EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered
into as of this 10th day of March, 2005 by and among Endocare, Inc., a Delaware
corporation (the "Company"), and the "Investors" named in that certain Purchase
Agreement by and among the Company and the Investors (the "Purchase Agreement").
The parties hereby agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
"Affiliate" means, with respect to any person, any other person which
directly or indirectly controls, is controlled by, or is under common control
with, such person.
"Business Day" means a day, other than a Saturday or Sunday, on which
banks in New York City are open for the general transaction of business.
"Common Stock" shall mean the Company's common stock, par value $0.001 per
share, and any securities into which such shares may hereinafter be
reclassified.
"Investors" shall mean the Investors identified in the Purchase Agreement
and any Affiliate or permitted transferee of any Investor who is a subsequent
holder of any Warrants or Registrable Securities.
"Prospectus" shall mean the prospectus included in any Registration
Statement, 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 such Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
"Register," "registered" and "registration" refer to a registration made
by preparing and filing a Registration Statement or similar document in
compliance with the 1933 Act (as defined below), and the declaration or ordering
of effectiveness of such Registration Statement or document.
"Registrable Securities" shall mean (i) the Shares, (ii) the Warrant
Shares and (iii) any other securities issued or issuable with respect to or in
exchange for Registrable Securities; provided, that, a security shall cease to
be a Registrable Security upon (A) sale pursuant to a Registration Statement or
Rule 144 under the 1933 Act, or (B) such security becoming eligible for sale by
the Investors pursuant to Rule 144(k).
"Registration Statement" shall mean any registration statement of the
Company filed under the 1933 Act that covers the resale of any of the
Registrable Securities pursuant to the provisions of this Agreement, amendments
and supplements to such Registration Statement, including post-effective
amendments, all exhibits and all material incorporated by reference in such
Registration Statement.
"Required Investors" means the Investors holding a majority of the
Registrable Securities.
"SEC" means the U.S. Securities and Exchange Commission.
"Shares" means the shares of Common Stock issued pursuant to the Purchase
Agreement.
"1933 Act" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
"Warrants" means, collectively, the Series A warrants to purchase shares
of Common Stock issued to the Investors pursuant to the Purchase Agreement, the
form of which is attached to the Purchase Agreement as Exhibit A and the Series
B warrants to purchase shares of Common Stock issued to the Investors pursuant
to the Purchase Agreement, the form of which is attached to the Purchase
Agreement as Exhibit B.
"Warrant Shares" means the shares of Common Stock issuable upon the
exercise of the Warrants.
2. Registration.
(a) Registration Statements.
(i) Promptly following the closing of the purchase and sale of
the securities contemplated by the Purchase Agreement (the "Closing Date") but
no later than thirty (30) days after the Closing Date (the "Filing Deadline"),
the Company shall prepare and file with the SEC one Registration Statement on
Form S-2 (or, if Form S-2 is not then available to the Company, on such form of
registration statement as is then available to effect a registration for resale
of the Registrable Securities), covering the resale of the Registrable
Securities in an amount at least equal to the Shares and the Warrant Shares.
Such Registration Statement shall include the plan of distribution attached
hereto as Exhibit A. Such Registration Statement also shall cover, to the extent
allowable under the 1933 Act and the rules promulgated thereunder (including
Rule 416), such indeterminate number of additional shares of Common Stock
resulting from stock splits, stock dividends or similar transactions with
respect to the Registrable Securities. The Company shall use its reasonable best
efforts to obtain from each person who now has piggyback registration rights a
waiver of those rights with respect to the Registration Statement. The
Registration Statement (and each amendment or supplement thereto, and each
request for acceleration of effectiveness thereof) shall be provided in
accordance with Section 3(c) to the Investors and their counsel prior to its
filing or other submission. If a Registration Statement covering the Registrable
Securities is not filed with the SEC on or prior to the Filing Deadline, the
Company will make pro rata payments to each Investor, as liquidated damages and
not as a penalty, in an amount equal to 1.0% of the aggregate amount invested by
such Investor for each 30-day period or pro rata for any portion thereof
following the Filing Deadline for which no Registration Statement is filed with
respect to the Registrable Securities. Such payments shall constitute the
Investors' sole monetary remedy for such events but shall not limit the
Investors' right to seek specific performance of the provisions hereof. Such
payments shall be made to each Investor in cash.
