Exhibit 4.2
REGISTRATION RIGHTS AGREEMENT
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This Registration Rights Agreement (this "Agreement") is made and
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entered into as of December 20, 2001, among Orthovita, Inc., a Pennsylvania
corporation (the "Company"), SDS Merchant Fund, L.P. ("SDS") and S.A.C. Capital
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Associates, LLC ("SAC") (SDS and SAC are collectively referred to herein as the
"Purchasers" and each individually as a "Purchaser").
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This Agreement is made pursuant to the Subscription Agreements, each
dated as of the date hereof, between the Company and the applicable Purchaser
(the "Purchase Agreement").
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The Company and the Purchaser hereby agree as follows:
1. Definitions.
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Capitalized terms used and not otherwise defined herein shall have the
meanings given such terms in the Purchase Agreement. As used in this Agreement,
the following terms shall have the following meanings:
"Advice" has the meaning set forth in Section 3(o) hereof.
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"Affiliate" means, with respect to any Person, any other Person that
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directly or indirectly controls or is controlled by or under common control with
such Person. For the purposes of this definition, "control", when used with
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respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "affiliated", controlling" and "controlled" have meanings
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correlative to the foregoing.
"Business Day" means any day except Saturday, Sunday and any day which
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shall be a legal holiday or a day on which banking institutions in the State of
New York generally are authorized or required by law or other government action
to close.
"Closing" shall mean the Closing as defined in the Purchase Agreement.
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"Commission" means the Securities and Exchange Commission.
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"Common Stock" means the Company's common stock, par value $0.01 per
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share.
"Effectiveness Date" means the date on which the Commission declares
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the Registration Statement effective.
"Effectiveness Period" has the meaning set forth in Section 2(a)
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hereof.
"Event" has the meaning set forth in Section 2(b) hereof.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Filing Date" means as soon as practicable after the Closing but in no
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event later than the 90th day following the Closing.
"Holder" or "Holders" means the holder or holders, as the case may be,
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from time to time of Registrable Securities.
"Indemnified Party" has the meaning set forth in Section 5(c) hereof.
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"Indemnifying Party" has the meaning set forth in Section 5(c) hereof.
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"Initial Registration Statement" has the meaning set forth in Section
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2(a) hereof.
"Losses" has the meaning set forth in Section 5(a) hereof.
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"Majority Holders" means the Holders of at least fifty percent (50%)
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of the Registrable Securities.
"National Market" means the NASDAQ National Market, the NASDAQ
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SmallCap Market, the New York Stock Exchange or the American Stock Exchange.
"Person" means an individual or a corporation, partnership, trust,
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incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Proceeding" means an action, claim, suit, arbitration, investigation
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or proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration
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Statement (including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference in such Prospectus.
"Registrable Securities" means the shares of Common Stock purchased
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under the Purchase Agreement.
"Registration Delay Payment" has the meaning set forth in Section 2(b)
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hereof.
"Registration Statement" means the Initial Registration Statement and
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any additional registration statements contemplated herein, including (in each
case) the Prospectus, amendments and supplements to such registration statement
or Prospectus, including pre- and
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post-effective amendments, all exhibits thereto, and all material incorporated
by reference in such registration statement.
"Rule 144" means Rule 144 promulgated by the Commission pursuant to
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the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 158" means Rule 158 promulgated by the Commission pursuant to
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the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission pursuant to
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the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended.
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"Special Counsel" means one special counsel to the Holders.
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"Trading Day" means a day on which the National Market on which the
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Common Stock is then listed is open for trading.
2. Registration Requirements.
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(a) Filing and Effectiveness Obligations. On or prior to the Filing
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Date, the Company shall prepare and file with the Commission a Registration
Statement (the "Initial Registration Statement") which shall cover all
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Registrable Securities for an offering to be made on a continuous basis pursuant
to a "Shelf" registration statement under Rule 415. The Initial Registration
Statement shall be on Form S-3 or any successor form (except if the Company is
not then eligible to register for resale the Registrable Securities on Form S-3,
in which case such registration shall be on Form S-1 or any successor form). The
Company shall use its best efforts to cause the Initial Registration Statement
to be declared effective under the Securities Act as promptly as possible after
the filing thereof, and to keep such Initial Registration Statement continuously
effective under the Securities Act (subject to Section 3(r)) from the
Effectiveness Date until the date when all Registrable Securities covered by
such Initial Registration Statement have been sold or may be sold without volume
restrictions pursuant to Rule 144 as determined by counsel to the Company
pursuant to a written opinion letter, addressed to the Holders and the Company's
transfer agent to such effect (the "Effectiveness Period"). The number of shares
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of Common Stock initially included in the Initial Registration Statement shall
be no less than 100% of the number of shares of Common Stock that are issued at
the Closing pursuant to the Purchase Agreement. The Company may register the
resale of securities in the Registration Statement on behalf of shareholders
other than the Holders.
