether or
not an underwriting agreement is entered into and whether or not the
registration is an underwritten registration:
(i) the Company shall make such representations and warranties
to the Holders of such Registrable Securities and the underwriters, if any, in
form, substance and scope as has been customarily made by the Company to
underwriters in similar offerings of securities of the Company;
(ii) the Company shall obtain opinions of counsel of the
Company and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the Managing Underwriters, if
any, and to the counsel to the Holders of the Registrable Securities being sold)
addressed to each selling Holder and the underwriters, if any,
13
covering the matters customarily covered in opinions requested in sales of
securities or underwritten offerings of the Company;
(iii) the Company shall obtain "cold comfort" letters and
updates thereof from the Company's independent certified public accountants
(and, if necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for which
financial statements are, or are required to be, included in any Shelf
Registration Statement) addressed to the underwriters, if any, and use its
reasonable best efforts to have such letters addressed to the selling Holders of
Registrable Securities (to the extent consistent with Statement on Auditing
Standards No. 72 of the American Institute of Certified Public Accounts), such
letters to be in customary form and covering matters of the type customarily
covered in "cold comfort" letters to underwriters in connection with similar
underwritten offerings of the Company;
(iv) the Company shall, if an underwriting agreement is
entered into, cause the same to set forth indemnification provisions and
procedures substantially equivalent to the indemnification provisions and
procedures set forth in Section 6 hereof with respect to the underwriters and
all other parties to be indemnified pursuant to said Section; and
(v) the Company shall deliver such documents and certificates
as may be reasonably requested and as are customarily delivered in similar
offerings to the holders of a majority of the Registrable Securities being sold
and the Managing Underwriters, if any;
the above to be done at (x) the effectiveness of any Shelf Registration
Statement (and each post-effective amendment thereto) and (y) each closing under
any underwriting or similar agreement as and to the extent required thereunder.
(q) Cause the Indenture to be qualified under the TIA not later than
the effective date of the Initial Shelf Registration Statement; and in
connection therewith, cooperate with the Trustee to effect such changes to the
Indenture as may be required for the Indenture to be so qualified in accordance
with the terms of the TIA and execute, and use its reasonable best efforts to
cause the Trustee to execute, all documents as may be required to effect such
changes, and all other forms and documents required to be filed with the SEC to
enable the Indenture to be so qualified in a timely manner.
(r) Use its reasonable best efforts to cause the Underlying Common
Shares to be listed on The Nasdaq National Market.
(s) In the event that any broker-dealer registered under the Exchange
Act shall underwrite any Registrable Securities or participate as a member of an
underwriting syndicate or selling group or "assist in the distribution" (within
the meaning of the Conduct Rules (the "NASD Rules") of the National Association
of Securities Dealers, Inc.) thereof, whether as a Holder of such Registrable
Securities or as an underwriter, a placement or sales agent or a broker or
dealer in respect thereof, or otherwise, the Company will assist such
broker-dealer in complying with the requirements of such NASD Rules, including,
without limitation, by: (i) if such NASD Rules, including NASD Rule 2720, shall
so require, engaging a "qualified independent underwriter" (as defined in NASD
Rule 2720) to participate in the preparation of the
14
Shelf Registration Statement relating to such Registrable Securities, to
exercise usual standards of due diligence in respect thereof and, if any portion
of the offering contemplated by such Shelf Registration Statement is an
underwritten offering or is made through a placement or sales agent, to
recommend the yield or price, as the case may be, of such Registrable
Securities; (ii) indemnifying any such qualified independent underwriter to the
extent of the indemnification of underwriters provided in Section 6 hereof; and
(iii) providing such information to such broker-dealer as may be required in
order for such broker-dealer to comply with the requirements of the NASD Rules.
Section 4. Holder's Obligations. Each Holder agrees, by acquisition of
the Registrable Securities, that no Holder of Registrable Securities shall be
entitled to sell any of such Registrable Securities pursuant to a Shelf
Registration Statement, to receive a Prospectus relating thereto or to receive
any liquidated damages pursuant to Section 2(e), unless such Holder has
furnished the Company with a Notice and Questionnaire as required pursuant to
Section 2(d) hereof (including the information required to be included in such
Notice and Questionnaire) and the information set forth in the next sentence.
