EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
May 14, 1999
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The parties to this agreement are MedSource Technologies, Inc. a
Delaware corporation (the "Company"), and the stockholder listed on Schedule A
to this agreement and executing a signature page to this agreement (the
"Stockholder").
The Stockholder owns or is acquiring shares of the Company's 6% Series
B Cumulative Convertible Redeemable Preferred Stock, par value $.01 per share
(the "Series B Preferred Stock"). The shares of Series B Preferred Stock are
convertible into shares of the Company's Common Stock, par value $.01 per share
(the "Common Stock"). The shares of Common Stock underlying the shares of Series
B Preferred Stock currently held by the Stockholder are the only shares of
capital stock of the Company entitled to the rights and benefits, and subject to
the terms and conditions, of this agreement, and are hereinafter collectively
referred to as, the "Shares."
The Company desires to provide to the Stockholder certain rights
regarding the registration of the Shares, all upon the terms and conditions set
forth below.
It is therefore agreed as follows:
1. Certain Definitions. As used in this agreement, the following
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terms shall have the meanings provided below:
(a) "Commission" means the United States Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
(b) "Demand Notice" means a written request from Holders to register
at least 25% of the Registrable Securities.
(c) "Holders" means the Stockholder and its permitted transferees who
hold Shares.
(d) "Other Securities" means, at any time, those shares of Common
Stock, and of any other class or series of capital stock of the Company or other
securities of the Company representing the right to acquire Common Stock, that
the Company is required to, or has determined to, register pursuant to a
registration statement filed by the Company with the Commission pursuant to this
or any other agreement.
(e) "Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
(f) "Registrable Securities" means the Shares and any other securities
issuable in replacement thereof by way of a recapitalization, exchange, merger,
consolidation, reorganization or other transaction; provided, however, that any
share shall cease to be a Registrable Security under this agreement when (A) a
registration statement with respect to such
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share's public sale shall have become effective under the Securities Act, (B) it
has been disposed of as permitted by, and in compliance with, Rule 144 (or
successor provision) promulgated under the Securities Act or (C) it shall have
ceased to be outstanding.
(g) "Registration Expenses" means all expenses incident to the
Company's performance of or compliance with the provisions of sections 2 and 3
including, without limitation, all registration, filing and National Association
of Securities Dealers, Inc. fees, all listing fees, all fees and expenses of
complying with securities or blue sky laws (including, without limitation,
reasonable fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications of the Registrable Securities hereunder), all word
processing, duplicating and printing expenses, messenger and delivery expenses,
the fees and disbursements of counsel for the Company, and the reasonable fees
and expenses of one counsel on behalf of the Holders whose Registrable
Securities are included in the registration statement, which counsel shall
either be (i) the same as the counsel representing the holders under the Whitney
Registration Rights Agreement or (ii) if that counsel declines to also represent
the Holders hereunder, counsel selected by a majority-in-interest of the Holders
hereunder participating in the offering (according to the number of shares of
Common Stock each such Holder is directly or indirectly registering for sale in
such registration statement), and the fees and disbursements of its independent
public accountants, including the expenses of "comfort" letters required by or
incident to such performance and compliance, and any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities; provided,
however, that Registration Expenses shall exclude, and the Holders shall pay,
underwriters fees and underwriting discounts and commissions in respect of the
Registrable Securities being registered hereunder as well as any fees and
expenses of counsel to the Holders of the Registrable Securities hereunder
(other than those of the one counsel referred to above).
(h) "Securities Act" means the Securities Act of 1933, and any
subsequent similar federal statute, and the rules and regulations promulgated
thereunder.
(i) "Whitney Initial Demand Date" means the first date on which the
stockholders under the Whitney Registration Rights Agreement shall be entitled
to demand the registration of securities pursuant to a "Demand Notice" under
section 2.1 of the Whitney Registration Rights Agreement.
(j) "Whitney Registration Rights Agreement" means that certain
registration rights agreement dated as of March 30, 1999 between the Company, J.
H. Whitney III, L.P., Whitney Strategic Partners III, L.P., J. H. Whitney
Mezzanine Fund, L.P., German American Capital Corporation ("GACC") and certain
other stockholders party thereto.