(b) Penalties. If (i) the Initial Registration Statement covering all
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the applicable Registrable Securities and required to be filed by the Company
pursuant to this
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Agreement is not filed with the Commission on or before the Filing Date, (ii)
the Company fails to respond, in a commercially reasonable manner, to any
comments made by the Commission with respect to the Initial Registration
Statement within ten (10) Business Days following the receipt thereof, or (iii)
on any day after the Registration Statement has been declared effective by the
Commission (A) sales of all the Registrable Securities required to be included
on a Registration Statement cannot be made pursuant to the Registration
Statement because of a failure to keep the Registration Statement effective, to
disclose such information as is necessary for sales to be made pursuant to the
Registration Statement, or to register sufficient shares of Common Stock, but
excluding any "black-out periods" pursuant to Section 3(r) hereof) or (B) the
Common Stock is not listed or included for quotation on a National Market after
being so listed or included for quotation (each such event specified in (i),
(ii), (iii) and (iv) above, an "Event"), then, as partial relief for the damages
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to any Holder by reason of any such delay in or reduction of its ability to sell
the Registrable Securities (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall pay to each Holder,
upon the occurrence of each such violation, an amount (a "Registration Delay
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Payment") equal to the product of (a) the purchase price of such Holder's Common
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Stock (as set forth in the Purchase Agreement) then owned beneficially and of
record by the Purchaser or an Affiliate of the Purchaser, (b) (.020) and (c) the
number of months (rounded up to the nearest whole month in the event of partial
months) that such Event has occurred and is continuing, provided, however, that
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there shall be excluded from such period any delays which are solely
attributable to changes required by the Holders in the Registration Statement
with respect to information relating to the Holders or to the failure of the
Holders to conduct their review of the Registration Statement pursuant to
Section 3(a). The Company shall pay such Registration Delay Payments to each
Holder in shares of Common Stock on the last Business Day of each month during
which an Event has occurred and is continuing. For the purposes of this Section
2, the value of the Common Stock shall equal: (i) the average closing bid price
of the Common Stock as reported on the National Market for each of the five
Trading Days immediately preceding the date on which the Registration Delay
Payment is due or paid, or (ii) if the Common Stock is not then publicly traded,
the fair market value of a share of Common Stock as determined by a nationally
recognized or major regional investment banking firm or firm of independent
certified public accountants (the "Appraiser") selected in good faith by the
registered owners of a majority of the Registrable Securities; provided,
however, that, after receipt of the determination by such Appraiser, the Company
shall have the right to select, in good faith, an additional Appraiser, in which
case the fair market value shall be equal to the average of the determinations
by each such Appraiser; and provided further that all determinations of the
value of the Common Stock pursuant to this Section 2 shall be appropriately
adjusted for any stock dividends, stock splits or other similar transactions
during such period. In the event the Company fails to make a Registration Delay
Payment within ten (10) Business Days of the date such Registration Delay
Payment is due, such Registration Delay Payment shall bear interest at the rate
of 2.0% per month (rounded up to the nearest whole month in the event of partial
months) until paid in full.
3. Registration Procedures.
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In connection with the Company's registration obligations hereunder,
the Company shall:
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(a) Preparation of Registration Statement. Prepare and file with the
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Commission on or prior to the Filing Date a Registration Statement on Form S-3
or its successor (or, if the Company is not then eligible to register the resale
of the Registrable Securities on Form S-3, the Registration Statement shall be
made on Form S-1 or its successor form) (which shall include a Plan of
Distribution substantially in the form of Exhibit A annexed hereto, and use best
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efforts to cause the Registration Statement to become effective and remain
effective as provided herein; provided, however, that not less than three (3)
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Business Days prior to the filing of the Registration Statement or any related
Prospectus or any amendment or supplement thereto (including any document that
would be incorporated therein by reference), the Company shall, if reasonably
practicable (i) furnish to the Holders and their Special Counsel, copies of all
such documents proposed to be filed (including documents incorporated by
reference), which documents will be subject to the review of such Holders and
their Special Counsel, and (ii) cause its officers and directors, counsel and
independent certified public accountants to respond to such inquiries as shall
be necessary, in the reasonable opinion of the Special Counsel to such Holders,
to conduct a reasonable investigation within the meaning of the Securities Act.
