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EXHIBIT 4.2
CARDIAC PATHWAYS CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Agreement is made as of May 20, 1999 by and between Cardiac Pathways
Corporation, a Delaware corporation (the "COMPANY"), and the persons and
entities listed on the Schedule of Holders attached hereto as Schedule 1 (the
"HOLDERS").
WHEREAS, pursuant to a Stock Purchase Agreement (the "STOCK PURCHASE
AGREEMENT") of even date herewith between the Company, and the Holders, the
Company is selling up to 40,000 shares of Series B Convertible Preferred Stock
convertible into shares of the Company's Common Stock, as set forth in the Stock
Purchase Agreement (the "SHARES") to the Holders for the aggregate consideration
of between $25,000,000 and $40,000,000; and
WHEREAS, to induce the Holders to enter into the Stock Purchase Agreement,
the Company has agreed to provide the Holders with certain registration rights
with respect to the Shares pursuant to the terms and conditions of this
Agreement;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions set forth in this Agreement, the Company and the Holders agree as
follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
(a) Business Day. Each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in New York are authorized
or obligated by law or executive order to close.
(b) Exchange Act. The Securities Exchange Act of 1934, as amended, or
any similar federal statute and the rules and regulations of the SEC
promulgated thereunder.
(c) Losses. See Section 5(a) hereof.
(d) Prospectus. The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement,
including, without limitation, with respect to the terms of the offering of
any portion of the Registrable Securities covered by such Registration
Statement and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by
reference or deemed to be incorporated by reference in such Prospectus.
Such Prospectus and any amendments or supplements shall comply with the
Securities Act.
(e) Register. The terms "register," "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the declaration or
ordering of the effectiveness of such registration statement by the SEC.
(f) Registrable Securities. The Shares or other securities issued or
issuable with respect to the Shares as a result of any conversion, stock
split, stock dividend, recapitalization, exchange, combination, merger,
consolidation, distribution or similar event.
(g) Registration Expenses. See Section 4 hereof.
(h) Registration Statement. Any registration statement of the Company
which covers any of the Registrable Securities pursuant to the provisions
of this Agreement, including the Prospectus, amendments and supplements to
such registration statement, including post-effective amendments, all
exhibits, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement. Such Registration
Statement and any amendments or supplements thereto shall comply with the
Securities Act.
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(i) Rule 144. Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
(j) SEC. The Securities and Exchange Commission.
(k) Securities Act. The Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
(l) Special Counsel. Cooley Godward LLP or such other successor
counsel as shall be specified by the BankAmerica Ventures on behalf of the
Holders as special counsel to the Holders, the fees and expenses of which
will be paid by the Company pursuant to Section 4 hereof.
2. Registration.
(a) Demand Registration.
(i) Request from Holders. If the Company shall receive at any time
after May 31, 2000 a written request from the Holders of forty five percent
(45%) of the Registrable Securities then outstanding that the Company file
a registration statement under the Securities Act covering the registration
of at least twenty percent (20%) of the Registrable Securities then
outstanding and having an aggregate offering price, net of underwriting
discounts and commissions, of at least $7,500,000, then the Company shall:
(1) within ten (10) days of the receipt thereof, give written
notice of such request to all Holders; and
(2) effect as soon as practicable, and in any event within sixty
(60) days of the receipt of such request, the registration under the
Securities Act of all Registrable Securities that the Holders request to
be registered, subject to the limitations of subsections 2(a)(ii),
2(a)(iii) and 2(a(iv), within twenty (20) days of the mailing of such
notice by the Company in accordance with Section 9(d).
