SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
September 30, 1998
Exogen, Inc.
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(Exact name of Registrant as specified in its Charter)
Delaware
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(State or other jurisdiction of incorporation)
000-26154 22-3208468
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(Commission File Number) (IRS Employer Identification Number)
10 Constitution Avenue, P.O. Box 6860, Piscataway, NJ 08855
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(Address of principal executive offices) (Zip Code)
(732) 981-0990
Registrant's telephone number, including area code:
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N/A
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(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events
On September 30, 1998 and October 9, 1998, the Company settled
all outstanding litigation in connection with Exogen, Inc. v.
Pilla Consulting, Inc. and Arthur A. Pilla, Index No.
601689/97 filed in the Supreme Court of the State of New York,
County of New York and Jonathan J. Kaufman v. Interpore
Orthopedics, Inc. and Exogen, Inc, No. 95 Civ. 2339 filed in
the United States District Court for the Southern District of
New York. The Company also entered into a settlement agreement
with Alessandro Chiabrera ("Chiabrera"). Messrs. Kaufman,
Pilla and Chiabrera, former consultants to Interpore
Orthopedics, Inc. ("Interpore"), the company from which Exogen
purchased certain SAFHS ultrasound assets at the time of
Exogen's formation, claimed the right to certain royalties
from the sale of SAFHS devices. As part of the settlement,
Exogen is obligated to pay the parties an aggregate of Seven
Hundred Thousand Dollars ($700,000), One Hundred Ninety
Thousand Nine Hundred Eight Dollars ($190,908) of which was
payable initially. The remainder is payable in annual
installments through July 2002. In addition, Exogen issued to
Pilla and Chiabrera five year warrants to purchase an
aggregate of One Hundred Twenty Five Thousand (125,000) shares
of Exogen's common stock, par value $0.0001 per share (the
"Common Stock"), at an exercise price of Three and 12/100
Dollars ($3.12) per share and granted them certain
registration rights. In addition to Exogen, Interpore was also
a party to the settlements and is obligated to pay certain
amounts to the parties.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit Number Description
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10.1 Promissory Note, dated October 6, 1998, issued by the Company
to Jonathan J. Kaufman.
10.2 Promissory Note, dated October 6, 1998, issued by the Company
to Alessandro Chiabrera.
10.3 Warrant to Purchase Common Stock, dated October 9, 1998,
issued by the Company to Alessandro Chiabrera.
10.4 Registration Rights Agreement, dated October 9, 1998, by and
between the Company and Alessandro Chiabrera.
10.5 Promissory Note, dated September 30, 1998, issued by the
Company to Pilla Consulting, Inc.
10.6 Warrant to Purchase Common Stock, dated September 30, 1998,
issued by the Company to Arthur A. Pilla.
10.7 Registration Rights Agreement, dated September 30, 1998, by
and between the Company and Arthur A. Pilla.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, hereto duly authorized.
EXOGEN, INC.
(Registrant)
Date: October 19, 1998 By: /s/ PATRICK A. McBRAYER
-------------------------
Patrick A. McBrayer
President and Chief Executive Officer
EXHIBIT 10.1
EXHIBIT B
PROMISSORY NOTE
In consideration of, and in connection with, the Settlement Agreement
and Mutual Release entered into as of October 9, 1998, by and among plaintiff
Jonathan J. Kaufman ("Kaufman") and defendants, Interpore International
("Interpore") and Exogen, Inc. ("Exogen") (the "Settlement Agreement"), the
undersigned, Exogen, whose current business address is 10 Constitution Avenue,
P.O. Box 6860, Piscataway, NJ 08855, promises to pay to the order of Kaufman,
the principal amount of three hundred eighty one thousand eight hundred
seventeen dollars and eighty cents ($381,817.80) in installments, as set forth
in Schedule 1 attached hereto, and made a part hereof. All payments shall be
made to Jonathan J. Kaufman care of Hecht & Steckman, P.C., 60 East 42nd Street,
Suite 5101, New York, New York 10165-5101, or at such other address as
designated by Kaufman in writing to Exogen.
UNCONDITIONAL RIGHT TO PAYMENT
The obligation of Exogen to pay each and every installment under this
Promissory Note is unconditional and irrevocable and the right of Kaufman to
receive each and every payment hereunder is uncontestable.
Exogen shall not have any right of offset with respect to any payments
due hereunder and Exogen hereby waives any defenses or counterclaims which would
result in a right of offset.
EVENTS OF DEFAULT
The occurrence of any of the following events shall be considered a
default in the obligations under this Promissory Note ("Events of Default"):
(a) Failure to timely pay any installment set forth on Schedule 1
annexed hereto. Subject to paragraph 5 of the Settlement
Agreement, a payment shall only be timely if received by Hecht
& Steckman, P.C. on or before the due date set forth in
Schedule 1, subject to the ten (10)-day period set forth
below; or
(b) Failure by Exogen to observe or perform any of the
covenants or agreements in the Settlement Agreement; or
(c) A decree or order by a court adjudging Exogen bankrupt or
insolvent, or approving, as properly filed, a petition seeking
reorganization of Exogen's affairs under the federal
bankruptcy code or any other similar federal, state or foreign
law, which is not dismissed within 60 days of filing; or
(d) A decree or order of a court for the appointment of a receiver
or trustee or assignee in bankruptcy or insolvency for Exogen,
or for the winding-up or liquidation of the affairs of Exogen;
or
(e) Exogen institutes proceedings to be adjudicated a voluntary
bankrupt or consents to the institution of a bankruptcy
proceedings or files a petition or answer or consent seeking
reorganization or rearrangement with creditors under any
federal or a state or foreign bankruptcy act or any other
similar federal or state law; or
<PAGE>
(f) Exogen makes an assignment for the benefit of creditors or
admits in writing an inability to pay debts generally as they
become due; or
(g) The agreement by Exogen to any merger, buy-out, acquisition,
asset sale transaction or other corporate event resulting in a
change of control which is not conditioned upon the acquiring
entity assuming Exogen's obligations under this Promissory
Note.
Upon the occurrence of any of the above events of default, and upon ten
(10) days written notice to Exogen in accordance with paragraph 5 of the
Settlement Agreement, all payments set forth on Schedule 1, which have not yet
been made, shall become immediately due and payable without presentment, demand
or notice of any kind, all of which are hereby expressly waived, anything in
this Promissory Note to the contrary notwithstanding. Upon the expiration of the
ten (10) day notice period, Kaufman shall have the right to institute an action
against Exogen for all payments set forth on Schedule 1, which have not yet been
made, with interest thereon at the rate of 9% per annum from the date of
commencement of the action. Exogen shall be liable for any and all attorneys'
fees incurred by Kaufman in such an action.
PREPAYMENTS
Exogen shall have the right to pre-pay the unpaid balance of this
Promissory Note without penalty upon 10 days written notice to Kaufman.
MERGER OR CONSOLIDATION
The obligations of Exogen hereunder shall extend to, and be binding
upon, each of its successors, assigns, any corporation of which it owns more
than 50% of the voting stock, and the transferee of all, or substantially all,
of Exogen's assets.
Dated: October 6, 1998
EXOGEN, INC.
By: /s/ PATRICK A. McBRAYER
------------------------
Name: Patrick A. McBrayer
Title: President and Chief
Executive Officer
<PAGE>
SCHEDULE 1
PAYMENTS BY EXOGEN, INC.
TO
JONATHAN J. KAUFMAN
Date Amount
July 1, 1999 $127,272.60
July 1, 2000 $127,272.60
July 1, 2001 $127,272.60
EXHIBIT 10.2
EXHIBIT C
PROMISSORY NOTE
In consideration of, and in connection with, the Settlement Agreement
and Mutual Release entered into as of October 9, 1998, by and among Alessandro
Chiabrera ("Chiabrera") and Interpore International ("Interpore") and Exogen,
Inc. ("Exogen") (the "Settlement Agreement"), the undersigned, Exogen, whose
current business address is 10 Constitution Avenue, P.O. Box 6860, Piscataway,
NJ 08855, promises to pay to the order of Chiabrera, the principal amount of
Fifty Thousand Nine Hundred Nine Dollars and Eight Cents ($50,909.08) in
installments, as set forth in Schedule 1 attached hereto, and made a part
hereof. All payments shall be made to Alessandro Chiabrera in care of Hecht &
Steckman, P.C., 60 East 42nd Street, Suite 5101, New York, New York 10165- 5101,
or at such other address as designated by Chiabrera in writing to Exogen.
UNCONDITIONAL RIGHT TO PAYMENT
The obligation of Exogen to pay each and every installment under this
Promissory Note is unconditional and irrevocable and the right of Chiabrera to
receive each and every payment hereunder is uncontestable.
Exogen shall not have any right of offset with respect to any payments
due hereunder and Exogen hereby waives any defenses or counterclaims which would
result in a right of offset.
EVENTS OF DEFAULT
The occurrence of any of the following events shall be considered a
default in the obligations under this Promissory Note ("Events of Default"):
(a) Failure to timely pay any installment set forth on Schedule 1
annexed hereto. Subject to paragraph 5 of the Settlement
Agreement, a payment shall only be timely if received by Hecht
& Steckman, P.C. on or before the due date set forth in
Schedule 1, subject to the ten (10)-day period set forth
below; or
(b) Failure by Exogen to observe or perform any of the
covenants or agreements in the Settlement Agreement; or
(c) A decree or order by a court adjudging Exogen bankrupt or
insolvent, or approving, as properly filed, a petition seeking
reorganization of Exogen's affairs under the federal
bankruptcy code or any other similar federal, state or foreign
law, which is not dismissed within 60 days of filing; or
(d) A decree or order of a court for the appointment of a receiver
or trustee or assignee in bankruptcy or insolvency for Exogen,
or for the winding-up or liquidation of the affairs of Exogen;
or
(e) Exogen institutes proceedings to be adjudicated a voluntary
bankrupt or consents to the institution of a bankruptcy
proceedings or files a petition or answer or consent seeking
reorganization or rearrangement with creditors under any
federal or a state or foreign bankruptcy act or any other
similar federal or state law; or
(f) Exogen makes an assignment for the benefit of creditors or
admits in writing an inability to pay debts generally as they
become due; or
<PAGE>
(g) The agreement by Exogen to any merger, buy-out, acquisition,
asset sale transaction or other corporate event resulting in a
change of control which is not conditioned upon the acquiring
entity assuming Exogen's obligations under this Promissory
Note.
Upon the occurrence of any of the above events of default, and upon ten
(10) days written notice to Exogen in accordance with paragraph 5 of the
Settlement Agreement, all payments set forth on Schedule 1, which have not yet
been made, shall become immediately due and payable without presentment, demand
or notice of any kind, all of which are hereby expressly waived, anything in
this Promissory Note to the contrary notwithstanding. Upon the expiration of the
ten (10) day notice period, Chiabrera shall have the right to institute an
action against Exogen for all payments set forth on Schedule 1, which have not
yet been made, with interest thereon at the rate of 9% per annum from the date
of commencement of the action. Exogen shall be liable for any and all attorneys'
fees incurred by Chiabrera in such an action.
PREPAYMENTS
Exogen shall have the right to pre-pay the unpaid balance of this
Promissory Note without penalty upon 10 days written notice to Chiabrera.
MERGER OR CONSOLIDATION
The obligations of Exogen hereunder shall extend to, and be binding
upon, each of its successors, assigns, any corporation of which it owns more
than 50% of the voting stock, and the transferee of all, or substantially all,
of Exogen's assets.
Dated: October 6, 1998
EXOGEN, INC.
By: /s/PATRICK A. McBRAYER
----------------------
PATRICK A. McBRAYER
Title: President and Chief
Executive Officer
<PAGE>
Schedule 1
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On or before July 1, 1999 $12,727.27
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On or before July 1, 2000 $12,727.27
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On or before July 1, 2001 $12,727.27
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On or before July 1, 2002 $12,727.27
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EXHIBIT 10.3
EXHIBIT A
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE
SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
No. CSPW-E03
Void after 5:00 p.m. New York Time, on July 20, 2003
(subject to certain exceptions)
Warrant to Purchase Forty-Five Thousand (45,000) Shares of Common Stock
WARRANT TO PURCHASE COMMON STOCK
OF
EXOGEN, INC.
This certifies that, for value received, Alessandro Chiabrera
(the "Holder"), is entitled, subject to the terms set forth below, to purchase
from Exogen, Inc., a Delaware corporation (the "Company"), Forty-five Thousand
(45,000) fully paid, validly issued and nonassessable shares of the Company's
common stock, $.0001 par value per share (the "Common Stock"), upon surrender
hereof, at the principal office of the Company referred to below, with the
Notice of Exercise annexed hereto duly executed, and simultaneous payment
therefor in lawful money of the United States or otherwise as hereinafter
provided, at $3.12 the Average Closing Sale Price of Exogen's Common Stock
between June 16, 1998 and July 16, 1998, as quoted on the Nasdaq National Market
(the "Exercise Price"). The number, character and Exercise Price of such shares
of Common Stock are subject to adjustment as provided below. The term "Warrant"
as used herein shall include this Warrant and any warrants delivered in
substitution or exchange therefor as provided herein.
1. Term of Warrant. Subject to the terms and conditions set
forth herein, this Warrant shall be exercisable, in whole or in part, at any
time or from time to time on or after the date the Settlement Agreement entered
into in conjunction herewith is executed and ending at 5:00 p.m., New York Time,
on July 20, 2003 and shall be void thereafter.
2. Exercise of Warrant.
(a) The purchase rights represented by this Warrant are
exercisable by the Holder in whole or in part, at any time or from time to time,
during the term hereof as described in Section 1 above, by the surrender of this
Warrant and the Notice of Exercise annexed hereto duly completed and executed on
behalf of the Holder, at the office of the Company (or such other office or
agency of the Company as it may designate by notice in writing to the Holder at
the address of the Holder appearing on the books of the Company), upon payment
in cash or by check acceptable to the Company.