The Company shall not be restricted in any manner from including within the
Registration Statement the distribution, issuance or resale of any of its or any
other securities, on its own behalf or on behalf of any of the Company's
stockholders. The Company shall not file the Registration Statement or any such
Prospectus or any amendments or supplements thereto to which the Majority
Holders or their Special Counsel shall reasonably object. The sections of such
Registration Statement covering information with respect to the Holders, the
Holders' beneficial ownership of securities of the Company or the Holders'
intended method of disposition of Registrable Securities shall conform to the
information provided to the Company by each of the Holders.
(b) Amendments. (i) Prepare and file with the Commission, in
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accordance with the requirements and in the time periods set forth in the
Securities Act, such amendments, including post-effective amendments, to the
Registration Statement as may be necessary to keep the Registration Statement
continuously effective for the Effectiveness Period and prepare and file with
the Commission such additional Registration Statements as are required to be
filed hereunder in order to register for resale under the Securities Act all of
the Registrable Securities, (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement, and as so supplemented or
amended to be filed pursuant to Rule 424 (or any similar provisions then in
force) promulgated under the Securities Act, (iii) respond as promptly as
possible to any comments received from the Commission with respect to the
Registration Statement or any amendment thereto and as promptly as practicable,
but in no event later than ten (10) Business Days after receipt thereof, and as
promptly as possible provide the Holders true and complete copies of all
correspondence from and to the Commission relating to the Registration
Statement, and (iv) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement during the
applicable period in accordance with the intended methods of disposition by the
Holders thereof set forth in the Registration Statement as so amended or in such
Prospectus as so supplemented.
(c) Notifications. Notify the Holders of Registrable Securities to be
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sold and their Special Counsel, as promptly as possible (and, in the case of
(i)(A) below, not less than five (5) days prior to such filing and, in the case
of (i)(C) below, not later than the first Business Day
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after effectiveness) following the day (i) (A) when a Prospectus or any
Prospectus supplement or post-effective amendment to the Registration Statement
is proposed to be filed, (B) when the Commission notifies the Company whether
there will be a "review" of such Registration Statement and whenever the
Commission comments in writing on such Registration Statement and (C) with
respect to the Registration Statement or any post-effective amendment, when the
same has become effective, (ii) of any request by the Commission or any other
federal or state governmental authority for amendments or supplements to the
Registration Statement or Prospectus or for additional information, (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement covering any or all of the Registrable Securities or the
initiation of any Proceedings for that purpose, (iv) any of the representations
and warranties of the Company contained in any agreement (including any
underwriting agreement) contemplated hereby ceases to be true and correct in all
material respects, (v) of the receipt by the Company 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, (vi) of the
occurrence of any event that makes any statement made in the Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading and (vii) the beginning and end of a black-out period
pursuant to Section 3(r).
(d) Confirmation of Effectiveness. Within two (2) Business Days after
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a Registration Statement which covers applicable Registrable Securities is
ordered effective by the Commission, the Company shall deliver, and shall cause
legal counsel for the Company to deliver, to the transfer agent for such
Registrable Securities (with copies to the Holders whose Registrable Securities
are included in such Registration Statement) confirmation that such Registration
Statement has been declared effective by the Commission in the form attached
hereto as Exhibit B.
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(e) Supplements and Post-Effective Amendments. If requested by the
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Holders of a majority in interest of the Registrable Securities to be sold, (i)
promptly incorporate in a Prospectus supplement or post-effective amendment to
the Registration Statement such information as the Company reasonably agrees
should be included therein and (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as soon as practicable after the
Company has received notification of the matters to be incorporated in such
Prospectus supplement or post-effective amendment; provided, however, that the
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Company shall not be required to take any action pursuant to this Section 3(e)
that would, in the written opinion of counsel for the Company (addressed to the
Holder's Special Counsel), violate applicable law.
(f) Copies of Registration Statement. Furnish to each Holder and their
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Special Counsel, without charge, at least one conformed copy of each
Registration Statement and each amendment thereto, including financial
statements and schedules, and all exhibits to the extent requested by such
Person (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission.
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(g) Copies of Prospectus. Promptly deliver to each Holder and their
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Special Counsel without charge, as many copies of the Prospectus or Prospectuses
(including each form of prospectus) and each amendment or supplement thereto as
such Persons may reasonably request; and the Company hereby consents to the use
of such Prospectus and each amendment or supplement thereto by each of the
selling Holders in connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or supplement thereto.
