EXHIBIT 4.2
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
BETWEEN
TEKELEC,
AS ISSUER,
AND
MORGAN STANLEY & CO. INCORPORATED,
AS INITIAL PURCHASER
DATED AS OF JUNE 17, 2003
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") dated as of June 17,
2003 between Tekelec, a California corporation (the "COMPANY"), and Morgan
Stanley & Co. Incorporated (the "INITIAL PURCHASER") pursuant to the Purchase
Agreement dated June 11, 2003 (the "PURCHASE AGREEMENT"), between the Company
and the Initial Purchaser. In order to induce the Initial Purchaser to enter
into the Purchase Agreement, the Company has agreed to provide the registration
rights set forth in this Agreement. The execution of this Agreement is a
condition to the closing under the Purchase Agreement.
The Company agrees with the Initial Purchaser, (i) for its benefit as
Initial Purchaser and (ii) for the benefit of the beneficial owners (including
the Initial Purchaser) from time to time of the Notes (as defined herein) and
the beneficial owners from time to time of the Underlying Common Stock (as
defined herein) issued upon conversion of the Notes (each of the foregoing a
"HOLDER" and together the "HOLDERS"), as follows:
SECTION 1. Definitions. Capitalized terms used herein without definition
shall have their respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following terms shall have the following meanings:
"AFFILIATE" means with respect to any specified person, an "affiliate,"
as defined in Rule 144, of such person.
"AMENDMENT EFFECTIVENESS DEADLINE DATE" has the meaning set forth in
Section 2(d) hereof.
"BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.
"COMMON STOCK" means the shares of common stock, without par value, of
the Company, together with the Rights evidenced by such Common Stock to the
extent provided in the Rights Agreement dated as of August 25, 1997 between the
Company and U.S. Stock Transfer Corporation, and any other shares of common
stock as may constitute "Common Stock" for purposes of the Indenture, including
the Underlying Common Stock.
"CONVERSION PRICE" has the meaning assigned such term in the Indenture.
"DAMAGES ACCRUAL PERIOD" has the meaning set forth in Section 2(e)
hereof.
"DAMAGES PAYMENT DATE" means each June 15 and December 15.
"DEFERRAL NOTICE" has the meaning set forth in Section 3(h) hereof.
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"DEFERRAL PERIOD" has the meaning set forth in Section 3(h) hereof.
"EFFECTIVENESS DEADLINE DATE" has the meaning set forth in Section 2(a)
hereof.
"EFFECTIVENESS PERIOD" means the period commencing on the date hereof
and ending on the date that all Registrable Securities have ceased to be
Registrable Securities.
"EVENT" has the meaning set forth in Section 2(e) hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"FILING DEADLINE DATE" has the meaning set forth in Section 2(a) hereof.
"HOLDER" has the meaning set forth in the second paragraph of this
Agreement.
"INDENTURE" means the Indenture, dated as of June 17, 2003, between the
Company and Deutsche Bank Trust Company, as trustee, pursuant to which the Notes
are being issued.
"INITIAL PURCHASER" means Morgan Stanley & Co. Incorporated.
"INITIAL SHELF REGISTRATION STATEMENT" has the meaning set forth in
Section 2(a) hereof.
"ISSUE DATE" means June 17, 2003.
"LIQUIDATED DAMAGES AMOUNT" has the meaning set forth in Section 2(e)
hereof.
"MATERIAL EVENT" has the meaning set forth in Section 3(h) hereof.
"NOTES" means the 2.25% Senior Subordinated Convertible Notes Due 2008
of the Company to be purchased pursuant to the Purchase Agreement.
"NOTICE AND QUESTIONNAIRE" means a written notice delivered to the
Company containing substantially the information called for by the Selling
Security Holder Notice and Questionnaire attached as Annex A to the Offering
Memorandum of the Company dated June 11, 2003 relating to the Notes.
"NOTICE HOLDER" means, on any date, any Holder that has delivered a
Notice and Questionnaire to the Company on or prior to such date.
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"PROSPECTUS" means 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 amendment or prospectus supplement, including
post-effective amendments, and all materials incorporated by reference or
explicitly deemed to be incorporated by reference in such Prospectus.
"PURCHASE AGREEMENT" has the meaning set forth in the preamble hereof.