2. Demand Registration.
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2.1 Rights to Demand Registration. If on the first anniversary of the
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Whitney Initial Demand Date the stockholders party to the Whitney Registration
Rights Agreement have not delivered a Demand Notice to cause a demand
registration, pursuant to section 2.1 of the Whitney Registration Rights
Agreement, in which the Holders pursuant to this agreement shall have piggyback
registration rights as contemplated in section 3 of this agreement, then, at any
time after such first anniversary on which the Company shall receive a Demand
Notice under
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this agreement, the Company shall promptly give written notice of such proposed
registration to all other Holders and shall offer to include in such proposed
registration any Registrable Securities requested to be included in such
proposed registration by the Holders who shall respond in writing to the
Company's notice within 10 days after receipt by the Holders in question of such
notice (which response shall specify the number of Registrable Securities
proposed to be included in such registration). Subject to section 2.2, the
Company shall promptly use its best efforts to effect such registration under
the Securities Act of the Registrable Securities that the Company has been so
requested to register on such appropriate registration form of the Commission as
shall be selected by the Company.
2.2 Limits on Demand Rights.
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(a) The Company shall not be obligated to file and cause to become
effective (i) more than one registration statement pursuant to section 2.1; and
(ii) any registration statement during the period beginning 30 days prior to the
filing and ending 90 days following the effective date of a registration
statement filed by the Company and relating to an underwritten offering in which
a majority of the shares are being sold by the Company for its own account.
(b) Unless the Company shall have delayed the commencement of a
registration statement pursuant to section 2.2(a)(ii) above or section 2.2(c)
below, the Company may delay the filing or effectiveness of any registration
statement for a period of up to 60 days after the date of delivery of the Demand
Notice pursuant to this section 2 if at the time of such request the Company is
engaged in a firm commitment underwritten public offering of Company Shares in
which the Holders may include Registrable Securities pursuant to section 3,
provided, however, that, in the event the Company exercises its rights under
this section 2.2(b), the registration shall not be counted as a demand for
registration by any Holder for purposes of section 2.2(a)(i) hereof.
(c) If, while a registration request is pending pursuant to this
section 2, the Company has been advised by legal counsel (i) that the filing of
a registration statement would require the disclosure of a material transaction
or other factor that the Company reasonably determines in good faith would have
a material adverse effect on the Company or (ii) the Company then is unable to
comply with Commission requirements applicable to the requested registration,
the Company shall not be required to effect a registration pursuant to this
section 2 until the earlier of (A) the date upon which such material information
is otherwise disclosed to the public or ceases to be material or the Company is
able to so comply with applicable Commission requirements, as the case may be,
and (B) 60 days after the Company makes such good faith determination, provided
that in the event the Company exercises its rights under this section 2.2(c),
the registration shall not be counted as a demand for registration by any Holder
for purposes of section 2.2(a)(i) hereof, and provided further that the Company
may not exercise its right under this section 2.2(c) more than once in any
12-month period.
(d) A requested registration under this section 2 may be rescinded by
written notice to the Company by the Holder or Holders initiating such request.
Such rescinded registration shall not count as a registration statement
initiated pursuant to this section 2 for
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purposes of section 2.2 above if such request is rescinded by such Holder or
Holders not later than five business days prior to the filing of a registration
statement with the Commission.
2.3 Underwriter "Cutbacks" in Demand Registrations. With respect to
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any registration pursuant to this section 2 that is being effected by one or
more underwriters, such underwriters shall be designated by the Company and
approved by a majority in interest of the stockholders selling Registrable
Securities and Other Securities (which approval shall not be unreasonably
withheld), and the Company may include in such registration any Other
Securities; provided, however, that, anything to the contrary in section 2.1
notwithstanding, if any managing underwriter for the public offering
contemplated by such registration advises the Company in writing that, in such
firm's good faith opinion, the inclusion of all Registrable Securities and Other
Securities proposed to be included in such registration would adversely affect
the offering and sale of all such securities, then the number of Registrable
Securities and Other Securities proposed to be included in such registration
shall be reduced pro rata based upon the number of shares of Common Stock owned
by each such Person and its affiliates (or that each such Person and its
affiliates have the right to acquire) at the time of such registration.
3. Piggyback Registration.
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3.1 Right to Include Registrable Securities.