<PAGE>
In lieu of paying the purchase price in cash or by check, the
Holder may elect to receive shares of Common Stock equal to the value of this
Warrant (or the portion thereof being exercised), in which even the Company
shall issue to the Holder the number of shares of the Company's Common Stock
computed using the following formula:
X = Y (A-B)
___________
A
Where:
X = the number of shares of Common Stock subject to
this Warrant to be issued to the Holder;
Y = the number of shares of Common Stock subject to
this Warrant otherwise purchasable under this Warrant
(at the date of such calculation);
A = the Market Price of one share of the Company's
Common Stock (at the date of such calculation); and
B = Exercise Price (as adjusted to the date of
such calculation).
For purposes of the foregoing calculation, "Market
Price" shall mean the last reported sales price regular way, or in case no such
sales take place on such day, the average of the closing bid and ask prices
regular way, of the Company's Common Stock in each case on the principal
national securities exchange on which the security is listed or admitted to
trading, or, if not listed or admitted to trading on any national securities
exchange, on the Nasdaq National Market or, if the Company's Common Stock is not
listed or admitted to trading on any national securities exchange and is not
quoted on the Nasdaq National Market, the average of the closing bid and ask
prices as furnished by any New York Stock Exchange member firm selected from
time to time by the Board of Directors of the Company for such purpose.
(b) This Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date of its surrender for
exercise as provided above, and the person entitled to receive the shares of
Common Stock issuable upon such exercise shall be treated for all purposes as
the holder of record of such shares as of the close of business on such date. As
promptly as practicable on or after such date, and in any event within ten (10)
days thereafter, the Company at its expense, shall issue and deliver to the
person or persons entitled to receive the same, a certificate or certificates
for the number of shares issuable upon such exercise. In the event that this
Warrant is exercised in part, the Company at its expense will execute and
deliver a new Warrant of like tenor exercisable for the number of shares for
which this Warrant may then be exercised.
3. Reservation of Shares. The Company covenants that during
the term this Warrant is exercisable, the Company will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of Common Stock upon the exercise of this Warrant. The Company
further covenants that all shares that may be issued upon the exercise of the
rights represented by this Warrant and payment of the Exercise Price, all as set
<PAGE>
forth herein, will be free from all taxes, liens, and charges in respect of the
issue thereof (other than taxes in respect of any transfer occurring
contemporaneously or otherwise specified herein). The Company agrees that its
issuance of this Warrant shall constitute full authority to its officers, who
are charged with the duty of executing stock certificates, to execute and issue
the necessary certificates for shares of Common Stock upon the exercise of this
Warrant.
4. No Fractional Shares or Scrip. No fractional shares or
scrip representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which the Holder would otherwise be
entitled, the Company shall make a cash payment equal to the Exercise Price
multiplied by such fraction.
5. Rights of Stockholders. The Holder shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at law
or equity, and the rights of the Holder are limited to those expressed in the
Warrant and are not enforceable against the Company except to the extent set
forth herein.
6. Adjustments. The Exercise Price and the number of shares
purchasable hereunder are subject to adjustment from time to time as follows:
(a) Reclassification, etc. If the Company at any time while
this Warrant, or any portion thereof, remains outstanding and unexpired shall,
by reclassification of securities or otherwise, change any of the securities as
to which purchase rights under this Warrant exist into the same or a different
number of securities of any other class or classes, this Warrant shall
thereafter represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities which were subject to the purchase rights under this Warrant
immediately prior to such reclassification or other change and the Exercise
Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 6.
(b) Split, Subdivision or Combination of Shares. If the
Company at any time while this Warrant, or any portion thereof, remains
outstanding and unexpired shall split, subdivide or combine the securities as to
which purchase rights under this Warrant exist, into a different number of
securities of the same class, the number of securities issuable upon the
exercise hereof and the Exercise Price for such securities shall be
appropriately adjusted.
(c) Adjustments for Dividends in Stock or Other Securities or
Property. If while this Warrant, or any portion hereof, remains outstanding and
unexpired the holders of the securities as to which purchase rights under this
Warrant exist at the time shall have received, or, on or after the record date
fixed for the determination of eligible stockholders, shall have become entitled
to receive, without payment therefor, other or additional stock or other
securities or property (other than cash) of the Company by way of dividend, then
and in each case, this Warrant shall represent the right to acquire, in addition
to the number of shares of the security receivable upon exercise of this
Warrant, and without payment of any additional consideration therefor, the
amount of such other or additional stock or other securities or property (other
than cash) of the Company which such holder would hold on the date of such
<PAGE>
exercise had it been the holder of record of the security receivable upon
exercise of this Warrant on the date hereof and had thereafter, during the
period from the date hereof to and including the date of such exercise, retained
such shares and/or all other additional stock available by it as aforesaid
during such period, giving effect to all adjustments called for during such
period by the provisions of this Section 6.
(d) Change of Control. If at any time while this Warrant, or
any portion thereof, remains outstanding and unexercised there occurs (i) a
reorganization of the Company (other than a combination, reclassification,
exchange or subdivision of shares otherwise provided for herein); (ii) a merger,
consolidation or other corporate combination of the Company with or into another
corporation in which the Company is not the surviving entity, or a reverse
triangular merger in which the Company is the surviving entity but the shares of
the Company's capital stock outstanding immediately prior to the merger are
converted, by virtue of the merger, into other property, whether in the form of
securities, cash, or otherwise; or (iii) a sale or transfer of the Company's
properties and assets as, or substantially as, an entirety to any other person,
this Warrant shall thereafter represent the right to acquire such number and
kind of securities as would have been issuable as the result of any such
transaction with respect to the shares of Common Stock subject to this Warrant
immediately prior to such transaction and the Exercise Price therefor shall be
appropriately adjusted, all subject to further adjustment as provided in this
Section 6.
(e) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment pursuant to this Section 6, the Company at its
expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to Holder a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon the written
request, at any time, of the Holder, furnish or cause to be furnished to the
Holder a like certificate setting forth: (i) such adjustments and readjustments;
(ii) the Exercise Price at the time in effect; and (iii) the number of shares
and the amount, if any, of other property which at the time would be received
upon the exercise of the Warrant.
(f) No Impairment. The Company will not, by any voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
to be observed or performed hereunder by the Company, but will at all times in
good faith assist in the carrying out of all the provisions of this Section 6
and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of the Holder against impairment.
7. Exchange, Transfer or Loss of Warrant. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its appointed transfer
agent, if any, for other warrants of different denominations entitling the
Holder thereof to purchase in the aggregate the same number of shares of Common
Stock purchasable hereunder. This Warrant may be divided or combined with other
warrants which carry the same rights upon presentation hereof at the principal
office of the Company or at the office of its appointed transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder. Upon receipt by the
Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will execute and deliver a new Warrant
of like tenor and date. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not this Warrant so lost, stolen, destroyed, or mutilated shall be at
any time enforceable by anyone.
<PAGE>
8. Compliance with Securities Laws.
(a) This Warrant may not be transferred or assigned in whole
or in part without compliance with all applicable federal and state securities
laws by the transferor and the transferee (including the delivery of investment
representation letters and legal opinions reasonably satisfactory to the
Company, if such are requested by the Company). Subject to the provisions of
this Warrant with respect to compliance with the Securities Act of 1933, as
amended (the "Securities Act"), title to this Warrant may be transferred by
endorsement and delivery in the same manner as a negotiable instrument
transferable by endorsement and delivery.
(b) The Holder of this Warrant, by acceptance hereof,
acknowledges that this Warrant, and the shares of Common Stock to be issued upon
exercise hereof, are being acquired solely for the Holder's own account and not
as a nominee for any other party, and for investment, and that the Holder will
not offer, sell, or otherwise dispose of this Warrant or any shares of Common
Stock to be issued upon exercise hereof except under circumstances that will not
result in a violation of the Securities Act or any state securities laws. Upon
exercise of this Warrant, the Holder shall, if requested by the Company, confirm
in writing, in a form satisfactory to the Company, that the shares of Common
Stock so purchased are being acquired solely for the Holder's own account and
not as a nominee for any other party, for investment, and not with a view toward
distribution or resale.
(c) This Warrant and all shares of Common Stock issued upon
exercise hereof shall be stamped or imprinted with a legend in substantially the
following form (in addition to any legend required by state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. SUCH SECURITIES AND ANY SECURITIES OR
SHARES ISSUED HEREUNDER OR THEREUNDER MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENT
COVERING THE PURCHASE OF THESE SECURITIES AND RESTRICTING
THEIR TRANSFER OR SALE MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD HEREOF TO THE SECRETARY
OF THE COMPANY AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
COMPANY.
9. Notices. In case (i) the Company shall take a record of the
holders of its Common Stock (or other stock or securities at the time receivable
upon the exercise of this Warrant) for the purpose of entitling them to receive
any dividend or other distribution, or any right to subscribe for or purchase
any shares of stock of any class or any other securities, or to receive any
other right; (ii) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation, or any conveyance of all
or substantially all of the assets of the Company to another corporation; or
(iii) of any voluntary dissolution, liquidation or winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to the
Holder a notice specifying, as the case may be, (A) the date on which a record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, or (B)
the date on which such reorganization, reclassification, consolidation, merger,
<PAGE>
conveyance, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holders of record of Common Stock
(or such stock or securities at the time receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Common Stock (or such
other stock or securities) for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be mailed at least
fifteen (15) days prior to the date therein specified. All such notices, advices
and communications shall be deemed to have been received (i) in the case of
personal delivery, on the date of such delivery and (ii) in the case of mailing,
on the third business day following the date of such mailing.
11. Amendments. Any term of this Warrant may be amended with
the written consent of the Company and the Holder.
IN WITNESS WHEREOF, EXOGEN, INC. has caused this Warrant to be
executed by its officers thereunto duly authorized.
Dated: October 9, 1998
EXOGEN, INC.
By: /s/ PATRICK A. McBRAYER
------------------------
Name: Patrick A. McBrayer
Title: President and Chief Executive Officer
HOLDER: Alessandro Chiabrera
<PAGE>
NOTICE OF EXERCISE
To: EXOGEN, INC.
(1) The undersigned hereby elects to purchase [ ] shares of
Common Stock of Exogen, Inc., pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price for such shares in full.
(2) In exercising this Warrant, the undersigned hereby
confirms and acknowledges that the shares of Common Stock to be issued upon
exercise hereof are being acquired solely for the account of the undersigned and
not as a nominee for any other party, and for investment, and that the
undersigned will not offer, sell, or otherwise dispose of any such shares of
Common Stock except under circumstances that will not result in a violation of
the Securities Act of 1933, as amended, or any state securities laws.
(3) Please issue a certificate or certificates representing
said shares of Common Stock in the name of the undersigned or in such other name
as is specified below:
__________________________________
[Name]
__________________________________
[Name]
(4) Please issue a new Warrant for the unexercised portion of
the attached Warrant in the name of the undersigned or in such other name as is
specified below:
__________________________________
[Name]
__________________________________
[Date] [Signature]
EXHIBIT 10.4
EXHIBIT B
-----------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
-----------------------------------------------------
October 9, 1998
<PAGE>
TABLE OF CONTENTS
1. Registration Rights...........................................
1.1 Definitions..........................................
1.2 Shelf Registration...................................
1.3 Company Registration.................................
1.4 Obligations of the Company...........................
1.5 Furnish Information..................................
1.6 Expenses of Registration.............................
1.7 Expenses of Company Registration.....................
1.8 Underwriting Requirements............................
1.9 Delay of Registration................................
1.10 Indemnification......................................
1.11 Reports Under Securities Exchange Act of 1934........
1.12 Assignment of Registration Rights....................
1.13 Limitations on Subsequent Registration Rights........
1.14 "Market Stand-Off" Agreement.........................
1.15 No Required Sale.....................................
2. Miscellaneous.................................................
2.1 Successors and Assigns...............................
2.2 Governing Law........................................
2.3 Counterparts.........................................
2.4 Titles and Subtitles.................................
2.5 Notices..............................................
2.6 Expenses.............................................
2.7 Amendments and Waivers...............................
2.8 Severability.........................................
2.9 Nominees for Beneficial Owners.......................
2.10 Specific Performance.................................
2.11 No Inconsistent Agreements...........................
2.12 Entire Agreement.....................................
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made as of the 9th day
of October 1998 by and between Exogen, Inc., a Delaware corporation (the
"Company"), and Alessandro Chiabrera (the "Warrant Holder").
RECITALS
WHEREAS, the Company and the Warrant Holder are parties to the
Settlement Agreement of even date herewith (the "Settlement Agreement");
WHEREAS, in order to induce the Company to enter into the
Settlement Agreement and to induce the Warrant Holder to agree to enter into the
Settlement Agreement, the Warrant Holder and the Company hereby agree that this
Agreement shall govern the rights of the Warrant Holder to cause the Company to
register the shares of Common Stock issuable to the Warrant Holder upon exercise
of the Warrant (as defined below) and certain other matters as set forth herein;
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Registration Rights. The Company covenants and agrees as
follows:
1.1 Definitions. For purposes of this Section 1:
(a) The term "Act" means the Securities Act
of 1933, as amended.