"RECORD HOLDER" means with respect to any Damages Payment Date relating
to any Notes or Underlying Common Stock as to which any Liquidated Damages
Amount has accrued, the registered holder of such Note or Underlying Common
Stock on the June 1 immediately preceding a Damages Payment Date occurring on a
June 15, and on the December 1 immediately preceding a Damages Payment Date
occurring on a December 15.
"REGISTRABLE SECURITIES" means the Notes until such Notes have been
converted into or exchanged for the Underlying Common Stock and, at all times
subsequent to any such conversion, the Underlying Common Stock and any
securities into or for which such Underlying Common Stock has been converted or
exchanged, and any security issued with respect thereto upon any stock dividend,
split or similar event until, in the case of any such security, (A) the earliest
of (i) its effective registration under the Securities Act and resale in
accordance with the Registration Statement covering it, (ii) expiration of the
holding period that would be applicable thereto, under Rule 144(k) and assuming
that the Holder is not an affiliate of the Company or (iii) its sale to the
public pursuant to Rule 144 (or any similar provision then in force, but not
Rule 144A) under the Securities Act, and (B) as a result of the event or
circumstance described in any of the foregoing clauses (i) through (iii), the
legend with respect to transfer restrictions required under the Indenture is
removed or removable in accordance with the terms of the Indenture or such
legend, as the case may be.
"REGISTRATION STATEMENT" means any registration statement of the Company
that 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 materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.
"RESTRICTED SECURITIES" means "restricted securities" as defined in Rule
144.
"RULE 144" means 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.
"RULE 144A" means Rule 144A 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.
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"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
"SHELF REGISTRATION STATEMENT" has the meaning set forth in Section 2(a)
hereof.
"SPECIAL COUNSEL" means Davis Polk & Wardwell or one such other
successor counsel as shall be specified by the Holders of a majority of the
Registrable Securities, but which may, with the written consent of the Initial
Purchaser (which shall not be unreasonably withheld), be another nationally
recognized law firm experienced in securities law matters designated by the
Company, the reasonable fees and expenses of which will be paid by the Company
pursuant to Section 5 hereof. For purposes of determining the Holders of a
majority of the Registrable Securities in this definition, Holders of Notes
shall be deemed to be the Holders of the number of shares of Underlying Common
Stock into which such Notes are or would be convertible as of the date the
consent is requested.
"SUBSEQUENT SHELF REGISTRATION STATEMENT" has the meaning set forth in
Section 2(b) hereof.
"TIA" means the Trust Indenture Act of 1939, as amended.
"TRUSTEE" means Deutsche Bank Trust Company, the Trustee under the
Indenture.
"UNDERLYING COMMON STOCK" means the Common Stock into which the Notes
are convertible or issued upon any such conversion.
SECTION 2. Shelf Registration. (a) The Company shall prepare and file or
cause to be prepared and filed with the SEC, as soon as practicable but in any
event by the date (the "FILING DEADLINE DATE") ninety (90) days after the Issue
Date, a Registration Statement for an offering to be made on a delayed or
continuous basis pursuant to Rule 415 of the Securities Act (a "SHELF
REGISTRATION STATEMENT") registering the resale from time to time by Holders
thereof of all of the Registrable Securities (the "INITIAL SHELF REGISTRATION
STATEMENT"). The Initial Shelf Registration Statement shall be on Form S-3 or
another appropriate form permitting registration of such Registrable Securities
for resale by such Holders in accordance with the methods of distribution
elected by the Holders and set forth in the Initial Shelf Registration
Statement. The Company shall use its reasonable best efforts to cause the
Initial Shelf Registration Statement to be declared effective under the
Securities Act as promptly as is practicable but in any event by the date (the
"EFFECTIVENESS DEADLINE DATE") that is one hundred eighty (180) days after the
Issue Date, and to keep the Initial Shelf Registration Statement (or any
Subsequent Shelf Registration Statement) continuously effective under the
Securities Act until the expiration of the Effectiveness Period. At the time the
Initial Shelf Registration Statement is declared effective,
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each Holder that became a Notice Holder on or prior to the date ten (10)
Business Days prior to such time of effectiveness shall be named as a selling
securityholder in the Initial Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Holder to deliver such Prospectus
to purchasers of Registrable Securities in accordance with applicable law. None
of the Company's security holders (other than the Holders of Registrable
Securities) shall have the right to include any of the Company's securities in
the Shelf Registration Statement.