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(ii) Upon the written demand of any Investor and upon any
change in the Warrant Price (as defined in the Warrant) such that additional
shares of Common Stock become issuable upon the exercise of the Warrants, the
Company shall prepare and file with the SEC one or more Registration Statements
on Form S-2 or amend the Registration Statement filed pursuant to clause (i)
above, if such Registration Statement has not previously been declared effective
(or, if Form S-2 is not then available to the Company, on such form of
registration statement as is then available to effect a registration for resale
of such additional shares of Common Stock (the "Additional Shares")) covering
the resale of the Additional Shares, but only to the extent the Additional
Shares are not at the time covered by an effective Registration Statement. Such
Registration Statement also shall cover, to the extent allowable under the 1933
Act and the rules promulgated thereunder (including Rule 416), such
indeterminate number of additional shares of Common Stock resulting from stock
splits, stock dividends or similar transactions with respect to the Additional
Shares. The Company shall use its reasonable best efforts to obtain from each
person who now has piggyback registration rights a waiver of those rights with
respect to such Registration Statement. The Registration Statement (and each
amendment or supplement thereto, and each request for acceleration of
effectiveness thereof) shall be provided in accordance with Section 3(c) to the
Investors and their counsel prior to its filing or other submission. If a
Registration Statement covering the Additional Shares is required to be filed
under this Section 2(a)(ii) and is not filed with the SEC within 30 days of the
request of any Investor or within 30 days of the occurrence of any of the events
specified in this Section 2(a)(ii), the Company will make pro rata payments to
each Investor, as liquidated damages and not as a penalty, in an amount equal to
1.0% of the aggregate amount invested by such Investor for each 30-day period or
pro rata for any portion thereof following the date by which such Registration
Statement should have been filed for which no Registration Statement is filed
with respect to the Additional Shares. Such payments shall constitute the
Investors' sole monetary remedy for such events but shall not limit the
Investors' right to seek specific performance of the provisions hereof. Such
payments shall be made to each Investor in cash.
(iii) Promptly following the date (the "Qualification Date")
upon which the Company becomes eligible to use a registration statement on Form
S-3 to register the Registrable Securities or Additional Shares, as applicable,
for resale, but in no event more than ten (10) days after the Qualification Date
(the "Qualification Deadline"), the Company shall file a registration statement
on Form S-3 covering the Registrable Securities or Additional Shares, as
applicable (or a post-effective amendment on Form S-3 to the registration
statement on Form S-2) (a "Shelf Registration Statement") and shall use
commercially reasonable efforts to cause such Shelf Registration Statement to be
declared effective as promptly as practicable thereafter. If a Shelf
Registration Statement covering the Registrable Securities is not filed with the
SEC on or prior to the Qualification Deadline, the Company will make pro rata
payments to each Investor, as liquidated damages and not as a penalty, in an
amount equal to 1.0% of the aggregate amount invested by such Investor for each
30-day period or pro rata for any portion thereof following the date by which
such Shelf Registration Statement should have been filed for which no such Shelf
Registration Statement is filed with respect to the Registrable Securities or
Additional Shares, as applicable. Such payments shall constitute the Investors'
sole monetary remedy for such events but shall not limit the Investors' right to
seek specific performance of the provisions hereof. Such payments shall be made
to each Investor in cash.
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(b) Expenses. The Company will pay all expenses associated
with each registration, including filing and printing fees, the Company's
counsel and accounting fees and expenses, costs associated with clearing the
Registrable Securities for sale under applicable state securities laws, listing
fees, reasonable fees and expenses of one counsel to the Investors not to exceed
$10,000 and the Investors' reasonable expenses in connection with the
registration, but excluding discounts, commissions, fees of underwriters,
selling brokers, dealer managers or similar securities industry professionals
with respect to the Registrable Securities being sold.
(c) Effectiveness.
(i) The Company shall use commercially reasonable efforts to
have the Registration Statement declared effective as soon as practicable. The
Company shall notify the Investors by facsimile or e-mail as promptly as
practicable, and in any event, within twenty-four (24) hours, after any
Registration Statement is declared effective and shall simultaneously provide
the Investors with copies of any related Prospectus to be used in connection
with the sale or other disposition of the securities covered thereby. If (A)(x)
a Registration Statement covering the Registrable Securities is not declared
effective by the SEC prior to the earlier of (i) if the SEC informs the Company
that no review of the Registration Statement will be made, then five (5)
Business Days after the later of (I) the date on which the SEC shall have
informed the Company that no review of the Registration Statement will be made
or (II) the date on which the Company shall have filed its internal control
report pursuant to Section 404 of the Xxxxxxxx-Xxxxx Act of 2002, or (ii) the
90th day after the Closing Date; (y) a Registration Statement covering
Additional Shares is not declared effective by the SEC within ninety (90) days
following the time such Registration Statement was required to be filed pursuant
to Section 2(a)(ii); or (z) a Shelf Registration Statement is not declared
effective by the SEC within ninety (90) days after the Qualification Deadline,
or (B) after a Registration Statement has been declared effective by the SEC,
sales cannot be made pursuant to such Registration Statement for any reason
(including without limitation by reason of a stop order, or the Company's
failure to update the Registration Statement), but excluding the inability of
any Investor to sell the Registrable Securities covered thereby due to market
conditions and except as excused pursuant to subparagraph (ii) below, then the
Company will make pro rata payments to each Investor, as liquidated damages and
not as a penalty, in an amount equal to 1.0% of the aggregate amount invested by
such Investor for each 30-day period or pro rata for any portion thereof
following the date by which such Registration Statement should have been
effective (the "Blackout Period"). Such payments shall constitute the Investors'
sole monetary remedy for such events but shall not limit the Investors' right to
seek specific performance of the provisions hereof. The amounts payable as
liquidated damages pursuant to this paragraph shall be paid monthly within three
(3) Business Days of the last day of each month following the commencement of
the Blackout Period until the termination of the Blackout Period. Such payments
shall be made to each Investor in cash.