(b) The terms "Form S-3" means such form
under the Act as in effect on the date hereof or any registration form under the
Act subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
(c) The term "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Securities Act
of 1933, as amended (the "Act"), and the declaration or ordering of
effectiveness of such registration statement or document;
(d) The term "Registrable Securities" means
the Shares of Common Stock of the Company issued (or issuable) upon the exercise
of the Warrant, and (2) any shares of Common Stock issued as a dividend or other
distribution with respect to, or in exchange for or in replacement of, such
Common Stock, excluding in all cases, however, any Registrable Securities which
are sold, assigned, pledged, hypothecated or otherwise disposed of by a Holder
in a transaction in which such Holder's rights under this Agreement are not
assigned or assignable;
(e) The number of shares of "Registrable
Securities then outstanding" shall be determined by the number of shares of
Common Stock outstanding which are, and the number of shares of Common Stock
issuable pursuant to then exercisable Warrant which are, Registrable Securities;
(f) The term "Holder" means the Warrant
Holder; and
<PAGE>
(g) The term "Warrant" means the Warrant to
purchase 45,000 shares of Common Stock issued pursuant to the Settlement
Agreement.
1.2 Shelf Registration.
(a) The Company shall, subject to the
limitations specified in this Agreement, use its best efforts (i) to file a
shelf registration statement on Form S-3 or any other form available to the
Company after two hundred forty (240) days from the date hereof (the "Filing
Date") covering the registration under the Act of all Registrable Securities
then outstanding to be offered or sold on a delayed or continuous basis as
provided by this Agreement, pursuant to Rule 415 of the Act (the "Shelf
Registration Statement"); and (ii) to maintain the effectiveness of the Shelf
Registration Statement for a period of five (5) years from the date that
registration statement is declared effective by the Securities and Exchange
Commission (or such shorter period in accordance with Section 1.4(a)).
(b) Notwithstanding the foregoing, if the
Company shall furnish to the Holder a certificate signed by the Chief Executive
Officer or President of the Company stating that, in the good faith judgment of
the Board of Directors of the Company, it would be seriously detrimental (a
"Detrimental Condition") to the Company and its stockholders for a registration
statement to be filed or to become or remain effective, as the case may be, and
provided that the Detrimental Condition has not resulted from actions taken by
the Company, (i) the Company shall have the right to defer taking action with
respect to the filing of the Shelf Registration Statement for a period of not
more than ninety (90) days after the Filing Date, (ii) in case a Shelf
Registration Statement has been filed but has not become effective, the Company
may cause such registration statement to be withdrawn or may postpone amending
or supplementing such registration statement until such Detrimental Condition no
longer exists, but in no event for more than ninety (90) days, or (iii) in case
a Shelf Registration Statement has been filed and has become effective, the
Company may cause such registration statement to be withdrawn and its
effectiveness terminated or may postpone amending or supplementing such
registration statement until such Detrimental Condition no longer exists, but in
no event for more than ninety (90) days. The Company may not declare a
Detrimental Condition, or take any of the actions specified in clauses (i), (ii)
or (iii) of the preceding sentence (and can take only one such action specified
in clauses (i), (ii) or (iii) per Detrimental Condition), more than once in any
twelve-month period. The Company shall give written notice of its determination
to postpone or withdraw a registration statement and of the fact that the
Detrimental Condition for such postponement or withdrawal no longer exists, in
each case, promptly after the occurrence thereof. The following events or
circumstances may result in the filing of a registration statement being
seriously detrimental to the Company and its shareholders: a pending material
acquisition, merger or sale or purchase of assets, pending or threatened
material litigation, pending or threatened material regulatory or governmental
action, pending material change in the business, prospects, condition (financial
or other) or properties of the Company. The foregoing list is for illustrative
purposes only and is not meant to be exclusive.
<PAGE>
(c) If the Company shall give any notice of
postponement or withdrawal of any registration statement, the Company shall not,
during the period of postponement or withdrawal pursuant to clauses (i), (ii) or
(iii) of the prior paragraph, register any Common Stock, other than pursuant to
a registration statement on Form S-4 or S-8 (or an equivalent registration form
then in effect). The Holder of Registrable Securities agrees that, upon receipt
of any notice from the Company that the Company has determined to withdraw any
registration statement pursuant to the immediately preceding paragraph, the
Holder will discontinue its disposition of Registrable Securities pursuant to
such registration statement and, if so directed by the Company, will deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies, then in Holder's possession of the prospectus covering such Registrable
Securities that was in effect at the time of receipt of such notice. If the
Company shall have withdrawn or prematurely terminated a registration statement
filed under this Section 1.2 (whether pursuant to the immediately preceding
paragraph, or as a result of any stop order, injunction or other order or
requirement of the SEC or any other governmental agency or court), the Company
shall not be considered to have effected an effective registration for the
purposes of this Agreement until the Company shall have filed a new registration
statement covering the Registrable Securities covered by the withdrawn
registration statement and such registration statement shall have been declared
effective and shall not have been withdrawn. If the Company shall give any
notice of withdrawal or postponement of a registration statement, the Company
shall, at such time as the Detrimental Condition that caused such withdrawal or
postponement no longer exists (but in no event later than ninety (90) days after
the date of the postponement or withdrawal), use its best efforts to effect the
registration under the Securities Act of the Registrable Securities covered by
the withdrawn or postponed registration statement in accordance with this
Section 1.2 (unless the Holder shall have withdrawn such request, in which case
the Company shall not be considered to have effected an effective registration
for the purposes of this Agreement).
(d) The registration statement filed
pursuant to this Section 1.2 may include other securities of the Company (i)
which are held by persons who, by virtue of agreements with the Company, are
entitled to include their securities in any such registration, (ii) which are
held by officers and directors of the Company, or (iii) which are being offered
for the account of the Company (collectively, the securities referred to in
clauses (i), (ii) and (iii) in this paragraph are hereinafter referred to as the
"Other Securities").
1.3 Company Registration. If (but without any
obligation to do so) the Company proposes to register (including for this
purpose a registration effected by the Company for stockholders other than the
Holder) any of its stock or other securities under the Act in connection with
the public offering of such securities solely for cash (other than a
registration relating solely to the sale of securities to participants in a
Company stock option, stock purchase or similar plan or a SEC Rule 145
transaction, a registration on any form which does not include substantially the
same information as would be required to be included in a registration statement
covering the sale of the Registrable Securities or a registration in which the
only Common Stock being registered is Common Stock issuable upon conversion of
debt securities that are also being registered), the Company shall, at such
time, promptly give the Holder written notice of such registration. Upon the
written request of the Holder given within twenty (20) days after mailing of
<PAGE>
such notice by the Company in accordance with Section 2.5, the Company shall,
subject to the provisions of Section 1.8, cause to be registered under the Act
all of the Registrable Securities that the Holder has requested to be
registered. No registration effected pursuant to this Section 1.3 shall relieve
the Company of its obligations to effect the required registration pursuant to
Section 1.2. The Holder shall have the right to withdraw his request for
inclusion of its Registrable Securities in any registration statement pursuant
to this Section 1.3 by giving written notice to the Company of its request to
withdraw.
1.4 Obligations of the Company. When required under
this Section 1 to effect the registration of the Registrable Securities, the
Company shall, as expeditiously as reasonably possible:
(a) Prepare and file with the Securities and
Exchange Commission (the "SEC") a Shelf Registration Statement or, if
applicable, any other form of registration statement, as the case may be, with
respect to the Registrable Securities and use its best efforts to cause such
registration statement to become effective within one hundred twenty (120) days
after such registration statement was filed and to keep such Shelf Registration
Statement effective for a period up to the fifth anniversary of the date hereof
or until the earlier of (i) completion of the distribution contemplated in the
Shelf Registration Statement has been completed, and (ii) when all Registrable
Securities may be sold without restriction under Rule 144 promulgated under the
Act provided, however, that before filing a registration statement or prospectus
or any amendments or supplements thereto, or comparable statements under
securities or blue sky laws of any jurisdiction, the Company will furnish to
counsel for the Holder (the "Holder's Counsel") participating in the planned
offering (selected by the Holder), and the underwriters, if any, copies of all
such documents proposed to be filed (including all exhibits thereto), which
documents will be subject to the reasonable review and reasonable comment of
such counsel.
(b) Prepare and file with the SEC such
amendments and supplements to such registration statement and the prospectus
used in connection with such registration statement as may be necessary to
comply with the provisions of the Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Holder whose Registrable
Securities are covered by the Shelf Registration Statement such numbers of
copies of a prospectus, including a preliminary prospectus, in conformity with
the requirements of the Act, and such other documents as they may reasonably
request in order to facilitate the disposition of Registrable Securities owned
by them.
(d) Use its best efforts to register and
qualify the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holder whose Registrable Securities are covered by the Shelf
Registration Statement; provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or jurisdictions
unless the Company is already subject to service in such jurisdiction.
<PAGE>
(e) In the event the Registrable Securities
are to be sold through an underwritten public offering under Section 1.3, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. The Holder
proposing to distribute Registrable Securities through such underwritten public
offering shall also enter into and perform their obligations under such an
agreement. No offering pursuant to a registration statement under Section 1.2
shall be an underwritten offering.
(f) In the event the Registrable Securities
are to be sold through an underwritten public offering under Section 1.3, use
its best efforts to furnish, on the date that such Registrable Securities are
delivered to the underwriters for sale in connection with a registration
pursuant to this Section 1, (i) an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, and (ii) a letter, dated such date,
from the independent certified public accountants of the Company addressed to
the underwriters, stating that such accountants are independent public
accountants within the meaning of the Act and the applicable published rules and
regulations thereunder, and otherwise in form and in substance as is customarily
given by independent certified public accountants to underwriters in connection
with an underwritten public offering.
(g) Promptly notify (i) the Holder selling
Registrable Securities covered by such registration statement and each managing
underwriter, if any: (A) when the registration statement, the prospectus or any
prospectus supplement related thereto or post-effective amendment to the
registration statement has been filed and, with respect to the registration
statement or any post-effective amendment, when the same has become effective,
(B) of the issuance by the SEC of any stop order suspending the effectiveness of
the registration statement or the initiation of any proceedings for that
purpose, (C) of the receipt by the Company of any notification with respect to
the suspension of the qualification of any Registrable Securities for sale under
the securities or blue sky laws of any jurisdiction or the initiation of any
proceeding for such purpose, and (D) when a prospectus relating to the
registration statement is required to be delivered under the Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing; and (ii) Holder's Counsel and each managing
underwriter of any request by the SEC for amendments or supplements to such
registration statement or prospectus related thereto or for additional
information. If the notification relates to an event described in clause (i)(D),
the Company shall, in accordance with paragraph (b) of this Section 1.4,
promptly prepare and furnish to the Holder selling Registrable Securities
covered by such registration statement and each managing underwriter, if any, in
a registration under Section 1.3 a reasonable number of copies of a prospectus
supplemented or amended 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 in the light of the
circumstances under which they were made not misleading.
<PAGE>
(h) Cooperate with the selling Holder of
Registrable Securities and the managing underwriter, if any, in a registration
under Section 1.3 to facilitate the timely preparation and delivery of
certificates not bearing any restrictive legends representing the Registrable
Securities to be sold, and cause such Registrable Securities to be issued in
such denominations and registered in such names in accordance with the
underwriting agreement prior to any sale of Registrable Securities to the
underwriters or, if not an underwritten offering, in accordance with the
instructions of the selling Holder of Registrable Securities at least three
business days prior to any sale of Registrable Securities and instruct any
transfer agent and registrar of Registrable Securities to release any stop
transfer orders in respect thereto.
(i) Comply with all applicable rules and
regulations of the SEC, and make generally available to its security holders, as
soon as reasonably practicable after the effective date of the registration
statement (and in any event within 16 months thereafter), an earnings statement
(which need not be audited) covering the period of at least twelve consecutive
months beginning with the first day of the Company's first calendar quarter
after the effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.
(j) (i) Cause all such Registrable
Securities covered by such registration statement to be listed on the principal
securities exchange on which similar securities issued by the Company are then
listed (if any), if the listing of such Registrable Securities is then permitted
under the rules of such exchange, or (ii) if no similar securities are then so
listed, to either cause all such Registrable Securities to be listed on a
national securities exchange or to secure designation of all such Registrable
Securities as a National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") "national market system security" within the meaning
of Rule 11Aa2-1 of the Exchange Act or, failing that, secure NASDAQ
authorization for such shares and, without limiting the generality of the
foregoing, take all actions that may be required by the Company as the issuer of
such Registrable Securities in order to facilitate the managing underwriter's
arranging for the registration of at least two market makers as such with
respect to such shares with the National Association of Securities Dealers, Inc.
(the "NASD").
(k) Provide and cause to be maintained a
transfer agent and registrar for all such Registrable Securities covered by such
registration statement not later than the effective date of such registration
statement.
(l) Deliver promptly to Holder's Counsel and
each underwriter, if any, copies of all correspondence between the SEC and the
Company, its counsel or auditors and all memoranda relating to discussions with
the SEC or its staff with respect to the registration statement, other than
those portions of any such memoranda which contain information subject to
attorney-client privilege with respect to the Company, and, upon receipt of such
confidentiality agreements as the Company may reasonably request, make
reasonably available for inspection by Holder's Counsel, by any underwriter, if
any, participating in any disposition to be effected pursuant to such
registration statement if such registration is under Section 1.3 and any
<PAGE>
attorney, accountant or other agent retained by any such underwriter, all
pertinent financial and other records, pertinent corporate documents and
properties of the Company, and cause all of the Company's officers, directors
and employees to supply all information reasonably requested by Holder's Counsel
or such underwriter, attorney, accountant or agent in connection with such
registration statement.
(m) Use reasonable best efforts to obtain
the withdrawal of any order suspending the effectiveness of the registration
statement.
(n) Upon written request, furnish to the
Holder participating in the offering and the managing underwriter, without
charge, at least one conformed copy of the registration statement and any
post-effective amendments thereto, including financial statements and schedules,
all documents incorporated therein by reference and all exhibits (including
those incorporated by reference).
(o) Take all such other commercially
reasonable actions as are necessary or advisable in order to expedite or
facilitate the disposition of such Registrable Securities.