(ii) Underwriting. If the Holders initiating the registration request
hereunder ("INITIATING HOLDERS") intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall
so advise the Company as a part of their request made pursuant to
subsection 2(a)(i) and the Company shall include such information in the
written notice referred to in subsection 2(a)(i)(1). The underwriter will
be selected by the Company and shall be reasonably acceptable to a majority
in interest of the Initiating Holders. In such event, the right of any
Holder to include his Registrable Securities in such registration shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting
(unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting
shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting. Notwithstanding
any other provision of this Section 2(a), if the underwriter advises the
Initiating Holders in writing that marketing factors require a limitation
of the number of shares to be underwritten, then the Initiating Holders
shall so advise all Holders of Registrable Securities that would otherwise
be underwritten pursuant hereto, and the number of shares of Registrable
Securities that may be included in the underwriting shall be allocated
among all Holders electing to include shares in the offering, including the
Initiating Holders, in proportion (as nearly as practicable) to the amount
of Registrable Securities of the Company owned by each Holder; provided,
however, that for purposes of making any such reduction, each Holder which
is an LLC or a partnership, together with the affiliates, partners and
retired partners of such Holder, the estates and family members of any such
partners and retired partners and their spouses, and any trusts for the
benefit of any of the foregoing persons shall be deemed to be a single
Holder of Registrable Securities and any pro-rata reduction with respect to
such Holder shall be based upon the aggregate amount of Registrable
Securities owned by all entities and individuals included in such Holder,
as defined in this proviso (and the aggregate amount so allocated to such
Holder shall be allocated among the entities and individuals included in
such Holder in such manner as such LLC or partnership shall
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reasonably determined. No Registrable Securities shall be excluded from the
underwriting until all other securities proposed to be included by the
Company and its stockholder have been excluded.
If any Holder of Registrable Securities disapproves of the terms of
the underwriting, such person may elect to withdraw therefrom by written
notice to the Company, the managing underwriter and the Initiating Holders.
The Registrable Securities and/or other securities so withdrawn shall also
be withdrawn from registration, and such Registrable Securities shall not
be transferred in a public distribution prior to 180 days after the
effective date of such registration, or such other shorter period of time
as the underwriters may permit. If by the withdrawal of such Registrable
Securities a greater number of Registrable Securities held by other Holders
may be included in such registration (up to the maximum of any limitation
then imposed by the underwriters), then the Company shall offer to all
Holders, if any, whose shares have been excluded from the registration by
the terms of the preceding paragraph, the right to include additional
Registrable Securities in the same proportion used in determining the
underwriter limitation in this Section 2(a) up to the limitation then
imposed by the underwriters.
(iii) Deferral. Notwithstanding the foregoing, if the Company shall
furnish to Holders requesting a registration statement pursuant to this
Section 2(a), a certificate from the Company stating that in the good faith
judgment of the Board of Directors of the Company, it would be seriously
detrimental to the Company and its stockholders for such registration
statement to be filed and it is therefore essential to defer the filing of
such registration statement, the Company shall have the right to defer
taking action with respect to such filing for a period of not more than
ninety (90) days after receipt of the request of the Initiating Holders;
provided, however, that the Company may not utilize this right more than
once in any twelve (12) month period.
(iv) Exceptions. In addition, the Company shall not be obligated to
effect, or to take any action to effect, any registration pursuant to this
Section 2(a):
(1) After the Company has effected two registrations pursuant to
this Section 2(a) and such registrations have been declared or ordered
effective;
(2) During the period starting with the date sixty (60) days prior
to the Company's good faith estimate of the date of filing of, and
ending on a date one hundred eighty (180) days after the effective date
of, a registration subject to Section 2(b) hereof; provided that the
Company is actively employing in good faith all reasonable efforts to
cause such registration statement to be effective; or
(3) If the Initiating Holders propose to dispose of shares of
Registrable Securities that may be immediately registered on Form S-3
pursuant to a request made pursuant to Section 2(c) below.
(b) Company Registration.
(i) Notice of Registration. If at any time or from time to time, the
Company shall determine to register any of its securities, either for its
own account or the account of a security holder or holders other than (i) a
registration relating solely to employee benefit plans, (ii) a registration
statement on Form S-4 relating to a merger or acquisition by or of the
Company or (iii) a registration relating solely to a Commission Rule 145
transaction, the Company will:
(1) promptly give to each Holder written notice thereof; and
(2) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting
involved in such registration, all the Registrable Securities specified
in a written request or requests made within twenty (20) days after
receipt of such written notice from the Company by any Holder, but only
to the extent that such inclusion will not diminish the number of
securities included by the Company or by holders of the Company's
securities who have demanded such registration.
(ii) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice
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given pursuant to Section 2(b)(i). In such event, the right of any Holder
to registration pursuant to Section 2(b) shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of
Registrable Securities in the underwriting to the extent provided herein.