(ii) For not more than twenty (20) consecutive days or for a
total of not more than forty-five (45) days in any twelve (12) month period, the
Company may delay the disclosure of material non-public information concerning
the Company, by suspending the use of any Prospectus included in any
registration contemplated by this Section containing such information, the
disclosure of which at the time is not, in the good faith opinion of the
Company, in the best interests of the Company (an "Allowed Delay"); provided,
that the Company shall
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promptly (a) notify the Investors in writing of the existence of (but in no
event, without the prior written consent of an Investor, shall the Company
disclose to such Investor any of the facts or circumstances regarding) material
non-public information giving rise to an Allowed Delay, (b) advise the Investors
in writing to cease all sales under the Registration Statement until the end of
the Allowed Delay and (c) use commercially reasonable efforts to terminate an
Allowed Delay as promptly as practicable.
3. Company Obligations. The Company will use commercially reasonable
efforts to effect the registration of the Registrable Securities in accordance
with the terms hereof, and pursuant thereto the Company will, as expeditiously
as possible:
(a) use commercially reasonable efforts to cause such
Registration Statement to become effective and to remain continuously effective
for a period that will terminate upon the earlier of (i) the date on which all
Registrable Securities covered by such Registration Statement as amended from
time to time, have been sold, and (ii) the date on which all Registrable
Securities covered by such Registration Statement may be sold pursuant to Rule
144(k) (the "Effectiveness Period") and advise the Investors in writing when the
Effectiveness Period has expired;
(b) prepare and file with the SEC such amendments and
post-effective amendments to the Registration Statement and the Prospectus as
may be necessary to keep the Registration Statement effective for the period
specified in Section 3(a) and to comply with the provisions of the 1933 Act and
the 1934 Act with respect to the distribution of all of the Registrable
Securities covered thereby;
(c) provide copies to and permit counsel designated by the
Investors to review each Registration Statement and all amendments and
supplements thereto no fewer than three (3) Business Days prior to their filing
with the SEC and not file any document to which such counsel reasonably objects;
(d) furnish to the Investors and their legal counsel (i)
promptly after the same is prepared and publicly distributed, filed with the
SEC, or received by the Company (but not later than two (2) Business Days after
the filing date, receipt date or sending date, as the case may be) one (1) copy
of any Registration Statement and any amendment thereto, each preliminary
prospectus and Prospectus and each amendment or supplement thereto, and each
letter written by or on behalf of the Company to the SEC or the staff of the
SEC, and each item of correspondence from the SEC or the staff of the SEC, in
each case relating to such Registration Statement (other than any portion of any
thereof which contains information for which the Company has sought confidential
treatment), and (ii) such number of copies of a Prospectus, including a
preliminary prospectus, and all amendments and supplements thereto and such
other documents as each Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Investor that are
covered by the related Registration Statement;
(e) use commercially reasonable efforts to (i) prevent the
issuance of any stop order or other suspension of effectiveness and, (ii) if
such order is issued, obtain the withdrawal of any such order at the earliest
possible moment;
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(f) prior to any public offering of Registrable Securities,
use commercially reasonable efforts to register or qualify or cooperate with the
Investors and their counsel in connection with the 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 asset forth on Exhibit B
attached hereto (the "Approved Jurisdictions") and do any and all other
commercially reasonable acts or things necessary or advisable to enable the
distribution in such jurisdictions of the Registrable Securities covered by the
Registration Statement; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (i) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(f), (ii) subject itself to general taxation in any
jurisdiction where it would not otherwise be so subject but for this Section
3(f), or (iii) file a general consent to service of process in any such
jurisdiction;
(g) use commercially reasonable efforts to cause all
Registrable Securities covered by a Registration Statement to be listed on each
securities exchange, interdealer quotation system or other market on which
similar securities issued by the Company are then listed;
(h) immediately notify the Investors, at any time when a
Prospectus relating to Registrable Securities is required to be delivered under
the 1933 Act, upon discovery that, or upon the happening of any event as a
result of which, the Prospectus included in a Registration Statement, as then in
effect, includes 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 then existing, and at the
request of any such holder, promptly prepare and furnish to such holder a
reasonable number of copies of a supplement to or an amendment of such
Prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such Prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing; and
(i) otherwise use commercially reasonable efforts to comply
with all applicable rules and regulations of the SEC under the 1933 Act and the
1934 Act, take such other actions as may be reasonably necessary to facilitate
the registration of the Registrable Securities hereunder; and make available to
its security holders, as soon as reasonably practicable, but not later than the
Availability Date (as defined below), an earnings statement covering a period of
at least twelve (12) months, beginning after the effective date of each
Registration Statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the 1933 Act, including Rule 158 promulgated thereunder (for
the purpose of this subsection 3(i), "Availability Date" means the 45th day
following the end of the fourth fiscal quarter that includes the effective date
of such Registration Statement, except that, if such fourth fiscal quarter is
the last quarter of the Company's fiscal year, "Availability Date" means the
90th day after the end of such fourth fiscal quarter).