1.5 Furnish Information. It shall be a condition
precedent to the obligations of the Company to take any action pursuant to this
Section 1 with respect to the Registrable Securities of the Holder whose
Registrable Securities are covered by the Shelf Registration Statement that the
Holder shall furnish to the Company such information regarding himself, the
Registrable Securities held by him, and the intended method of disposition of
such securities as shall be required to effect the registration of such Holder's
Registrable Securities.
1.6 Expenses of Registration.
(a) Subject to Section 1.6(c), "Expenses"
shall mean any and all fees and expenses incident to the Company's performance
of or compliance with this Section 1, including, without limitation: (i) SEC,
stock exchange or NASD registration and filing fees and all listing fees and
fees with respect to the inclusion of securities in NASDAQ, (ii) fees and
expenses of compliance with state securities or "blue sky" laws and in
connection with the preparation of a "blue sky" survey, including without
limitation, reasonable fees and expenses of blue sky counsel, (iii) printing and
copying expenses, (iv) messenger and delivery expenses, (v) expenses incurred in
connection with any road show, (vi) fees and disbursements of counsel for the
Company, (vii) with respect to each registration, the fees and disbursements of
one counsel for the selling Holder (selected by the Holder), (viii) fees and
disbursements of the Company's independent public accountants (including the
expenses of any audit and/or "cold comfort" letter) and fees and expenses of
other persons, including special experts, retained by the Company, (ix) any fees
and expenses payable to a Qualified Independent Underwriter (as such term is
defined in Conduct Rule 2720 of the National Association of Securities Dealers,
Inc.'s By-Laws) and (x) any other fees and disbursements of underwriters, if
any, customarily paid by issuers or sellers of securities (collectively,
"Expenses").
(b) The Company shall pay all Expenses with
respect to any registration pursuant to Section 1.2, whether or not such
registration statement becomes effective or remains effective for the period
contemplated by Section 1.2(a).
<PAGE>
(c) Notwithstanding the foregoing, (i) the
provisions of this Section 1.6 shall be deemed amended to the extent necessary
to cause these expense provisions to comply with "blue sky" laws of each state
in which the offering is made and (ii) in connection with any registration under
Section 1, the selling Holder shall pay all underwriting discounts and
commissions and any transfer taxes, if any, attributable to the sale of such
Registrable Securities, and (iii) the Company shall, in the case of all
registrations under this Section 1, be responsible for all its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties).
1.7 Expenses of Company Registration. The Company
shall bear and pay all Expenses incurred in connection with any registration,
filing or qualification of Registrable Securities with respect to the
registrations pursuant to Section 1.3 for the Holder (which right may be
assigned as provided in Section 1.12).
1.8 Underwriting Requirements. In connection with any
offering involving an underwriting of shares of the Company's capital stock, the
Company shall not be required under Section 1.3 to include any of the Holder's
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by stockholders to be
included in such offering exceeds the amount of securities sold other than by
the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, that the underwriters determine in their sole discretion
will not jeopardize the success of the offering (the securities so included to
be apportioned pro rata among the selling stockholders according to the total
amount of securities entitled to be included therein owned by each selling
stockholder or in such other proportions as shall mutually be agreed to by such
selling stockholders, but in any event subject to the apportionment rights of
certain selling stockholders under Section 1.8 of the Registration Rights
Agreement, dated October 20, 1997, between the Company and certain
stockholders). For purposes of the preceding parenthetical concerning
apportionment, for any selling stockholder that is a Holder of Registrable
Securities and that is a partnership or corporate partners, retired partners and
stockholders of such Holder, or the estates and family members of any such
partners and retired partners and any trusts for the benefit of any of the
foregoing persons shall be deemed to be a single "selling stockholder," and any
pro-rata reduction with respect to such "selling stockholder" shall be based
upon the aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "selling stockholder," as defined in
this sentence.
1.9 Delay of Registration. The Holder shall not have
any right to obtain or seek an injunction restraining or otherwise delaying any
such registration as the result of any controversy that might arise with respect
to the interpretation or implementation of this Section 1.
1.10 Indemnification. In the event any Registrable
Securities are included in a registration statement under this Section 1:
<PAGE>
(a) To the extent permitted by law, the
Company will indemnify and hold harmless the Holder whose Registrable Securities
are covered by the Registration Statement, its directors, officers, fiduciaries,
employees and stockholders or general or limited partners (and the directors,
officers, employees and stockholders thereof), any underwriter (as defined in
the Act) for such Holder and each person, if any, who controls such Holder or
underwriter within the meaning of the Act or the Securities Exchange Act of
1934, as amended (the "1934 Act"), each officer, director, employee, stockholder
or partner of such underwriter, against any losses, claims, damages, or
liabilities (joint or several) or actions or proceedings (whether commenced or
threatened) and expenses (including reasonable fees of counsel and any amounts
paid in any settlement effected with the Company's consent), to which they may
become subject under the Act, the 1934 Act or any state securities law, insofar
as such losses, claims, damages, or liabilities (or actions or proceedings in
respect thereof) ("Claims") or expenses arise out of or are based upon any of
the following statements, omissions or violations (collectively a "Violation"):
(i) any untrue statement or alleged untrue statement of a material fact
contained in such registration statement, including any preliminary prospectus,
summary prospectus or final prospectus contained therein or any amendments or
supplements thereto, together with documents incorporated by reference therein,
(ii) 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, or (iii) any violation or alleged violation by the Company of the
Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the Act, the 1934 Act or any state securities law; and the
Company will pay to such Holder, and each such underwriter or controlling person
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, expense or
action or proceeding; provided, however, that (A) the indemnity agreement
contained in this Section 1.10 shall not apply to amounts paid in settlement of
any such Claim if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), (B) the Company shall not be
liable in any case for any such Claim to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by the Holder, or any such underwriter or controlling person. Such
indemnity and reimbursement of expenses shall remain in full force and effect
regardless of any investigation made by as on behalf of such indemnified party
and shall survive the transfer of such securities by such Holder.
(b) To the extent permitted by law, the
Holder whose Registrable Securities are covered by the Shelf Registration
Statement will, severally and not jointly, indemnify and hold harmless the
Company, each of its directors, each of its officers who has signed the
registration statement, each person, if any, who controls the Company within the
meaning of the Act, any underwriter, and any controlling person of any such
underwriter, against any losses, claims, damages, or liabilities (joint or
several) to which any of the foregoing persons may become subject, under the
Act, or the 1934 Act, insofar as such Claim arises out of or is based upon any
Violation, in each case to the extent (and only to the extent) that such
Violation occurs in reliance upon and in conformity with written information
furnished by such Holder expressly for use in connection with such registration;
and such Holder will pay, as incurred, any legal or other expenses reasonably
incurred by any person intended to be indemnified pursuant to this Section 1.10,
in connection with investigating or defending any such Claim; provided, however,
<PAGE>
that the indemnity agreement contained in this Section 1.10 shall not apply to
amounts paid in settlement of any such Claim if such settlement is effected
without the consent of such Holder, which consent shall not be unreasonably
withheld; provided that, in no event shall any indemnity under this Section 1.10
exceed the net proceeds from the offering received by such Holder. Such
indemnity and reimbursement of expenses shall remain in full force and effect
regardless of any investigation made by as on behalf of such indemnified party
and shall survive the transfer of such securities by such Holder.
(c) Promptly after receipt by an indemnified
party under this Section 1.10 of notice of the commencement of any action
(including any governmental action), such indemnified party will, if a claim in
respect thereof is to be made against any indemnifying party under this Section
1.10, deliver to the indemnifying party a written notice of the commencement
thereof and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an indemnified
party (together with all other indemnified parties which may be represented
without conflict by one counsel) shall have the right to retain one separate
counsel, with the fees and expenses to be paid by the indemnifying party, (i) 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 such indemnified party and any other party represented by such
counsel in such proceeding; (ii) if the indemnifying party fails to take
reasonable steps necessary to defend diligently the action or proceeding within
30 days after receiving notice from such indemnified party; or (iii) if such
indemnified party who is a defendant in any action or proceeding which is also
brought against the indemnifying party reasonably shall have concluded that
there may be one or more legal defenses available to such indemnified party
which are not available to the indemnifying party. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 1.10, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section
1.10.
(d) If the indemnification provided for in
this Section 1.10 is held by a court of competent jurisdiction to be unavailable
to an indemnified party with respect to any Claim or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such Claim or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other in connection with the statements
or omissions that resulted in such Claim or expense as well as any other
relevant equitable considerations. The relative fault of the indemnifying party
and of the indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission. If, however, the allocation provided in the first
sentence of this paragraph is not permitted by applicable law, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
<PAGE>
relative faults but also the relative benefits of the indemnifying party and the
indemnified party as well as any other relevant equitable considerations. The
parties hereto agree that it would not be just and equitable if contributions
pursuant to this Section 1.10(d) were to be determined by pro rata allocation or
by any other method of allocation which does not take account of the equitable
considerations referred to in the preceding sentences of this Section 1.10(d).
The amount paid or payable in respect of any Claim shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending such Claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Notwithstanding anything in this
Section 1.10(d) to the contrary, no indemnifying party (other than the Company)
shall be required pursuant to this Section 1.10(d) to contribute any amount in
excess of the net proceeds received by such indemnifying party from the sale of
Registrable Securities in the offering to which the Claims of the indemnified
parties relate, less the amount of any indemnification payment made by such
indemnifying party pursuant to Sections 1.10(b).
(e) Notwithstanding the foregoing, to the
extent that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten public
offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control.
(f) The obligations of the Company and
Holder under this Section 1.10 shall survive the completion of any offering of
Registrable Securities in a registration statement under this Section 1, and
otherwise.
1.11 Reports Under Securities Exchange Act of 1934.
With a view to making available to the Holder the benefits of Rule 144
promulgated under the Act and any other rule or regulation of the SEC that may
at any time permit Holder to sell securities of the Company to the public
without registration or pursuant to a registration on Form S-3, the Company
agrees to:
(a) make and keep public information
available, as those terms are understood and defined in SEC Rule 144, at all
times;
(b) take such action as is necessary to
maintain the Holder's ability to utilize Form S-3 for the sale of their
Registrable Securities;
(c) file with the SEC in a timely manner all
reports and other documents required of the Company under the Act and the 1934
Act; and
(d) furnish to the Holder, so long as Holder
owns any Registrable Securities, forthwith upon request (i) a written statement
by the Company that it has complied with the reporting requirements of SEC Rule
144, the Act and the 1934 Act (at any time after it so qualifies), (ii) a copy
of the most recent annual or quarterly report of the Company and such other
reports and documents filed by the Company with the SEC, and (iii) such other
information as may be reasonably requested in availing the Holder of any rule or
regulation of the SEC which permits the selling of any such securities without
registration or pursuant to such form.
<PAGE>
1.12 Assignment of Registration Rights.
(a) The rights to cause the Company to
register Registrable Securities pursuant to this Section 1 may be assigned (but
only with all related obligations) by the Holder to a transferee or assignees of
such securities provided: (i) the Company is, within a reasonable time after
such transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; (ii) such transferee or assignee agrees
in writing to be bound by and subject to the terms and conditions of this
Agreement, including, without limitation, the provisions of Section 1.14 below;
and (iii) such assignment shall be effective only if such transfer is exempt
from registration under the Act. For the purposes of determining the number of
shares of Registrable Securities held by a transferee or assignee, the holding
of transferees and assignees of a partnership who are partners or retired
partners of such partnership (including spouses and ancestors, lineal
descendants and siblings of such partners or spouses who acquire Registrable
Securities by gift, will or intestate succession) shall be aggregated together
with the partnership; provided that all assignees and transferees who would not
qualify individually for assignment of registration rights shall have a single
attorney-in-fact for the purpose of exercising any rights, receiving notices or
taking any action under this Section 1.
(b) Subject to clause (a) above, the right
to have the Company register the Registrable Securities pursuant to this Section
1 may not otherwise be assigned; provided, however, that (i) any heir or the
estate of the Holder which acquires the Registrable Securities from the Holder
by will or intestate succession shall be entitled to have the Company register
the Registrable Securities pursuant to this Section 1 (provided that such heirs
or such estate shall have a single attorney-in-fact for the purpose of
exercising any rights, receiving any notices or taking any action under this
Section 1), and (ii) Holder may sell, assign or transfer Registrable Securities
to his or her spouse or children or to a trust established for the benefit of
his or her spouse, children or himself or herself, and such transferee shall be
entitled to have the Company register the Registrable Securities pursuant to
this Section 1, if, and only if, such transferee agrees in writing to be bound
by the terms of this Agreement. In each such event and for purposes of this
Agreement, the term "Holder" as used herein shall include all such heirs, such
estate or such transferees.
1.13 Limitations on Subsequent Registration Rights.
From and after the date of this Agreement, the Company shall not, without the
prior written consent of the Holder, enter into any agreement with any holder or
prospective holder of any securities of the Company that would allow such holder
or prospective holder to include such securities in any registration filed under
Section 1.2 hereof, unless under the terms of such agreement, such holder or
prospective holder may include such securities in any such registration only to
the extent that the inclusion of his securities will not reduce the amount of
the Registrable Securities of the Holder that is included.
1.14 "Market Stand-Off" Agreement. The Holder hereby
agrees that, during the period of duration specified by the Company and an
underwriter of Common Stock or other securities of the Company, following the
effective date of a registration statement of the Company filed under the Act,
he shall not, to the extent requested by the Company and such underwriter,
directly or indirectly sell, offer to sell, contract to sell (including, without
limitation, any short sale), grant any option to purchase or otherwise transfer
<PAGE>
or dispose of (other than to donees who agree to be similarly bound) any
securities of the Company held by it at any time during such period except
Common Stock included in such registration, and the Holder agrees to enter into
an agreement to such effect with such underwriter; provided, however, that (a)
all officers and directors of the Company enter into similar agreements, and,
(b) such market stand-off time period shall not exceed 120 days. If the
underwriters agree to any waivers of such restrictions, then the Holder shall be
entitled to sell, transfer or dispose of the same number or amount of securities
of the Company as the person or entity receiving such waiver, upon the same
terms and conditions set forth in such waiver.