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(a) Subject to section 3.1(b), if the Company at any time proposes to
register any of its securities under the Securities Act (as defined below) by
registration on Forms SB-2, S-1, S-2, S-3 (but not Forms S-4 or S-8) or any
successor or similar form(s) (except registrations on such or similar forms for
registration of securities in connection with (i) an employee benefit plan or
dividend reinvestment plan or a merger, consolidation or other business
combination, (ii) debt securities that are not convertible into Common Stock, or
(iii) the Company's initial public offering), whether or not for sale for its
own account, it shall, each such time, give written notice to the Holders of its
intention to do so and of the Holders' rights under this section 3 at least 30
days prior to the filing of a registration statement with respect to such
registration with the Commission. Upon the written request of any Holder made
within 20 days after the receipt of that notice, which request shall specify the
Registrable Securities intended to be registered and disposed of by such Holder,
the Company shall, subject to the provisions hereof, use its best efforts to
include in such registration statement all Registrable Securities that the
Company has been so requested to register by such Holder.
(b) If, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Holder and upon giving that notice (i) in the case of a
determination not to register, the Company shall be relieved of its obligation
to register any Registrable Securities in connection with such registration (but
not from any obligation of the Company to pay the Registration Expenses (as
defined below) in connection therewith), without prejudice; and (ii) in the case
of a determination to delay registering, the Company shall be permitted to delay
registering any Registrable Securities for the same period as the delay in
registering such other securities.
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(c) The Company shall pay all Registration Expenses in connection
with registration of Registrable Securities requested pursuant to this section
3.1.
3.2 Underwriter "Cutbacks" in Piggyback Registrations. Anything in
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section 3.1 to the contrary notwithstanding, with respect to any registration
pursuant to which shares are registered pursuant to this section 3 that is being
effected by one or more underwriters, such underwriters shall be designated by
the Company and approved by a majority in interest of the stockholders selling
Registrable Securities and Other Securities (which approval shall not be
unreasonably withheld), and if any managing underwriter for the public offering
contemplated by such registration advises the Company in writing that, in such
firm's good faith opinion, the inclusion of all Registrable Securities and Other
Securities proposed to be included in such registration would adversely affect
the offering and sale of all such securities, then all securities proposed to be
sold by the Company for its own account shall be included in such registration
to the extent possible and the number of Registrable Securities and Other
Securities proposed to be included in such registration shall be reduced pro
rata based upon the number of shares of Common Stock owned by each such Person
(other than the Company) and its affiliates (or that each such Person and its
affiliates have the right to acquire) at the time of such registration.
4. Registration Procedures. In connection with the registration of
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any Registrable Securities under the Securities Act as provided in sections 2
and 3, the Company shall as expeditiously as possible:
(i) prepare and file with the Commission the requisite
registration statement to effect such registration and thereafter use its
best efforts to cause such registration statement to become and remain
effective (subject to clause (ii) below); provided, however, that the
Company may discontinue any registration of its securities that are not
Registrable Securities at any time prior to the effective date of the
registration statement relating thereto;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective and to comply with the provisions of the Securities Act
with respect to the disposition of all Registrable Securities covered by
such registration statement for such period as shall be required for the
disposition of all of such Registrable Securities; provided, however, that,
the foregoing notwithstanding, the Company shall not be required under this
item (ii) to maintain the effectiveness of any such registration statement
for longer than 180 days, or such longer period beyond such 180 days (up to
an aggregate of 270 days) as may be available without requiring the Company
to file any financial statements as of a later date and for a later period
than the financial statements that may have been required to maintain the
effectiveness of the registration statement for the 180-day period;
(iii) furnish to the Holders such number of conformed copies of
such registration statement and of each such amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 under the Securities Act, in
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conformity with the requirements of the Securities Act, and such other
documents, as the Holders may reasonably request from time to time;
(iv) use its best efforts (x) to register or qualify all Registrable
Securities and other securities covered by such registration statement
under such other securities or blue sky laws of such states of the United
States of America where an exemption is not available and as the Holders
shall reasonably request, (y) to keep such registration or qualification in
effect for so long as such registration statement remains in effect, and
(z) to take any other action that may reasonably be necessary or advisable
to enable the Holders to consummate the disposition in such jurisdictions
of the securities to be sold by the Holders, except that the Company shall
not for any such purpose be required to qualify generally to do business as