Each Notice Holder agrees promptly to furnish to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by such Notice Holder not misleading and any other information
regarding such Notice Holder and the distribution of such Registrable Securities
as the Company may from time to time reasonably request. Any sale of any
Registrable Securities by any Holder shall constitute a representation and
warranty by such Holder that the information relating to such Holder and its
plan of distribution is as set forth in the Prospectus delivered by such Holder
in connection with such disposition, that such Prospectus does not as of the
time of such sale contain any untrue statement of a material fact relating to or
provided by such Holder or its plan of distribution and that such Prospectus
does not as of the time of such sale omit to state any material fact relating to
or provided by such Holder or its plan of distribution necessary in order to
make the statements in such Prospectus, in the light of the circumstances under
which they were made, not misleading.
Section 5. Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with the performance by the Company of its
obligations under Section 2 and 3 of this Agreement whether or not any of the
Shelf Registration Statements are filed or declared effective under the
Securities Act. Such fees and expenses ("Registration Expenses") shall include,
without limitation, (i) all registration and filing fees and expenses
(including, without limitation, fees and expenses (x) with respect to filings
required to be made with the National Association of Securities Dealers, Inc.
and (y) of compliance with federal securities laws and state securities or Blue
Sky laws (including, without limitation, reasonable fees and disbursements of
counsel for the Holders in connection with Blue Sky qualifications of the
Registrable Securities under the laws of such jurisdictions as the Notice
Holders of a majority of the Registrable Securities being sold pursuant to a
Shelf Registration Statement may designate), (ii) all printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities in a form eligible for deposit with The Depository Trust
Company and printing Prospectuses), (iii) all duplication and mailing expenses
relating to copies of any Shelf Registration Statement or Prospectus delivered
to any Holders hereunder, (iv) all fees and disbursements of counsel for the
Company and the fees and disbursements of one counsel for the Holders in
connection with the Shelf Registration Statement, (v) all fees and disbursements
of
15
the Trustee and its counsel and of the registrar and transfer agent for the
Common Shares and (vi) Securities Act liability insurance obtained by the
Company in its sole discretion. In addition, the Company shall pay the internal
expenses of the Company (including, without limitation, all salaries and
expenses of officers and employees performing legal or accounting duties), the
expense of any annual audit, the fees and expenses incurred in connection with
the listing by the Company of the Registrable Securities on any securities
exchange on which similar securities of the Company are then listed and the fees
and expenses of any person, including special experts, retained by the Company.
Section 6. Indemnification; Contribution.
(a) The Company agrees to indemnify, defend and hold harmless each
Initial Purchaser, each Holder, each person, if any, who controls any Initial
Purchaser or Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (a "Controlling Person") and the respective
officers, directors, partners, employees, representatives and agents of any
Initial Purchaser, the Holders or any Controlling Person (each, an "Indemnified
Party"), from and against any loss, damage, expense, liability, claim or any
actions in respect thereof (including the reasonable cost of investigation)
which such Indemnified Party may incur or become subject to under the Securities
Act, the Exchange Act or otherwise, insofar as such loss, damage, expense,
liability, claim or action arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in any Shelf
Registration Statement or Prospectus, including any document incorporated by
reference therein, or in any amendment or supplement thereto or in any
preliminary prospectus, or arises out of or is based upon any omission or
alleged omission to state a material fact required to be stated in any Shelf
Registration Statement or in any amendment or supplement thereto or necessary to
make the statements therein not misleading, or arises out of or is based upon
any omission or alleged omission to state a material fact necessary in order to
make the statements made in any Prospectus or in any amendment or supplement
thereto or in any preliminary prospectus, in the light of the circumstances
under which they were made, not misleading, and the Company shall reimburse, as
incurred, the Indemnified Parties for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
damage, expense, liability, claim or action in respect thereof; provided,
however, that the Company shall not be required to provide any indemnify
pursuant to this Section 6(a) in any such case insofar as any such loss, damage,
expense, liability, claim or action arises out of or is based upon any untrue
statement or omission or alleged untrue statement or omission of a material fact
contained in, or omitted from, and in conformity with information furnished in
writing by or on behalf of an Initial Purchaser or a Holder to the Company
expressly for use therein; provided further that, with respect to any untrue
statement or omission or alleged untrue statement or omission made in any
preliminary prospectus relating to a Shelf Registration Statement, the indemnity
agreement contained in this subsection (a) shall not inure to the benefit of any
Holder from whom the person asserting any such losses, damages, expenses,
liabilities, claims or actions purchased the Registrable Securities concerned,
to the extent that a prospectus relating to such Registrable Securities was
required to be delivered by such Holder under the Securities Act in connection
with such purchase and any such loss, damage, expense, liability, claim or
action of such Holder results from the fact that there was not sent or given to
such person, at or prior to the written confirmation of the sale of such
Registrable Securities to such person, a copy of the final
16
prospectus if the Company had previously furnished copies thereof to such
Holder; provided further, however, that this indemnity agreement will be in
addition to any liability which the Company may otherwise have to such
Indemnified Party.