In order to enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to the Registrable
Securities of the Holder (and the shares or securities of every other person
subject to the foregoing restriction) until the end of such period.
1.15 No Required Sale. Nothing in this Agreement
shall be deemed to create an independent obligation on the part of Holder to
sell any Registrable Securities pursuant to any effective registration
statement.
2. Miscellaneous.
2.1 Successors and Assigns. Except as otherwise
provided herein, and provided that the transfer or assignment is in accordance
with the terms hereof, the terms and conditions of this Agreement shall inure to
the benefit of and be binding upon the respective successors and assigns of the
parties (including any permitted transferees of any shares of Registrable
Securities). 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.
2.2 Governing Law. This Agreement shall be governed
by and construed under the laws of the State of New York without regard to
principles of conflicts or choice of laws.
2.3 Counterparts. 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.
2.4 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.
2.5 Notices. Unless otherwise provided, any notice
required or permitted under this Agreement shall be given in writing and shall
be deemed effectively given upon personal delivery to the party to be notified
or upon deposit with the United States Post Office, by registered or certified
mail, postage prepaid and addressed to the party to be notified at the address
indicated for such party in the Settlement Agreement, or at such other address
as such party may designate by ten (10) days' advance written notice to the
other parties.
<PAGE>
2.6 Expenses. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.
2.7 Amendments and Waivers. Any term of this
Agreement may be amended and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holder. Any
amendment or waiver effected in accordance with this Section 2.7 shall be
binding upon the Holder of any Registrable Securities then outstanding, each
future Holder of all such Registrable Securities, and the Company.
2.8 Severability. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
2.9 Nominees for Beneficial Owners. If Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its option, be treated as the Holder of such
Registrable Securities for purposes of any request or other action by the Holder
or the Holder of Registrable Securities pursuant to this Agreement (or any
determination of any number or percentage of shares constituting Registrable
Securities held by the Holder or the Holder of Registrable Securities
contemplated by this Agreement), provided that the Company shall have received
assurances reasonably satisfactory to it of such beneficial ownership.
2.10 Specific Performance. The parties hereto
acknowledge that there would be no adequate remedy at law if any party fails to
perform any of its obligations hereunder, and accordingly agree that each party,
in addition to any other remedy to which it may be entitled at law or in equity,
shall be entitled to injunctive relief, including specific performance, to
enforce such obligations without the posting of any bond, 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.
2.11 No Inconsistent Agreements. The rights granted
to the Holder of Registrable Securities hereunder do not in any way conflict
with and are not inconsistent with any other agreements to which the Company is
a party or by which it is bound. Without the prior written consent of the
Holder, neither the Company nor any Holder will, on or after the date of this
Agreement, enter into any agreement with respect to its securities which is
inconsistent with the rights granted in this Agreement or otherwise conflicts
with the provisions hereof, other than any lock-up agreement with the
underwriters in connection with any registered offering effected hereunder,
pursuant to which the Company shall agree not to register for sale, and the
Company shall agree not to sell or otherwise dispose of, Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock, for
a specified period following the registered offering. The Company further agrees
that if any other registration rights agreement entered into after the date of
this Agreement with respect to any of its securities contains terms which are
more favorable to, or less restrictive on, the other party thereto than the
terms and conditions in this Agreement are (insofar as they are applicable to
the Holder), then the terms and conditions of this Agreement shall immediately
be deemed to have been amended without further action by the Company or the
Holder of Registrable Securities so that the Holder shall be entitled to the
benefit of any such more favorable or less restrictive terms or conditions.
2.12 Entire Agreement. This Agreement (including the
Exhibits hereto, if any) constitutes the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first above written.
EXOGEN, INC.
By: /s/ PATRICK A. McBRAYER
------------------------
Name: Patrick A. McBrayer
Title: President and Chief Executive Officer
Address: 10 Constitution Avenue
P.O. Box 6860
Piscataway, NJ 08855
WARRANTHOLDER:
/s/DR. ALESSANDRO CHIABRERA
---------------------------
Dr. Alessandro Chiabrera
EXHIBIT 10.5
EXHIBIT C
PROMISSORY NOTE
In consideration of, and in connection with, the Settlement Agreement
and Mutual Release entered into as of September 30, 1998, by and among plaintiff
Exogen Inc., ("Exogen") and defendants, Pilla Consulting, Inc., ("Consulting")
and Arthur A. Pilla, ("Pilla") Arthur A. Pilla as Third Party Plaintiff against
the Third Party Defendants, Interpore International, ("Interpore") and Interpore
Orthopaedics ("IOI"), (the "Settlement Agreement"), the undersigned, Exogen,
whose current business address is 10 Constitution Avenue, P.O. Box 6860,
Piscataway, NJ 08855, promises to pay to the order of Consulting, the principal
amount of Seventy Six Thousand Three Hundred Sixty Four Dollars and Twenty One
Cents ($76,364.21) in installments, as set forth in Schedule 1 attached hereto,
and made a part hereof. All payments shall be made to Pilla Consulting, Inc.,
care of 133 Heights Road, Ridgewood, New Jersey 07450, or at such other address
as designated by Consulting in writing to Exogen.
UNCONDITIONAL RIGHT TO PAYMENT
The obligation of Exogen to pay each and every installment under this
Promissory Note is unconditional and irrevocable and the right of Consulting to
receive each and every payment hereunder is uncontestable.
Exogen shall not have any right of offset with respect to any payments
due hereunder and Exogen hereby waives any defenses or counterclaims which would
result in a right of offset.
EVENTS OF DEFAULT
The occurrence of any of the following events shall be considered a
default in the obligations under this Promissory Note ("Events of Default"):
(a) Failure to timely pay any installment set forth on Schedule 1
annexed hereto. Subject to paragraph 5 of the Settlement
Agreement, a payment shall be timely if received by Consulting
on or before the due date set forth in Schedule 1; or
(b) Failure by Exogen to observe or perform any of the covenants
or agreements in the Settlement Agreement; or
(c) A decree or order by a court adjudging Exogen bankrupt or
insolvent, or approving, as properly filed, a petition seeking
reorganization of Exogen's affairs under the federal
bankruptcy code or any other similar federal, state or foreign
law, which is not dismissed within 60 days of filing; or
(d) A decree or order of a court for the appointment of a receiver
or trustee or assignee in bankruptcy or insolvency for Exogen,
or for the winding-up or liquidation of the affairs of Exogen;
or
(e) Exogen institutes proceedings to be adjudicated a voluntary
bankrupt or consents to the institution of a bankruptcy
proceedings or files a petition or answer or consent seeking
reorganization or rearrangement with creditors under any
federal or a state or foreign bankruptcy act or any other
similar federal or state law or
(f) Exogen makes an assignment for the benefit of creditors or
admits in writing an inability to pay debts generally as they
become due; or
<PAGE>
(g) The agreement by Exogen to any merger, buy-out, acquisition,
asset sale transaction or other corporate event resulting in a
change of control which is not conditioned upon the acquiring
entity assuming Exogen's obligations under this Promissory
Note.
Upon the occurrence of any of the above events of default, and upon ten
(10) days written notice to Exogen in accordance with paragraph 5 of the
Settlement Agreement, all payments set forth on Schedule 1, which have not yet
been made, shall become immediately due and payable without presentment, demand
or notice of any kind, all of which are hereby expressly waived, anything in
this Promissory Note to the contrary notwithstanding. Upon the expiration of the
ten (10) day notice period, Consulting shall have the right to institute an
action against Exogen for all payments set forth on Schedule 1, which have not
yet been made, with interest thereon at the rate of 9% per annum from the date
of commencement of the action. Exogen shall be liable for and pay any and all
attorneys' fees incurred by Consulting in such an action.
PREPAYMENTS
Exogen shall have the right to pre-pay the unpaid balance of this
Promissory Note without penalty upon 10 days written notice to Consulting.
MERGER OR CONSOLIDATION
The obligations of Exogen hereunder shall extend to, and be binding
upon, each of its successors, assigns, any corporation of which it owns more
than 50% of the voting stock, and the transferee of all, or substantially all,
of Exogen's assets.
Dated: September 30, 1998
EXOGEN, INC.
By: /s/ RICHARD H. REISNER
-----------------------
Name: Richard H. Reisner
Title: Vice President and Chief Financial Officer
EXHIBIT 10.6
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER
SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
No. CSPW-E02
Void after 5:00 p.m. New York Time, on July 20, 2003
(subject to certain exceptions)
Warrant to Purchase Eighty Thousand (80,000) Shares of Common Stock
WARRANT TO PURCHASE COMMON STOCK
OF
EXOGEN, INC.
This certifies that, for value received, Arthur A. Pilla (the
"Holder"), is entitled, subject to the terms set forth below, to purchase from
Exogen, Inc., a Delaware corporation (the "Company"), Eighty Thousand (80,000)
fully paid, validly issued and nonassessable shares of the Company's common
stock, $.0001 par value per share (the "Common Stock"), upon surrender hereof,
at the principal office of the Company referred to below, with the Notice of
Exercise annexed hereto duly executed, and simultaneous payment therefor in
lawful money of the United States or otherwise as hereinafter provided, at
$3.12, the Average Closing Sale Price of Exogen's Common Stock between June 16,
1998 and July 16, 1998, as quoted on the Nasdaq National Market (the "Exercise
Price"). The number, character and Exercise Price of such shares of Common Stock
are subject to adjustment as provided below. The term "Warrant" as used herein
shall include this Warrant and any warrants delivered in substitution or
exchange therefor as provided herein.
1. Term of Warrant. Subject to the terms and conditions set
forth herein, this Warrant shall be exercisable, in whole or in part, at any
time or from time to time on or after the date the Settlement Agreement entered
into in conjunction herewith is executed and ending at 5:00 p.m., New York Time,
on July 20, 2003 and shall be void thereafter.
2. Exercise of Warrant.
(a) The purchase rights represented by this Warrant
are exercisable by the Holder in whole or in part, at any time or from time to
time, during the term hereof as described in Section 1 above, by the surrender
of this Warrant and the Notice of Exercise annexed hereto duly completed and
executed on behalf of the Holder, at the office of the Company (or such other
office or agency of the Company as it may designate by notice in writing to the
Holder at the address of the Holder appearing on the books of the Company), upon
payment in cash or by check acceptable to the Company.
In lieu of paying the purchase price in cash or by check, the
Holder may elect to receive shares of Common Stock equal to the value of this
Warrant (or the portion thereof being exercised), in which event the Company
shall issue to the Holder the number of shares of the Company's Common Stock
computed using the following formula:
X = Y (A-B)
-----------
A
Where:
X - the number of shares of Common Stock subject to this
Warrant to be issued to the Holder;
<PAGE>
Y - the number of shares of Common Stock subject to
this Warrant otherwise purchasable under this Warrant
(at the date of such calculation);
A - the Market Price of one share of the Company's
Common Stock (at the date of such calculation); and
B - Exercise Price (as adjusted to the date of such
calculation).
For purposes of the foregoing calculation, "Market Price"
shall mean the last reported sales prices regular way, or in case no such sales
take place on such day, the average of the closing bid and ask prices regular
way, of the Company's Common Stock in each case on the principal national
securities exchange on which the security is listed or admitted to trading, or,
if not listed or admitted to trading on any national securities exchange, on the
Nasdaq National Market or, if the Company's Common Stock is not listed or
admitted to trading on any national securities exchange and is not quoted on the
Nasdaq National Market, the average of the closing bid and ask prices as
furnished by any New York Stock Exchange member firm selected from time to time
by the Board of Directors of the Company for such purpose.
(b) This Warrant shall be deemed to have been
exercised immediately prior to the close of business on the date of its
surrender for exercise as provided above, and the person entitled to receive the
shares of Common Stock issuable upon such exercise shall be treated for all
purposes as the holder of record of such shares as of the close of business on
such date. As promptly as practicable on or after such date, and in any event
within ten (10) days thereafter, the Company at its expense, shall issue and
deliver to the person or persons entitled to receive the same, a certificate or
certificates for the number of shares issuable upon such exercise. In the event
that this Warrant is exercised in part, the Company at its expense will execute
and deliver a new Warrant of like tenor exercisable for the number of shares for
which this Warrant may then be exercised.
3. Reservation of Shares. The Company covenants that during
the term this Warrant is exercisable, the Company will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of Common Stock upon the exercise of this Warrant. The Company
further convents that all shares that may be issued upon the exercise of the
rights represented by this Warrant and payment of the Exercise Price, all as set
forth herein, will be free from all taxes, liens, and charges in respect of the
issue thereof (other than taxes in respect of any transfer occurring
contemporaneously or otherwise specified herein). The Company agrees that its
issuance of this Warrant shall constitute full authority to its officers, who
are charged with duty of executing stock certificates, to execute and issue the
necessary certificates for shares of Common Stock upon the exercise of this
Warrant.
4. No Fractional Shares or Scrip. No fractional shares or
scrip representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which the Holder would otherwise be
entitled, the Company shall make a cash payment equal to the Exercise Price
multiplied by such fraction.
<PAGE>
5. Rights of Stockholders. The Holder shall not, by virtue
hereof, be entitled to any rights of a stockholder in the Company, either at law
or equity, and the rights of the Holder are limited to those expressed in the
Warrant and are not enforceable against the Company except to the extent set
forth herein.