a foreign corporation in any jurisdiction wherein it would not, but for the
requirements of this paragraph (iv), be obligated to be so qualified or to
consent to general service of process in any such jurisdiction;
(v) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by
such other federal or state governmental agencies or authorities as may be
necessary in the opinion of counsel to the Company to consummate the
disposition of such Registrable Securities in accordance with their
intended method of disposition;
(vi) furnish to the Holders' underwriters, if any, (x) an opinion of
counsel for the Company, and (y) a "comfort" letter signed by the
independent public accountants who have certified the Company's financial
statements included or incorporated by reference in such registration
statement, each covering substantially the same matters with respect to
such registration statement (and the prospectus included therein) and, in
the case of the accountant's comfort letter, with respect to events
subsequent to the date of such financial statements, as are customarily
covered in opinions of issuer's counsel and in accountant's comfort letters
delivered to the underwriters in underwritten public offerings of
securities (and dated the dates such opinions and comfort letters are
customarily dated);
(vii) immediately notify the Holders when a prospectus relating
thereto is required to be delivered under the Securities Act, upon
discovery that, or upon 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 any
material fact required to be stated therein or necessary to make the
statements therein not misleading, in the light of the circumstances under
which they were made, and at the request of the Holders promptly prepare
and furnish to them a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they
were made;
(viii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as
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reasonably practicable, an earnings statement covering the period of at
least 12 months, but not more than 18 months, beginning with the first full
calendar month after the effective date of such registration statement,
which earnings statement shall satisfy the provisions of section 11(a) of
the Securities Act and Rule 158 promulgated thereunder, and promptly
furnish the same to the Holders; and
(ix) provide and cause to be maintained a transfer agent and
registrar (which, in each case, may be the Company) for all Registrable
Securities covered by such registration statement from and after a date not
later than the effective date of such registration.
The Company may require the Holders to furnish the Company such
information regarding the Holders and the distribution of the Holders'
Registrable Securities as the Company may from time to time reasonably request
in writing, based on its reasonable belief that such information is required to
be disclosed in the Registration Statement pursuant to the Securities Act and
applicable State securities laws.
Upon receipt of any notice from the Company of the happening of an
event of the kind described in item (vii) of this section 4, the Holders shall
forthwith discontinue their disposition of Registrable Securities pursuant to
the registration statement relating to such Registrable Securities until the
Holders' receipt of the copies of the supplemented or amended prospectus
contemplated by item (vii) and, if so directed by the Company, the Holders shall
deliver to the Company all copies, other than permanent file copies, then in the
Holders' possession, of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice.
5. Underwritten Offerings.
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5.1 Piggyback Underwritten Offerings. If the Company proposes to
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register any of its securities under the Securities Act as contemplated by
section 2 or section 3 and such securities are to be distributed by or through
one or more underwriters, the Company shall, subject to the provisions of
section 2 and section 3 (including, without limitation, the provisions of
sections 2.3 and 3.2), if requested by the Holders, arrange for such
underwriters to include all the Registrable Securities to be offered and sold by
the Holders with and among the securities of the Company to be distributed by
such underwriters. The Holders shall become a party to the underwriting
agreement negotiated between the Company and such underwriters and shall make
all representations and warranties to and shall enter into all agreements with
the Company or the underwriters as shall be reasonably requested of them
including all representations and warranties required by law, customarily given
or reasonably requested of selling shareholders by an underwriter in an
underwritten public offering.
5.2 Holdback Agreements.
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(a) If the Company, in connection with an underwritten offering of
securities for its own account, at any time shall register shares of Common
Stock under the Securities Act for sale to the public (other than on Forms S-4
or S-8 or a shelf registration), the Holders shall not sell pursuant to an
effective registration statement, publicly make any short sale of, publicly
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grant any option for the purchase of, or otherwise publicly dispose of any
Shares (other than those Shares included in such registration pursuant to
section 2 or section 3) without the prior written consent of the managing
underwriter for a period required by the underwriters and designated by the
Company, which period shall begin not more than thirty (30) days prior to the
effectiveness of the registration statement pursuant to which such public
offering shall be made and shall last not more than one hundred eighty (180)
days after the effective date of such registration statement in the case of the
Company's initial public offering, or ninety (90) days after the effective date
of such registration statement in the case of any such other offering. The
Company may legend and impose stop transfer instructions on any certificate
evidencing Registrable Securities relating to the restrictions provided in this
section 5.2.