(b) Each Holder, severally and not jointly, agrees to indemnify, defend
and hold harmless the Company, its directors, officers, employees,
representatives, agents and any person who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
(each, a "Company Indemnified Party") from and against any loss, damage,
expense, liability, claim or any actions in respect thereof (including the
reasonable cost of investigation) which such Company Indemnified Party may incur
or become subject to under the Securities Act, the Exchange Act or otherwise,
insofar as such loss, damage, expense, liability, claim or action arises out of
or is based upon any untrue statement or alleged untrue statement of a material
fact contained in information furnished in writing by or on behalf of such
Holder to the Company expressly for use in any Shelf Registration Statement or
Prospectus, including any document incorporated by reference therein, or in any
amendment or supplement thereto or in any preliminary prospectus, or arises out
of or is based upon any omission or alleged omission to state a material fact
required to be stated in any Shelf Registration Statement or in any amendment or
supplement thereto or necessary to make the statements therein not misleading,
or arises out of or is based upon any omission or alleged omission to state a
material fact necessary in order to make the statements in any Prospectus or in
any amendment or supplement thereto or in any preliminary prospectus, in the
light of the circumstances under which they were made, not misleading, in
connection with such information; and, subject to the limitation set forth
immediately preceding this clause, each Holder shall reimburse, as incurred, the
Company for any legal or other expenses reasonably incurred by the Company or
any such controlling person in connection with investigating or defending any
loss, damage, expense, liability, claim or action in respect thereof. This
indemnity agreement will be in addition to any liability which such Holder may
otherwise have to the Company or any of its controlling persons. In no event
shall the liability of any selling Holder of Registrable Securities hereunder be
greater in amount than the dollar amount of the proceeds received by such Holder
upon the sale of the Registrable Securities pursuant to the Shelf Registration
Statement giving rise to such indemnification obligation.
(c) If any action, suit or proceeding (each, a "Proceeding") is brought
against any person in respect of which indemnity may be sought pursuant to
either subsection (a) or (b) of this Section 6, such person (the "Indemnified
Party") shall promptly notify the person against whom such indemnity may be
sought (the "Indemnifying Party") in writing of the institution of such
Proceeding and the Indemnifying Party shall assume the defense of such
Proceeding; provided, however, that the omission to notify such Indemnifying
Party shall not relieve such Indemnifying Party from any liability which it may
have to such Indemnified Party or otherwise. Such Indemnified Party shall have
the right to employ its own counsel in any such case, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party unless the
employment of such counsel shall have been authorized in writing by such
Indemnifying Party in connection with the defense of such Proceeding or such
Indemnifying Party shall not have employed counsel to have charge of the defense
of such Proceeding within thirty (30) days of the receipt of notice thereof or
such Indemnified Party shall have reasonably concluded upon the written advice
of counsel that there may be one or more defenses available to it that are
different
17
from, additional to or in conflict with those available to such Indemnifying
Party (in which case such Indemnifying Party shall not have the right to direct
that portion of the defense of such Proceeding on behalf of the Indemnified
Party, but such Indemnifying Party may employ counsel and participate in the
defense thereof but the fees and expenses of such counsel shall be at the
expense of such Indemnifying Party), in any of which events such reasonable fees
and expenses shall be borne by such Indemnifying Party and paid as incurred (it
being understood, however, that such Indemnifying Party shall not be liable for
the expenses of more than one separate counsel in any one Proceeding or series
of related Proceedings together with reasonably necessary local counsel
representing the Indemnified Parties who are parties to such action). An
Indemnifying Party shall not be liable for any settlement of such Proceeding
effected without the written consent of such Indemnifying Party, but if settled
with the written consent of such Indemnifying Party, such Indemnifying Party
agrees to indemnify and hold harmless an Indemnified Party from and against any
loss or liability by reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an Indemnified Party shall have requested an
Indemnifying Party to reimburse such Indemnified Party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, then such
Indemnifying Party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than sixty (60) Business Days after receipt by such
Indemnifying Party of the aforesaid request, (ii) such Indemnifying Party shall
not have reimbursed such Indemnified Party in accordance with such request prior
to the date of such settlement and (iii) such Indemnified Party shall have given
such Indemnifying Party at least thirty (30) days' prior notice of its intention
to settle. No Indemnifying Party shall, without the prior written consent of any
Indemnified Party, effect any settlement of any pending or threatened Proceeding
in respect of which such Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified 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 and does
not include an admission of fault, culpability or a failure to act, by or on
behalf of such Indemnified Party.
