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EXHIBIT 10.7
REGISTRATION RIGHTS AGREEMENT
among
NITINOL MEDICAL TECHNOLOGIES, INC.,
WHITNEY SUBORDINATED DEBT FUND, L.P.
and
X.X. XXXXXXX & CO.
___________________________________
Dated as of July 8, 1998
__________________________________
TABLE OF CONTENTS
Page
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1. Definitions............................................................ 1
2. Securities Subject to this Agreement................................... 3
(a) Registrable Securities.......................................... 3
(b) Holders of Registrable Securities............................... 3
3. Demand Registration.................................................... 3
(a) Request for Demand Registration................................. 3
(b) Effective Demand Registration................................... 4
(c) Expenses........................................................ 4
(d) Underwriting Procedures......................................... 4
(e) Selection of Underwriters....................................... 5
(f) Limitations on Demand Registrations............................. 5
4. Piggy-Back Registration................................................ 6
(a) Piggy-Back Rights............................................... 6
(b) Priority of Registrations....................................... 7
(c) Expenses........................................................ 7
(d) Conditions and Limitations on Piggyback Registrations........... 7
5. Holdback Agreements.................................................... 8
(a) Restrictions on Public Sale by Holders.......................... 8
(b) Restrictions on Public Sale by the Company...................... 8
6. Registration Procedures................................................ 8
(a) Obligations of the Company...................................... 8
(b) Seller Information.............................................. 11
(c) Notice to Discontinue........................................... 11
7. Registration Expenses.................................................. 11
8. Indemnification; Contribution.......................................... 12
(a) Indemnification by the Company.................................. 12
(b) Indemnification by Holders...................................... 12
(c) Conduct of Indemnification Proceedings.......................... 13
(d) Contribution.................................................... 14
9. Rule 144; Other Exemptions............................................. 14
10. Certain Limitations on Registration Rights............................. 15
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Page
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11. Miscellaneous.......................................................... 15
(a) Recapitalizations, Exchanges, etc............................... 15
(b) No Inconsistent Agreements; Other Registration Rights........... 15
(c) Remedies........................................................ 15
(d) Amendments and Waivers.......................................... 15
(e) Notices......................................................... 16
(f) Successors and Assigns.......................................... 17
(g) Counterparts.................................................... 17
(h) Headings........................................................ 17
(i) Governing Law................................................... 17
(j) Jurisdiction.................................................... 17
(k) Severability.................................................... 18
(l) Rules of Construction........................................... 18
(m) Entire Agreement................................................ 18
(n) Further Assurances.............................................. 18
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REGISTRATION RIGHTS AGREEMENT
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REGISTRATION RIGHTS AGREEMENT, dated as of July 8, 1998, among NITINOL
MEDICAL TECHNOLOGIES, INC., a Delaware corporation (the Company"), WHITNEY
SUBORDINATED DEBT FUND, L.P., a Delaware limited partnership ("WSDF") and X.X.
XXXXXXX & CO. ("Whitney").
WHEREAS, the Company, WSDF and Whitney have entered into that certain
Subordinated Note and Common Stock Purchase Agreement of even date herewith (the
"Purchase Agreement"), pursuant to which the Company has (i) sold to WSDF a
subordinated promissory note, due September 30, 2003, in the principal amount of
$20,000,000 (the "Note") and 113,793 shares of Common Stock and (ii) paid to
Whitney a transaction fee of 561,207 shares of Common Stock. In order to induce
WSDF to purchase the Note, the Company has agreed to provide registration rights
with respect to the Registrable Securities (as hereinafter defined) as set forth
in this Agreement.
The parties hereby agree as follows:
1. Definitions. As used in this Agreement, and unless the context
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requires a different meaning, the following terms have the meanings indicated:
"Act" means the Securities Act of 1933, as amended, and the rules
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and regulations of the SEC promulgated hereunder.
"Approved Underwriter" has the meaning assigned such term in
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Section 3(e).
"Approved Underwriter Amount" has the meaning assigned such term
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in Section 3(d).
"Business Day" means any day other than a Saturday, Sunday or
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other day on which commercial banks in the City of New York are authorized or
required by law or executive order to close.
"Common Stock" means the Common Stock, $0.001 par value, of the
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Company, or any other capital stock of the Company into which such stock is
reclassified or reconstituted.
"Company Underwriter" has the meaning assigned such term in
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Section 4(a).
"Demand Registration" has the meaning assigned such term in
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Section 3(a).
"Designated Holder" means WSDF and Whitney and any of their
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respective transferees to whom Registrable Securities have been transferred
other than the transferee to whom such securities have been transferred pursuant
to a registration statement under the Act or Rule 144 under the Act.
"Exchange Act" means the Securities and Exchange Act of 1934, as
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amended, and the rules and regulations of the SEC thereunder.
"Holder" has the meaning assigned such term in Section 2(b).