(j) With a view to making available to the Investors the
benefits of Rule 144 (or its successor rule) and any other rule or regulation of
the SEC that may at any time permit the Investors to sell shares of Common Stock
to the public without registration, the Company covenants and agrees to: (i)
make and keep public information available, as those
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terms are understood and defined in Rule 144, until the earlier of (A) six
months after such date as all of the Registrable Securities may be resold
pursuant to Rule 144(k) or any other rule of similar effect or (B) such date as
all of the Registrable Securities shall have been resold; (ii) file with the SEC
in a timely manner all reports and other documents required of the Company under
the 1934 Act; and (iii) furnish to each Investor upon request, as long as such
Investor owns any Registrable Securities, (A) a written statement by the Company
that it has complied with the reporting requirements of the 1934 Act, (B) a copy
of the Company's most recent Annual Report on Form 10-K or Quarterly Report on
Form 10-Q, and (C) such other information as may be reasonably requested in
order to avail such Investor of any rule or regulation of the SEC that permits
the selling of any such Registrable Securities without registration.
4. Due Diligence Review; Information. The Company shall make
available, during normal business hours, for inspection and review by the
Investors, advisors to and representatives of the Investors (who may or may not
be affiliated with the Investors and who are reasonably acceptable to the
Company), all financial and other records, all SEC Filings (as defined in the
Purchase Agreement) and other filings with the SEC, and all other corporate
documents and properties of the Company as may be reasonably necessary for the
purpose of such review, and cause the Company's officers, directors and
employees, within a reasonable time period, to supply all such information
reasonably requested by the Investors or any such representative, advisor or
underwriter in connection with such Registration Statement (including, without
limitation, in response to all questions and other inquiries reasonably made or
submitted by any of them), prior to and from time to time after the filing and
effectiveness of the Registration Statement for the sole purpose of enabling the
Investors and such representatives, advisors and underwriters and their
respective accountants and attorneys to conduct initial and ongoing due
diligence with respect to the Company and the accuracy of such Registration
Statement.
After the date of this Agreement, the Company shall not disclose
material nonpublic information to the Investors, or to advisors to or
representatives of the Investors, unless prior to disclosure of such information
the Company identifies such information as being material nonpublic information
and provides the Investors, such advisors and representatives with the
opportunity to accept or refuse to accept such material nonpublic information
for review and any Investor wishing to obtain such information enters into an
appropriate confidentiality agreement with the Company with respect thereto.
5. Obligations of the Investors.
(a) Each Investor shall furnish in writing to the Company such
information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it, as
shall be reasonably required to effect the registration of such Registrable
Securities and shall execute such documents in connection with such registration
as the Company may reasonably request. At least five (5) Business Days prior to
the first anticipated filing date of any Registration Statement, the Company
shall notify each Investor of the information the Company requires from such
Investor if such Investor elects to have any of the Registrable Securities
included in the Registration Statement. An Investor shall provide such
information to the Company at least two (2) Business Days prior to the first
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anticipated filing date of such Registration Statement if such Investor elects
to have any of the Registrable Securities included in the Registration
Statement.
(b) Each Investor, by its acceptance of the Registrable
Securities agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of a Registration
Statement hereunder, unless such Investor has notified the Company in writing of
its election to exclude all of its Registrable Securities from such Registration
Statement.
(c) Each Investor agrees that, upon receipt of any notice from
the Company of either (i) the commencement of an Allowed Delay pursuant to
Section 2(c)(ii) or (ii) the happening of an event pursuant to Section 3(h)
hereof, such Investor will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities, until the Investor's receipt of the copies of the supplemented or
amended prospectus filed with the SEC and until any related post-effective
amendment is declared effective and, if so directed by the Company, the Investor
shall deliver to the Company (at the expense of the Company) or destroy (and
deliver to the Company a certificate of destruction) all copies in the
Investor's possession of the Prospectus covering the Registrable Securities
current at the time of receipt of such notice.