6. Adjustments. The Exercise Price and the number of shares
purchasable hereunder are subject to adjustment from time to time as follows:
(a) Reclassification, etc. If the Company at any time
while this Warrant, or any portion thereof, remains outstanding and unexpired
shall, by reclassification of securities or otherwise, change any of the
securities as to which purchase rights under this Warrant exist into the same or
a different number of securities of any other class or classes, this Warrant
shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with respect
to the securities which were subject to the purchase rights under this Warrant
immediately prior to such reclassification or other change and the Exercise
Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 6.
(b) Split, Subdivision or Combination of Shares. If
the Company at any time while this Warrant, or any portion thereof, remains
outstanding and unexpired shall split, subdivide or combine the securities as to
which purchase rights under this Warrant exist, into a different number of
securities of the same class, the number of securities issuable upon the
exercise hereof and the Exercise Price for such securities shall be
appropriately adjusted.
(c) Adjustments for Dividends in Stock or Other
Securities or Property. If while this Warrant, or any portion hereof, remains
outstanding and unexpired the holder of the securities as to which purchase
rights under this Warrant exist at the time shall have received, or, on or after
the record date fixed for the determination of eligible stockholders, shall have
become entitled to receive, without payment therefor, other or additional stock
or other securities or property (other than cash) of the Company by way of
dividend, then and in each case, this Warrant shall represent the right to
acquire, in addition to the number of shares of the security receivable upon
exercise of this Warrant, and without payment of any additional consideration
therefor, the amount of such other or additional stock or other securities or
property (other than cash) of the Company which such holder would hold on the
date of such exercise had it been the holder of record of the security
receivable upon exercise of this Warrant on the date hereof and had thereafter,
during the period from the date hereof to and including the date of such
exercise, retained such shares and/or all other additional stock available by it
as aforesaid during such period, giving effect to all adjustments called for
during such period by the provisions of this Section 6.
(d) Change of Control. If at any time while this
Warrant, or any portion thereof, remains outstanding and unexercised there
occurs (i) a reorganization of the Company (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein); (ii) a merger, consolidation or other corporate combination of the
Company with or into another corporation in which the Company is not the
surviving entity, or a reverse triangular merger in which the company is the
surviving entity but the shares of the Company's capital stock outstanding
immediately prior to the merger are converted, by virtue of the merger, into
<PAGE>
other property, whether in the form of securities, cash, or otherwise; or (iii)
a sale or transfer of the Company's properties and assets as, or substantially
as, an entirety to any other person, this Warrant shall thereafter represent the
right to acquire such number and kind of securities as would have been issuable
as the result of any such transaction with respect to the shares of Common Stock
subject to this Warrant immediately prior to such transaction and the Exercise
Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 6.
(e) Certificate as to Adjustments. Upon the
occurrence of each adjustment or readjustment pursuant to this Section 6, the
Company at its expense shall promptly compute such adjustment or readjustment in
accordance with the terms hereof and furnish to Holder a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based. The Company shall, upon the written
request, at any time, of the Holder, furnish or cause to be furnished to the
Holder a like certificate setting forth; (i) such adjustments and readjustments;
(ii) the Exercise Price at the time in effect; and (iii) the number of shares
and the amount, if any, of other property which at the time would be received
upon the exercise of the Warrant.
(f) No Impairment. The Company will not, by any
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the provisions of this
Section 6 and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder against impairment.
7. Exchange, Transfer or Loss of Warrant. This Warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company or at the office of its appointed transfer
agent, if any, for other warrants of different denominations entitling the
Holder thereof to purchase in the aggregate the same number of shares of Common
Stock purchasable hereunder. This Warrant may be divided or combined with other
warrants which carry the same rights upon presentation hereof at the principal
office of the Company or at the office of its appointed transfer agent, if any,
together with a written notice specifying the names and denominations in which
new Warrants are to be issued and signed by the Holder. Upon receipt by the
Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will execute and deliver a new Warrant
of like tenor and date. Any such new Warrant executed and delivered shall
constitute an additional contractual obligation on the part of the Company,
whether or not this Warrant so lost, stolen, destroyed, or mutilated shall be at
any time enforceable by anyone.
8. Compliance with Securities Law.
(a) This Warrant may not be transferred or assigned
in whole or in part without compliance with all applicable federal and state
securities laws by the transferor and the transferee (including the delivery of
investment representation letters and legal opinions reasonably satisfactory to
the Company, if such are requested by the Company). Subject to the provisions of
this Warrant with respect to compliance with the Securities Act of 1933, as
amended (the "Securities Act"), title to this Warrant may be transferred by
endorsement and delivery in the same manner as a negotiable instrument
transferable by endorsement and delivery.
<PAGE>
(b) The Holder of this Warrant, by acceptance hereof,
acknowledges that this Warrant, and the shares of Common Stock to be issued upon
exercise hereof, are being acquired solely for the Holder's own account and not
as a nominee for any other party, and for investment, and that the Holder will
not offer, sell, or otherwise dispose of this Warrant or any shares of Common
Stock to be issued upon exercise hereof except under circumstances that will not
result in a violation of the Securities Act or any state securities laws. Upon
exercise of this Warrant, the Holder shall, if requested by the Company, confirm
in writing, in a form satisfactory to the Company, that the shares of Common
Stock so purchased are being acquired solely for the Holder's own account and
not as a nominee for any other party, for investment, and not with a view toward
distribution or resale.
(c) This Warrant and all shares of Common Stock
issued upon exercise hereof shall be stamped or imprinted with a legend in
substantially the following form (in addition to any legend required by state
securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. SUCH SECURITIES AND ANY SECURITIES OR
SHARES ISSUED HEREUNDER OR THEREUNDER MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE AGREEMENT
COVERING THE PURCHASE OF THESE SECURITIES AND RESTRICTING
THEIR TRANSFER OR SALE MAY BE OBTAINED AT NO COST BY WRITTEN
REQUEST MADE BY THE HOLDER OF RECORD HEREOF TO THE SECRETARY
OF THE COMPANY AT THE PRINCIPAL EXECUTIVE OFFICES OF THE
COMPANY.
9. Notices. In case (i) the Company shall take a record of the
holders of its Common Stock (or other stock or securities at the time receivable
upon the exercise of this Warrant) for the purpose of entitling them to receive
any dividend or other distribution, or any right to subscribe for or purchase
any shares of stock of any class or any other securities, or to receive any
other right; (ii) of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation, or any conveyance of all
or substantially all of the assets of the Company to another corporation; or
(iii) of any voluntary dissolution, liquidation or winding-up of the Company,
then, and in each such case, the Company will mail or cause to be mailed to the
Holder a notice specifying, as the case may be, (A) the date on which a record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, or (B)
the date on which such reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holders of record of Common Stock
(or such stock or securities at the time receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Common Stock (or such
other stock or securities) for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be mailed at least
fifteen (15) days prior to the date therein specified. All such notices, advices
and communications shall be deemed to have been received (i) in the case of
personal delivery, on the date of such delivery and (ii) in the case of mailing,
on the third business day following the date of such mailing.
10. Amendments. Any term of this Warrant may be amended with
the written consent of the Company and the Holder.
<PAGE>
IN WITNESS WHEREOF, EXOGEN, INC. has caused this Warrant to be
executed by its officers thereunto duly authorized.
Dated: September 30, 1998
EXOGEN, INC.
By: /s/Richard H. Reisner
---------------------
Name: Richard H. Reisner
Title: Vice-President and Chief
Financial Officer
HOLDER: Arthur A. Pilla
<PAGE>
NOTICE OF EXERCISE
To: EXOGEN, INC.
(1) The undersigned hereby elects to purchase [ ] shares of
Common Stock of Exogen, Inc. pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price for such shares in full.
(2) In exercising this Warrant, the undersigned hereby
confirms and acknowledges that the shares of Common Stock to be issued upon
exercise hereof are being acquired solely for the account of the undersigned and
not as a nominee for any other party, and for investment, and that the
undersigned will not offer, sell, or otherwise dispose of any such shares of
Common Stock except under circumstances that will not result in a violation of
the Securities Act of 1933, as amended, or any state securities laws.
(3) Please issue a certificate or certificates representing
said shares of Common Stock in the name of the undersigned or in such other name
as is specified below:
________________________
[Name]
________________________
[Name]
(4) Please issue a new Warrant for the unexercised portion of
the attached Warrant in the name of the undersigned or in such other name as is
specified below:
________________________
[Name]
________________________
_________________ ________________________
[Date] [Signature]
EXHIBIT 10.7
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
- --------------------------------------------------------------------------------
September 30, 1998
<PAGE>
TABLE OF CONTENTS
1. Registration Rights....................................................
1.1 Definitions...................................................
1.2 Shelf Registration............................................
1.3 Company Registration..........................................
1.4 Obligations of the Company....................................
1.5 Furnish Information...........................................
1.6 Expenses of Registration......................................
1.7 Expenses of Company Registration..............................
1.8 Underwriting Requirements.....................................
1.9 Delay of Registration.........................................
1.10 Indemnification...............................................
1.11 Reports Under Securities Exchange Act of 1934.................
1.12 Assignment of Registration Rights.............................
1.13 Limitations on Subsequent Registration Rights.................
1.14 "Market Stand-Off" Agreement..................................
1.15 No Required Sale..............................................
2. Miscellaneous..........................................................
2.1 Successors and Assigns........................................
2.2 Governing Law.................................................
2.3 Counterparts..................................................
2.4 Titles and Subtitles..........................................
2.5 Notices.......................................................
2.6 Expenses......................................................
2.7 Amendments and Waivers........................................
2.8 Severability..................................................
2.9 Nominees for Beneficial Owners................................
2.10 Specific Performance..........................................
2.11 No Inconsistent Agreements....................................
2.12 Entire Agreement..............................................
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made as of the 30th day
of September, 1998 by and between Exogen, Inc., a Delaware corporation (the
"Company"), and Arthur A. Pilla (the "Warrant Holder").
RECITALS
WHEREAS, the Company and the Warrant Holder are parties to the
Settlement Agreement of even date herewith (the "Settlement Agreement");
WHEREAS, in order to induce the Company to enter into the
Settlement Agreement and to induce the Warrant Holder to agree to enter into the
Settlement Agreement, the Warrant Holder and the Company hereby agree that this
Agreement shall govern the rights of the Warrant Holder to cause the Company to
register the shares of Common Stock issuable to the Warrant Holder upon exercise
of the Warrant (as defined below) and certain other matters as set forth herein;
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Registration Rights. The Company covenants and agrees as
follows:
1.1 Definitions. For purposes of this Section 1:
(a) The term "Act" means the Securities Act of 1933,
as amended.
(b) The terms "Form S-3" means such form under the
Act as in effect on the date hereof or any registration form under the Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.
(c) The term "register," "registered," and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the Securities Act
of 1933, as amended (the "Act"), and the declaration or ordering of
effectiveness of such registration statement or document;
(d) The term "Registrable Securities" means (1) the
Shares of Common Stock of the Company issued (or issuable) upon the exercise of
the Warrant, and (2) any shares of Common Stock issued as a dividend or other
distribution with respect to, or in exchange for or in replacement of, such
Common Stock, excluding in all cases, however, any Registrable Securities which
are sold, assigned, pledged, hypothecated or otherwise disposed of by the Holder
in a transaction in which such Holder's rights under this Agreement are not
assigned or assignable;
(e) The number of shares of "Registrable Securities
then outstanding" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to the then exercisable Warrant which are, Registrable Securities;
(f) The term "Holder" means the Warrant Holder; and
(g) The term "Warrant" means the Warrant to purchase
80,000 shares of Common Stock issued pursuant to the Settlement Agreement.
<PAGE>
1.2 Shelf Registration.
(a) The Company shall, subject to the limitations
specified in this Agreement, use its best efforts (i) to file a shelf
registration statement on Form S-3 or any other form available to the Company
after two hundred forty (240) days from the date hereof (the "Filing Date")
covering the registration under the Act of all Registrable Securities then
outstanding to be offered or sold on a delayed or continuous basis as provided
by this Agreement, pursuant to Rule 415 of the Act (the "Shelf Registration
Statement"); and (ii) to maintain the effectiveness of the Shelf Registration
Statement for a period of five (5) years from the date that registration
statement is declared effective by the Securities and Exchange Commission (or
such shorter period in accordance with Section 1.4(a)).
(b) Notwithstanding the foregoing, if the Company
shall furnish to the Holder a certificate signed by the Chief Executive Officer
or President of the Company stating that, in the good faith judgment of the
Board of Directors of the Company, it would be seriously detrimental (a
"Detrimental Condition") to the Company and its stockholders for a registration
statement to be filed or to become or remain effective, as the case may be, and
provided that the Detrimental Condition has not resulted from actions taken by
the Company, (i) the Company shall have the right to defer taking action with
respect to the filing of the Shelf Registration Statement for a period of not
more than ninety (90) days after the Filing Date, (ii) in case a Shelf
Registration Statement has been filed but has not become effective, the Company
may cause such registration statement to be withdrawn or may postpone amending
or supplementing such registration statement until such Detrimental Condition no
longer exists, but in no event for more than ninety (90) days, or (iii) in case
a Shelf Registration Statement has been filed and has become effective, the
Company may cause such registration statement to be withdrawn and its
effectiveness terminated or may postpone amending or supplementing such
registration statement until such Detrimental Condition no longer exists, but in
no event for more than ninety (90) days. The Company may not declare a
Detrimental Condition, or take any of the actions specified in clauses (i), (ii)
or (iii) of the preceding sentence (and can take only one such action specified
in clauses (i), (ii) or (iii) per Detrimental Condition), more than once in any
twelve-month period. The Company shall give written notice of its determination
to postpone or withdraw a registration statement and of the fact that the
Detrimental Condition for such postponement or withdrawal no longer exists, in
each case, promptly after the occurrence thereof. The following events or
circumstances may result in the filing of a registration statement being
seriously detrimental to the Company and its stockholders: a pending material
acquisition, merger or sale or purchase of assets, pending or threatened
material litigation, pending or threatened material regulatory or governmental
action, pending material change in the business, prospects, condition (financial
or other) or properties of the Company. The foregoing list is for illustrative
purposes only and is not meant to be exclusive.