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"Holders' Counsel" means (a) with respect to any Demand
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Registration that has been requested pursuant to Section 3, the one counsel
selected by the Initiating Holders holding a majority of the Registrable
Securities held by all Initiating Holders being registered in such registration,
and (b) with respect to a request for registration of Registrable Securities
pursuant to Section 4, the one counsel selected by the Holders holding a
majority of the Registrable Securities being registered in such registration.
"Indemnified Party" has the meaning assigned such term in Section
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8(c).
"Indemnifying Party" has the meaning assigned such term in
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Section 8(c).
"Initiating Holders" has the meaning assigned to such term in
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Section 3(a).
"Inspector" has the meaning assigned such term in Section
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6(a)(viii).
"NASD" has the meaning assigned such term in Section 6(a)(xv).
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"Other Investors" means holders of the Common Stock of the
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Company not entitled to distribute such shares of Common Stock to the public
pursuant to Rule 144(k) (or any successor provision then in effect) under the
Act.
"Person" means any individual, firm, corporation, partnership,
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trust, incorporated or unincorporated association, joint venture, joint stock
company, government (or an agency or political subdivision thereof) or other
entity of any kind, and shall include any successor (by merger or otherwise) of
any such entity.
"Registrable Securities" means, subject to Section 2(a), each of
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the following: (a) the 561,207 shares of Common Stock issued to WSDF pursuant to
the Purchase Agreement, (b) the 113,793 shares of Common Stock issued to Whitney
pursuant to the Purchase Agreement and (c) any shares of Common Stock issued or
issuable in respect of shares of Common Stock issued pursuant to clauses (a) and
(b)
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above by way of a stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise.
"Registration Expenses" has the meaning assigned such term in
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Section 7.
"SEC" means the Securities and Exchange Commission.
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"Shares" means the Common Stock, any class of common stock of the
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Company authorized after the date of this Agreement, or any other class of stock
resulting from successive changes or reclassifications of the Shares.
"Total Securities" has the meaning assigned such term in Section
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4(a).
"Underwriters" has the meaning assigned such term in Section
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6(d).
"Valid Business Reason" has the meaning assigned such term in
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Section 3(f).
2. Securities Subject to this Agreement.
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(a) Registrable Securities. For the purposes of this Agreement,
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Registrable Securities will cease to be Registrable Securities when (i) a
registration statement covering such Registrable Securities has been declared
effective under the Act by the SEC and such Registrable Securities have been
disposed of pursuant to such effective registration statement or (ii) the entire
amount of Registrable Securities proposed to be sold in a single sale are or, in
the opinion of counsel satisfactory to the Company and the Holder, each in their
reasonable judgment, may, be distributed to the public pursuant to Rule 144 in
compliance with the requirements of paragraphs (c), (e), (f) and (g) of Rule 144
(notwithstanding the provisions of paragraph (k) of such Rule) (or any successor
provision then in effect) under the Act.
(b) Holders of Registrable Securities. A Person is deemed to be
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a holder of Registrable Securities (a "HOLDER") whenever such Person (i) is a
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party to this Agreement (or a permitted transferee thereof) and (ii) owns of
record Registrable Securities. If the Company receives conflicting
instructions, notices or elections from two or more persons with respect to the
same Registrable Securities, the Company may act upon the basis of the
instructions, notice or election received from the registered owner of such
Registrable Securities.
3. Demand Registration.
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(a) Request for Demand Registration. Subject to Section 3(f)
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below, at any time the Designated Holders holding at least 25% of the
Registrable Securities held by all of the Designated Holders (the "INITIATING
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HOLDERS") may request in writing the registration of Registrable Securities
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under the Act, and under
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the securities or blue sky laws of any jurisdiction designated by such holder or
holders (each such registration under this Section 3(a) that satisfies the
requirements set forth in Section 3(b) is referred to herein as a "DEMAND
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REGISTRATION"). Notwithstanding the foregoing, in no event shall the Company be
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required to effect more than three Demand Registrations. Two or more
registrations filed in response to one demand shall be counted as one
registration statement. Each request for a Demand Registration by the
Initiating Holders in respect thereof shall specify the amount of the
Registrable Securities proposed to be sold, the intended method of disposition
thereof and the jurisdictions in which registration is desired. Upon a request
for a Demand Registration, the Company shall promptly take such steps as are
necessary or appropriate to prepare for the registration of the Registrable
Securities to be registered. Within fifteen (15) days after the receipt of such
request, the Company shall give written notice thereof to all other Designated
Holders and include in such registration all Registrable Securities held by a
Designated Holder from whom the Company has received a written request for
inclusion therein at least ten (10) days prior to the filing of the registration
statement. Each such request will also specify the number of Registrable
Securities to be registered, the intended method of disposition thereof and the
jurisdictions in which registration is desired. Subject to Section 3(d), the
Company shall be entitled to include in any registration statement and offering
made pursuant to a Demand Registration, authorized but unissued shares of Common
Stock, shares of Common Stock held by the Company as treasury shares or shares
of Common Stock held by Stockholders other than the Holders; provided, that such
inclusion shall be permitted only to the extent that it is pursuant to and
subject to the terms of the underwriting agreement or arrangements, if any,
entered into by the Initiating Holders exercising the Demand Registration
rights.