6. Indemnification.
(a) Indemnification by the Company. The Company will indemnify
and hold harmless each Investor and its officers, directors, members, employees
and agents, successors and assigns, and each other person, if any, who controls
such Investor within the meaning of the 1933 Act, against any losses, claims,
damages or liabilities, joint or several, to which they may become subject under
the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement of any material fact contained
in any Registration Statement, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof; (ii) any blue sky
application or other document executed by the Company specifically for that
purpose or based upon written information furnished by the Company filed in any
Approved Jurisdiction in order to qualify any or all of the Registrable
Securities under the securities laws thereof (any such application, document or
information herein called a "Blue Sky Application"); (iii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; (iv) any violation
by the Company or its agents of any rule or regulation promulgated under the
1933 Act applicable to the Company or its agents and relating to action or
inaction required of the Company in connection with such registration; or (v)
any failure to register or qualify the Registrable Securities included in any
such Registration in any Approved Jurisdiction and will reimburse such Investor,
and each such officer, director or member and each such controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case if and
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by
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such Investor or any such controlling person in writing specifically for use in
such Registration Statement or Prospectus.
(b) Indemnification by the Investors. Each Investor agrees,
severally but not jointly, to indemnify and hold harmless, to the fullest extent
permitted by law, the Company, its directors, officers, employees, stockholders
and each person who controls the Company (within the meaning of the 0000 Xxx)
against any losses, claims, damages, liabilities and expense (including
reasonable attorney fees) resulting from any untrue statement of a material fact
or any omission of a material fact required to be stated in the Registration
Statement or Prospectus or preliminary prospectus or amendment or supplement
thereto 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 furnished in writing by such Investor to the
Company specifically for inclusion in such Registration Statement or Prospectus
or amendment or supplement thereto. In no event shall the liability of a selling
Investor be greater in amount than the dollar amount of the proceeds (net of all
expense paid by such Investor in connection with any claim relating to this
Section 6 and the amount of any damages such Investor has otherwise been
required to pay by reason of such untrue statement or omission) received by such
Investor upon the sale of the Registrable Securities included in the
Registration Statement giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. Any person
entitled to indemnification hereunder shall (i) give prompt notice to the
indemnifying party of any claim with respect to which it seeks indemnification
and (ii) permit such indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party; provided that any
person entitled to indemnification hereunder shall have the right to employ
separate counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such person unless (a)
the indemnifying party has agreed to pay such fees or expenses, or (b) the
indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such person or (c) in the reasonable
judgment of any such person, based upon written advice of its counsel, a
conflict of interest exists between such person and the indemnifying party with
respect to such claims (in which case, if the person notifies the indemnifying
party in writing that such person elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such claim on behalf of such person); and
provided, further, that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
hereunder, except to the extent that such failure to give notice shall
materially adversely affect the indemnifying party in the defense of any such
claim or litigation. It is understood that the indemnifying party shall not, in
connection with any proceeding in the same jurisdiction, be liable for fees or
expenses of more than one separate firm of attorneys at any time for all such
indemnified parties. No indemnifying party will, except with the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect of such claim or litigation.
(d) Contribution. If for any reason the indemnification
provided for in the preceding paragraphs (a) and (b) is unavailable to an
indemnified party or insufficient to hold
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it harmless, other than as expressly specified therein, then the indemnifying
party shall contribute to the amount paid or payable by the indemnified party as
a result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable considerations. No
person guilty of fraudulent misrepresentation within the meaning of Section
11(f) of the 1933 Act shall be entitled to contribution from any person not
guilty of such fraudulent misrepresentation. In no event shall the contribution
obligation of a selling holder of Registrable Securities be greater in amount
than the dollar amount of the proceeds (net of all expenses paid by such holder
in connection with any claim relating to this Section 6 and the amount of any
damages such holder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission) received by it upon
the sale of the Registrable Securities giving rise to such contribution
obligation.
7. Miscellaneous.
(a) Amendments and Waivers. This Agreement may be amended only
by a writing signed by the Company and the Required Investors. The Company may
take any action herein prohibited, or omit to perform any act herein required to
be performed by it, only if the Company shall have obtained the written consent
to such amendment, action or omission to act, of the Required Investors.
(b) Notices. All notices and other communications provided for
or permitted hereunder shall be made as set forth in Section 9.4 of the Purchase
Agreement.
(c) Assignments and Transfers by Investors. The provisions of
this Agreement shall be binding upon and inure to the benefit of the Investors
and their respective successors and assigns. An Investor may transfer or assign,
in whole or from time to time in part, to one or more persons its rights
hereunder in connection with the transfer of Registrable Securities by such
Investor to such person, provided that such Investor complies with all laws
applicable thereto and provides written notice of assignment to the Company
promptly after such assignment is effected.