(h) Blue Sky. Prior to any public offering of Registrable Securities,
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use its best efforts to register or qualify or cooperate with the selling
Holders and their Special Counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any Holder requests in
writing, to keep each such registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by a Registration Statement;
provided, however, that the Company shall not be required to qualify generally
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to do business in any jurisdiction where it is not then so qualified or to take
any action that would subject it to general service of process in any such
jurisdiction where it is not then so subject or subject the Company to any
material tax in any such jurisdiction where it is not then so subject.
(i) Certificates. Cooperate with the Holders to facilitate the timely
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preparation and delivery of certificates representing Registrable Securities to
be sold pursuant to a Registration Statement, which certificates shall be free,
to the extent permitted by applicable law and the Purchase Agreement, of all
restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such managing underwriters or
Holders may request at least two (2) Business Days prior to any sale of
Registrable Securities.
(j) Certain Revisions. Upon the occurrence of any event contemplated
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by Section 3(c)(vi), as promptly as possible, prepare a supplement or amendment,
including a post-effective amendment, to the Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither the Registration Statement nor such
Prospectus will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(k) Listing. Cause all Registrable Securities relating to such
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Registration Statement to be listed on a National Market on which similar
securities issued by the Company are then listed or quoted.
(l) Due Diligence. Make available for inspection by the selling
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Holders, any representative of such Holders, and any attorney or accountant
retained by such selling Holders, at the offices where normally kept, during
reasonable business hours, all financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries, and
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cause the officers, directors, agents and employees of the Company and its
subsidiaries to supply all information in each case reasonably requested by any
such Holder, representative, attorney or accountant in connection with the
Registration Statement; provided, however, that if any information is determined
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in good faith by the Company (in writing) to be of a confidential nature at the
time of delivery of such information, then prior to delivery of such
information, the Company and the Holders shall enter into a confidentiality
agreement reasonably acceptable to the Company and the Holders providing that
such information shall be kept confidential, unless (i) disclosure of such
information is required by court or administrative order or is necessary to
respond to inquiries of regulatory authorities (provided, however, that the
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Company shall be given notice of any such pending disclosure so that the Company
may seek a protective order), (ii) disclosure of such information, in the
opinion of counsel to such Person, is required by law, (iii) such information
becomes generally available to the public other than as a result of a disclosure
or failure to safeguard by such Person, or (iv) such information becomes
available to such Person from a source other than the Company and such source is
not bound by a confidentiality agreement with the Company.
(n) Intentionally omitted.
(o) Information. The Company may require each selling Holder to
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furnish to the Company information regarding such Holder and the distribution of
such Registrable Securities as is required by law to be disclosed in the
Registration Statement, and the Company may exclude from such registration the
Registrable Securities of any such Holder who unreasonably fails to furnish such
information within a reasonable time after receiving such request.
The Company shall hold in confidence and not make any disclosure of
information concerning a Holder provided to the Company unless (i) disclosure of
such information is necessary to comply with federal or state securities laws,
(ii) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other order from a court
or governmental body of competent jurisdiction, or (iv) such information has
been made generally available to the public other than by disclosure in
violation of this Agreement or any other agreement. The Company agrees that it
shall, upon learning that disclosure of such information concerning a Holder is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to such Holder prior to making such
disclosure, and allow the Holder, at its expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective order for, such
information.
If the Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (if such reference to such Holder by name or otherwise
is not required by the Securities Act or any similar federal statute then in
force) the deletion of the reference to such Holder in any amendment or
supplement to the Registration Statement filed or prepared subsequent to the
time that such reference ceases to be required.
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Each Holder agrees by its acquisition of such Registrable Securities
that, upon receipt of a notice from the Company of the occurrence of any event
of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v),
3(c)(vi) or 3(c)(vii), such Holder will forthwith discontinue disposition of
such Registrable Securities under the Registration Statement until such Holder's
receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement contemplated by Section 3(j), or until it is advised in writing (the
"Advice") by the Company that the use of the applicable Prospectus may be
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resumed, and, in either case, has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such Prospectus or Registration Statement.
(p) Responses to the Commission. The Company agrees to respond fully
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and completely to any and all comments on a Registration Statement received from
the Commission staff as promptly as possible but, in no event later than ten
(10) Business Days of the receipt of such comments, regardless of whether such
comments are in oral or written form.
(q) Suspensions. Use its best efforts to avoid the issuance of, or, if
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issued, obtain the withdrawal of (i) any order suspending the effectiveness of
the Registration Statement or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.