(d) If the indemnification provided for in this Section 6 is
unavailable to an Indemnified Party under subsections (a) and (b) of this
Section 6 in respect of any losses, damages, expenses, liabilities, claims or
actions referred to therein, then each applicable Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, damages, expenses,
liabilities, claims or actions (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Holders or the Initial Purchasers on the other hand from the offering of the
Registrable Securities or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Holders or the Initial
Purchasers on the other in connection with the statements or omissions which
resulted in such losses, damages, expenses, liabilities, claims or actions, as
well as any other relevant equitable considerations. The relative fault of the
Company on the one hand and of the Holders or the Initial Purchasers on the
other shall be determined by reference to, among other things, whether the
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission relates to information supplied by the Company or by the
Holders or the Initial Purchasers and the parties' relative intent, knowledge,
access to
18
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, damages,
expenses, liabilities, claims and actions referred to above shall be deemed to
include any reasonable legal or other fees or expenses reasonably incurred by
such party in connection with investigating or defending any Proceeding.
(e) The Company, the Holders and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 6 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in subsection
(d) above. Notwithstanding the provisions of this Section 6, no Holder shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by it were offered to the public
exceeds the amount of any damages which it has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. 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. The Holders'
respective obligations to contribute pursuant to this Section 6 are several in
proportion to the respective amount of Registrable Securities they have sold
pursuant to a Shelf Registration Statement, and not joint. The remedies provided
for in this Section 6 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity.
(f) The indemnity and contribution provisions contained in this Section
6 shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Holder or the Initial Purchasers or any person controlling any Holder or
Initial Purchaser, or the Company, or the Company's officers or directors or any
person controlling the Company and (iii) the sale of any Registrable Security by
any Holder.
Section 7. Information Requirements. (a) The Company covenants that, if
at any time before the end of the Effectiveness Period it is not subject to the
reporting requirements of the Exchange Act, it will cooperate with any Holder of
Registrable Securities and take such further action as any Holder of Registrable
Securities may reasonably request in writing (including, without limitation,
making such representations as any such 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 within the limitations
of the exemptions provided by Rule 144, Rule 144A, Regulation S and Regulation D
under the Securities Act and customarily taken in connection with sales pursuant
to such exemptions. Upon the written request of any Holder of Registrable
Securities, the Company shall deliver to such Holder a written statement as to
whether it has complied with the reporting requirements of the Exchange Act,
unless such a statement has been included in the Company's most recent report
filed with the SEC pursuant to Section 13 or Section 15(d) of Exchange Act.
Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to
require the Company to register any of its securities (other than the Common
Shares) under any section of the Exchange Act.
(a) The Company shall file the reports required to be filed by it under
the Exchange Act and shall comply with all other requirements set forth in the
instructions to Form X-0, Xxxx X-0, Form F-1 or Form F-3, as the case may be, in
order to allow the Company to be eligible to
19
file registration statements on Form S-1 or Form S-3 or, in accordance with the
SEC's Multi-Jurisdictional Disclosure System, Form F-1 or Form F-3.
Section 8. Underwritten Registrations.
(a) If any of the Registrable Securities covered by the Shelf
Registration Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering ("Managing Underwriters") will be selected by the
holders of a majority in aggregate principal amount of such Registrable
Securities to be included in such offering (provided that holders of Common
Shares issued upon conversion of the Notes shall not be deemed holders of Common
Shares, but shall be deemed to be holders of the aggregate principal amount of
Notes from which such Common Shares were converted).
(b) No person may participate in any underwritten registration
hereunder unless such person (i) agrees to sell such person's Registrable
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.