(b) Effective Demand Registration. The Company shall use its best
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efforts to cause any such Demand Registration to become effective not later than
ninety (90) days after it receives a request under Section 3(a). A registration
requested pursuant to Section 3(a) hereof shall not count as one of the three
demands to which the Designated Holders are entitled thereunder unless such
registration statement is declared effective and remains effective for at least
ninety (90) days.
(c) Expenses. In any registration initiated as a Demand Registration,
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the Company shall pay all Registration Expenses in connection therewith, whether
or not such requested Demand Registration becomes effective.
(d) Underwriting Procedures. If the Initiating Holders holding a
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majority of the Registrable Securities held by all Initiating Holders to which
the requested Demand Registration relates so elect, the offering of such
Registrable Securities pursuant to such requested Demand Registration shall be
in the form of a firm commitment underwritten offering and the managing
underwriter or underwriters selected for such offering shall be the Approved
Underwriter selected in accordance with Section 3(e). In such event, if the
Approved Underwriter advises the Company in writing that, in its opinion, the
aggregate amount of such Registrable Securities requested to be included in such
offering (including those securities requested by the Company to be included in
such registration) is sufficiently large to have an adverse effect on the
success of such offering, then the Company shall include in such registration
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only the aggregate amount of Registrable Securities that in the opinion of the
Approved Underwriter may be sold without any such effect on the success of such
offering (the "APPROVED UNDERWRITER AMOUNT"), and (i) each Designated Holder
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shall be entitled to have included in such registration Registrable Securities
equal to its pro rata portion of the Approved Underwriter Amount, as based on
the amounts of Registrable Securities sought to be registered by the Designated
Holders in their requests for participation in the requested Demand Registration
and (ii) to the extent that the number of Registrable Securities to be included
by the Designated Holders is less than the Approved Underwriter Amount,
securities that the Company proposes to register shall also be included.
If, as a result of the proration provision of this Section 3(d), any
Designated Holder shall not be entitled to include all Registrable Securities in
a registration that such Designated Holder has requested to be included, such
Designated Holder may elect to withdraw his request to include Registrable
Securities in such registration or may reduce the number requested to be
included; provided, however, that (x) 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 and (y) such
withdrawal or reduction shall be irrevocable.
(e) Selection of Underwriters. If any requested Demand Registration
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is in the form of an underwritten offering, the Initiating Holders holding a
majority of the Registrable Securities held by all Initiating Holders to be
included in the requested Demand Registration shall select and obtain an
investment banking firm of national reputation to act as the managing
underwriter of the offering (the "APPROVED UNDERWRITER"); provided, that such
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underwriter shall be reasonably satisfactory to the Company.
(f) Limitations on Demand Registrations. The Demand Registration
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rights granted to the Holders in Section 3(a) are subject to the following
limitations: (i) each registration in respect of a Demand Registration must
include Registrable Securities having an aggregate market value of at least
$5,000,000.00, which market value shall be determined by multiplying the number
of Registrable Securities to be included in the Demand Registration by the
proposed per share offering price (provided that the limitation set forth in
this clause (i) shall not be in effect at any time the Holders' Registrable
Securities are not able to be sold under Rule 144 under the Act because of the
Company's failure to comply with the information requirements thereunder, unless
at such time, the Company's outside counsel (which shall be reasonably
acceptable to the Holders requesting such registration) delivers a written
opinion of counsel to such Holders to the effect that such Holders' Registrable
Securities may be publicly offered and sold without registration under the Act);
(ii) the Company shall not be required to cause a registration pursuant to
Section 3(a) to be declared effective within a period of 150 days after the
effective date of any registration statement of the Company effected in
connection with a Demand Registration; and (iii) if the Board of Directors of
the Company, in its good faith judgment, determines that any registration of
Registrable Securities should not be made or continued because it would
materially interfere with any material financing, acquisition, corporate
reorganization or merger or other
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transaction involving the Company or any of its subsidiaries (a "VALID BUSINESS
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REASON"), the Company may (x) postpone filing a registration statement relating
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to a Demand Registration until such Valid Business Reason no longer exists, but
in no event for more than ninety (90) days, and,(y) in case a registration
statement has been filed relating to a Demand Registration, if the Valid
Business Reason has not resulted from actions taken by the Company, the Company,
upon the approval of a majority of the Company's Board of Directors, such
majority to include at least one director affiliated with WSDF, may cause such
registration statement to be withdrawn and its effectiveness terminated or may
postpone amending or supplementing such registration statement; the Company
shall give written notice of its determination to postpone or withdraw a
registration statement and of the fact that the Valid Business Reason for such
postponement or withdrawal no longer exists, in each case, promptly after the
occurrence thereof. Notwithstanding anything to the contrary contained herein,
the Company may not postpone or withdraw a filing under Section 3(f)(iii) hereof
more than once in any twelve-month period.
