REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of January 6, 1997, between
Procept, Inc., a Delaware corporation (the "Company"), and Xxxxxx Xxxx LLC
(together with its permitted assignees, the "Holders").
W I T N E S S E T H
WHEREAS, the Company has issued to the Holders warrants (the
"Warrants") to purchase shares of the common stock, $0.01 par value per share
(the "Common Stock"), of the Company (the "Warrant Shares");
NOW, THEREFORE, in consideration of the premises and the agreements
herein set forth, and for other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Grant of Rights.
1.1. Demand Registration Rights.
1.1.1. Filing of Registration Statement. Upon the receipt of
demand from the Holders of a majority of the total number of Registrable Shares
(as defined below), requesting registration of Registrable Shares, then not
later than 60 days after the date of such demand, the Company shall prepare and
file with the Securities and Exchange Commission (the "Commission") a
Registration Statement on Form S-8 or Form S-3 sufficient to permit the public
offering and sale of the Registrable Shares requested to be registered (together
with additional Registrable Shares for which registration is requested under
Section 1.1.2) through all securities exchanges and over-the-counter markets on
which the Common Stock is then traded. For the purposes of this Agreement
"Registrable Shares" shall mean Warrant Shares outstanding or issuable upon the
exercise of the Warrants and any such outstanding Warrant Shares or issuable
Warrant Shares that either (i) are not at that time the subject of an effective
registration statement filed with the Commission or previously sold pursuant to
such a registration statement, (ii) are not eligible for sale under the
provisions of the Commission's Rule 144 without regard to volume limitations, or
(iii) have not been previously sold in compliance with Rule 144.
1.1.2. Notice of Filing of Registration Statement. In the
event the Company receives a demand to file a registration pursuant to Section
1.1.1, the Company shall notify each Holder not named in the demand of the
proposed filing and request that each Holder notify the Company within 15 days
thereafter of the number of Registrable Shares such Holder wishes the Company to
register on such Holder's behalf. Each Holder shall, prior to the end of such 15
day period, request in writing that the Company register the sale of all or part
of such Holder's Registrable Shares, or such Holder shall lose the right to
participate in the registration under Section 1.1.1.
1.2. Piggyback Registration Rights.
1.2.1. Offer to Include Registrable Shares in Company
Offering. If, at any time when Registrable Shares are outstanding, the Company
shall file a registration statement (other than on Form X-0, Xxxx X-0, or any
successor form) to register shares of Common Stock for its own account with the
Commission, the Company shall give all the Holders at least 45 days' prior
written notice of the filing of such registration statement. Subject to Section
1.2.2 below, if requested by any Holder in writing within 30 days after receipt
of any such notice, the Company shall register or qualify all or, at each
Holder's option, any portion of the Registrable Shares of any Holders who shall
have made such request, concurrently with the registration of such other
securities, all to the extent requisite to permit the public offering and sale
of the Registrable Shares through the facilities of all appropriate securities
exchanges and the over-the-counter market, and will use its best efforts through
its officers, directors, auditors, and counsel to cause such registration
statement to become effective as promptly as practicable.
1.2.2. Cutback of Participation in Company Offering.
Notwithstanding Section 1.2.1 above, if the managing underwriter of any such
offering shall advise the Company in writing that, in its opinion, the
distribution of all or a portion of the Registrable Shares requested to be
included in the registration concurrently with the securities being registered
by the Company would materially adversely affect the distribution of such
securities by the Company for its own account, then the number of Registrable
Shares held by such Holder to be included in such registration statement shall
be reduced to the extent advised by such managing underwriter, provided that any
such reduction shall be made pro rata among the Holders electing to participate
in such registration based on the aggregate number of Registrable Shares held by
each Holder electing to so participate.
1.3. Underwriting.
1.3.1. Underwriting in Secondary Registration. If the
Company undertakes a registration under Section 1.1, any Holder wishing to
distribute the Registrable Shares which such Holder has requested to be
registered in such registration by means of an underwriting, such Holder shall
so advise the Company in such Holder's request to participate in such
registration under Sections 1.1.1 or 1.1.2. The Holders of a majority of the
Registrable Shares being offered may select one or more underwriters for the
registration under Section 1.1, which selection shall be approved by the
Company, which approval shall not be unreasonably withheld provided such
underwriter(s) are experienced and reputable. The Company shall, together with
the Holders engaged in the registration hereunder, enter into an underwriting
agreement with the representative of the underwriter or underwriters selected
for such underwriting in accordance with this Section 1.3.1.