(b) Subject to the provisions of Section 3(h), if the Initial Shelf
Registration Statement or any Subsequent Shelf Registration Statement ceases to
be effective for any reason at any time during the Effectiveness Period (other
than because all Registrable Securities registered thereunder shall have been
resold pursuant thereto or shall have otherwise ceased to be Registrable
Securities), the Company shall use its reasonable best efforts to obtain the
prompt withdrawal of any order suspending the effectiveness thereof, and in any
event shall within thirty (30) days of such cessation of effectiveness amend the
Shelf Registration Statement in a manner reasonably expected to obtain the
withdrawal of the order suspending the effectiveness thereof, or file an
additional Shelf Registration Statement covering all of the securities that as
of the date of such filing are Registrable Securities (a "SUBSEQUENT SHELF
REGISTRATION STATEMENT"). If a Subsequent Shelf Registration Statement is filed,
the Company shall use its reasonable best efforts to cause the Subsequent Shelf
Registration Statement to become effective as promptly as is practicable after
such filing and to keep such Registration Statement (or subsequent Shelf
Registration Statement) continuously effective until the end of the
Effectiveness Period.
(c) Subject to the provisions of Section 3(h), the Company shall
supplement and amend the Shelf Registration Statement if required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Shelf Registration Statement, if required by the Securities Act
or as necessary to name a Notice Holder as a selling securityholder pursuant to
Section 2(d) below.
(d) Each Holder agrees that if such Holder wishes to sell Registrable
Securities pursuant to a Shelf Registration Statement and related Prospectus, it
will do so only in accordance with this Section 2(d) and Section 3(h). Following
the date that the Initial Shelf Registration Statement is declared effective,
each Holder wishing to sell Registrable Securities pursuant to a Shelf
Registration Statement and related Prospectus agrees to deliver a Notice and
Questionnaire to the Company at least three (3) Business Days prior to any
intended distribution of Registrable Securities under the Shelf Registration
Statement. Each Holder who elects to sell Registrable Securities pursuant to a
Shelf Registration Statement agrees by submitting a Notice and Questionnaire to
the Company, it will be bound by the terms and conditions of the Notice and
Questionnaire and this Agreement. From and after the date the Initial Shelf
Registration Statement is declared effective, the Company shall, as promptly as
practicable after the date a Notice and Questionnaire is delivered pursuant to
Section 8(c) hereof, and in any event upon the later of (x) five (5) Business
Days after such date or (y) five (5) Business Days after the
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expiration of any Deferral Period in effect when the Notice and Questionnaire is
delivered or put into effect within five (5) Business Days of such delivery
date:
(i) if required by applicable law, file with the SEC a
post-effective amendment to the Shelf Registration Statement or
prepare and, if required by applicable law, file a supplement to the
related Prospectus or a supplement or amendment to any document
incorporated therein by reference or file any other required document
so that the Holder delivering such Notice and Questionnaire is named
as a selling securityholder in the Shelf Registration Statement and
the related Prospectus in such a manner as to permit such Holder to
deliver such Prospectus to purchasers of the Registrable Securities
in accordance with applicable law and, if the Company shall file a
post-effective amendment to the Shelf Registration Statement, use its
reasonable best efforts to cause such post-effective amendment to be
declared effective under the Securities Act as promptly as is
practicable, but in any event by the date (the "AMENDMENT
EFFECTIVENESS DEADLINE DATE") that is forty-five (45) days after the
date such post-effective amendment is required by this clause to be
filed;
(ii) provide such Holder copies of any documents filed pursuant to
Section 2(d)(i); and
(iii) notify such Holder as promptly as practicable after the
effectiveness under the Securities Act of any post-effective
amendment filed pursuant to Section 2(d)(i);
provided, that if such Notice and Questionnaire is delivered during a Deferral
Period, the Company shall so inform the Holder delivering such Notice and
Questionnaire and shall take the actions set forth in clauses (i), (ii) and
(iii) above upon expiration of the Deferral Period in accordance with Section
3(h). Notwithstanding anything contained herein to the contrary, (i) the Company
shall be under no obligation to name any Holder that is not a Notice Holder as a
selling securityholder in any Registration Statement or related Prospectus and
(ii) the Amendment Effectiveness Deadline Date shall be extended by up to ten
(10) Business Days from the expiration of a Deferral Period (and the Company
shall incur no obligation to pay Liquidated Damages during such extension) if
such Deferral Period shall be in effect on the Amendment Effectiveness Deadline
Date.