Each Holder of Registrable Securities agrees that, upon receipt of any
notice from the Company that the Company has determined to withdraw any
registration statement pursuant to clause (iii) above, such Holder will
discontinue its disposition of Registrable Securities pursuant to such
registration statement and, if so directed by the Company, will deliver to the
Company (at the Company's expenses) all copies, other than permanent file
copies, then in such Holder's possession, of the prospectus covering such
Registrable Securities that was in effect at the time of receipt of such notice.
If the Company shall give any notice of postponement or withdrawal of a
registration statement, the Company shall, at such time as the Valid Business
Reason that caused such postponement or withdrawal no longer exists (but in no
event no later than ninety (90) days after the date of the postponement), use
its best efforts to promptly effect the registration under the Act of the
Registrable Securities covered by the postponed or withdrawn registration
statement in accordance with this Section 3 (unless the Holder(s) delivering the
Demand Registration request shall have withdrawn such request, in which case the
Company shall not be considered to have effected an effective registration for
the purposes of this Agreement), and such registration shall not be postponed or
withdrawn pursuant to clause (iii) above.
4. Piggy-Back Registration.
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(a) Piggy-Back Rights. If the Company proposes to file a
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registration statement under the Act with respect to an offering by the Company
for its own account of any class of security (other than a registration
statement on Form S-4 or S-8 (or any successor form thereto)) under the Act,
then the Company shall give written notice of such proposed filing to each of
the Holders at least twenty (20) days before the anticipated filing date, and
such notice shall describe in detail the proposed registration and distribution
(including those jurisdictions where registration under the securities or blue
sky laws is intended) and offer such Holders the opportunity to register the
number of Registrable Securities as each such Holder may request. The Company
shall use its best efforts (within ten (10) days of the notice provided for in
the preceding sentence) to permit the Holders who have requested to participate
in the registration for such offering to include such Registrable Securities in
such offering on
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the same terms and conditions as the securities of the Company included therein.
Notwithstanding the foregoing, if such registration involves an underwritten
offering and the managing underwriters or underwriters (the "COMPANY
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UNDERWRITER") shall advise the Holders of Registrable Securities in writing
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that, in its opinion, the total amount of securities requested to be included in
such offering (the "TOTAL SECURITIES") is sufficiently large so as to have an
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adverse effect on the success of the distribution of the Total Securities, then
the Company shall include in such registration, to the extent of the number of
Registrable Securities which the Company is so advised can be sold in (or during
the time of) such offering, first, all Common Stock or securities convertible
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into, or exchangeable or exercisable for, Common Stock that the Company proposed
to register for its own account, second, all securities proposed to be
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registered by all Designated Holders and Other Investors, pro rata among such
Designated Holders and Other Investors, and third, all other securities proposed
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to be registered.
(b) Priority of Registrations. Subject to the provisions of Section
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3(f)(iii), if the Company proposes to register securities pursuant to Section
4(a) hereof on the same day that the Designated Holders request a registration
pursuant to Section 3(a) hereof, then the Demand Registration requested pursuant
to Section 3(a) hereof shall be given priority.
(c) Expenses. The Company shall bear all Registration Expenses in
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connection with any registration pursuant to this Section 4.
(d) Conditions and Limitations on Piggyback Registrations. If, at any
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time after giving written notice of its intention to register any 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 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 the Registrable Securities in
connection with such abandoned registration, without prejudice, however, to the
rights of Holders under Section 3, and (ii) in the case of a determination to
delay the registration of its 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.
Any Holder shall have the right to withdraw its request for inclusion
of its Registrable Securities in any registration statement pursuant to this
Section 4 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 and (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.
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5. Holdback Agreements.
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(a) Restrictions on Public Sale by Holders. To the extent not
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inconsistent with applicable law, each Holder agrees not to effect any public
sale or distribution of any Registrable Securities being registered or of any
securities convertible into or exchangeable or exercisable for such Registrable
Securities, including a sale pursuant to Rule 144 under the Act, during the
ninety (90) day period beginning on the effective date of such Demand
Registration or Piggy-Back Registration or other underwritten offering (except
as part of such registration), if and to the extent requested by any other
Holder, in the case of a non-underwritten public offering, or if and to the
extent requested by the Company Underwriter, in the case of an underwritten
public offering.
(b) Restrictions on Public Sale by the Company. The Company
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agrees not to effect any public sale or distribution of any of its securities
for its own account (except pursuant to registrations on Form S-4 or S-8 (or any
successor form thereto) under the Act) during the ninety (90) day period
beginning on the effective date of any registration statement in which the
Holders are participating.