1.3.2. Underwriting in Piggyback Registration. In the event
of an underwritten registration pursuant to the provisions of Section 1.2, any
Holder who requests
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to have Registrable Shares included in such registration shall enter into such
custody agreements and powers of attorney as are reasonably requested by the
Company and any such underwriter, and, if requested, enter into an underwriting
agreement containing customary terms.
1.3.3. Right of Withdrawal from Underwriting. In the event
of an underwritten offering under Section 1.3.1 or 1.3.2, the right of a Holder
to participate in a registration hereunder shall be conditioned upon the
inclusion of such Holder's Registrable Shares in such underwriting. If a Holder
disapproves of the terms of the underwriting, such Holder may elect to withdraw
therefrom by written notice to the Company and the underwriter delivered at
least seven days prior to the effective date of the Registration Statement. The
securities so withdrawn shall also be withdrawn from the Registration Statement.
1.4. Effectiveness and Expenses. The Company will use its best
efforts through its officers, directors, auditors and counsel to cause any
Registration Statement filed pursuant to this Section 1 to become effective as
promptly as practicable. The Company shall be obligated to use its best efforts
to maintain the effectiveness of such Registration Statement only until the date
on which no Registrable Shares remain outstanding (the "Registration Termination
Date"). The Company shall be obligated to pay all expenses (other than the fees
and disbursements of counsel for the Holders and underwriting discounts, if any,
payable in respect of the Registrable Shares sold by the Holders) in connection
with any such registration statement.
1.5. Blue Sky Registrations. In the event of a registration
pursuant to the provisions of this Section 1, the Company shall use its best
efforts to cause the Registrable Shares so registered to be registered or
qualified for sale under the securities or blue sky laws of such jurisdictions
as the Holders may reasonably request; provided, however, that the Company shall
not be required to qualify to do business in any state by reason of this Section
1.5 in which it is not otherwise required to qualify to do business.
1.6. Continuing Effectiveness. Until the Registration Termination
Date, the Company shall use its best efforts to keep effective any registration
or qualification contemplated by this Section 1 and shall from time to time
amend or supplement each applicable registration statement, preliminary
prospectus, final prospectus, application, document and communication for such
period of time as shall be required to permit the Holders to complete the offer
and sale of the Registrable Shares covered thereby.
1.7. Copies of Registration Statement and Related Documents. In
the event of a registration pursuant to the provisions of this Section 1, the
Company shall furnish to each Holder a copy of the Registration Statement and of
each amendment and supplement thereto (in each case, including all exhibits),
and a reasonable number of copies of each prospectus contained in such
registration statement and each supplement or amendment thereto (including each
preliminary prospectus), all of which shall conform to the
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requirements of the Securities Act of 1933, as amended (the "Securities Act"),
and the rules and regulations thereunder, and such other documents, as any
Holder may reasonably request to facilitate the disposition of the Registrable
Shares included in such registration.
1.8. Rule 144 Eligibility. The Company agrees that until all the
Registrable Shares have been sold under a registration statement or pursuant to
Rule 144 under the Securities Act, the Company shall use its best efforts to
keep current in filing all reports, statements and other materials required to
be filed with the Commission to permit holders of the Registrable Shares to sell
such securities under Rule 144.
2. Indemnity.
2.1. Company Indemnification of the Holders. Subject to the
conditions set forth below, the Company agrees to indemnify and hold harmless
each Holder, its officers, directors, partners, employees, agents and counsel,
and each person, if any, who controls any such person within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), from and against any and all loss,
liability, charge, claim, damage and expense whatsoever (which shall include,
for all purposes of this Section 2, without limitation, attorneys' fees and any
and all expenses whatsoever incurred in investigating, preparing or defending
against any litigation, commenced or threatened, or any claim whatsoever, and
any and all amounts paid in settlement of any claim or litigation), as and when
incurred, arising out of, based upon, or in connection with any untrue statement
or alleged untrue statement of a material fact contained in any registration
statement, preliminary prospectus or final prospectus (as from time to time
amended and supplemented), or any amendment or supplement thereto, relating to
the sale of any of the Registrable Shares; or any omission or alleged omission
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, unless such statement or omission was made in
reliance upon and in conformity with written information furnished to the
Company with respect to such Holder by or on behalf of such person expressly for
inclusion in any registration statement, preliminary prospectus, or final
prospectus, or any amendment or supplement thereto, as the case may be. The
foregoing agreement to indemnify shall be in addition to any liability the
Company may otherwise have, including liabilities arising under this Agreement.