(c) If the Company shall give any notice of
postponement or withdrawal of any registration statement, the Company shall not,
during the period of postponement or withdrawal pursuant to clauses (i), (ii) or
(iii) of the prior paragraph, register any Common Stock, other than pursuant to
a registration statement on Form S-4 or S-8 (or an equivalent registration form
then in effect). The Holder of Registrable Securities agrees that, upon receipt
of any notice from the Company that the Company has determined to withdraw any
registration statement pursuant to the immediately preceding paragraph, the
Holder will discontinue its disposition of Registrable Securities pursuant to
<PAGE>
such registration statement and, if so directed by the Company, will deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies, then in the Holder's possession of the prospectus covering such
Registrable Securities that was in effect at the time of receipt of such notice.
If the Company shall have withdrawn or prematurely terminated a registration
statement filed under this Section 1.2 (whether pursuant to the immediately
preceding paragraph, or as a result of any stop order, injunction or other order
or requirement of the SEC or any other governmental agency or court), the
Company shall not be considered to have effected an effective registration for
the purposes of this Agreement until the Company shall have filed a new
registration statement covering the Registrable Securities covered by the
withdrawn registration statement and such registration statement shall have been
declared effective and shall not have been withdrawn. If the Company shall give
any notice of withdrawal or postponement of a registration statement, the
Company shall, at such time as the Detrimental Condition that caused such
withdrawal or postponement no longer exists (but in no event later than ninety
(90) days after the date of the postponement or withdrawal), use its best
efforts to effect the registration under the Securities Act of the Registrable
Securities covered by the withdrawn or postponed registration statement in
accordance with this Section 1.2 (unless the Holder shall have withdrawn such
request, in which case the Company shall not be considered to have effected an
effective registration for the purposes of this Agreement).
(d) The registration statement filed pursuant to this
Section 1.2 may include other securities of the Company (i) which are held by
persons who, by virtue of agreements with the Company, are entitled to include
their securities in any such registration, (ii) which are held by officers and
directors of the Company, or (iii) which are being offered for the account of
the Company (collectively, the securities referred to in clauses (i), (ii) and
(iii) in this paragraph are hereinafter referred to as the "Other Securities").
1.3 Company Registration. If (but without any obligation to do
so) the Company proposes to register (including for this purpose a registration
effected by the Company for stockholders other than the Holder) any of its stock
or other securities under the Act in connection with the public offering of such
securities solely for cash (other than a registration relating solely to the
sale of securities to participants in a Company stock option, stock purchase or
similar plan or a SEC Rule 145 transaction, a registration on any form which
does not include substantially the same information as would be required to be
included in a registration statement covering the sale of the Registrable
Securities or a registration in which the only Common Stock being registered is
Common Stock issuable upon conversion of debt securities that are also being
registered), the Company shall, at such time, promptly give the Holder written
notice of such registration. Upon the written request of the Holder given within
twenty (20) days after mailing of such notice by the Company in accordance with
Section 2.5, the Company shall, subject to the provisions of Section 1.8, cause
to be registered under the Act all of the Registrable Securities that the Holder
has requested to be registered. No registration effected pursuant to this
Section 1.3 shall relieve the Company of its obligations to effect the required
registration pursuant to Section 1.2. The Holder shall have the right to
withdraw his request for inclusion of its Registrable Securities in any
registration statement pursuant to this Section 1.3 by giving written notice to
the Company of its request to withdraw.
1.4 Obligations of the Company. When required under this
Section 1 to effect the registration of the Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
<PAGE>
(a) Prepare and file with the Securities and Exchange
Commission (the "SEC") a Shelf Registration Statement or, if applicable, any
other form of registration statement, as the case may be, with respect to the
Registrable Securities and use its best efforts to cause such registration
statement to become effective within one hundred twenty (120) days after such
registration statement was filed and to keep such Shelf Registration Statement
effective for a period up to the fifth anniversary of the date hereof or until
the earlier of (i) completion of the distribution contemplated in the Shelf
Registration Statement has been completed, and (ii) when all Registrable
Securities may be sold without restriction under Rule 144 promulgated under the
Act provided, however, that before filing a registration statement or prospectus
under the Act provided, however, that before filing a registration statement or
prospectus or any amendments or supplements thereto, or comparable statements
under securities or blue sky laws of any jurisdiction, the Company will furnish
to one counsel for the Holder (the "Holder's Counsel") participating in the
planned offering (selected by the Holder), and the underwriters, if any, copies
of all such documents proposed to be filed (including all exhibits thereto),
which documents will be subject to the reasonable review and reasonable comment
of such counsel.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement.
(c) Furnish to the Holder whose Registrable
Securities are covered by the Shelf Registration Statement such numbers of
copies of a prospectus, including a preliminary prospectus, in conformity with
the requirements of the Act, and such other documents as they may reasonable
request in order to facilitate the disposition of Registrable Securities owned
by them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holder whose Registrable Securities are covered by the Shelf Registration
Statement; provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions unless
the Company is already subject to service in such jurisdiction.
(e) In the event the Registrable Securities are to be
sold through an underwritten public offering under Section 1.3, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. The Holder proposing to
distribute Registrable Securities through such underwritten public offering
shall also enter into and perform his obligations under such an agreement. No
offering pursuant to a registration statement under Section 1.2 shall be an
underwritten offering.
(f) In the event the Registrable Securities are to be
sold through an underwritten public offering under Section 1.3, use its best
efforts to furnish, on the date that such Registrable Securities are delivered
to the underwriters for sale in connection with a registration pursuant to this
Section 1, (i) an opinion, dated such date, of the counsel representing the
Company for the purposes of such registration, in form and substance as is
<PAGE>
customarily given to underwriters in an underwritten public offering, addressed
to the underwriters, and (ii) a letter, dated such date, from the independent
certified public accountants of the Company addressed to the underwriters,
stating that such accountants are independent public accountants within the
meaning of the Act and the applicable published rules and regulations
thereunder, and otherwise in form and in substance as is customarily given by
independent certified public accountants to underwriters in connection with an
underwritten public offering.
(g) Promptly notify (i) the Holder selling
Registrable Securities covered by such registration statement and each managing
underwriter, if any: (A) when the registration statement, the prospectus or any
prospectus supplement related thereto or post-effective amendment to the
registration statement has been filed and, with respect to the registration
statement or any post-effective amendment, when the same has become effective,
(B) of the issuance by the SEC of any stop order suspending the effectiveness of
the registration statement or the initiation of any proceedings for that
purpose, (C) of the receipt by the Company of any notification with respect to
the suspension of the qualification of any Registrable Securities for sale under
the securities or blue sky laws of any jurisdiction or the initiation of any
proceeding for such purpose, and (D) when a prospectus relating to the
registration statement is required to be delivered under the Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing; and (ii) Holder's Counsel and each managing
underwriter of any request by the SEC for amendments or supplements to such
registration statement or prospectus related thereto or for additional
information. If the notification relates to an event described in clause (i)(D),
the Company shall, in accordance with paragraph (b) of this Section 1.4,
promptly prepare and furnish to the Holder selling Registrable Securities
covered by such registration statement and each managing underwriter, if any, in
a registration under Section 1.3 a reasonable number of copies of a prospectus
supplemented or amended 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 in the light of the
circumstances under which they were made not misleading.
(h) Cooperate with the selling Holder of Registrable
Securities and the managing underwriter, if any, in a registration under Section
1.3 to facilitate the timely preparation and delivery of certificates not
bearing nay restrictive legends representing the Registrable Securities to be
sold, and cause such Registrable Securities to be issued in such denominations
and registered in such names and in accordance with the underwriting agreement
prior to any sale of Registrable Securities to the underwriters or, if not an
underwritten offering, in accordance with the instructions of the selling Holder
of Registrable Securities at least three business days prior to any sale of
Registrable Securities and instruct any transfer agent and registrar of
Registrable Securities to release any stop transfer orders in respect thereto.
(i) Comply with all applicable rules and regulations
of the SEC, and make generally available to its security holders, as soon as
reasonably practicable after the effective date of the registration statement
(and in any event within 16 months thereafter), an earnings statement (which
need not be audited) covering the period of at least twelve consecutive months
beginning with the first day of the Company's first calendar quarter after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder.
<PAGE>
(j) (i) Cause all such Registrable Securities covered
by such registration statement to be listed on the principal securities exchange
on which similar securities issued by the Company are then listed (if any), if
the listing of such Registrable Securities is then permitted under the rules of
such exchange, or (ii) if no similar securities are then so listed, to either
cause all such Registrable Securities to be listed on a national securities
exchange or to secure designation of all such Registrable Securities as a
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") "national market system security" within the meaning of Rule 11Aa2-1
of the Exchange Act or, failing that, secure NASDAQ authorization for such
shares and, without limiting the generality of the foregoing, take all actions
that may be required by the Company as the issuer of such Registrable Securities
in order to facilitate the managing underwriter's arranging for the registration
of at least two market makers as such with respect to such shares with the
National Association of Securities Dealers, Inc. (the "NASD"). (k) Provide and
cause to be maintained a transfer agent and registrar for all such Registrable
Securities covered by such registration statement not later than the effective
date of such registration statement.
(k) Provide and cause to be maintained a transfer
agent and registrar for all such Registrable Securities covered by such
registration statement not later than the effective date of such registration
statement.
(l) Deliver promptly to Holder's Counsel and each
underwriter, if any, copies of all correspondence between the SEC and the
Company, its counsel or auditors and all memoranda relating to discussions with
the SEC or its staff with respect to the registration statement, other than
those portions of any such memoranda which contain information subject to
attorney-client privilege with respect to the Company, and, upon receipt of such
confidentiality agreements as the Company may reasonably request, make
reasonably available for inspection by Holder's Counsel, by any underwriter, if
any, participating in any disposition to be effected pursuant to such
registration statement if such registration is under Section 1.3 and any
attorney, accountant or other agent retained by any such underwriter, all
pertinent financial and other records, pertinent corporate documents and
properties of the Company, and cause all of the Company's officers, directors
and employees to supply all information reasonably requested by Holder's Counsel
or such underwriter, attorney, accountant or agent in connection with such
registration statement.
(m) Use reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of the registration
statement.
(n) Upon written request, furnish to the Holder
participating in the offering and the managing underwriter, without charge, at
least one conformed copy of the registration statement and any post-effective
amendments thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those incorporated
by reference).
(o) Take all such other commercially reasonable
actions as are necessary or advisable in order to expedite or facilitate the
disposition of such Registrable Securities.
1.5 Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Section 1
with respect to the Registrable Securities of the Holder whose Registrable
Securities are covered by the Shelf Registration Statement that the Holder shall
furnish to the Company such information regarding himself, the Registrable
Securities held by him, and the intended method of disposition of such
securities as shall be required to effect the registration of such Holder's
Registrable Securities.
<PAGE>
1.6 Expenses of Registration.
(a) Subject to Section 1.6(c), "Expenses" shall mean
any and all fees and expenses incident to the Company's performance of or
compliance with this Section 1, including, without limitation: (i) SEC, stock
exchange or NASD registration and filing fees and all listing fees and fees with
respect to the inclusion of securities in NASDAQ, (ii) fees and expenses of
compliance with state securities or "blue sky" laws and in connection with the
preparation of a "blue sky" survey, including without limitation, reasonable
fees and expenses of blue sky counsel, (iii) printing and copying expenses, (iv)
messenger and delivery expenses, (v) expenses incurred in connection with any
road show, (vi) fees and disbursements of counsel for the Company, (vii) with
respect to each registration, the fees and disbursements of one counsel for the
selling Holder (selected by the Holder), (viii) fees and disbursements of the
Company's independent public accountants (including the expenses of any audit
and/or "cold comfort" letter) and fees and expenses of other persons, including
special experts, retained by the Company, (ix) any fees and expenses payable to
a Qualified Independent Underwriter (as such term is defined in Conduct Rule
2720 of the National Association of Securities Dealers, Inc.'s By-Laws) and (x)
any other fees and disbursements of underwriters, if any, customarily paid by
issuers or sellers of securities (collectively, "Expenses").
(b) The Company shall pay all Expenses with respect
to any registration pursuant to Section 1.2, whether or not such registration
statement becomes effective or remains effective for the period contemplated by
Section 1.2(a).
(c) Notwithstanding the foregoing, (i) the provisions
of this Section 1.6 shall be deemed amended to the extent necessary to cause
these expense provisions to comply with "blue sky" laws of each state in which
the offering is made and (ii) in connection with any registration under Section
1, the selling Holder shall pay all underwriting discounts and commissions and
any transfer taxes, if any, attributable to the sale of such Registrable
Securities, and (iii) the Company shall, in the case of all registrations under
this Section 1, be responsible for all its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties).
1.7 Expenses of Company Registration. The Company shall bear
and pay all Expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 1.3 for the Holder (which right may be assigned as provided
in Section 1.12).