All Holders proposing to distribute their securities through such
underwriting shall (together with the Company and the other holders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the managing underwriter
selected for such underwriting by the Company (or by the holders who have
demanded such registration). Notwithstanding any other provision of this
Section 2(b), if the managing underwriter determines that marketing factors
require a limitation of the number of shares to be underwritten, the number
of shares that may be included in the underwriting will be allocated,
first, to the Company; and second, to each of the Holders requesting
inclusion of their Registrable Securities in such registration statement on
a pro rata basis based on the total number of Registrable Securities held
by each such Holder; provided, however, that a minimum of twenty five
percent (25%) of the shares to be underwritten will be allocated to the
Holders requesting inclusion in such offering, on a pro rata basis and
provided further, that in the event of such limitation, no third party
other than a Holder invoking the right to register shares under this
Section 2(b) shall be entitled to sell shares in such offering. To
facilitate the allocation of shares in accordance with the above
provisions, the Company or the underwriters may round the number of shares
allocated to any Holder or other holder to the nearest 100 shares. For
purposes of making any pro rata reduction pursuant to the preceding
sentence, each Holder which is an LLC or a partnership together with the
affiliates, partners and retired partners of such Holder of Registrable
Securities and any pro-rata reduction with respect to such Holder shall be
based upon the aggregate amount of Registrable Securities owned by all
entities and individuals included in such Holder, as defined in this
sentence (and the aggregate amount so allocated to such Holder shall be
allocated among the entities and individuals included in such Holder in
such manner as such partnership shall reasonably determine).
The Company shall advise all Holders and other holders distributing
their securities through such underwriting of any such limitation, and the
number of shares of Registrable Securities and other securities that may be
included in the registration and underwriting shall be allocated among all
Holders and such other holders in proportion, as nearly as practicable, to
the respective amounts of Registrable Securities held by such Holders and
such other holders at the time of filing the registration statement. If any
Holder or holder disapproves of the terms of any such underwriting, he may
elect to withdraw therefrom by written notice to the Company and the
managing underwriter. Any securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration, and shall not be
transferred in a public distribution prior to 180 days after the effective
date of the registration statement relating thereto, or such other shorter
period of time as the underwriters may require. If by the withdrawal of
such Registrable Securities a greater number of Registrable Securities held
by other Holders may be included in such registration (up to the maximum of
any limitation then imposed by the underwriters), then the Company shall
offer to all Holders, if any, whose shares have been excluded from the
registration by the terms of the preceding paragraph, the right to include
additional Registrable Securities in the same proportion used in
determining the underwriter limitation in this Section 2(b)(ii) up to the
limitation then imposed by the underwriters.
(iii) Right to Terminate Registration. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2(b) prior to the effectiveness of such registration, whether or
not any Holder has elected to include securities in such registration.
(iv) Other Registration Rights. No Stockholder of the Company shall be
granted rights to participate in a Company registration that would reduce
the number of shares permitted to be included by the Holders of Registrable
Securities in such registration without the consent of holders of at least
sixty six and two thirds percent (66 2/3%) of the Registrable Securities.
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(c) Form S-3 Registration. If the Company shall receive at any time after
May 31, 2000 a written request or requests from the Holders of forty five
percent (45%) of the Registrable Securities then outstanding that the Company
effect a registration on Form S-3 and any related qualification or compliance
with respect to all or a part of the Registrable Securities owned by such Holder
or Holders, the Company will:
(i) promptly give written notice of the proposed registration, and any
related qualification or compliance, to all other Holders; and
(ii) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit
or facilitate the sale and distribution of all or such portion of such
Holder's or Holders' Registrable Securities as are specified in such
request, together with all or such portion of the Registrable Securities of
any other Holder or Holders joining in such request as are specified in a
written request given within fifteen (15) days after receipt of such
written notice from the Company; provided, however, that the Company shall
not be obligated to effect any such registration, qualification or
compliance, pursuant to this Section 2(c): (1) if Form S-3 is not available
for such offering by the Holders; (2) if the Holders, together with the
holders of any other securities of the Company entitled to inclusion in
such registration, propose to sell Registrable Securities and such other
securities (if any) at an aggregate price to the public (net of any
underwriters' discounts or commissions) of less than $2,000,000; (3) if the
Company shall furnish to the Holders a certificate stating that in the good
faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its stockholders for such Form S-3
Registration to be effected at such time, in which event the Company shall
have the right to defer the filing of the Form S-3 registration statement
for a period of not more than one hundred twenty (120) days after receipt
of the request of the Holder or Holders under this Section 2(c); provided,
however, that the Company shall not utilize this right more than once in
any twelve (12) month period; (4) if the Company has, within the twelve
(12) month period preceding the date of such request, already effected one
(1) registration on Form S-3 for the Holders pursuant to this Section 2(c);
or (5) in any particular jurisdiction in which the Company would be
required to qualify to do business or to execute a general consent to
service of process in effecting such registration, qualification or
compliance.