(b) During the 15-day period prior to the effective date of any
registration statement of Registrable Securities pursuant to an underwritten
public offering and during the 90-day period beginning on that effective date,
the Company shall not (except as part of such registration) effect any public
sale or distribution of any of its equity securities or of any security
convertible into or exchangeable or exercisable for any equity security of the
Company (other than in connection with any employee stock option or other
benefit plan).
5.3 Preparation; Reasonable Investigation. In connection with
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the preparation and filing of each registration statement under the Securities
Act pursuant to this agreement, the Company shall give the Holders, their
underwriters, if any, and their respective counsel and accountants the
opportunity to participate in the preparation of such registration statement,
each prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and give each of them such access to
its books and records, such opportunities to discuss the business of the Company
with officers and the independent public accountants who have certified its
financial statements as shall be necessary, in the opinion of the Holders' and
such underwriters' respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act.
6. Indemnification.
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6.1 Indemnification by the Company. In the event of any
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registration statement filed pursuant to section 2 or section 3, the Company
shall, and hereby does, indemnify and hold harmless each of the Holders and each
of their directors, officers, partners, agents, attorneys, representatives and
affiliates and each other individual, group, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture or
other entity of whatever nature ("Person") who participates as an underwriter in
the offering or sale of such securities and each other Person, if any, who
controls any Holder or any such underwriter within the meaning of the Securities
Act (each of the foregoing, a "Holder Indemnitee"), insofar as losses, claims,
damages, or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any such
registration statement, any preliminary prospectus, final prospectus, or summary
prospectus contained therein, or any amendment or supplement thereto, or 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 in which they were made not misleading, and the Company shall
reimburse each Holder Indemnitee for any legal or any other fees, costs and
expenses reasonably
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incurred by them in connection with investigating or defending any such loss,
claim, liability, action or proceeding; provided, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability (or action or proceeding in respect thereof) or expense arises out of
or is based upon an untrue statement or omission made in reliance upon and in
conformity with information furnished to the Company by or on behalf of a Holder
or such underwriter, as the case may be, for use in the preparation thereof; and
provided, further, that the Company shall not be liable to any Holder Indemnitee
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of such Person's
failure to send or give a copy of the final prospectus, as the same may be then
supplemented or amended, to the Person asserting an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus so long as such
final prospectus, and any amendments or supplements thereto, have been furnished
to such underwriter or any Holder, as applicable.
6.2 Indemnification by the Holders. If any Registrable
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Securities are included in any registration statement, the Holders of such
Registrable Securities so registered shall, and hereby do, severally and not
jointly, indemnify and hold harmless (in the same manner and to the same extent
as set forth in section 6.1 above) the Company, and each director and officer of
the Company, and each other Person, if any, who controls the Company within the
meaning of the Securities Act, with respect to all losses, claims, damages,
expenses or liabilities ("Losses") to which the Company or such control person
becomes subject under the Securities Act, insofar as such Losses arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or an omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if such statement or alleged statement or omission or
alleged omission was made in reliance upon and in conformity with written
information pertaining to such Holder and furnished to the Company by such
Holder for use in the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement,
provided, however, that no Holder shall have any liability under this section
6.2 for any amount in excess of the net proceeds actually received by such
Holder from the sale of the Registrable Securities included in such registration
statement.