1.8 Underwriting Requirements. In connection with any offering
involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under Section 1.3 to include any of the Holder's
securities in such underwriting unless they accept the terms of the underwriting
as agreed upon between the Company and the underwriters selected by it (or by
other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by stockholders to be
included in such offering exceeds the amount of securities sold other than by
the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
<PAGE>
Registrable Securities, that the underwriters determine in their sole discretion
will not jeopardize the success of the offering (the securities so included to
be apportioned pro rata among the selling stockholders according to the total
amount of securities entitled to be included therein owned by each selling
stockholder or in such other proportions as shall mutually be agreed to by such
selling stockholders, but in any event subject to the apportionment rights of
certain selling stockholders under Section 1.8 of the Registration Rights
Agreement, dated October 20, 1997, between the Company and certain
stockholders). For purposes of the preceding parenthetical concerning
apportionment, for any selling stockholder that is a Holder of Registrable
Securities and that is a partnership or corporate partners, retired partners and
stockholders of such Holder, or the estates and family members of any such
partners and retired partners and any trusts for the benefit of any of the
foregoing persons shall be deemed to be a single "selling stockholder," and any
pro-rata reduction with respect to such "selling stockholder" shall be based
upon the aggregate amount of shares carrying registration rights owned by all
entities and individuals included in such "selling stockholder," as defined in
this sentence.
1.9 Delay of Registration. The Holder shall not have any right
to obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 1.
1.10 Indemnification. In the event any Registrable Securities
are included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will
indemnify and hold harmless that Holder whose Registrable Securities are covered
by the Registration Statement, its directors, officers, fiduciaries, employees
and stockholders or general or limited partners (and the directors, officers,
employees and stockholders thereof), any underwriter (as defined in the Act) for
such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Act or the Securities Exchange Act of 1934, as amended
(the "1934 Act"), each officer, director, employee, stockholder or partner of
such underwriter, against any losses, claims, damages, or liabilities (joint or
several) or actions or proceedings (whether commenced or threatened) and
expenses (including reasonable fees of counsel and any amounts paid in any
settlement effected with the Company's consent), to which they may become
subject under the Act, the 1934 Act or any state securities law, insofar as such
losses, claims, damages, or liabilities (or actions or proceedings in respect
thereof) ("Claims") or expenses arise out of or are based upon any of the
following statements, omissions or violations (collectively a "Violation"): (i)
any untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus, summary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, together with documents incorporated by reference therein,
(ii) 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, or (iii) any violation or alleged violation by the Company of the
Act, the 1934 Act, any state securities law or any rule or regulation
promulgated under the Act, the 1934 Act or any state securities law; and the
Company will pay to such Holder, and each such underwriter or controlling person
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, expense or
action or proceeding; provided, however, that (A) the indemnity agreement
<PAGE>
contained in this Section 1.10 shall not apply to amounts paid in settlement of
any such Claim if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), (B) the Company shall not be
liable in any case for any such Claim to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by the Holder, or any such underwriter or controlling person. Such
indemnity and reimbursement of expenses shall remain in full force and effect
regardless of any investigation made by as on behalf of such indemnified party
and shall survive the transfer of such securities by such Holder.
(b) To the extent permitted by law, the Holder whose
Registrable Securities are covered by the Shelf Registration Statement will,
severally and not jointly, indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration statement, each
person, if any, who controls the Company within the meaning of the Act, any
underwriter, and any controlling person of any such underwriter, against any
losses, claims, damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject, under the Act, or the 1934 Act, insofar as
such Claim arises out of or is based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by such Holder expressly for
use in connection with such registration; and such Holder will pay, as incurred,
any legal or other expenses reasonably incurred by any person intended to be
indemnified, pursuant to this Section 1.10, in connection with investigating or
defending any such Claim; provided, however, that the indemnity agreement
contained in this Section 1.10 shall not apply to amounts paid in settlement of
any such Claim if such settlement is effected without the consent of such
Holder, which consent shall not be unreasonably withheld; provided that, in no
event shall any indemnity under this Section 1.10 exceed the net proceeds from
the offering received by such Holder. Such indemnity and reimbursement of
expenses shall remain in full force and effect regardless of any investigation
made by as on behalf of such indemnified party and shall survive the transfer of
such securities by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 1.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.10, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, (i) 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 such indemnified party and any other party represented by such
counsel in such proceeding; (ii) if the indemnifying party fails to take
reasonable steps necessary to defend diligently the action or proceeding within
30 days after receiving notice from such indemnified party; or (iii) if such
indemnified party who is a defendant in any action or proceeding which is also
brought against the indemnifying party reasonably shall have concluded that
<PAGE>
there may be one or more legal defenses available to such indemnified party
which are not available to the indemnifying party. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of such action, if prejudicial to its ability to defend such
action, shall relieve such indemnifying party of nay liability to the
indemnified party under this Section 1.10, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section
1.10.
(d) If the indemnification provided for in this Section 1.10
is held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any Claim or expense referred to therein, then the
indemnifying party, in lieu of payable by such indemnified party as a result of
such Claim or expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the statements or omissions that resulted
in such Claim or expense as well as any other relevant equitable considerations.
The relative fault of the indemnifying party and of the indemnified party shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission. If, however, the
allocation provided in the first sentence of this paragraph is not permitted by
applicable law, then each indemnifying party shall contribute to the amount paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative faults but also the relative benefits of the
indemnifying party and the indemnified party as well as any other relevant
equitable considerations. The parties hereto agree that it would not be just and
equitable if contributions pursuant to this Section 1.10(d) were to be
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the
preceding sentences of this Section 1.10(d). The amount paid or payable in
respect of any Claim shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending such Claim. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Notwithstanding anything in this Section 1.10(d) to the
contrary, no indemnifying party (other than the Company) shall be required
pursuant to this Section 1.10(d) to contribute any amount in excess of the net
proceeds received by such indemnifying party from the sale of Registrable
Securities in the offering to which the Claims of the indemnified parties
relate, less the amount of any indemnification payment made by such indemnifying
party pursuant to Sections 1.10(b).
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company and Holder under this
Section 1.10 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 1, and otherwise.
<PAGE>
1.11 Reports Under Securities Exchange Act of 1934. With a
view to making available to the Holder the benefits of Rule 144 promulgated
under the Act and any other rule or regulation of the SEC that may at any time
permit a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as
those terms are understood and defined in SEC Rule 144, at all times;
(b) take such action as is necessary to maintain the
Holder's ability to utilize Form S-3 for the sale of their Registrable
Securities;
(c) file with the SEC in a timely manner all reports
and other documents required of the Company under the Act and the 1934 Act; and
(d) furnish to the Holder, so long as the Holder owns
any Registrable Securities, forthwith upon request (i) a written statement by
the Company that it has complied with the reporting requirements of the SEC Rule
144, the Act and the 1934 Act (at any time after it so qualifies), (ii) a copy
of the most recent annual or quarterly report of the Company and such other
reports and documents filed by the Company with the SEC, and (iii) such other
information as may be reasonably requested in availing the Holder of any rule or
regulation of the SEC which permits the selling of any such securities without
registration or pursuant to such form.
1.12 Assignment of Registration Rights.
(a) The rights to cause the Company to register
Registrable Securities pursuant to this Section 1 may be assigned (but only with
all related obligations) by the Holder to a transferee or assignees of such
securities provided: (i) the Company is, within a reasonable time after such
transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; (ii) such transferee or assignee agrees
in writing to be bound by and subject to the terms and conditions of this
Agreement, including, without limitation, the provisions of Section 1.14 below;
and (iii) such assignment shall be effective only if such transfer is exempt
from registration under the Act. For the purposes of determining the number of
shares of Registrable Securities held by a transferee or assignee, the holding
of transferees and assignees of a partnership who are partners or retired
partners of such partnership (including spouses and ancestors, lineal
descendants and siblings of such partners or spouses who acquire Registrable
Securities by gift, will or intestate succession) shall be aggregated together
with the partnership; provided that all assignees and transferees who would not
qualify individually for assignment of registration rights shall have a single
attorney-in-fact for the purpose of exercising any rights, receiving notices or
taking any action under this Section 1.
<PAGE>
(b) Subject to clause (a) above, the right to have
the Company register the Registrable Securities pursuant to this Section 1 may
not otherwise be assigned; provided however, that (i) any heir or the estate of
the Holder which acquires the Registrable Securities from such Holder by will or
intestate succession shall be entitled to have the Company register the
Registrable Securities pursuant to this Section 1 (provided that such heirs or
such estate shall have a single attorney-in-fact for the purpose of exercising
any rights, receiving any notices or taking any action under this Section 1),
and (ii) any individual Holder may sell, assign or transfer Registrable
Securities to his or her spouse or children or to a trust established for the
benefit of his or her spouse, children or himself or herself, and such
transferee shall be entitled to have the Company register the Registrable
Securities pursuant to this Section 1, if, and only if, such transferee agrees
in writing to be bound by the terms of this Agreement. In each such event and
for purposes of this Agreement, the term "Holder" as used herein shall include
all such heirs, such estate or such transferees.
1.13 Limitations on Subsequent Registration Rights. From and
after the date of this Agreement, the Company shall not, without the prior
written consent of the Holder, enter into any agreement with any holder or
prospective holder of any securities of the Company that would allow such holder
or prospective holder to include such securities in any registration filed under
Section 1.2 hereof, unless under the terms of such agreement, such holder or
prospective holder may include such securities in any such registration only to
the extent that the inclusion of his securities will not reduce the amount of
the Registrable Securities of the Holder that is included.
1.14 "Market Stand-Off" Agreement. The Holder hereby agrees
that, during the period of duration specified by the Company and an underwriter
of Common Stock or other securities of the Company, following the effective date
of a registration statement of the Company filed under the Act, it shall not, to
the extent requested by the Company and such underwriter, directly or indirectly
sell, offer to sell, contract to sell (including, without limitation, any short
sale), grant any option to purchase or otherwise transfer or dispose of (other
than to donees who agree to be similarly bound) any securities of the Company
held by it at any time during such period except Common Stock included in such
registration, and the Holder agrees to enter into an agreement to such effect
with such underwriter; provided, however, that (a) all officers and directors of
the Company enter into similar agreements, and, (b) such market stand-off time
period shall not exceed 120 days. If the underwriters agree to any waivers of
such restrictions, then the Holder shall be entitled to sell, transfer or
dispose of the same number or amount of securities of the Company as the person
or entity receiving such waiver, upon the same terms and conditions set forth in
such waiver.
In order to enforce the foregoing covenant, the Company may
impose stop-transfer instruction with respect to the Registrable Securities of
the Holder (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
1.15 No Required Sale. Nothing in this Agreement shall be
deemed to create an independent obligation on the part of the Holder to sell any
Registrable Securities pursuant to any effective registration statement.
2. Miscellaneous.
2.1 Successors and Assigns. Except as otherwise provided
herein, and provided that the transfer or assignment is in accordance with the
terms hereof, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
<PAGE>
parties (including any permitted transferees of any shares of Registrable
Securities). 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, obligation, or liabilities under or
by reason of this Agreement, except as expressly provided in this Agreement.
2.2 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of New York without regard to principles
of conflicts or choice of laws.
2.3 Counterparts. 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.
2.4 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.
2.5 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to the party to be notified at the address
indicated for such party in the Settlement Agreement, or at such other address
as such party may designate by ten (10) days' advance written notice to the
other parties.
2.6 Expenses. If any action at law or in equity is necessary
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to reasonable attorney's fees, costs, and necessary disbursements in
addition to any other relief to which such party may be entitled.
2.7 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holder. Any
amendment or waiver effected in accordance with this Section 2.7 shall be
binding upon the Holder of any Registrable Securities then outstanding, each
future Holder of all such Registrable Securities, and the Company.
2.8 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
2.9 Nominees for Beneficial Owners. If Registrable Securities
are held by a nominee for the beneficial owner thereof, the beneficial owner
thereof may, at its option, be treated as the Holder of such Registrable
Securities for purposes of any request or other action by the Holder or the
Holder of Registrable Securities pursuant to this Agreement (or any
determination of any number or percentage of shares constituting Registrable
Securities held by the Holder or the Holder of Registrable Securities
contemplated by this Agreement), provided that the Company shall have received
assurances reasonably satisfactory to it of such beneficial ownership.
<PAGE>
2.10 Specific Performance. The parties hereto acknowledge that
there would be no adequate remedy at law if any party fails to perform any of
its obligations hereunder, and accordingly agree that each party, in addition to
any other remedy to which it may be entitled at law or in equity, shall be
entitled to injunctive relief, including specific performance, to enforce such
obligation without the posting of any bond, 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.
2.11 No Inconsistent Agreements. The rights granted to the
Holder of Registrable Securities hereunder do not in any way conflict with and
are not inconsistent with any other agreements to which the Company is a party
or by which it is bound. Without the prior written consent of the Holder,
neither the Company nor any Holder will, on or after the date of this Agreement
enter into any agreement with respect to its securities which is inconsistent
with the rights granted in this Agreement or otherwise conflicts with the
provisions hereof, other than any lock-up agreement with the underwriters in
connection with any registered offering effected hereunder, pursuant to which
the Company shall agree not to register for sale, and the Company shall agree
not to sell or to otherwise dispose of, Common Stock or any securities
convertible into or exercisable or exchangeable of Common Stock, for a specified
period following the registered offering. The Company further agrees that if any
other registration rights agreement entered into after the date of this
Agreement will respect to any of its securities contains terms which are more
favorable to, or less restrictive on, the other party thereto than the terms and
conditions in this Agreement are (insofar as they are applicable to the Holder),
then the terms and conditions of this Agreement shall immediately be deemed to
have been amended without further action by the Company or the Holder of
Registrable Securities so that the Holder shall be entitled to the benefit of
any such more favorable or less restrictive terms or conditions.
2.12 Entire Agreement. This Agreement (including the Exhibits
hereto, if any) constitutes the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first above written.
EXOGEN, INC.
By: /s/Patrick A. McBrayer
---------------------
Name: Patrick A. McBrayer
Title: President and Chief Executive
Officer
Address: 10 Constitution Avenue
P.O. Box 6860
Piscataway, NJ 08855
WARRANTHOLDER:
/s/Dr.Arthur A. Pilla
------------------
Dr. Arthur A. Pilla