(e) The parties hereto agree that the Holders of Registrable Securities
will suffer damages, and that it would not be feasible to ascertain the extent
of such damages with precision, if, other than as permitted hereunder,
(i) the Initial Shelf Registration Statement has not been filed on
or prior to the Filing Deadline Date,
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(ii) the Initial Shelf Registration Statement has not been declared
effective under the Securities Act on or prior to the Effectiveness
Deadline Date,
(iii) the Company has failed to perform its obligations set forth
in Section 2(d)(i) within the time period required therein,
(iv) any post-effective amendment to a Shelf Registration Statement
filed pursuant to Section 2(d)(i) has not become effective under the
Securities Act on or prior to the Amendment Effectiveness Deadline
Date, or
(v) the aggregate duration of Deferral Periods in any period
exceeds the number of days permitted in respect of such period
pursuant to Section 3(h) hereof,
(vi) the number of Deferred Periods in any period exceeds the
number permitted in respect of such period pursuant to Section 3(h)
hereof.
Each event described in any of the foregoing clauses (i) through (vi) is
individually referred to herein as an "EVENT." For purposes of this Agreement,
each Event set forth above shall begin on the dates set forth in the table below
and shall end on the ending dates set forth in the table below:
Type of
Event by Beginning Ending
Clause Date Date
-------- --------- ------
(i) Filing Deadline Date the date the Initial Shelf
Registration Statement is
filed
(ii) Effectiveness Deadline the date the Initial Shelf
Date Registration Statement
becomes effective under
the Securities Act
(iii) the date by which the the date the Company
Company is required to performs its obligations
perform its obligations set forth in Section 2(d)
under Section 2(d)
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Type of
Event by Beginning Ending
Clause Date Date
-------- --------- ------
(iv) the Amendment the date the applicable
Effectiveness Deadline Date post-effective amendment
to a Shelf Registration
Statement becomes
effective under the
Securities Act
(v) the date on which the termination of the Deferral
aggregate duration of Period that caused the limit
Deferral Periods in any on the aggregate duration
period exceeds the number of Deferral Periods to be
of days permitted by exceeded
Section 3(h)
(vi) the date of commencement termination of the
of a Deferral Period that Deferred Period that
causes the number of caused the number of
Deferred Periods to exceed Deferral Periods to exceed
the number permitted by the number permitted by
Section 3(h) Section 3(h)
Commencing on (and including) any date that an Event has begun and
ending on (but excluding) the next date on which there are no Events that have
occurred and are continuing (a "DAMAGES ACCRUAL PERIOD"), the Company shall pay,
as liquidated damages and not as a penalty, to Record Holders of Registrable
Securities an amount (the "LIQUIDATED DAMAGES AMOUNT") accruing, for each day in
the Damages Accrual Period, (i) in respect of any Note, at a rate per annum
equal to 0.5% of the aggregate principal amount of such Note and (ii) in respect
of each share of Underlying Common Stock at a rate per annum equal to 0.5% on
the Conversion Price on such date, as the case may be; provided that in the case
of a Damages Accrual Period that is in effect solely as a result of an Event of
the type described in clause (iii) or (iv) of the preceding paragraph, such
Liquidated Damages Amount shall be paid only to the Holders (as set forth in the
succeeding paragraph) that have delivered Notices and Questionnaires that caused
the Company to incur the obligations set forth in Section 2(d) the
non-performance of which is the basis of such Event. In calculating the
Liquidated Damages Amount on any date on which no Notes are outstanding, the
Conversion Price and the Liquidated Damages Amount payable with respect to
shares of Common Stock that are Registrable Securities, shall be calculated as
if the Notes were still outstanding. Notwithstanding the foregoing, no
Liquidated Damages Amount shall accrue as to any Registrable Security from and
after the earlier of (x) the date such security is no longer a Registrable
Security and (y) expiration of the Effectiveness Period. The rate of
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accrual of the Liquidated Damages Amount with respect to any period shall not
exceed the rate provided for in this paragraph notwithstanding the occurrence of
multiple concurrent Events.