(d) "Market Stand-Off" Agreement. Each Holder of more than one percent (1%)
of the Company's outstanding securities hereby agrees that, during the period of
duration (not to exceed ninety (90) days) 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's securities filed
under the Securities 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; provided,
however, that all officers, directors and employees of the Company enter into
similar agreements. In order to enforce the foregoing covenant, the Company may
impose stop-transfer instructions with respect to the securities of each Holder
(and the shares or securities of every other person subject to the foregoing
restriction) until the end of such period.
3. Registration Procedures. In connection with the Company's registration
obligations under Section 2 hereof, the Company shall effect such registrations
to permit the sale of the Registrable Securities in accordance with the intended
method or methods of disposition thereof and pursuant thereto the Company shall
as expeditiously as possible:
(a) Prepare and file with the SEC a Registration Statement or
Registration Statements on any appropriate form under the Securities Act
available for the sale of the Registrable Securities by the Holders in
accordance with the intended method or methods of distribution thereof, and
cause each such Registration Statement to become effective and remain
effective as provided herein; provided, that before filing any such
Registration Statement or Prospectus or any amendments or supplements
thereto (other than documents that would be incorporated or deemed to be
incorporated therein by reference and that the Company is required by
applicable securities laws or stock exchange requirements to file) the
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Company shall furnish to the Special Counsel copies of all such documents
proposed to be filed, which documents will be subject to the review of the
Special Counsel.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the applicable period
specified in Section 2; cause the related Prospectus to be timely
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 (or any similar provisions then in force)
under the Securities Act; and comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with the
intended methods of disposition by the Holders set forth in such
Registration Statement as so amended or such Prospectus as so supplemented.
(c) Notify the Holders and the Special Counsel promptly, and (if
requested by any such person) confirm such notice in writing, (i) when a
Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of any
request by the SEC or any other federal or state governmental authority
during the period of effectiveness of the Registration Statement for
amendments or supplements to a Registration Statement or related Prospectus
or for additional information, (iii) of the issuance by the SEC or any
other federal or state governmental authority of any stop order suspending
the effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding for
such purpose, (v) of the happening of any event which makes any statement
made in such Registration Statement or related Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in
any material respect or which requires the making of any changes in the
Registration Statement or Prospectus so that, in the case of the
Registration Statement, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
that in the case of the Prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact or omit to
state any 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, and (vi) of the Company's reasonable
determination that a post-effective amendment to a Registration Statement
would be appropriate.
(d) Use every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the lifting of
any suspension of the qualification (or exemption from qualification) of
any of the Registrable Securities for sale in any jurisdiction, at the
earliest possible moment.
(e) Subject to the last paragraph of this Section 3, if reasonably
requested by the Holders (i) promptly incorporate in a Prospectus
supplement or post-effective amendment such information as the Holders
agrees should be included therein as required by applicable law, (ii) make
all required filings of such Prospectus supplement or such post-effective
amendment as soon as practicable after the Company has received
notification of the matters to be incorporated in such Prospectus
supplement or post-effective amendment, and (iii) supplement or make
amendments to any Registration Statement consistent with clause (i) or (ii)
above; provided, that the Company shall not be required to take any actions
under this Section 3(e) that are not, in the opinion of counsel for the
Company, necessary or advisable to comply with applicable law.
(f) Furnish to the Holders and the Special Counsel, without charge, at
least one conformed copy of the Registration Statement or Registration
Statements and any post-effective amendment thereto, including financial
statements, but excluding schedules, all documents incorporated or deemed
to be incorporated therein by reference and all exhibits (unless requested
in writing by the Holders or Special Counsel).
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(g) Promptly deliver to the Holders and the Special Counsel, without
charge, as many copies of the Prospectus or Prospectuses relating to such
Registrable Securities (including each preliminary prospectus) and any
amendment or supplement thereto as such persons may reasonably request; and
the Company hereby consents to the use of such Prospectus or each amendment
or supplement thereto by the Holders in connection with the offering and
sale of the Registrable Securities covered by such Prospectus or any
amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities, to
register or qualify or cooperate with the Holders and the Special Counsel
in connection with the registration or qualification (or exemption from
such registration or qualification) of such Registrable Securities for
offer and sale under the securities or Blue Sky laws of such jurisdictions
within the United States as the Holders reasonably request in writing; keep
each such registration or qualification (or exemption therefrom) effective
during the period such Registration Statement is required to be kept
effective and do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Registrable Securities
covered by the applicable Registration Statement; provided, that the
Company will not be required to (i) qualify generally to do business in any
jurisdiction where it is not then so qualified or (ii) take any action that
would subject it to general service of process in suits or to taxation in
any such jurisdiction where it is not then so subject.