6. Registration Procedures.
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(a) Obligations of the Company. Whenever registration of
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Registrable Securities has been requested pursuant to Section 3 or 4 of this
Agreement, the Company shall use its best efforts to effect the registration and
sale of such Registrable Securities in accordance with the intended method of
distribution thereof as quickly as practicable, and in connection with any such
request, the Company shall, as expeditiously as possible:
(i) prepare and file with the SEC (in any event not later
than sixty (60) Business Days after receipt of a request to file a registration
statement with respect to Registrable Securities) a registration statement on
any form on which registration is requested for which the Company then
qualifies, which counsel for the Company and Holders' Counsel shall deem
appropriate and which shall be available for the sale of such Registrable
Securities in accordance with the intended method of distribution thereof, and
use its best efforts to cause such registration statement to become effective;
provided, however, that before filing a registration statement or prospectus or
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any amendments or supplements thereto, the Company shall (A) provide Holders'
Counsel with an adequate and appropriate opportunity to participate in the
preparation of such registration statement and each prospectus included therein
(and each amendment or supplement thereto) to be filed with the SEC, which
documents shall be subject to the review of Holders' Counsel, and (B) notify
Holders' Counsel and each seller of Registrable Securities pursuant to such
registration statement of any stop order issued or threatened by the SEC and
take all reasonable action required to prevent the entry of such stop order or
to remove it if entered;
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection
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therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Act with respect to the disposition of all
Registrable Securities covered by such registration statement until the earlier
of (a) such time as all of such Registrable Securities and other securities have
been disposed of in accordance with the intended methods of disposition by the
sellers thereof set forth in such registration statement and (b) 180 days after
the effective date of such registration statement, except with respect to any
such registration statement filed pursuant to Rule 415 (or any successor Rule)
under the Act if the Company is eligible to file a registration statement on
Form S-3, in which case such period shall be two (2) years;
(iii) as soon as reasonably possible, furnish to each
seller of Registrable Securities, prior to filing a registration statement,
copies of such registration statement as it is proposed to be filed, and
thereafter such number of copies of such registration statement, each amendment
and supplement thereto (in each case including all exhibits thereto), the
prospectus included in such registration statement (including each preliminary
prospectus) and such other documents as each such seller may reasonably request
in order to facilitate the disposition of the Registrable Securities owned by
such seller;
(iv) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions as any seller of Registrable Securities may request, and to
continue such qualification in effect in each such jurisdiction for as long as
is permissible pursuant to the laws of such jurisdiction, or for as long as any
such seller requests or until all of such Registrable Securities are sold,
whichever is shortest, and do any and all other acts and things which may be
reasonably necessary or advisable to enable any such seller to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
seller; provided, however, that the Company shall not be required to (A) qualify
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generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 6(a)(iv), (B) subject itself to
taxation in any such jurisdiction or (C) consent to general service of process
in any such jurisdiction;
(v) use its best efforts to obtain all other approvals,
covenants, exemptions or authorizations from such governmental agencies or
authorities as may be necessary to enable the sellers of such Registrable
Securities to consummate the disposition of such Registrable Securities;
(vi) notify each seller of Registrable Securities at
any time when a prospectus relating thereto is required to be delivered under
the Act, upon discovery that, or upon the happening of any event as a result of
which, the prospectus included in such registration statement contains an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made, and the Company shall
promptly prepare a supplement or amendment to such prospectus and furnish to
each such seller a reasonable number of copies of a supplement to or amendment
of such prospectus as may be necessary so that, after delivery to the purchasers
of such Registrable Securities, such prospectus
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shall not contain an 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 in light of the circumstances under which they were made;
(vii) enter into and perform customary agreements
(including an underwriting agreement in customary form with the Approved
Underwriter or Company Underwriter, if any, selected as provided in Section 3 or
4; provided, that the underwriting agreement, if any, shall be reasonably
satisfactory in form and substance to the Company) and take such other actions
as are reasonably required in order to expedite or facilitate the disposition of
such Registrable Securities;
(viii) make available for inspection by any seller of
Registrable Securities, any managing underwriter participating in any
disposition pursuant to such registration statement, Holders' Counsel and any
attorney, accountant or other agent retained by any such seller or any managing
underwriter (each, an "INSPECTOR" and, collectively, the "INSPECTORS"), all
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financial and other records, per tinent corporate documents and properties of
the Company and any subsidiaries thereof as may be in existence at such time
(collectively, the "RECORDS") as shall be reasonably necessary to enable them to
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exercise their due diligence responsibility, and cause the Company's and any
subsidiaries' officers, directors and employees, and the independent public
accountants of the Company, to supply all information reasonably requested by
any such Inspector in connection with such registration statement; provided,
that such Inspector agrees to keep all such information confidential.