Section 9. Miscellaneous.
(a) Remedies. The Company acknowledges and agrees that any failure by
the Company to comply with its obligations under this Agreement may result in
material irreparable injury to the Initial Purchasers or the Holders for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
any Initial Purchaser or Holder may obtain such relief as may be required to
specifically enforce the Company's obligations under this Agreement. The Company
further agrees to waive the defense in any action for specific performance that
a remedy at law would be adequate. Notwithstanding the foregoing two sentences,
this Section 9(a) shall not apply to the subject matter referred to in and
contemplated by Section 2(e).
(b) No Conflicting Agreements. The Company is not, as of the date
hereof, a party to, nor shall it, on or after the date of this Agreement, enter
into, any agreement with respect to its securities that conflicts with the
rights granted to the Holders of Registrable Securities in this Agreement. The
Company represents and warrants that the rights granted to the Holders of
Registrable Securities hereunder do not in any way conflict with the rights
granted to the holders of the Company's securities under any other agreements.
The Company will not take any action with respect to the Registrable Securities
which would adversely affect the ability of any of the Holders to include such
Registrable Securities in a registration undertaken pursuant to this Agreement,
and after the date hereof, the Company shall not grant to any of its security
holders (other than the Holders in such capacity) the right to include any of
its securities in the Shelf Registration Statement filed pursuant to this
Agreement.
(c) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or
20
consents to departures from the provisions hereof may not be given, unless the
Company has obtained the written consent of Holders of a majority in aggregate
principal amount of such Registrable Securities (provided that holders of Common
Shares issued upon conversion of the Notes shall not be deemed holders of Common
Shares, but shall be deemed to be holders of the aggregate principal amount of
Notes from which such Common Shares were converted); provided that, no consent
is necessary from any of the Holders in the event that this Agreement is
amended, modified or supplemented for the purpose of curing any ambiguity,
defect or inconsistency that does not adversely affect the rights of any
Holders. Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a Shelf Registration Statement and that does not directly or
indirectly affect the rights of other Holders of Registrable Securities may be
given by Holders of at least a majority of the Registrable Securities being sold
by such Holders pursuant to such Shelf Registration Statement; provided that the
provisions of this sentence may not be amended, modified, or supplemented except
in accordance with the provisions of the immediately preceding sentence. Each
Holder of Registrable Securities outstanding at the time of any such amendment,
modification, supplement, waiver or consent or thereafter shall be bound by any
such amendment, modification, supplement, waiver or consent effected pursuant to
this Section 9(c), whether or not any notice, writing or marking indicating such
amendment, modification, supplement, waiver or consent appears on the
Registrable Securities or is delivered to such Holder.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, by telecopier, by
courier guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day after
being deposited with such courier, if made by overnight courier or (iv) on the
date indicated on the notice of receipt, if made by first-class mail, to the
parties as follows:
(x) if to a Holder of Registrable Securities, at the most current
address given by such Holder to the Company in a Notice and Questionnaire or any
amendment thereto;
(y) if to the Company, to:
QLT Inc.
000 Xxxxx Xxxxxxxx Xxx
Xxxxxxxxx, X.X. X0X 0X0
Xxxxxx
Attention: General Counsel
Telecopy No.: (000) 000-0000
(z) if to the Initial Purchasers, to:
c/o UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Syndicate Department
21
Telecopy No.: (000) 000-0000
with a copy to (for informational purposes only):
UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Legal Department
Telecopy No.: (000) 000-0000
and
UBS Securities LLC
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Syndicate Department
Telecopy No.: (000) 000-0000
or to such other address as such person may have furnished to the other persons
identified in this Section 9(d) in writing in accordance herewith.
(e) Approval of Holders. Whenever the consent or approval of Holders of
a specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its affiliates (as such term is
defined in Rule 405 under the Securities Act) (other than the Initial Purchasers
or subsequent Holders of Registrable Securities if such subsequent Holders are
deemed to be such affiliates solely by reason of their holdings of such
Registrable Securities) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.
(f) Third Party Beneficiaries. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on the one
hand, and the Initial Purchasers, on the other hand, and shall have the right to
enforce such agreements directly to the extent they may deem such enforcement
necessary or advisable to protect their rights or the rights of Holders
hereunder.