(i) Cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies or authorities within the United States, except as
may be required solely as a consequence of the nature of a Holder, in which
case the Company will cooperate in all reasonable respects with the filing
of such Registration Statement and the granting of such approvals, as may
be necessary to enable the Holders or to consummate the disposition of such
Registrable Securities.
(j) Upon the occurrence of any event contemplated by Section 3(c)(v)
or 3(c)(vi) above, prepare a supplement or post-effective amendment to each
Registration Statement or a supplement to the related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, such Prospectus will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(k) Notwithstanding anything in this Agreement to the contrary, a
Holder shall not be entitled to sell any of such Registrable Securities
pursuant to a Registration Statement or to receive a Prospectus relating
thereto unless such Holder (A) has at such time a current intent to sell
such Registrable Securities, and confirms such intent in writing, and (B)
has furnished the Company promptly after the Company's request, such
information regarding the Holder and the distribution of such Registrable
Securities as the Company may from time to time reasonably request. The
Company may refrain from filing a registration for any Holder's Registrable
Securities if it does not furnish such information provided above. Each of
the Holders agrees promptly to furnish to the Company all information
required to be disclosed in order to make the information previously
furnished to the Company by Holders not misleading with respect to such
Holder.
The Holders agree by acquisition of the Registrable Securities that,
upon receipt of any notice from the Company of (A) the happening of any
event of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv),
3(c)(v) or 3(c)(vi) hereof or (B) that, in the reasonable judgment of the
Company, it is advisable to suspend use of the Prospectus for a discrete
period of time due to pending corporate developments, public filings with
the SEC or similar events, the Holders will forthwith discontinue
disposition of such Registrable Securities covered by such Registration
Statement or Prospectus until the Holders' receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(j) hereof, or
until it is advised in writing (the "Advice") by the Company that the use
of the applicable Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are
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incorporated or deemed to be incorporated by reference in such Prospectus.
The Company shall use its reasonable efforts to insure that the use of the
Prospectus may be resumed as soon as practicable.
(l) Use its best efforts to furnish, on the date that such Registrable
Securities are delivered to the underwriters for sale, if such securities
are being sold through underwriters, (i) an opinion, dated as of 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 Holders participating
in the offering, and (ii) a letter dated as of such date, from the
independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering addressed to
the Holder participating in the offering.
4. Registration Expenses. All fees and expenses incident to the Company's
performance of or compliance with this Agreement shall be borne by the Company
whether or not any of the Registration Statements become effective. Such fees
and expenses shall include, without limitation, (i) all registration and filing
fees (including, without limitation, fees and expenses (x) with respect to
filings required to be made with the National Association of Securities Dealers,
Inc. and (y) of compliance with federal securities or Blue Sky laws, (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities in a form eligible for deposit with The
Depository Trust Company), (iii) fees and disbursements of counsel for the
Company and the Special Counsel, and (iv) Securities Act liability insurance
obtained by the Company in its sole discretion. In addition, the Company shall
pay its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
the expense of any annual audit, the fees and expenses incurred in connection
with the listing of the securities to be registered on any securities exchange
on which similar securities issued by the Company are then listed and rating
agency fees and the fees and expenses of any person, including special experts,
retained by the Company. Notwithstanding the provisions of this Section 4, the
Holders shall pay all registration expenses to the extent that the Company is
prohibited by applicable Blue Sky laws from paying for or on behalf of the
Holders.
All underwriting discounts, selling commissions and stock transfer taxes
applicable to the sale of the Registrable Securities if any, shall be paid by
the Holders.