If any action is brought against any Holder or any of its officers,
directors, partners, employees, agents or counsel, or any controlling persons of
such person (an "Indemnified Party") in respect of which indemnity may be sought
against the Company pursuant to the foregoing paragraph, such Indemnified Party
or Parties shall promptly notify the Company in writing of the institution of
such action (but the failure so to notify shall not relieve the Company from any
liability other than pursuant to this Section 2.1) and the Company shall
promptly assume the defense of such action, including the employment of counsel
(reasonably satisfactory to such Indemnified Party or Parties) and payment of
expenses. Such Indemnified Party or Parties shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such
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Indemnified Party or Parties unless the employment of such counsel shall have
been authorized in writing by the Company in connection with the defense of such
action or the Company shall not have promptly employed counsel reasonably
satisfactory to such Indemnified Party or Parties to have charge of the defense
of such action or such Indemnified Party or Parties shall have reasonably
concluded that there may be one or more legal defenses available to it or them
or to other indemnified parties which are different from or additional to those
available to the Company, in any of which events such fees and expenses shall be
borne by the Company, and the Company shall not have the right to direct the
defense of such action on behalf of the Indemnified Party or Parties. Anything
in this Section 2 to the contrary notwithstanding, the Company shall not be
liable for any settlement of any such claim or action effected without its
written consent, which shall not be unreasonably withheld. The Company shall
not, without the prior written consent of each Indemnified Party that is not
released as described in this sentence, settle or compromise any action, or
permit a default or consent to the entry of judgment in or otherwise seek to
terminate any pending or threatened action, in respect of which indemnity may be
sought hereunder (whether or not any Indemnified Party is a party thereto),
unless such settlement, compromise, consent or termination includes an
unconditional release of each Indemnified Party from all liability in respect of
such action. The Company agrees promptly to notify the Holders of the
commencement of any litigation or proceedings against the Company or any of its
officers or directors in connection with the sale of any Registrable Shares or
any preliminary prospectus, prospectus, registration statement or amendment or
supplement thereto, or any application relating to any sale of any Registrable
Shares.
2.2. Holder Indemnification of the Company. Each Holder
participating in any such registration shall indemnify and hold harmless the
Company, each director of the Company, each officer of the Company who shall
have signed the registration statement covering Registrable Shares held by the
Holder, each other person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act, and
its or their respective counsel, to the same extent as the foregoing indemnity
from the Company to the Holders in Section 2.1, but only with respect to
statements or omissions, if any, made in any registration statement, preliminary
prospectus or final prospectus or any amendment or supplement thereto, or in any
application, in reliance upon and in conformity with written information
furnished to the Company with respect to such Holder by or on behalf of such
Holder expressly for inclusion in any such registration statement, preliminary
prospectus or final prospectus (as from time to time amended and supplemented),
or any amendment or supplement thereto, or in any application, as the case may
be. If any action shall be brought against the Company or any other person so
indemnified based on any such registration statement, preliminary prospectus or
final prospectus, or any amendment or supplement thereto, or in any application,
and in respect of which indemnity may be sought against such Holder pursuant to
this Section 2.2, such Holder shall have the rights and duties given to the
Company and the Company and each other person so indemnified shall have the
rights and duties given to the indemnified parties, by the provisions of Section
2.1.
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2.3. Contribution. To provide for just and equitable
contribution, if (i) an Indemnified Party makes a claim for indemnification
pursuant to Section 2.1 or 2.2 (subject to the limitations thereof) but it is
found in a final judicial determination, not subject to further appeal, that
such indemnification may not be enforced in such case, even though this
Agreement expressly provides for indemnification in such case, or (ii) any
indemnified or indemnifying party seeks contribution under the Securities Act,
the Exchange Act or otherwise, then the Company (including for this purpose any
contribution made by or on behalf of any director of the Company, any officer of
the Company who signed any such registration statement, any controlling person
of the Company, and its or their respective counsel), as one entity, and the
Holders of the Registrable Shares included in such registration in the aggregate
(including for this purpose any contribution by or on behalf of an Indemnified
Party), as a second entity, shall contribute to the losses, liabilities, claims,
damages and expenses whatsoever to which any of them may be subject, on the
basis of relevant equitable considerations such as the relative fault of the
Company and such Holders in connection with the facts which resulted in such
losses, liabilities, claims, damages and expenses. The relative fault, in the
case of an untrue statement, alleged untrue statement, omission or alleged
omission, shall be determined by, among other things, whether such statement,
alleged statement, omission or alleged omission relates to information supplied
by the Company or by such Holders, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement,
alleged statement, omission or alleged omission. The Company and the Holder
agree that it would be unjust and inequitable if the respective obligations of
the Company and the Holders for the contribution were determined by pro rata or
per capita allocation of the aggregate losses, liabilities, claims, damages and
expenses (even if the Holder and the other indemnified parties were treated as
one entity for such purpose) or by any other method of allocation that does not
reflect the equitable considerations, referred to in this Section 2.3. In no
case shall any Holder be responsible for a portion of the contribution
obligation imposed on all Holders in excess of its pro rata share based on the
number of Registrable Shares owned by it and included in such registration as
compared to the number of Registrable Shares owned by all Holders and included
in such registration. No person guilty of a fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation. For purposes of this Section 2.3, each person, if any, who
controls any Holder within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act and each officer, director, partner, employee,
agent and counsel of each such Holder or control person shall have the same
rights to contribution as such Holder or control person and each person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act, each officer of the Company who shall have
signed any such registration statement, each director of the Company and its or
their respective counsel shall have the same right to contribution as the
Company, subject in each case to the provisions of this Section 2.3. Anything in
this Section 2.3 to the contrary notwithstanding, no party shall be liable for
contribution with respect to the settlement of any claim or action effected
without its written consent. This Section 2.3 is intended to supersede any right
to contribution under the Securities Act, the Exchange Act or otherwise.
