Exhibit 10.5
Registration Rights Agreement
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NITINOL MEDICAL TECHNOLOGIES, INC.
REGISTRATION RIGHTS AGREEMENT
This Agreement dated as of February 27, 1998 is entered into by and among
Nitinol Medical Technologies, Inc., a Delaware corporation (the "Company"), and
Xx. Xxxxxx Xxxxx (the "Optionee").
WHEREAS, the Company and the Optionee have entered into the Non-Plan Stock
Option Agreement of even date herewith (the "Non-Plan Option Agreement");
WHEREAS, the Company and the Optionee have entered into Non-Statutory Stock
Option Letter Agreement under the 1996 Stock Option Plan of the Company (the
"Plan Option Agreement"); and
WHEREAS, the Company and the Optionee desire to provide for certain
arrangements with respect to the registration of shares of capital stock of the
Company under the Securities Act of 1933;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
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shall have the following respective meanings:
"Commission" means the Securities and Exchange Commission, or any
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other Federal agency at the time administering the Securities Act.
"Common Stock" means the common stock, $.001 par value per share, of
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the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
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or any similar Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Non-Plan Option" means the option granted pursuant to the Non-Plan
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Option Agreement.
"Plan Option" means the option granted pursuant to the Plan Option
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Agreement.
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"Registration Statement" means a registration statement filed by the
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Company with the Commission for a public offering and sale of Common Stock
(other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation).
"Registration Expenses" means the expenses described in Section 4.
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"Registrable Shares" means (a) the shares of Common Stock issued or
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issuable upon exercise of the Non-Plan Option pursuant to the Non-Plan Option
Agreement, (b) to the extent not otherwise included in a Registration Statement
on Form S-8 effective under the Securities Act, the shares of Common Stock
issued or issuable upon exercise of the Plan Option pursuant to the Plan Option
Agreement, and (c) any other shares of Common Stock issued in respect of such
shares (because of stock splits, stock dividends, reclassifications,
recapitalizations or similar events); provided, however, that shares of Common
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Stock which are Registrable Shares shall cease to be Registrable Shares (i) upon
any sale pursuant to a Registration Statement or Rule 144 under the Securities
Act or (ii) upon any sale in any manner to a person or entity which, by virtue
of Section 9 of this Agreement, is not entitled to the rights provided by this
Agreement.
"Securities Act" means the Securities Act of 1933, as amended, or any
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similar Federal statute, and the rules and regulations of the Commission issued
under such Act, as they each may, from time to time, be in effect.
"Shares" means the shares received upon the exercise of the Plan
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Option under the Plan Option Agreement and/or the Non-Plan Option under the Non-
Plan Option Agreement.
"Stockholders" means the Optionee and any persons or entities to whom
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the rights granted under this Agreement are transferred by the Optionee, their
successors or assigns pursuant to Section 9 hereof.
2. Registration.
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(a) Whenever the Company proposes to file a Registration Statement
(either for its own account or at the request of any stockholder) at any time
and from time to time, it will, prior to such filing, give written notice to all
Stockholders of its intention to do so and, upon the written request of a
Stockholder or Stockholders given within 15 days after the Company provides such
notice (which request shall state the intended method of disposition of such
Registrable Shares), the Company shall use its best efforts to cause all
Registrable Shares which the Company has been requested by such Stockholder or
Stockholders to register to be registered under the
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Securities Act to the extent necessary to permit their sale or other disposition
in accordance with the intended methods of distribution specified in the request
of such Stockholder or Stockholders; provided that the Company shall have the
right to postpone or withdraw any registration effected pursuant to this Section
2 without obligation to any Stockholder.
(b) In connection with any registration under this Section 2 involving
an underwriting, the Company shall not be required to include any Registrable
Shares in such registration unless the holders thereof accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected by
it. If in the opinion of the managing underwriter it is appropriate because of
marketing factors to limit the number of Registrable Shares to be included in
the offering, then the Company shall be required to include in the registration
only that number of Registrable Shares, if any, which the managing underwriter
believes should be included therein. If the number of Registrable Shares to be
included in the offering in accordance with the foregoing is less than the total
number of shares which the holders of Registrable Shares have requested to be
included, then the holders of Registrable Shares who have requested registration
and other holders of securities entitled to include them in such registration
shall participate in the registration pro rata based upon their total ownership
of shares of Common Stock. If any holder would thus be entitled to include more
securities than such holder requested to be registered, the excess shall be
allocated among other requesting holders pro rata in the manner described in the
preceding sentence.