5. Indemnification.
(a) Indemnification by the Company. The Company shall indemnify and hold
harmless, to the fullest extent permitted by law, BankAmerica Ventures ("BAV")
each of its officers, directors, partners and members and each selling Holder
and each person, if any, who controls such Holder (within the meaning of Section
15 of the Securities Act or Section 20(a) of the Exchange Act) from and against
all losses, liabilities, claims, damages and expenses (including but not limited
to reasonable attorney fees and any and all reasonable expenses whatsoever
incurred in investigating, preparing or defending against litigation, commenced
or threatened, or any claim whatsoever, and any and all amounts paid in
settlement of any claim or litigation) (collectively, "LOSSES"), arising out of
or based upon any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, Prospectus or form of Prospectus or in
any amendment or supplement thereto or in any preliminary prospectus, or arising
out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, except insofar as the same are based solely upon information
furnished in writing to the Company by BAV or any Holder expressly for use
therein; provided, that the Company shall not be liable to BAV or any Holder (or
any person controlling any of the Holders) to the extent that any such Losses
arise out of or are based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in any prospectus if either (A) (i) BAV or
any of the Holders failed to send or deliver a copy of the Prospectus with or
prior to the delivery of written confirmation of the sale by the Holders of a
Registrable Security to the person asserting the claim from which such Losses
arise and (ii) the Prospectus would have corrected such untrue statement or
alleged untrue statement or such omission or alleged omission, or (B) (x) such
untrue statement or alleged untrue statement, omission or alleged omission is
corrected in an amendment or supplement to the Prospectus and (y) having
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previously been furnished by or on behalf of the Company with copies of the
Prospectus as so amended or supplemented, the Holders thereafter fail to deliver
such Prospectus as so amended or supplemented, with or prior to the delivery of
written confirmation of the sale of a Registrable Security to the person
asserting the claim from which such Losses arise. The Company shall also
indemnify each underwriter and each person who controls such person (within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act) to the same extent as provided above with respect to the indemnification of
the Holder.
(b) Indemnification by Holder. In connection with any Registration
Statement in which the Holders are participating, BAV or the Holders shall
furnish to the Company in writing such information as the Company reasonably
requests for use in connection with any Registration Statement or Prospectus and
each Holder agrees to indemnify, to the fullest extent permitted by law, the
Company, its directors and officers and each other person who controls the
Company (within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act), from and against all Losses in each case arising out of or
based upon any untrue statement of a material fact contained in any Registration
Statement, Prospectus or preliminary prospectus or arising out of or based upon
any omission of a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, to the extent, but only to the extent, that such untrue
statement or omission is contained in any information so furnished in writing by
BAV or the Holders to the Company expressly for use in such Registration
Statement, Prospectus or preliminary prospectus. In no event shall the liability
of BAV or any of the Holders hereunder exceed the net proceeds received from
sales of its Registrable Securities. The Company shall be entitled to receive
indemnities from underwriters participating in the distribution to the same
extent as provided above with respect to information so furnished in writing by
such persons expressly for use in any Prospectus or Registration Statement.
(c) Conduct of Indemnification Proceedings. If any person shall be entitled
to indemnity hereunder (an "INDEMNIFIED PARTY"), such Indemnified Party shall
give prompt notice to the party from which such indemnity is sought (the
"INDEMNIFYING PARTY") of any claim or of the commencement of any proceeding with
respect to which such Indemnified Party seeks indemnification or contribution
pursuant hereto; provided, that the failure to so notify the Indemnifying Party
shall not relieve the Indemnified Party from any obligation or liability except
to the extent that the Indemnified Party has been prejudiced materially by such
failure. All such fees and expenses (including any fees and expenses incurred in
connection with investigating or preparing to defend such action or proceeding)
shall be paid to the Indemnified Party on a quarterly basis following written
notice thereof to the Indemnified Party (notwithstanding the absence of judicial
determination as to the propriety and enforceability of the Indemnified Party's
obligation to reimburse the Indemnified Party for such expense and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction). In case any such action is brought against an
Indemnified Party, the Indemnified Party shall be entitled to participate
therein and it may elect by written notice delivered to the Indemnified Party
within a reasonable period of time after receiving the aforesaid notice from
such Indemnified Party, to assume the defense thereof with counsel reasonably
satisfactory to such Indemnified Party. No Indemnifying Party, in the defense of
any such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant for
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.