(r) Black-out Periods. Subject to the last sentence of this Section
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3(r), the Company may by written notice require that the Holders immediately
cease sales of Registrable Securities (for a period not to exceed twenty (20)
consecutive days in any one instance and for a period not to exceed fifty (50)
calendar days in any twelve-month period) pursuant to a Registration Statement
at any time that (i) the Company becomes engaged in a business activity or
negotiation which is not disclosed in a Registration Statement (or the
prospectus included therein) which the Company reasonably believes must be
disclosed therein under applicable law and which the Company desires to keep
confidential for business purposes, (ii) the Company determines that a
particular disclosure so determined to be required to be disclosed therein would
be premature or would adversely affect the Company or its business or prospects
or (iii) the Registration Statement can no longer be used under the existing
rules and regulations promulgated under the Securities Act (each of (i), (ii) or
(iii), a "Material Condition"). The Company shall not be required to disclose to
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the Holders which of the reasons specified in (i), (ii) or (iii) above is the
basis for requiring a suspension of sales due to the occurrence of a Material
Condition. The Company will use its commercially reasonable best efforts to
ensure that the use of the Registration Statement (and the prospectus included
therein) may be resumed as soon as it is practicable. The Company may not
suspend sales of Registrable Securities under a Registration Statement pursuant
to this Section 3(r) more than four (4) times during any twelve-month period.
4. Registration Expenses.
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All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by the Company, whether or not
the Registration Statement is filed or becomes effective and whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without
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limitation, fees and expenses (A) with respect to filings required to be made
with the National Market and each other securities exchange or market on which
Registrable Securities are required hereunder to be listed or quoted and (B) in
compliance with state securities or Blue Sky laws), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv)
reasonable fees and disbursements of counsel for the Company, (v) Securities Act
liability insurance, if the Company so desires such insurance, and (vi) fees and
expenses of all other Persons retained by the Company in connection with the
consummation of the transactions contemplated by this Agreement. In addition,
the Company shall be responsible for all of its internal expenses incurred in
connection with the consummation of the transactions contemplated by this
Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit, and the fees and expenses incurred in connection with the
listing of the Registrable Securities on any securities exchange, system or
market as required hereunder. The Holders shall pay the fees and expenses of the
Special Counsel retained by them .
5. Indemnification.
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(a) Indemnification by the Company. The Company shall, notwithstanding
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any termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents (including any underwriters retained by such Holder
in connection with the offer and sale of Registrable Securities), brokers
(including brokers who offer and sell Registrable Securities as principal as a
result of a pledge or any failure to perform under a margin call of Common
Stock), investment advisors and employees of each such Holder, each Person who
controls any such Holder (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) and the officers, directors, agents and
employees of each such controlling Person, to the fullest extent permitted by
applicable law, from and against any and all joint or several losses, claims,
damages, liabilities, costs (including, without limitation, costs of preparation
and reasonable attorneys' fees) and expenses (collectively, together with
Proceedings by any regulatory or self-regulatory organization, whether commenced
or threatened, "Losses"), as incurred, arising out of or relating to (i) any
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untrue or alleged untrue statement of a material fact contained in the
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary Prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of
any Prospectus or form of prospectus or amendment or supplement thereto, in
light of the circumstances under which they were made) not misleading, except to
the extent, but only to the extent, that such untrue statements or omissions are
based solely upon and in conformity with information regarding such Holder
furnished in writing to the Company by such Holder expressly for use therein,
which information was reasonably relied on by the Company for use therein or to
the extent that such information relates to such Holder or such Holder's
proposed method of distribution of Registrable Securities and was reviewed and
expressly approved in writing by such Holder expressly for use in the
Registration Statement, such Prospectus or such form of prospectus or in any
amendment or supplement thereto (provided that the Company amended any
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disclosure with respect to the method of distribution upon written notice from
the Holders that such section of the Prospectus should be revised in any way) or
(ii) any violation or alleged violation by the Company of the
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Securities Act, the Exchange Act, any other law, including, without limitation,
any state securities law, or any rule or regulation thereunder relating to the
offer or sale of Registrable Securities. The Company shall not, however, be
liable to any Holder for any Losses with respect to any untrue or alleged untrue
statement of material fact or omission or alleged omission of material fact if
such statement or omission was made in a preliminary Prospectus and such Holder
did not receive a copy of the final Prospectus (or any amendment or supplement
thereto) at or prior to the confirmation of the sale of the Registrable
Securities in any case where such delivery is required by the Securities Act and
the untrue or alleged untrue statement of material fact or omission or alleged
omission of material fact contained in such preliminary Prospectus was corrected
in the final Prospectus (or any amendment or supplement thereto), unless the
failure to deliver such final Prospectus (as amended or supplemented) was a
result of noncompliance by the Company with Section 3(g) of this Agreement. The
Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding of which the Company is aware in connection with the
transactions contemplated by this Agreement.