6.3 Notice of Claims, Etc.
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(a) Promptly after receipt by an indemnified party of notice of
the commencement of any action or proceeding involving a claim referred to in
sections 6.1 or 6.2, such indemnified party will, if a claim in respect thereof
is to be made against an indemnifying party, immediately give written notice to
the latter of the commencement of such action; provided, however, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its indemnity obligations, except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
unless in the reasonable judgment of counsel for such indemnified party, a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim (in which case the indemnified party shall be entitled
to retain separate counsel as provided below), the indemnifying party shall be
entitled to participate in and
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to assume the defense thereof, jointly with any other indemnifying party
similarly notified to the extent that it may wish and at any time, with counsel
[reasonably] satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses subsequently incurred by the indemnified
party in connection with the defense thereof other than reasonable costs related
to the indemnified party's cooperation with the indemnifying party provided,
however, that (i) if the indemnifying party fails to assume the defense of such
claim after a reasonable time the indemnified party may retain counsel to defend
such claim and the reasonable fees and expenses of such counsel shall be paid by
the indemnifying party, (ii) the indemnified party may, at its own expense,
retain separate counsel to participate in such defense, (iii) the indemnified
party shall have the right to employ separate counsel at the expense of the
indemnifying party and to control its own defense of such action, claim or
proceeding if, in the reasonable opinion of counsel to such indemnified party, a
material conflict or potential material conflict exists between the indemnified
party and the indemnifying party that would make such separate representation
advisable, except that in no event shall the indemnifying party be required to
pay fees and expenses under this section 6 for more than one separate firm of
attorneys in any one legal action or group of related legal actions.
(b) No indemnifying party shall be liable for any settlement of
any action or proceeding effected without its written consent, which consent
shall not be unreasonably withheld. No indemnifying party shall, without the
consent of the indemnified party, consent to entry of any judgment or enter into
any settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.
6.4 Contribution. If indemnification shall for any reason be
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held by a court to be unavailable to an indemnified party under section 6.1 or
section 6.2 in respect of any loss, claim, damage or liability, or any action in
respect thereof, then, in lieu of the amount paid or payable under section 6.1
or section 6.2, as applicable, the indemnified party and the indemnifying party
shall contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating the same), (i) in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and the Holders on the other hand
that resulted in such loss, claim, damage or liability, or action in respect
thereof, with respect to the statements or omissions that resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations or (ii) if the allocation provided by item (i)
above is not permitted by applicable law, in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on the one
hand and the Holders on the other provided, however, that no Holder shall have
any liability under this section 6.4 for any amount in excess of the net
proceeds actually received by such Holder from the sale of the Registrable
Securities included in such registration statement. No Person guilty of
fraudulent misrepresentation (within the meaning of the Securities Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. In addition, no Person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim,
effected without such Person's consent, which consent shall not be unreasonably
withheld.
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6.5 Rule 144. With a view to making available the benefits of
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certain rules and regulations of the Commission that may at any time permit the
sale of the Registrable Securities to the public without registration, at all
times from and after 90 days following the effective date of the first
registration of the Company under the Securities Act of an offering of its
securities to the public, the Company shall:
(a) use its best efforts to facilitate the sale of the
Registrable Securities to the public, without registration under the Securities
Act, pursuant to Rule 144 promulgated under the Securities Act, provided that
this shall not require the Company to file reports under the Securities Act and
the Securities Exchange Act of 1934, or any similar federal statute, and the
rules and regulations of the Commission thereunder ("Exchange Act"), at any time
prior to the Company's being otherwise required to file such reports;
(b) make and keep public information available, as those terms
are understood and defined in Rule 144 promulgated under the Securities Act at
all times after 90 days after the effective date of the first registration under
the Securities Act filed by the Company for an offering of its securities to the
general public;
(c) use its best efforts to then file with the Commission in a
timely manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(d) deliver to the Holders, upon any Holder's request, a written
statement as to whether it has complied with the requirements of this section 6,
a copy of the most recent annual or quarterly report of the Company filed with
the Commission or any stock exchange or self regulatory organization [registered
under the Securities Exchange Act of 1934], and such other reports and documents
so filed as a Holder may reasonably request to avail itself of any rule or
regulation of the Commission allowing it to sell its Registrable Securities
without registration.
7. Representations and Warranties of the Company and the
-----------------------------------------------------
Stockholders. Each of the Company, on the one hand, and the Stockholders, on the
- ------------
other hand, hereby severally (and not jointly) represent and warrant to the
Company and to each of the Stockholders as set forth below (all of such
representations and warranties to survive the execution and delivery of this
agreement):
(a) Binding Effect. This agreement has been duly executed and
delivered by the Company or the Stockholder, as applicable, and constitutes the
legal, valid and binding obligation of such party enforceable against such party
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
relating to enforceability.