(d) Contribution. If the indemnification provided for in this Section 5 is
unavailable to an Indemnified Party under Section 5(a) or 5(b) hereof in respect
of any Losses or is insufficient to hold such Indemnified Party harmless, then
each applicable Indemnified Party, in lieu of indemnifying such Indemnified
Party, shall, jointly and severally, contribute to the amount paid or payable by
such Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnified Party or
indemnifying parties, on the one hand, and such Indemnified Party, on the other
hand, in connection with the actions, statements or omissions that resulted in
such Losses as well as any other relevant equitable considerations. The relative
fault of such Indemnified Party or indemnifying parties, on the one hand, and
such Indemnified Party, on the other hand, shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged
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omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnified Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include any
reasonable legal or other reasonable fees or expenses incurred by such party in
connection with any proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method or allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding this Section 5(d), if any of the Holders are the Indemnifying
Party, such Holders shall not be required to contribute any amount in excess of
the amount by which the net proceeds exceeds the amount of any damages which
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
The indemnity, contribution and expense reimbursement obligations of the
Company hereunder shall be in addition to any liability the Company may
otherwise have hereunder or otherwise. The provisions of this Section 5 shall
survive so long as Registrable Securities remain outstanding, notwithstanding
any termination of this Agreement.
6. Rule 144 Information Requirements. For so long as any Registrable
Securities are "restricted securities" under Rule 144, the Company agrees to
timely file the reports required to be filed by it under the Securities Act and
the Exchange Act.
7. Sale without Registration. The Holders agree to comply in all respects
with the provisions of this Section 7 so long as each certificate representing
the Shares is required to bear the legend in substantially the form set forth in
the Stock Purchase Agreement among the Holders and the Company (or any similar
legend). Prior to any proposed transfer of any Registrable Securities by the
Holders which shall not be registered under the Securities Act, the Holders
shall give written notice to the Company of its intention to effect such
transfer, accompanied by: (a) such information as is reasonably necessary in
order to establish that such transfer may be made without registration under the
Securities Act; and (b) at the expense of such Holder or such Holder's
transferee, an unqualified written opinion of legal counsel, satisfactory in
form and substance to the Company, to the effect that such transfer may be made
without registration under the Securities Act; provided that nothing contained
in this Section 7 shall relieve the Company from complying with its obligations
pursuant to Section 2 of this Agreement.
8. Transfer of Rights. The rights granted to the Holders under Section 2
hereof may be assigned to any transferee or assignee who is (a) a subsidiary,
parent, LLC, general partner, limited partner, retired partner, member or
retired member of a Holder, (b) a Holder's ancestors, descendants or spouse or
to trusts for the benefit of such persons or such Holder or (c) a client,
employee or member of BAV, provided that (i) such transfer may otherwise be
effected in accordance with applicable securities laws, (ii) the Company is
given written notice of any such transfer five (5) Business Days prior to the
date of said transfer, stating the name and address of said transferee or
assignee and identifying the securities with respect to which such registration
rights are being assigned and (iii) the transferee or assignee of such rights is
not deemed by the Board of Directors of the Company, in its reasonable judgment,
to be a competitor of the Company and provided further that the transferee or
assignee of such rights assumes in writing in a form reasonably acceptable to
the Company the obligations of the Holders under this Agreement. Notwithstanding
the above, BAV shall be permitted to transfer or assign its rights to Bank of
America Ventures, L.P. without the requirements set forth in Section 8.
9. Miscellaneous.
(a) Remedies. In the event of a breach by the Company of its obligations
under this Agreement, the Holders, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of their rights under this Agreement. The Company agrees
that monetary
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damages would not be adequate compensation for any loss incurred by reason of a
breach by it of any of the provisions of this Agreement and hereby further
agrees that, in the event of any action for specific performance in respect of
such breach, it shall waive the defense that a remedy at law would be adequate.
(b) No Conflicting Agreements. The Company has not, as of the date hereof,
and shall not, on or after the date of this Agreement, enter into any agreement
with respect to its securities which materially conflicts with the rights
granted to the Holders in this Agreement.
(c) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of a majority of the
Holders.
(d) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing and shall be deemed given (i) when made, if
made by hand delivery, (ii) upon confirmation, if made by telecopier or (iii)
one business day after being deposited with a reputable next-day courier,
postage prepaid, to the parties as follows:
(i) if to the Holders, c/o BankAmerica Ventures, 950 Tower Lane, Suite
700, Foster City, California 94404, Attention: Mark Brooks and Robert S.
Fore, or to such other address as a Holder may hereafter furnish to the
Company in writing in accordance herewith, with a copy to Julia Davidson,
Cooley Godward LLP, Five Palo Alto Square, Palo Alto, CA 94306-2155.
(ii) if to the Company, to Cardiac Pathways Corporation, 995 Benecia
Avenue, Sunnyvale, California 94086, Attention: G. Michael Latta, Chief
Financial Officer, or to such other address as the Company may hereafter
furnish to BAV in writing in accordance herewith, with a copy to Chris F.