3. Registration Procedures. If and whenever the Company is required by
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the provisions of this Agreement to use its best efforts to effect the
registration of any of the Registrable Shares under the Securities Act, the
Company shall:
(a) file with the Commission a Registration Statement with respect to
such Registrable Shares and use its best efforts to cause that Registration
Statement to become and remain effective;
(b) as expeditiously as possible prepare and file with the Commission
any amendments and supplements to the Registration Statement and the prospectus
included in the Registration Statement as may be necessary to keep the
Registration Statement effective, in the case of a firm commitment underwritten
public offering, until each underwriter has completed the distribution of all
securities purchased by it and, in the case of any other offering, until the
earlier of the sale of all Registrable Shares covered thereby or 120 days after
the effective date thereof;
(c) as expeditiously as possible furnish to each selling Stockholder
such reasonable numbers of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as the selling Stockholder may reasonably request in order to
facilitate the
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public sale or other disposition of the Registrable Shares owned by the selling
Stockholder; and
(d) as expeditiously as possible use its best efforts to register or
qualify the Registrable Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states as the selling Stockholders shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the selling Stockholders to consummate the
public sale or other disposition in such states of the Registrable Shares owned
by the selling Stockholder; provided, however, that the Company shall not be
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required in connection with this paragraph (d) to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction.
If the Company has delivered preliminary or final prospectuses to the
selling Stockholders and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, the Company shall promptly
notify the selling Stockholders and, if requested, the selling Stockholders
shall immediately cease making offers of Registrable Shares and return all
prospectuses to the Company. The Company shall promptly provide the selling
Stockholders with revised prospectuses and, following receipt of the revised
prospectuses, the selling Stockholders shall be free to resume making offers of
the Registrable Shares.
4. Allocation of Expenses. The Company will pay all Registration
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Expenses of all registrations under this Agreement. For purposes of this
Section 4, the term "Registration Expenses" shall mean all expenses incurred by
the Company in complying with this Agreement, including, without limitation, all
registration and filing fees, exchange listing fees, printing expenses, fees and
expenses of counsel for the Company, state Blue Sky fees and expenses, and the
expense of any special audits incident to or required by any such registration,
but excluding underwriting discounts, selling commissions and the fees and
expenses of selling Stockholders' own counsel, if any.
5. Indemnification and Contribution.
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(a) In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, the Company will indemnify
and hold harmless the seller of such Registrable Shares, each underwriter of
such Registrable Shares, and each other person, if any, who controls such seller
or underwriter within the meaning of the Securities Act or the Exchange Act
against any losses, claims, damages or liabilities, joint or several, to which
such seller, underwriter or controlling person may become subject under the
Securities Act, the Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained
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in any Registration Statement under which such Registrable Shares were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement, or any amendment or
supplement to such Registration Statement, or arise out of or are based upon the
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and the
Company will reimburse such seller, underwriter and each such controlling person
for any legal or any other expenses reasonably incurred by such seller,
underwriter or controlling person in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the
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Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or omission made in such Registration Statement, preliminary prospectus or final
prospectus, or any such amendment or supplement, in reliance upon and in
conformity with information furnished to the Company, in writing, by or on
behalf of such seller, underwriter or controlling person specifically for use in
the preparation thereof.
(b) In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, each seller of Registrable
Shares, severally and not jointly, will indemnify and hold harmless the Company,
each of its directors and officers and each underwriter (if any) and each
person, if any, who controls the Company or any such underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages or liabilities, joint or several, to which the Company, such directors
and officers, underwriter or controlling person may become subject under the
Securities Act, Exchange Act, state securities or Blue Sky laws or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement under which
such Registrable Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if the statement or omission was made in reliance upon
and in conformity with information relating to such seller furnished in writing
to the Company by or on behalf of such seller specifically for use in connection
with the preparation of such Registration Statement, prospectus, amendment or
supplement; provided, however, that the obligations of each such Stockholder
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hereunder shall be limited to an amount equal to the proceeds to such
Stockholder of Registrable Shares sold in connection with such registration.