(b) Indemnification by Holders. Each Holder shall, severally and not
--------------------------
jointly, indemnify and hold harmless the Company, its officers, directors,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
officers, directors, agents and employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, arising solely out of or based solely upon any untrue statement of a
material fact contained in the Registration Statement, any Prospectus, or any
form of prospectus, or arising solely out of or based solely upon any omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading to the extent, but only to the extent, that
such untrue statement or omission is contained in any information so furnished
in writing by such Holder to the Company specifically for inclusion in the
Registration Statement or such Prospectus and that such information was
reasonably relied upon by the Company for use in the Registration Statement,
such Prospectus or such form of prospectus or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of prospectus; provided, however, that the indemnity
-------- -------
agreement contained in this Section 5(b) shall not apply to amounts paid in
settlement of any Losses if such settlement is effected without the prior
written consent of such Holder, which consent shall not be unreasonably
withheld. In no event shall the liability of any selling Holder hereunder be
greater in amount than the dollar amount of the gross proceeds received by such
Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
(c) Conduct of Indemnification Proceedings. If any Proceeding shall be
--------------------------------------
brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party promptly shall notify the Person
-----------------
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
------------------
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the payment of all
reasonable fees and expenses incurred in connection with defense thereof;
provided, however, that the failure of any Indemnified Party to give such notice
-------- -------
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and
11
only) to the extent that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or further review)
that such failure shall have proximately and materially adversely prejudiced the
Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
or Indemnified Parties unless: (i) the Indemnifying Party has agreed in writing
to pay such fees and expenses; (ii) the Indemnifying Party shall have failed
promptly to assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding; or
(iii) the named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and such
Indemnified Party shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnified Party
and the Indemnifying Party (in which case, if such Indemnified Party notifies
the Indemnifying Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the reasonable
expense of the Indemnifying Party). The Indemnifying Party shall not be liable
for any settlement of any such Proceeding effected without its written consent,
which consent shall not be unreasonably withheld. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such Proceeding.
All reasonable fees and expenses of the Indemnified Party (including
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten (10)
Business Days of written notice thereof to the Indemnifying Party, which notice
shall be delivered no more frequently than on a monthly basis (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
--------
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).
(d) Contribution. If a claim for indemnification under Section 5(a) or
------------
5(b) is unavailable to an Indemnified Party because of a failure or refusal of a
court of competent jurisdiction to enforce such indemnification in accordance
with its terms (by reason of public policy or otherwise), then each 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, in
such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party and Indemnified Party in connection with the actions,
statements or omissions that resulted in such Losses as well as any other
relevant equitable considerations. The relative fault of such Indemnifying Party
and Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission of a material fact, has been
taken or made by, or relates to information supplied by, such Indemnifying Party
or Indemnified Party, and the
12
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms. In no event shall any selling Holder be
required to contribute an amount under this Section 5(d) in excess of the gross
proceeds received by such Holder upon sale of the Registrable Securities
pursuant to the Registration Statement giving rise to such contribution
obligation.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
No Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
6. Miscellaneous.
-------------
(a) Remedies. In the event of a breach by the Company or by a Holder
--------
of any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither the Company nor any of its
--------------------------
subsidiaries has, as of the date hereof, nor shall the Company or any of its
subsidiaries, on or after the date of this Agreement, enter into any agreement
with respect to its securities that is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions hereof.
This Agreement, together with the Purchase Agreement, contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters.
(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 consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Majority Holders; provided, however, that for the purposes of this
-------- -------
sentence, Registrable Securities that are owned, directly or indirectly, by the
13
Company, or an Affiliate of the Company are not deemed outstanding.
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 a
Holder and that does not directly or indirectly affect the rights of any other
Holders may be given by the Holders to which such waiver or consent relates;
provided, however, that the provisions of this sentence may not be amended,
-------- -------
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence. Any amendment or waiver effected in accordance
with this Section shall be binding upon each Holder, each future Holder, and the
Company. Upon effectiveness of each such amendment or waiver, the Company shall
promptly give written notice thereof to the Holders who have not previously
consented thereto in writing.