The Liquidated Damages Amount shall accrue from the first day of the
applicable Damages Accrual Period, and shall be payable on each Damages Payment
Date during the Damages Accrual Period (and on the Damages Payment Date next
succeeding the end of the Damages Accrual Period if the Damages Accrual Period
does not end on a Damages Payment Date) to the Record Holders of the Registrable
Securities entitled thereto; provided that any Liquidated Damages Amount accrued
with respect to any Note or portion thereof redeemed by the Company on a
redemption date or converted into Underlying Common Stock on a conversion date
prior to the Damages Payment Date, shall, in any such event, be paid instead to
the Holder who submitted such Note or portion thereof for redemption or
conversion on the applicable redemption date or conversion date, as the case may
be, on such date (or promptly following the conversion date, in the case of
conversion); provided further, that, in the case of an Event of the type
described in clause (iii) or (iv) of the first paragraph of this Section 2(e),
such Liquidated Damages Amount shall be paid only to the Holders entitled
thereto pursuant to such first paragraph by check mailed to the address set
forth in the Notice and Questionnaire delivered by such Holder. The Trustee
shall be entitled, on behalf of registered holders of Notes or Underlying Common
Stock, to seek any available remedy for the enforcement of this Agreement,
including for the payment of such Liquidated Damages Amount. Notwithstanding the
foregoing, the parties agree that the sole damages payable for a violation of
the terms of this Agreement with respect to which liquidated damages are
expressly provided shall be such liquidated damages. Nothing shall preclude any
Holder from pursuing or obtaining specific performance or other equitable relief
with respect to this Agreement.
All of the Company's obligations set forth in this Section 2(e) that are
outstanding with respect to any Registrable Security at the time such security
ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement pursuant to Section 8(k)).
The parties hereto agree that the liquidated damages provided for in
this Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure of the
Shelf Registration Statement to be filed or declared effective or available for
effecting resales of Registrable Securities in accordance with the provisions
hereof.
SECTION 3. Registration Procedures. In connection with the registration
obligations of the Company under Section 2 hereof, during the Effectiveness
Period, the Company shall:
(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
thereof in accordance with the intended method or
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methods of distribution thereof, and use its reasonable best efforts to
cause each such Registration Statement to become effective and remain
effective as provided herein; provided that before filing any
Registration Statement or Prospectus or any amendments or supplements
thereto with the SEC, the Company shall furnish to the Initial Purchaser
and the Special Counsel of such offering, if any, copies of all such
documents proposed to be filed at least three (3) Business Days prior to
the filing of such Registration Statement or amendment thereto or
Prospectus or supplement thereto.
(b) Subject to Section 3(h), 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(a); cause the
related Prospectus to be 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 use
its reasonable best efforts to comply with the provisions of the
Securities Act applicable to it with respect to the disposition of all
securities covered by such Registration Statement during the
Effectiveness Period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration
Statement as so amended or such Prospectus as so supplemented.
(c) As promptly as practicable give notice to the Notice Holders,
the Initial Purchaser and the Special Counsel, (i) when any Prospectus,
prospectus supplement, Registration Statement or post-effective
amendment to a Registration Statement has been filed with the SEC and,
with respect to a Registration Statement or any post-effective
amendment, when the same has been declared effective, (ii) of any
request, following the effectiveness of the Initial Shelf Registration
Statement under the Securities Act, by the SEC or any other federal or
state governmental authority for amendments or supplements to any
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 any Registration Statement or the initiation or
threatening 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 occurrence of, but not
the nature of or details concerning, a Material Event and (vi) of the
determination by the Company that a post-effective amendment to a
Registration Statement will be filed with the SEC, which notice may, at
the discretion of the Company (or as required pursuant to Section 3(h)),
state that it constitutes a Deferral Notice, in which event the
provisions of Section 3(h) shall apply.