(ix) obtain a "cold comfort" letter from the Company's
independent public accountants in customary form and covering such matters of
the type customarily covered by "cold comfort" letters, as Holders' Counsel or
the managing underwriter reasonably request;
(x) furnish, at the request of any seller of Registrable
Securities on the date such securities are delivered to the underwriters for
sale pursuant to such registration or, if such securities are not being sold
through underwriters, on the date the registration statement with respect to
such securities becomes effective, an opinion, dated such date, of counsel
representing the Company for the purposes of such registration, addressed to the
underwriters, if any, and to the seller making such request, covering such legal
matters with respect to the registration in respect of which such opinion is
being given as such seller may reasonably request and as are customarily
included in such opinions;
(xi) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable but no later than fifteen (15) months
after the effective date of the registration statement, an earnings statement
covering a period of twelve (12) months beginning after the effective date of
the registration statement, in a manner which satisfies the provisions of
Section 11(a) of the Act;
(xii) cause all such Registrable Securities to be listed on
each securities exchange on which similar securities issued by the Company are
then
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listed (if any) if the listing of such Registrable Securities is then permitted
under the rules of such exchange or, if no similar securities are then so
listed, cause all such Registrable Securities to be listed on an exchange on
which the Initiating Holders request that such Registrable Securities be listed,
subject to the satisfaction of the applicable listing requirements of each such
exchange;
(xiii) keep each seller of Registrable Securities advised in
writing as to the initiation and progress of any registration under Section 3 or
4 hereunder;
(xiv) provide officers' certificates and other customary
closing documents;
(xv) cooperate with each seller of Registrable
Securities and each underwriter participating in the disposition of such
Registrable Securities and their respective counsel in connection with any
filings required to be made with the National Association of Securities Dealers,
Inc. (the "NASD"); and
----
(xvi) use its best efforts to take all other steps
necessary to effect the registration of the Registrable Securities contemplated
hereby.
(b) Seller Information. The Company may require as a condition
------------------
precedent of the Company's obligations under this Section 6 that each seller of
Registrable Securities as to which any registration is being effected furnish to
the Company such information regarding such seller and the distribution of such
securities as the Company may from time to time reasonably request in writing.
(c) Notice to Discontinue. Each Holder agrees that, upon receipt of
---------------------
any notice from the Company of the happening of any event of the kind described
in Section 6(a)(vi), such Holder shall forthwith discontinue 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 Section 6(a)(vi) and, if so
directed by the Company, such Holder shall 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 Registrable Securities
which is current at the time of receipt of such notice. If the Company shall
give any such notice, the Company shall extend the period during which such
registration statement shall be maintained effective pursuant to this Agreement
(including, without limitation, the period referred to in Section 6(a)(ii)) by
the number of days during the period from and including the date of the giving
of such notice pursuant to Section 6(a)(vi) to and including the date when the
Holder shall have received the copies of the supplemented or amended prospectus
contem plated by and meeting the requirements of Section 6(a)(vi).
7. Registration Expenses. The Company shall pay all expenses (other
---------------------
than underwriting discounts and commissions) arising from or incident to the
performance of, or compliance with, this Agreement, including, without
limitation, (a) SEC, stock exchange and NASD registration and filing fees, (b)
all fees and
-11-
expenses incurred in complying with securities or blue sky laws (including,
without limitation, reasonable fees, charges and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities), (c) all
printing, messenger and delivery expenses, (d) the fees, charges and
disbursements of counsel to the Company and of its independent public
accountants and any other accounting and legal fees, charges and expenses
incurred by the Company (including, without limitation, any expenses arising
from any special audits incident to or required by any registration or
qualification) and (e) the reasonable fees, charges and expenses of any special
experts retained by the Company in connection with any requested Demand
Registration or piggy-back registration pursuant to the terms of this Agreement,
regardless of whether the registration statement filed in connection with such
registration is declared effective. In connection with each registration
hereunder, the Company shall reimburse the Holders of Registrable Securities
being registered in such registration for the reasonable fees, charges and
disbursements of not more than one Holders' Counsel. All of the expenses
described in this Section 7 are referred to in this Agreement as "REGISTRATION
------------
EXPENSES." Notwithstanding the foregoing provisions of this Section 7, in
--------
connection with any registration hereunder, each Holder of Registrable
Securities being registered shall pay all underwriting discounts and commissions
and any capital gains, income or transfer taxes, if any, attributable to the
sale of such Registrable Securities, pro rata with respect to payments of
--- ----
discounts and commissions in accordance with the number of shares sold in the
offering.
8. Indemnification; Contribution.
-----------------------------
(a) Indemnification by the Company. In the event of any proposed
------------------------------
registration of securities of the Company pursuant to Section 3 or Section 4,
the Company agrees to indemnify and hold harmless each Holder, its directors,
officers, partners, employees, advisors and agents, and each Person who controls
(within the meaning of the Act or the Exchange Act) such Holder, to the extent
permitted by law, from and against any and all losses, claims, damages, expenses
(including, without limitation, reasonable costs of investigation and fees,
disbursements and other charges of counsel) or other liabilities resulting from
or arising out of or based upon any untrue, or alleged untrue, statement of a
material fact contained in any registration statement, prospectus or preliminary
prospectus or notification or offering circular (as amended or supplemented if
the Company shall have furnished any amendments or supplements thereto) or
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by or on behalf of such Holder
expressly for use therein. The Company shall also indemnify any underwriters of
the Registrable Securities, their officers, directors and employees, and each
Person who controls any such underwriter (within the meaning of the Act and the
Exchange Act) to the same extent as provided above with respect to the
indemnification of the Holders of Registrable Securities.