(d) Assignments and Transfers by the Company. This Agreement
may not be assigned by the Company (whether by operation of law or otherwise)
without the prior written consent of the Required Investors, provided, however,
that the Company may assign its rights and delegate its duties hereunder to any
surviving or successor corporation in connection with a merger or consolidation
of the Company with another corporation, or a sale, transfer or other
disposition of all or substantially all of the Company's assets to another
corporation, without the prior written consent of the Required Investors, after
notice duly given by the Company to each Investor.
(e) Benefits of the Agreement. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
-10-
(f) Counterparts; Faxes. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement may
also be executed via facsimile, which shall be deemed an original.
(g) Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(h) Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereby
waive any provision of law which renders any provisions hereof prohibited or
unenforceable in any respect.
(i) Further Assurances. The parties shall execute and deliver
all such further instruments and documents and take all such other actions as
may reasonably be required to carry out the transactions contemplated hereby and
to evidence the fulfillment of the agreements herein contained.
(j) 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. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
(k) Governing Law; Consent to Jurisdiction; Waiver of Jury
Trial. This Agreement shall be governed by, and construed in accordance with,
the internal laws of the State of New York without regard to the choice of law
principles thereof. Each of the parties hereto irrevocably submits to the
exclusive jurisdiction of the courts of the State of New York located in New
York County and the United States District Court for the Southern District of
New York for the purpose of any suit, action, proceeding or judgment relating to
or arising out of this Agreement and the transactions contemplated hereby.
Service of process in connection with any such suit, action or proceeding may be
served on each party hereto anywhere in the world by the same methods as are
specified for the giving of notices under this Agreement. Each of the parties
hereto irrevocably consents to the jurisdiction of any such court in any such
suit, action or proceeding and to the laying of venue in such court. Each party
hereto irrevocably waives any objection to the laying of venue of any such suit,
action or proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO
REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.
-11-
IN WITNESS WHEREOF, the parties have executed this Agreement or
caused their duly authorized officers to execute this Agreement as of the date
first above written.
The Company: ENDOCARE, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------------------
Xxxxxxx X. Xxxxxxxxx
Senior Vice President, Finance and Chief
Financial Officer
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT RELATING TO SALE OF COMMON
STOCK AND WARRANTS OF ENDOCARE, INC.]
-12-
The Investors: SRB Greenway Capital, L.P.
By: SRB Management, L.P., General Partner
By: BC Advisors, L.L.C., General Partner
By /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Xxxxxx X. Xxxxxx, Member
-13-
The Investors: SRB Greenway Capital (QP), L.P.
By: SRB Management, L.P., General Partner
By: BC Advisors, L.L.C., General Partner
By /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx, Member
-14-
The Investors: SRB Greenway Offshore Operating Fund, L.P.
By: SRB Management, L.P., General Partner
By: BC Advisors, L.L.C., General Partner
By /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx, Member
-15-
The Investors: WS Opportunity Fund (QP), L.P.
By: WS Ventures Management, L.P.,
General Partner
By: WSV Management, L.L.C., General Partner
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Xxxx X. Xxxxxx, Member
-16-
The Investors: WS Opportunity Fund International, Ltd.
By: WS Ventures Management, L.P.,
As agent and attorney-in-fact
By: WSV Management, L.L.C., General Partner
By: /s/ Xxxx Xxxxxx
--------------------------------------
Xxxx Xxxxxx, Member
-17-
The Investors: Xxxxxx Xxxxx Capital (QP), L.P.
By: WS Capital Management, L.P.,
General Partner
By: WS Capital, L.L.C., General Partner
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx, Member
-18-
The Investors: WS Opportunity Fund, L.P.
By: WS Ventures Management, L.P.,
General Partner
By: WSV Management, L.L.C., General Partner
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Xxxx X. Xxxxxx, Member
-19-
The Investors: Xxxxxx Xxxxx International Fund, Ltd.
By: WS Capital Management, L.P.,
As agent and attorney-in-fact
By: WS Capital, L.L.C., General Partner
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx, Member
-20-
The Investors: Xxxxxx Xxxxx Capital, L.P.
By: WS Capital Management, L.P.,
General Partner
By: WS Capital, L.L.C., General Partner
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx, Member
-21-
The Investors (continued): PARAGON ASSOCIATES J.V.
By /s/ Xxxxxxxx Xxxx, III
--------------------------------
Name: Xxxxxxxx Xxxx, III
Title: Managing Agent
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT RELATING TO SALE OF COMMON
STOCK AND WARRANTS OF ENDOCARE, INC.]
-22-
The Investors (continued): XXXXX CAPITAL PARTNERS, L.P.
By: XXXXX CAPITAL MANAGEMENT, LLC,
Its General Partner
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Member
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT RELATING TO SALE OF COMMON
STOCK AND WARRANTS OF ENDOCARE, INC.]