(d) Use its reasonable best efforts to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement or
the lifting of any suspension
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of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction in which they have
been qualified for sale, in either case at the earliest practicable
moment, and provide notice as promptly as possible to each Notice Holder
and the Initial Purchaser of the withdrawal of any such order.
(e) As promptly as practicable furnish to each Notice Holder, the
Special Counsel and the Initial Purchaser, upon request and without
charge, at least one (1) conformed copy of the Registration Statement
and any amendment thereto, including exhibits and if requested, all
documents incorporated or deemed to be incorporated therein by
reference.
(f) During the Effectiveness Period, deliver to each Notice
Holder, the Special Counsel, if any, and the Initial Purchaser, in
connection with any sale of Registrable Securities pursuant to a
Registration Statement, 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
Notice Holder may reasonably request; and the Company hereby consents
(except during such periods that a Deferral Notice is outstanding and
has not been revoked) to the use of such Prospectus or each amendment or
supplement thereto by each Notice Holder in connection with any offering
and sale of the Registrable Securities covered by such Prospectus or any
amendment or supplement thereto in the manner set forth therein.
(g) Prior to any public offering of the Registrable Securities
pursuant to a Registration Statement, use its reasonable best efforts to
register or qualify or cooperate with the Notice 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 any Notice Holder
reasonably requests in writing (which request may be included in the
Notice and Questionnaire); prior to any public offering of the
Registrable Securities pursuant to the Shelf Registration Statement, use
its reasonable best efforts to keep each such registration or
qualification (or exemption therefrom) effective during the
Effectiveness Period in connection with such Notice Holder's offer and
sale of Registrable Securities pursuant to such registration or
qualification (or exemption therefrom) and do any and all other acts or
things reasonably necessary or advisable to enable the disposition in
such jurisdictions of such Registrable Securities in the manner set
forth in the relevant Registration Statement and the related Prospectus;
provided that the Company will not be required to (i) qualify as a
foreign corporation or as a dealer in securities in any jurisdiction
where it would not otherwise be required to qualify but for this
Agreement 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.
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(h) Upon (A) the issuance by the SEC of a stop order suspending
the effectiveness of the Shelf Registration Statement or the initiation
of proceedings with respect to the Shelf Registration Statement under
Section 8(d) or 8(e) of the Securities Act, (B) the occurrence of any
event or the existence of any fact (a "MATERIAL EVENT") as a result of
which any Registration Statement shall 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, or
any Prospectus shall 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, in the light of the
circumstances under which they were made, not misleading, or (C) the
occurrence or existence of any pending corporate development that, in
the reasonable discretion of the Company, makes it appropriate to
suspend the availability of the Shelf Registration Statement and the
related Prospectus:
(i) in the case of clause (B) above, subject to the next
sentence, as promptly as practicable prepare and file, if
necessary pursuant to applicable law, a post-effective amendment
to such Registration Statement or a supplement to the related
Prospectus or any document incorporated therein by reference or
file any other required document that would be incorporated by
reference into such Registration Statement and Prospectus so that
such Registration Statement does 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 such Prospectus does 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, in the light of the circumstances under which they were
made, not misleading, as thereafter delivered to the purchasers of
the Registrable Securities being sold thereunder, and, in the case
of a post-effective amendment to a Registration Statement, subject
to the next sentence, use its reasonable best efforts to cause it
to be declared effective as promptly as is practicable, and
(ii) give notice to the Notice Holders, and the Special
Counsel, if any, that the availability of the Shelf Registration
Statement is suspended (a "DEFERRAL NOTICE") and, upon receipt of
any Deferral Notice, each Notice Holder agrees not to sell any
Registrable Securities pursuant to the Registration Statement
until such Notice Holder's receipt of copies of the supplemented
or amended Prospectus provided for in clause (i) above, or until
it is advised in writing by the Company that the Prospectus may be
used, and has received copies of any additional or supplemental
filings that are incorporated or deemed incorporated by reference
in such Prospectus.