(b) Indemnification by Holders. In connection with any proposed
--------------------------
registration in which a Holder is participating pursuant to Section 3 or 4
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hereof, each such Holder shall furnish to the Company in writing such
information with respect to such Holder as the Company may reasonably request or
as may be required by law for use in connection with any registration statement
or prospectus to be used in connection with such registration and each Holder
agrees to indemnify and hold harmless the Company, any underwriter retained by
the Company and their respective directors, officers, employees and each Person
who controls (within the meaning of the Act and the Exchange Act) the Company or
such underwriter to the same extent as the foregoing indemnity from the Company
to the Holders (subject to the proviso to this sentence and applicable law), but
only with respect to any such information furnished in writing by or on behalf
of such Holder expressly for use therein; provided, however, that the liability
-------- -------
of any Holder under this Section 8(b) shall be limited to the amount of the net
proceeds received by such Holder in the offering giving rise to such liability.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
--------------------------------------
indemnification hereunder (the "INDEMNIFIED PARTY") agrees to give prompt
-----------------
written notice to the indemnifying party (the "INDEMNIFYING PARTY") after the
------------------
receipt by the Indemnified Party of any written notice of the commencement of
any action, suit, proceeding or investigation or threat thereof made in writing
for which the Indemnified Party intends to claim indemnification or contribution
pursuant to this Agreement; provided, that, the failure so to notify the
-------- ----
Indemnifying Party shall not relieve the Indemnifying Party of any liability
that it may have to the Indemnified Party hereunder. If notice of commencement
of any such action is given to the Indemnifying Party as above provided, the
Indemnifying Party shall be entitled to participate in and, to the extent it may
wish, jointly with any other Indemnifying Party similarly notified, to assume
the defense of such action at its own expense, with counsel chosen by it and
satisfactory to such Indemnified Party. The Indemnified Party shall have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel (other than
reasonable costs of investigation) shall be paid by the Indemnified Party unless
(i) the Indemnifying Party agrees to pay the same, (ii) the Indemnifying Party
fails to assume the defense of such action with counsel satisfactory to the
Indemnified Party in its reasonable judgment, (iii) the named parties to any
such action (including any impleaded parties) have been advised by such counsel
that either (A) representation of such Indemnified Party and the Indemnifying
Party by the same counsel would be inappropriate under applicable standards of
professional conduct or (B) there may be one or more legal defenses available to
it which are different from or additional to those available to the Indemnifying
Party; provided, however, that the Indemnifying Party shall only have to pay the
fees and expenses of one firm of counsel for all Indemnified Parties in each
jurisdiction, except to the extent representation of all Indemnified Parties by
the same counsel is inappropriate under applicable standards of professional
conduct. In either of such cases the Indemnifying Party shall not have the
right to assume the defense of such action on behalf of such Indemnified Party.
No Indemnifying Party shall be liable for any settlement entered into without
its written consent, which consent shall not be unreasonably withheld. 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
-13-
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 as to or an admission of fault, culpability or a failure to act, by or
on behalf of any Indemnified Party. The rights accorded to any Indemnified Party
hereunder shall be in addition to any rights that such Indemnified Party may
have at common law, by separate agreement or otherwise.
(d) Contribution. If the indemnification provided for in Section 8(a)
------------
from the Indemnifying Party is unavailable to an Indemnified Party in respect of
any losses, claims, damages, expenses or other liabilities referred to therein,
then the Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such losses, claims, damages, expenses or other liabilities in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party and Indemnified Party in connection with the actions which resulted in
such losses, claims, damages, expenses or other liabilities, as well as any
other relevant equitable considerations. The relative faults of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, was made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the Indemnifying Party's and
Indemnified Party's relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid or payable by a
party as a result of the losses, claims, damages, expenses or other liabilities
referred to above shall be deemed to include, subject to the limitations set
forth in Section 8(a), 8(b) and 8(c), any legal or other fees, charges or
expenses reasonably incurred by such party in connection with any investigation
or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable con siderations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution pursuant to this
Section 8(d).
9. Rule 144; Other Exemptions. The Company covenants that it shall
--------------------------
file any reports required to be filed by it under the Exchange Act and the rules
and regulations adopted by the SEC thereunder, and that it shall take such
further action as each Holder may reasonably request (including, but not limited
to, providing any information necessary to comply with Rules 144 and 144A under
the Act), all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Act within the
limitation of the exemptions provided by (a) Rule 144 or Rule 144A under the
Act, as such rules may be amended from time to time, or (b) any other rules or
regulations now existing or hereafter adopted by the SEC. The Company shall,
upon the request of any Holder, deliver to
-14-
such Holder a written statement as to whether the Company has complied with such
requirements.
10. Certain Limitations on Registration Rights. In the case of a
------------------------------------------
registration under Section 4 if the Company has determined to enter into an
underwriting agreement in connection therewith, no person may participate in
such registration unless such person (a) agrees to sell such person's securities
on the basis provided therein and (b) completes and executes all questionnaires,
powers of attorney, indemnities, lock-up agreements, underwriting agreements and
other documents reasonably required under the terms of such underwriting
agreements.