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3. Miscellaneous.
3.1. Termination. This Agreement shall terminate on the date on
which there are no Registrable Shares outstanding.
3.2. Governing Law. This Agreement shall be governed in all
respects by the laws of the Commonwealth of Massachusetts without giving effect
to principles of conflicts of law thereunder. It is acknowledged that it will be
impossible to measure in money the damages that would be suffered if the parties
fail to comply with any of the obligations imposed on them by this Agreement and
that in the event of any such failure an aggrieved party will be irreparably
damaged and will not have an adequate remedy at law. Any such party shall,
therefore, be entitled to injunctive relief and/or specific performance to
enforce such obligations, and if any action should be brought in equity to
enforce any of the provisions of this Agreement, none of the parties hereto
shall raise the defense that there is an adequate remedy at law.
3.3. Successors and Assigns. Except as otherwise expressly
provided in this Agreement, the provisions of this Agreement shall inure to the
benefit of, and be binding upon, the successors, heirs, executors and
administrators of the parties; provided, however, (i) the Holder may not assign
its rights hereunder other than to a Holder of Registrable Shares; and (ii) the
Company may not assign its rights or delegate its duties under this Agreement.
The assignment of a Warrant or the transfer of Registrable Shares in a private
transaction shall be deemed to be an assignment of the rights of a Holder
hereunder with respect to the Registrable Shares.
3.4. Entire Agreement; Amendment and Waiver. This Agreement
constitutes the full and entire understanding and agreement between the parties
with regard to the subject matter hereof. Neither this Agreement nor any term
hereof may be amended, discharged or terminated, except by a written instrument
signed by the Company and the holders of fifty percent (50%) or more of the
Registrable Shares; provided, however, that the effect of any such amendment
will be such that all of the Holders will be treated equally. Any provision of
this Agreement may be waived with respect to rights of any Holder by a written
instrument executed by the holders of fifty percent (50%) or more of the
Registrable Shares; provided, however, that the effect of such waiver shall be
such that all of the Holders will be treated equally.
3.5. Notices. All notices and other communications required or
permitted under this Agreement shall be in writing and shall be deemed
effectively given upon personal delivery, upon delivery by a nationally
recognized overnight courier service, or upon deposit with the United States
Post Office, by registered or certified mail, postage prepaid, addressed to the
Company at 000 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 and to a Holder at
his or its address set forth in the records of the Company or at such other
address as any party may designate by ten days' prior written notice to the
other parties.
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3.6. Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any party upon any breach or default of
another party under this Agreement shall impair any such right, power or remedy
of such non-defaulting party nor shall it be construed to be a waiver of any
such breach or default, or an acquiescence therein, or in any similar breach or
default occurring thereafter; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any holder of any breach or default under this
Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be made in writing and shall be effective
only to the extent specifically set forth in such writing. All remedies, either
under this Agreement or by law or otherwise afforded to any party, shall be
cumulative and not alternative.
3.7. Rights; Separability. Unless otherwise expressly provided in
this Agreement, each Holder's rights are several rights, not rights jointly held
with any of the other Holders. In case any provision of this Agreement shall be
held to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
3.8. Titles. The titles of the Sections of this Agreement are for
convenience of reference only and are not to be considered in construing this
Agreement.
3.9. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall constitute one Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first above written.
PROCEPT, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxx
Vice President, Finance
XXXXXX XXXX LLC
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Xxxxxxx X. Xxxxx
Managing Director
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