(b) Power; Authorization; Non-Contravention. Each of the Company
and the Stockholder, as applicable, has all power and authority to execute,
deliver and perform his, her or its obligations under this agreement. The
execution, delivery and performance by each of the Company or the Stockholder,
as applicable, of this agreement and the consummation of the
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transactions contemplated hereby, (i) has been duly authorized by all necessary
corporate or limited liability company, and if required, stockholder action, as
applicable, on the part of or on behalf of such party and (ii) does not violate,
contravene the terms of, or exceed the authority grant under, any agreement,
document or instrument of or applicable to such party.
8. Miscellaneous.
--------------
(a) Notices. All notices, instructions and other communications
-------
in connection with this agreement shall be in writing and may be given by
personal delivery or mailed, certified mail, return receipt requested, postage
prepaid or by a nationally recognized overnight courier to the parties at the
address of the Company as follows, and at the address of the Holders as set
forth on the signature page to this agreement (or at such other address as the
Company or the Holders may specify in a notice to each other):
If to the Company:
MedSource Technologies, Inc.
Two Carlson Parkway
Minneapolis, Minnesota 55447
Attention: Chief Executive Officer
and
Kidd & Company, LLC
Three Pickwick Plaza
Greenwich, CT 06830
Attention: Richard J. Effress
With a copy to:
Edward R. Mandell
Parker Chapin Flattau & Klimpl, LP
1211 Avenue of the Americas
New York, New York 10036-8735
If to a Stockholder, to the address set forth on the signature
page below.
(b) No Waiver. No course of dealing and no delay on the part of
---------
any party hereto in exercising any right, power or remedy conferred by this
agreement shall operate as a waiver thereof or otherwise prejudice such party's
rights, powers and remedies conferred by this agreement or shall preclude any
other or further exercise thereof or the exercise of any other right, power and
remedy.
(c) Binding Effect; Assignability. This agreement shall be
-----------------------------
binding upon and, except as otherwise provided herein, shall inure to the
benefit of the respective parties and their permitted successors and assigns.
This agreement shall not be assignable except as otherwise provided herein;
provided, however, that the Holders of the Series B Preferred Stock shall have
- -------- -------
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the right to assign and transfer all or any portion of their rights under this
agreement to a purchaser of the Shares in accordance with the terms of the
Purchase Agreement dated as of the date hereof between the Company, such Holders
and the other parties thereto.
(d) Severability. Any provision of this agreement that is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereby waive any provision of law which renders
any provisions hereof prohibited or unenforceable in any respect.
(e) Modification. No term or provision of this agreement may be
------------
amended, altered, modified, rescinded or terminated except upon the express
written consent of the party against whom the same is sought to be enforced.
(f) Law Governing. This agreement shall be governed by and
-------------
construed in accordance with the law of the state of New York, applicable to
agreements made and to be performed entirely in New York, without regard to the
principals of conflicts of law of such state.
(g) Amendment to Securities Laws. The Company (on the one hand)
----------------------------
and the Stockholders (on the other hand) agree that any amendment to federal
securities laws (and regulations promulgated thereunder (and related
registration forms) and related state securities laws) shall not affect the
substantive registration requirements (and other obligations of the Company) set
forth in this agreement; and, following any such amendment, the Company shall
continue to be required to cause the registration of the Registrable Securities
(and pay all Registration Expenses and provide indemnification pursuant to
section 6.1) under the federal securities laws, as amended, in a manner
consistent with carrying out the intent and purposes of (and on terms as similar
as practicable as the terms set forth in) this agreement.
(h) Headings. All headings and captions in this agreement are
--------
for purposes of reference only and shall not be construed to limit or affect the
substance of this agreement.
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(i) Entire Agreement. This agreement contains, and is intended
----------------
as, a complete statement of all the terms of the arrangements between the
parties with respect to the matters provided for, supersedes any previous
agreements and understandings between the parties with respect to those matters
and cannot be changed or terminated orally.
MEDSOURCE TECHNOLOGIES, INC.
By: /s/ RICHARD J. EFFRESS
--------------------------------
Name: Richard J. Effress
Title: Chairman
INDOSUEZ MST PARTNERS
By: Indosuez CM II, Inc.
as general partner
By: /s/ MICHAEL F. WALSH
--------------------------------
Name: Michael F. Walsh
Title: Vice President
Address:
1211 Avenue of the Americas
New York, New York 10036
Attention: Michael F. Walsh
Telecopier: (212) 278-2287
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