-23-
The Investors (continued): GW 2001 FUND, L.P.
By: XXXXX CAPITAL MANAGEMENT, LLC,
Its General Partner
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Member
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT RELATING TO SALE OF COMMON
STOCK AND WARRANTS OF ENDOCARE, INC.]
-24-
The Investors (continued): ARBOR PARTNERS, L.P.
By: APM Partners, L.P., General Partner
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: President of Shuco, Inc., General
Partner of APM Partners, L.P.
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT RELATING TO SALE OF COMMON
STOCK AND WARRANTS OF ENDOCARE, INC.]
-25-
The Investors (continued): WPG OPPORTUNISTIC VALUE FUND,
L.P.
By: WPG Opportunistic Value Fund
Manager, L.L.C., General Partner
By: Xxxxx, Xxxx & Xxxxx Investments, a
Division of Robeco USA, L.L.C., Sole
Managing Member
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Chief Investment Officer
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT RELATING TO SALE OF COMMON
STOCK AND WARRANTS OF ENDOCARE, INC.]
-26-
The Investors (continued): WPG OPPORTUNISTIC VALUE FUND,
OVERSEAS L.P.
By: WPG Opportunistic Value Fund
Manager, L.L.C., Supervisory General Partner
By: Xxxxx, Xxxx & Xxxxx Investments, a
Division of Robeco USA, L.L.C., Sole
Managing Member
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Managing Director
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Chief Investment Officer
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT RELATING TO SALE OF COMMON
STOCK AND WARRANTS OF ENDOCARE, INC.]
-27-
The Investors (continued): PUBLIC EMPLOYEE RETIREMENT SYSTEM OF IDAHO
CITY OF MILFORD PENSION & RETIREMENT FUND
CITY OF STAMFORD FIREMEN'S PENSION FUND
NORWALK EMPLOYEES' PENSION PLAN
X.X. XXXXXX TRUST CO (BAHAMAS) LTD. AS TRUSTEE
U/A/D 11/30/93
XXXXXX X. XXXXXXX
By: XXXXXXX CAPITAL GROUP, LLC,
As Attorney-in-fact
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT RELATING TO SALE OF COMMON
STOCK AND WARRANTS OF ENDOCARE, INC.]
-28-
The Investors (continued): CIMARRON OVERSEAS EQUITY MASTER
FUND LP
By: /s/ X.X. Xxxxxx Xxxxx
-----------------------------------
Name: X.X. Xxxxxx Xxxxx
Title: President of the General Partner
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT RELATING TO SALE OF COMMON
STOCK AND WARRANTS OF ENDOCARE, INC.]
-29-
The Investors (continued): XXXXXXX FAMILY LIMITED PARTNERSHIP
LP
By: /s/ X.X. Xxxxxx Xxxxx
------------------------------
Name: X.X. Xxxxxx Xxxxx
Title: Managing General Partner
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT RELATING TO SALE OF COMMON
STOCK AND WARRANTS OF ENDOCARE, INC.]
-30-
The Investors (continued): XXXXXX X. XXXXXXX AND XXXXXXX X.
XXXXXXX REVOCABLE TRUST
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Trustee
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT RELATING TO SALE OF COMMON
STOCK AND WARRANTS OF ENDOCARE, INC.]
-31-
The Investors (continued): HAIMOVITCH MEDICAL TECHNOLOGY
CONSULTANTS
By: /s/ Xxxxx Xxxxxxxxxx
------------------------------
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT RELATING TO SALE OF COMMON
STOCK AND WARRANTS OF ENDOCARE, INC.]
-32-
The Investors:
/s/ Xxxxx Xxxxxx
----------------------------------
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT RELATING TO SALE OF COMMON
STOCK AND WARRANTS OF ENDOCARE, INC.]
-33-
The Investors:
/s/ Xxxx Xxxxxxx
----------------------------------
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT RELATING TO SALE OF COMMON
STOCK AND WARRANTS OF ENDOCARE, INC.]
-34-
The Investors (continued): MIDWOOD CAPITAL PARTNERS, L.P.
By: /s/ Xxxx XxXxxx
------------------------------
Name: Xxxx XxXxxx
Title: Principal
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT RELATING TO SALE OF COMMON
STOCK AND WARRANTS OF ENDOCARE, INC.]
-35-
The Investors (continued): MIDWOOD CAPITAL PARTNERS QP, L.P.
By: /s/ Xxxx XxXxxx
------------------------------
Name: Xxxx XxXxxx
Title: Principal
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT RELATING TO SALE OF COMMON
STOCK AND WARRANTS OF ENDOCARE, INC.]
-36-
The Investors (continued):
/s/ Xxxxx X. Xxxxxxxxx
----------------------------------
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT RELATING TO SALE OF COMMON
STOCK AND WARRANTS OF ENDOCARE, INC.]