(d) Notices. Any notices, consents, waivers or other communications
-------
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered (i) upon receipt, when
delivered personally, (ii) upon receipt, when sent by facsimile, provided
--------
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party (if received by or before 5:00 p.m. Eastern
Time where such notice is received) or the first (1st) Business Day following
such delivery (if received after 5:00 p.m. Eastern Time where such notice is
received) or (iii) one (1) Business Day after deposit with a nationally
recognized overnight courier. The addresses for such communications are (A) if
to the Company, to the address set forth on Schedule I hereto, with copies to
----------
Xxxxxx, Xxxxx & Xxxxxxx, LLP, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000,
Attention: Xxxxxxxxx X. Xxxxxx, Esq., facsimile no. (000) 000-0000, and (B) if
to any Purchaser, to its address set forth on Schedule I hereto, or to such
----------
other address as may be designated in writing hereafter, in the same manner, by
such Person.
(e) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Holder. The Company may not
assign its rights or obligations hereunder without the prior written consent of
the Majority Holders. Each Holder may assign its rights hereunder in the manner
and to the Persons as permitted under the Purchase Agreement. In addition, the
rights of each Holder hereunder, including the right to have the Company
register for resale Registrable Securities in accordance with the terms of this
Agreement, shall be automatically assignable by each Holder if: (i) the Holder
agrees in writing with the transferee or assignee to assign such rights, and a
copy of such agreement is furnished to the Company within a reasonable time
after such assignment; (ii) the Company is, within a reasonable time after such
transfer or assignment, furnished with written notice of (A) the name and
address of such transferee or assignee and (B) the securities with respect to
which such registration rights are being transferred or assigned; (iii)
following such transfer or assignment the further disposition of such securities
by the transferee or assignees is restricted under the Securities Act and
applicable state securities laws; (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this Section, the
transferee or assignee agrees in writing with the Company to be bound by all of
the provisions of this Agreement; and (v) such transfer shall have been made in
accordance with the applicable requirements of the Purchase Agreement.
14
(f) Counterparts. This Agreement may be executed in any number of
------------
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. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) the same with the same force and
effect as if such facsimile signature were the original thereof.
(i) Governing Law. The corporate laws of the State of New York shall
-------------
govern all issues concerning the relative rights of the Company and the Holders
as its stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to principles of conflicts of law. Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the City of
New York, Borough of Manhattan, for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any
Proceeding any claim that it is not personally subject to the jurisdiction of
any such court, that such Proceeding is improper. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law.
(j) Cumulative Remedies. The remedies provided herein are cumulative
-------------------
and not exclusive of any remedies provided by law.
(k) Severability. If any term, provision, covenant or restriction of
------------
this Agreement is held by a court of competent jurisdiction 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, and the parties
hereto shall use their reasonable 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 is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(l) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(m) Shares Held by The Company and its Affiliates. 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 (other than any Holder or transferees or successors or assigns
thereof if such Holder is deemed to be an Affiliate solely by reason of its
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.
[SIGNATURE PAGES FOLLOW]
15
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
ORTHOVITA, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Chief Financial
Officer
S.A.C. CAPITAL ASSOCIATES, LLC
By: S.A.C. Capital Advisors, LLC
By: /s/ Xxxxx Xxxxxxxx
------------------
Name: Xxxxx Xxxxxxxx
Title: General Counsel
SDS MERCHANT FUND, L.P.
By: /s/ Xxxxx Xxxxx
---------------
Name: Xxxxx Xxxxx
Title: Managing Member
16
SCHEDULE I
----------
Company
-------
Orthovita, Inc.
00 Xxxxx Xxxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx, Vice President and Chief Financial Officer
Facsimile: (000) 000-0000
Purchasers:
----------
S.A.C. Capital Associates, LLC
c/o S.A.C. Capital Advisors, LLC
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Facsimile: (000) 000-0000
SDS Merchant Fund, L.P.
Xxx Xxxxx Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Facsimile: (000) 000-0000
17
EXHIBIT A
PLAN OF DISTRIBUTION
We are registering the shares of common stock on behalf of the selling
security holders. Sales of shares may be made by selling security holders,
including their respective donees, transferees, pledgees or other
successors-in-interest, from time to time on the Nasdaq National Market, any
other exchange upon which our shares may trade in the future, in the
over-the-counter market or otherwise, at market prices prevailing at the time of
sale, at prices related to market prices, or at negotiated or fixed prices. The
shares may be sold by one or more of, or a combination of, the following:
. a block trade in which the broker-dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
. purchases by a broker-dealer as principal and resale by such
broker-dealer for its account pursuant to this prospectus;
. ordinary brokerage transactions and transactions in which the broker
solicits purchases;
. through options, swaps or derivatives;
. in privately negotiated transactions;
. in making short sales or in transactions to cover short sales; and
. put or call option transactions relating to the shares.