(c) Each party entitled to indemnification under this Section 5 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has
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actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the Indemnifying
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Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, provided, further, that the failure of any Indemnified Party to
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give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 5. The Indemnified Party may participate in such
defense at such party's expense; provided, however, that the Indemnifying Party
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shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which 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, and no Indemnified Party shall
consent to entry of any judgment or settle such claim or litigation without the
prior written consent of the Indemnifying Party.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Registrable Shares exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 5 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 5 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of any such selling Stockholder or any such controlling
person in circumstances for which indemnification is provided under this Section
5; then, in each such case, the Company and such Stockholder will contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportions so that such holder
is responsible for the portion represented by the percentage that the public
offering price of its Registrable Shares offered by the Registration Statement
bears to the public offering price of all securities offered by such
Registration Statement, and the Company is responsible for the remaining
portion; provided, however, that, in any such case, (A) no such holder will be
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required to contribute any amount in excess of the proceeds to it of all
Registrable Shares sold by it pursuant to such Registration Statement, and (B)
no person or entity guilty of fraudulent misrepresentation, within the meaning
of Section 11(f) of the Securities Act, shall be entitled to contribution from
any person or entity who is not guilty of such fraudulent misrepresentation.
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6. Information by Holder. Each Stockholder including Registrable Shares
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in any registration shall furnish to the Company such information regarding such
Stockholder and the distribution proposed by such Stockholder as the Company may
reasonably request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Agreement.
7. Rule 144 Requirements. The Company agrees to furnish to any holder of
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Registrable Shares upon request (i) a written statement by the Company as to its
compliance with the requirements of said Rule 144(c), and the reporting
requirements of the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), (ii) a copy of the most
recent annual or quarterly report of the Company, and (iii) such other reports
and documents of the Company as such holder may reasonably request to avail
itself of any similar rule or regulation of the Commission allowing it to sell
any such securities without registration.
8. Termination. All of the Company's obligations to register Registrable
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Shares under this Agreement shall terminate on the eleventh anniversary of this
Agreement.
9. Transfers of Rights. This Agreement, and the rights and obligations
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of the Optionee hereunder, may be assigned by the Optionee to any person or
entity to which Shares or Options are transferred by the Optionee, and such
transferee shall be deemed a "Stockholder" for purposes of this Agreement, and
be bound by all the obligations to which the Optionee is bound under this
Agreement; provided that the transferee provides written notice of such
assignment to the Company. If, as a result of a merger, consolidation,
reorganization or other transaction, either the Plan Option or Non-Plan Option
becomes exercisable pursuant to its terms for securities issued by an entity
other than the Company, then, as a condition of such transaction, the Company
shall cause lawful and adequate provision to be made (through assumption of this
Agreement by such other entity or otherwise) so that the Stockholders will have
rights with respect to such other securities which are reasonably equivalent to
their rights hereunder with respect to the Registrable Shares.
10. General.
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(a) Notices. All notices, requests, consents, and other
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communications under this Agreement shall be in writing and shall be delivered
by hand or mailed by first class certified or registered mail, return receipt
requested, postage prepaid:
If to the Company, at 00 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Xxxxxxxx X. Xxxxxx, Chief Financial Officer, or at such other
address or addresses as may have been furnished in writing by the Company to the
Optionee or
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Stockholders, with a copy to Xxxxxx X. Xxxxxx, Xxxx and Xxxx LLP, 00 Xxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000; or
If to the Optionee, at 0 Xxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at
such other address or addresses as may have been furnished to the Company in
writing by the Optionee, with a copy to Xxxxxxxx X. Hulbert, Foley, Xxxx &
Elliot LLP, Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
If to a Stockholder other than Optionee, at such address or addresses as
may have been furnished to the Company by such Stockholder.
Notices provided in accordance with this Section 10(a) shall be deemed
delivered upon personal delivery or two business days after deposit in the mail.
(b) Entire Agreement. This Agreement embodies the entire agreement
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and understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
(c) Amendments and Waivers. Any term of this Agreement may be amended
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and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), with the
written consent of the Company and the holders of at least a majority of the
Registrable Shares; provided, that this Agreement may be amended with the
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consent of the holders of less than all Registrable Shares only in a manner
which affects all Registrable Shares in the same fashion. No waivers of or
exceptions to any term, condition or provision of this Agreement, in any one or
more instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, condition or provision.
(d) Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
(e) Severability. The invalidity or unenforceability of any provision
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of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(f) Governing Law. This Agreement shall be governed by and construed
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in accordance with the laws of the Commonwealth of Massachusetts.
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Executed as of the date first written above.
Nitinol Medical Technologies, Inc.
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: President
Optionee:
By: /s/ Xxxxxx Xxxxx
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Name: Xx. Xxxxxx Simon
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