-37-
The Investors (continued):
/s/ Xxxxxxx X. Xxxxx
----------------------------------
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT RELATING TO SALE OF COMMON
STOCK AND WARRANTS OF ENDOCARE, INC.]
-38-
The Investors (continued):
Xxxxxxx Family Trust
Trustee /s/ Xxxx X. Xxxxxxx, M.D.
----------------------------------
Trustee /s/ XxxxXxxxx Xxxxxxx
----------------------------------
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT RELATING TO SALE OF COMMON
STOCK AND WARRANTS OF ENDOCARE, INC.]
-39-
Exhibit A
PLAN OF DISTRIBUTION
The selling stockholders, which as used herein includes donees, pledgees,
transferees or other successors-in-interest selling shares of common stock or
interests in shares of common stock received after the date of this prospectus
from a selling stockholder as a gift, pledge, partnership distribution or other
transfer, may, from time to time, sell, transfer or otherwise dispose of any or
all of their shares of common stock or interests in shares of common stock on
any stock exchange, market or trading facility on which the shares are traded or
in private transactions. These dispositions may be at fixed prices, at
prevailing market prices at the time of sale, at prices related to the
prevailing market price, at varying prices determined at the time of sale, or at
negotiated prices.
The selling stockholders may use any one or more of the following methods
when disposing of shares or interests therein:
- ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
- block trades in which the broker-dealer 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 the
broker-dealer for its account;
- an exchange distribution in accordance with the rules of the applicable
exchange;
- privately negotiated transactions;
- short sales effected after the date the registration statement of which
this Prospectus is a part is declared effective by the SEC;
- through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise;
- broker-dealers may agree with the selling stockholders to sell a
specified number of such shares at a stipulated price per share;
- a combination of any such methods of sale; and
- any other method permitted pursuant to applicable law.
The selling stockholders may, from time to time, pledge or grant a
security interest in some or all of the shares of common stock owned by them
and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares of common stock, from
time to time, under this prospectus, or under an amendment to this
prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act amending the list of selling stockholders to include the pledgee, transferee
or other successors in interest as selling stockholders under this prospectus.
The selling stockholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other successors in
interest will be the selling beneficial owners for purposes of this prospectus.
In connection with the sale of our common stock or interests therein, the
selling stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. The selling
stockholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The selling
stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
The aggregate proceeds to the selling stockholders from the sale of the
common stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any. Each of the selling stockholders reserves the
right to accept and, together with their agents from time to time, to reject, in
whole or in part, any proposed purchase of common stock to be made directly or
through agents. We will not receive any of the proceeds from this offering. Upon
any exercise of the warrants by payment of cash, however, we will receive the
exercise price of the warrants.
The selling stockholders also may resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act of
1933, provided that they meet the criteria and conform to the requirements of
that rule.
The selling stockholders and any underwriters, broker-dealers or agents
that participate in the sale of the common stock or interests therein may be
"underwriters" within the meaning of Section 2(11) of the Securities Act. Any
discounts, commissions, concessions or profit they earn on any resale of the
shares may be underwriting discounts and commissions under the Securities Act.
Selling stockholders who are "underwriters" within the meaning of Section 2(11)
of the Securities Act will be subject to the prospectus delivery requirements of
the Securities Act.
To the extent required, the shares of our common stock to be sold, the
names of the selling stockholders, the respective purchase prices and public
offering prices, the names of any agents, dealer or underwriter, any applicable
commissions or discounts with respect to a particular offer will be set forth in
an accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this prospectus.
In order to comply with the securities laws of some states, if applicable,
the common stock may be sold in these jurisdictions only through registered or
licensed brokers or dealers. In addition, in some states the common stock may
not be sold unless it has been registered or
-41-
qualified for sale or an exemption from registration or qualification
requirements is available and is complied with.
We have advised the selling stockholders that the anti-manipulation rules
of Regulation M under the Exchange Act may apply to sales of shares in the
market and to the activities of the selling stockholders and their affiliates.
In addition, we will make copies of this prospectus (as it may be supplemented
or amended from time to time) available to the selling stockholders for the
purpose of satisfying the prospectus delivery requirements of the Securities
Act. The selling stockholders may indemnify any broker-dealer that participates
in transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.
We have agreed to indemnify the selling stockholders against liabilities,
including liabilities under the Securities Act and state securities laws,
relating to the registration of the shares offered by this prospectus.
We have agreed with the selling stockholders to keep the registration
statement of which this prospectus constitutes a part effective until the
earlier of (1) such time as all of the shares covered by this prospectus have
been disposed of pursuant to and in accordance with the registration statement
or (2) the date on which the shares may be sold pursuant to Rule 144(k) of the
Securities Act.
-42-
Exhibit B
Approved Jurisdictions
Arizona
California
Florida
Illinois
Massachusetts
New Jersey
New York
Texas
-43-