The selling security holders may effect these transactions by selling
shares directly to purchasers or to or through broker-dealers, which may act as
agents or principals. These broker-dealers may receive compensation in the form
of discounts, concessions or commissions from the selling security holders
and/or the purchasers of shares for whom such broker-dealers may act as agents
or to whom they sell as principal, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions). The
selling security holders have advised us that they have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their securities.
The selling security holders may enter into hedging transactions with
broker-dealers or other financial institutions. In connection with those
transactions, the broker-dealers or other financial institutions may engage in
short sales of the shares or of securities convertible into or exchangeable for
the shares in the course of hedging positions they assume with the selling
security holders. The selling security holders may also enter into options or
other transactions with broker-dealers or other financial institutions which
require the delivery of shares offered by this prospectus to those
broker-dealers or other financial institutions. The broker-dealer or other
financial institution may then resell the shares pursuant to this prospectus (as
amended or supplemented to reflect those transactions).
The selling security holders and any broker-dealers that act in connection
with the sale of shares may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act of 1933, and any commissions received by
broker-dealers or any profit on the resale of the shares sold by them while
acting as principals may be deemed to be underwriting discounts or commissions
under the Securities Act. The selling security holders may agree to indemnify
any agent, dealer or broker-dealer that participates in transactions involving
sales of the shares against liabilities, including liabilities arising under the
Securities Act. Orthovita has agreed to indemnify each of the selling security
holders and each selling security holder has agreed, severally and not jointly,
to indemnify Orthovita against some
liabilities in connection with the offering of the shares, including liabilities
arising under the Securities Act.
The selling security holders will be subject to the prospectus delivery
requirements of the Securities Act. We have informed the selling security
holders that the anti-manipulative provisions of Regulation M promulgated under
the Securities Exchange Act of 1934 may apply to their sales in the market.
Selling security holders also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of Rule 144.
Upon being notified by a selling security holder that a material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer, we will file a supplement to
this prospectus, if required pursuant to Rule 424(b) under the Securities Act,
disclosing:
. the name of each such selling security holder and of the participating
broker-dealer(s);
. the number of shares involved;
. the initial price at which the shares were sold;
. the commissions paid or discounts or concessions allowed to the
broker-dealer(s), where applicable;
. that such broker-dealer(s) did not conduct any investigation to verify
the information set out or incorporated by reference in this
prospectus; and
. other facts material to the transactions.
In addition, we will file a supplement to this prospectus when a selling
security holder notifies us that a donee or pledgee intends to sell more than
500 shares of common stock.
Expenses Associated with Registration. We are paying all expenses and fees
in connection with the registration of the shares. The selling security holders
will bear all brokerage or underwriting discounts or commissions paid to
broker-dealers in connection with the sale of the shares.
2
EXHIBIT B
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[TRANSFER AGENT]
Attention:
Re: Orthovita, Inc.
Ladies and Gentlemen:
We are counsel to Orthovita, Inc., a Pennsylvania corporation (the
"Company"), and have represented the Company in connection with: (i) that
certain Subscription Agreement dated as of December __, 2001 entered into by and
between the Company and S.A.C. Capital Associates, LLC ("SAC") pursuant to which
the Company issued to SAC shares of the Company's common stock, par value $0.01
per share ("Common Stock"); and (ii) that certain Subscription Agreement dated
as of December __, 2001 entered into by and between the Company and SDS Merchant
Fund, L.P. ("SDS") pursuant to which the Company issued to SDS shares of the
Company's Common Stock. Pursuant to each of the Subscription Agreements
referenced above, the Company also has entered into a Registration Rights
Agreement (the "Registration Rights Agreement") with SDS and SAC (collectively,
the "Holders") pursuant to which the Company agreed, among other things, to
register the Registrable Securities (as defined in the Registration Rights
Agreement), under the Securities Act of 1933, as amended (the "1933 Act"). In
connection with the Company's obligations under the Registration Rights
Agreement, on _______________, 2002, the Company filed a Registration Statement
on Form [S-3/S-1] (File No. 333-_____________) (the "Registration Statement")
with the Securities and Exchange Commission (the "SEC") relating to the
Registrable Securities which names each of the Holders as a selling shareholder
thereunder.
In connection with the foregoing, we advise you that a member of the SEC's
staff has advised us by telephone that the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very truly yours,
[ISSUER'S COUNSEL]
cc: [LIST NAMES OF HOLDERS]