Fennell, Wilson Sonsini Goodrich & Rosati, 650 Page Mill Road, Palo Alto,
California 94304-1050.
(e) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of each of the parties.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF CALIFORNIA, WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS.
(i) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their best efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, void or unenforceable.
(j) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and is intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and the registration rights granted by the
Company with respect to the Shares. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
with respect to the registration rights granted by the Company with
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respect to the Shares. This Agreement supersedes all prior agreements and
understandings among the parties with respect to such registration rights.
(k) Attorneys' Fees. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the prevailing party, as determined by the court, shall be
entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
(l) Further Assurances. Each of the parties hereto shall use all reasonable
efforts to take, or cause to be taken, all appropriate action, do or cause to be
done all things reasonably necessary, proper or advisable under applicable law,
and execute and deliver such documents and other papers, as may be required to
carry out the provisions of this Agreement and the other documents contemplated
hereby and consummate and make effective the transactions contemplated hereby.
(m) Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the earlier of (i) May 20, 2004, or (ii) or when
all of the Registrable Securities have been sold or cease to be Registrable
Securities.
(n) Actions by the Holders. Any action to be taken by the Holders pursuant
to the Agreement may be taken by the Holders of a majority of the Registrable
Securities.
The foregoing Registration Rights Agreement is hereby executed as of the
date first above written.
"COMPANY"
CARDIAC PATHWAYS CORPORATION
By:
/s/ WILLIAM N. STARLING
------------------------------------
William N. Starling
President and Chief Executive Officer
"HOLDERS"
BANKAMERICA VENTURES
By:
/s/ ANCHIE Y. KUO
------------------------------------
Title:
President and Managing Director
-----------------------------------
MORGAN STANLEY VENTURE PARTNERS III,
L.P.
By: Morgan Stanley Venture Partners
III, L.L.C.
its General Partner
By: Morgan Stanley Venture Capital
III, Inc.,
its Institutional Managing Member
By:
/s/ FAZLE HUSAIN
------------------------------------
Name: Fazle Husain
Title: General Partner
Address: 1221 Avenue of the Americas
New York, New York 10020
Fax: (212) 762-8424
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MORGAN STANLEY VENTURE INVESTORS III,
L.P.
By: Morgan Stanley Venture Partners
III, L.L.C.
its General Partner
By: Morgan Stanley Venture Capital
III, Inc.,
its Institutional Managing Member
By:
/s/ FAZLE HUSAIN
------------------------------------
Name: Fazle Husain
Title: General Partner
Address: 1221 Avenue of the Americas
New York, New York 10020
Fax: (212) 762-8424
MORGAN STANLEY VENTURE PARTNERS
ENTREPRENEUR FUND, L.P.
By: Morgan Stanley Venture Partners
III, L.L.C.
its General Partner
By: Morgan Stanley Venture Capital
III, Inc.,
its Institutional Managing Member
By:
/s/ FAZLE HUSAIN
------------------------------------
Name: Fazle Husain
Title: General Partner
Address: 1221 Avenue of the Americas
New York, New York 10020
Fax: (212) 762-8424
VAN WAGONER CAPITAL MANAGEMENT
By:
/s/ GARRETT R. VAN WAGONER
------------------------------------
Name: Garrett R. Van Wagoner
Title: President
Address: 345 California Street
San Francisco, CA
Fax: (415) 835-5050
STATE OF WISCONSIN INVESTMENT BOARD
By:
/s/ JOHN F. NELSON
------------------------------------
Name: John Nelson
Title: Investment Director
Address:
Fax:
/s/ THOMAS FOGARTY
--------------------------------------
THOMAS FOGARTY
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SCHEDULE 1
SCHEDULE OF HOLDERS
NUMBER OF SHARES
OF REGISTRABLE
HOLDER AND BENEFICIAL OWNER NOMINEE AND RECORD HOLDER SECURITIES
--------------------------- ------------------------- ----------------
BankAmerica Ventures................................... 10,000
Morgan Stanley Venture Partners III, L.P............... 8,773
Morgan Stanley Venture Investors III, L.P.............. 842
Morgan Stanley Venture Partners Entrepreneurs Fund,
L.P. ................................................ 385
Van Wagoner Capital Management......................... 5,000
State of Wisconsin Investment Board.................... 6,000
Thomas Fogarty......................................... 500
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