(g) Successors and Assigns. Any person who purchases any Registrable
Securities from any Initial Purchaser or from any Holder shall be deemed, for
purposes of this Agreement, to be an assignee of such Initial Purchaser or such
Holder, as the case may be. This Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of each of the parties hereto
and shall inure to the benefit of and be binding upon each Holder of any
Registrable Securities.
(h) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.
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(i) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES THEREOF.
(k) Severability. If any term, provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated thereby, and the parties hereto shall use their reasonable best
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction, it being intended that all of the rights and privileges
of the parties shall be enforceable to the fullest extent permitted by law.
(l) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and the registration rights
granted by the Company with respect to the Registrable Securities. Except as
provided in the Purchase Agreement, there are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
with respect to the registration rights granted by the Company with respect to
the Registrable Securities. This Agreement supersedes all prior agreements and
undertakings among the parties with respect to such registration rights. No
party hereto shall have any rights, duties or obligations other than those
specifically set forth in this Agreement.
(m) Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Section 4, 5 or 6 hereof and the
obligations to make payments of and provide for liquidated damages under Section
2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
its terms.
(n) Judgment Currency. The Company hereby covenants and agrees that the
following provisions shall apply to conversion of currency in the case of this
Agreement:
(i) If for the purpose of obtaining judgment in, or enforcing
the judgment of, any court in any country other than the United States,
it becomes necessary to convert into any other currency (the "judgment
currency") an amount due in United States Dollars, then the conversion
shall be made at the rate of exchange prevailing on the Business Day
before the day which judgment is given or the order of enforcement is
made, as the case may be. The term "rate(s) of exchange" shall mean the
rate at which the Trustee is able or would have been able on the
relevant date to purchase, at such money center bank in the City of New
York as the Trustee designates at such time, United States Dollars with
judgment currency above and includes any premiums and costs of exchange
payable.
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(ii) The Company hereby agrees to indemnify the Initial
Purchasers and each other indemnified party related to the Initial
Purchasers against any loss incurred by any of them as a result of any
judgment or order being given or made for any amount due under this
Agreement and such judgment or order being expressed and paid in the
judgment currency and as a result of any variation as between (i) the
rate of exchange at which the United States Dollar amount is converted
into the judgment currency for the purpose of such judgment or order
and (ii) the spot rate of exchange in the City of New York at which the
Company on the date of payment of judgment or order is able to purchase
United States Dollars with the amount of the judgment currency actually
paid by the Company. The foregoing indemnity shall continue in full
force and effect notwithstanding any such judgment or order as
aforesaid. The term "spot rate of exchange" shall include any premiums
and costs of exchange payable in connection with the purchase of, or
conversion into, United States Dollars.
(iii) All calculations under this Agreement based on amounts
which are initially in Canadian Dollars will be converted into United
States Dollars based on the rate of exchange in effect on the date of
calculation, and vice versa.
(o) Submission to Jurisdiction. Except as set forth below, no
Proceeding may be commenced, prosecuted or continued in any court other than the
courts of the State of New York located in the City and County of New York or in
the United States District Court for the Southern District of New York, which
courts shall have non-exclusive jurisdiction over the adjudication of such
matters, and the Company hereby consents to the non-exclusive jurisdiction of
such courts and personal service with respect thereto. The Company hereby
consents to non-exclusive personal jurisdiction, service and venue in any court
in which any Proceeding arising out of or in any way relating to this Agreement
is brought by any third party against any Initial Purchaser. THE COMPANY HEREBY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) IN ANY WAY ARISING OUT OF OR RELATING TO THIS
AGREEMENT. The Company agrees that a final judgment in any such Proceeding
brought in any such court shall be conclusive and binding upon the Company and
may be enforced in any other courts in the jurisdiction of which the Company is
or may be subject, by suit upon such judgment. The Company hereby appoints,
without power of revocation, CT Corporations System as its agent to accept and
acknowledge on its behalf service of any and all process which may be served in
any action, proceeding or counterclaim in any way relating to or arising out of
this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
QLT INC.
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President and Chief
Executive Officer
Confirmed and accepted as of the date
first above written on behalf of itself
and the other several Initial Purchaser:
UBS SECURITIES LLC
By: /s/ Xxxxxxxx Xxxxxxx
------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Managing Director
By: /s/ Xxxxxxxx Xxxxx
------------------------------
Name: Xxxxxxxx Xxxxx
Title: Associate Director