11. Miscellaneous.
-------------
(a) Recapitalizations, Exchanges, etc. The provisions of this
---------------------------------
Agreement shall apply, to the full extent set forth herein with respect to the
Shares, to any and all shares of capital stock of the Company or any successor
or assign of the Company (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in exchange for or in substitution
of, the Shares and shall be appropriately adjusted for any stock dividends,
splits, reverse splits, combinations, recapitalizations and the like occurring
after the date hereof.
(b) No Inconsistent Agreements; Other Registration Rights. The
-----------------------------------------------------
Company shall not enter into any agreement with respect to its securities that
is inconsistent with or adversely affects the rights granted to the Holders in
this Agreement other than any lock-up agreement with the underwriters in
connection with an underwritten offering pursuant to which the Company agrees,
for a period not in excess of 90 days, not to register for sale, and not to sell
or otherwise dispose of, Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock. The Company shall not grant any
other Person registration rights without the written consent of the Designated
Holders holding at least a majority of the Registrable Securities held by all of
the Designated Holders. If the Company shall at any time hereafter provide to
any holder of any securities of the Company rights with respect to the
registration of such securities and such rights are provided on terms or
conditions more favorable to such holder than the terms and conditions
applicable to the Designated Holders herein, the Company shall provide (by way
of amendment to this Agreement or otherwise) such more favorable terms or
conditions to the Designated Holders under this Agreement.
(c) Remedies. The Holders, in addition to being entitled to
--------
exercise all rights granted by law, including recovery of damages, shall be
entitled to specific performance of their rights under this Agreement. The
Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Agreement
and hereby agrees to waive in any action for specific performance the defense
that a remedy at law would be adequate.
(d) Amendments and Waivers. Except as otherwise provided herein
----------------------
the provisions of this Agreement may not be amended, modified or supplemented,
-15-
and waivers or consents to departures from the provisions of such section may
not be given unless the Company has obtained the prior written consent of (i)
the Designated Holders holding at least a majority of the Registrable Securities
held by all of the Designated Holders and (ii) the Holders holding at least a
majority of the Registrable Securities.
(e) Notices. All notices, demands and other communications
-------
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, telecopier,
courier service or personal delivery:
(i) if to Whitney Subordinated Debt Fund, L.P. or
X.X. Xxxxxxx & Co.:
c/o X.X. Xxxxxxx & Co.
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxx, M.D.
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
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(ii) if to the Company:
Nitinol Medical Technologies, Inc.
00 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Chief Executive Officer
with a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esquire
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial overnight courier service; five Business
Days after being deposited in the mail, postage prepaid, if mailed; and when
receipt is acknowledged, if telecopied.
(f) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors and assigns of the parties hereto;
provided, however, that the registration rights and the other obligations of the
-------- -------
Company contained in this Agreement shall, with respect to any Registrable
Security, be automatically transferred from a Holder to any subsequent holder of
such Registrable Security (including any pledgee). Notwithstanding any transfer
of such rights, all of the obligations of the Company hereunder shall survive
any such transfer and shall continue to inure to the benefit of all transferees.
(g) 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 an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of New York, without regard to the
principles of conflicts of law of such State.
(j) Jurisdiction. Each party to this Agreement hereby irrevocably
------------
agrees that any legal action or proceeding arising out of or relating to this
Agreement or any agreements or transactions contemplated hereby may be brought
in the courts of the State of New York or of the United States of America for
the
-00-
Xxxxxxxx Xxxxxxxx of New York and hereby expressly submits to the personal
jurisdiction and venue of such courts for the purposes thereof and expressly
waives any claim of improper venue and any claim that such courts are an
inconvenient forum. Each party hereby irrevocably consents to the service of
process of any of the aforementioned courts in any such suit, action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the address set forth in Section 10(e), such service to
become effective 10 days after such mailing.
(k) Severability. If any one or more of the provisions contained
------------
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, it being intended that all
of the rights and privileges of the Holders shall be enforceable to the fullest
extent permitted by law.
(l) Rules of Construction. Unless the context otherwise requires,
---------------------
"or" is not exclusive, and references to sections or subsections refer to
sections or subsections of this Agreement.
(m) Entire Agreement. This Agreement is intended by the parties as a
----------------
final expression of their agreement and 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. There are no restrictions, promises,
warranties or undertakings in respect of the subject matter contained herein,
other than those set forth or referred to herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
(n) Further Assurances. Each of the parties shall execute such
------------------
documents and perform such further acts as may be reasonably required or
desirable to carry out or to perform the provisions of this Agreement.
-18-
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed and delivered by their respective officers hereunto duly authorized on
the date first above written.
NITINOL MEDICAL TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: President and Chief Executive Officer
WHITNEY SUBORDINATED DEBT FUND, L.P.
By: /s/ Xxxxxx X. X'Xxxxx
--------------------------------------
Name: Xxxxxx X. X'Xxxxx
Title: A General Partner
X.X. XXXXXXX & CO.
By: /s/ Xxxxxx X. X'Xxxxx
--------------------------------------
Name: Xxxxxx X. X'Xxxxx
Title:
-19-