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The Company will use its reasonable best efforts to ensure that the use of the
Prospectus may be resumed (x) in the case of clause (A) above, as promptly as is
practicable, (y) in the case of clause (B) above, as soon as, in the sole
judgment of the Company, public disclosure of such Material Event would not be
prejudicial to or contrary to the interests of the Company or, if necessary to
avoid unreasonable burden or expense, as soon as practicable thereafter and (z)
in the case of clause (C) above, as soon as in the reasonable discretion of the
Company, such suspension is no longer appropriate. The Company shall be entitled
to exercise its right under this Section 3(h) to suspend the availability of the
Shelf Registration Statement or any Prospectus, without incurring or accruing
any obligation to pay liquidated damages pursuant to Section 2(e), no more than
one (1) time in any three month period or three (3) times in any twelve month
period, and any such period during which the availability of the Registration
Statement and any Prospectus is suspended (the "DEFERRAL PERIOD") shall, without
incurring any obligation to pay liquidated damages pursuant to Section 2(e), not
exceed 30 days; provided that the aggregate duration of any Deferral Periods
shall not exceed 30 days in any three month period (or 60 days in any three
month period in the event of a Material Event pursuant to which the Company has
delivered a second notice as required below) or 90 days in any twelve (12) month
period; provided that in the case of a Material Event relating to an acquisition
or a probable acquisition or financing, recapitalization, business combination
or other similar transaction, the Company may, without incurring any obligation
to pay liquidated damages pursuant to Section 2(e), deliver to Notice Holders a
second notice to the effect set forth above, which shall have the effect of
extending the Deferral Period by up to an additional 30 days, or such shorter
period of time as is specified in such second notice.
(i) If reasonably requested in writing in connection with a
disposition of Registrable Securities pursuant to a Registration
Statement, make reasonably available for inspection during normal
business hours by a representative for the Notice Holders of such
Registrable Securities, any broker-dealers, attorneys and accountants
retained by such Notice Holders, and any attorneys or other agents
retained by a broker-dealer engaged by such Notice Holders, all relevant
financial and other records and pertinent corporate documents and
properties of the Company and its subsidiaries, and cause the
appropriate officers, directors and employees of the Company and its
subsidiaries to make reasonably available for inspection during normal
business hours on reasonable notice all relevant information reasonably
requested by such representative for the Notice Holders, or any such
broker-dealers, attorneys or accountants in connection with such
disposition, in each case as is customary for similar "due diligence"
examinations; provided that such persons shall first agree in writing
with the Company that any non-public information shall be kept
confidential by such persons and shall be used solely for the purposes
of exercising rights under this Agreement, unless (i) disclosure of such
information is required by court or administrative order or is necessary
to respond to inquiries of regulatory authorities, (ii) in the opinion
of Special Counsel, disclosure of such information is required by law
(including any disclosure requirements pursuant to federal securities
laws in connection with the filing of any Registration Statement or the
use of
13
any prospectus referred to in this Agreement), (iii) such information
becomes generally available to the public other than as a result of a
disclosure or failure to safeguard by any such person or (iv) such
information becomes available to any such person from a source other
than the Company and such source is not bound by a confidentiality
agreement, and provided further that the foregoing inspection and
information gathering shall, to the greatest extent possible, be
coordinated on behalf of all the Notice Holders and the other parties
entitled thereto by the counsel referred to in Section 5. Any person
legally compelled to disclose any such confidential information made
available for inspection shall provide the Company with prompt prior
written notice of such requirement so that the Company may seek a
protective order or other appropriate remedy.
(j) Comply with all applicable rules and regulations of the SEC
and make generally available to its security holders earning statements
(which need not be audited) satisfying the provisions of Section 11(a)
of the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) for a 12-month period commencing
on the first day of the first fiscal quarter of the Company commencing
after the effective date of a Registration Statement, which statements
shall be made available no later than 45 days after the end of the
12-month period or 90 days if the 12-month period coincides with the
fiscal year of the Company.
(k) Cooperate with each Notice Holder to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities sold or to be sold pursuant to a Registration Statement,
which certificates shall not bear any restrictive legends, and cause
such Registrable Securities to be in such denominations as are permitted
by the Indenture and registered in such names as such Notice Holder may
request in writing at least two (2) Business Days prior to any sale of
such Registrable Securities.
(l) Provide a CUSIP number for all Registrable Securities covered
by each Registration Statement not later than the effective date of such
Registration Statement and provide the Trustee and the transfer agent
for the Common Stock with printed certificates for the Registrable
Securities that are in a form eligible for deposit with The Depository
Trust Company.
(m) Cooperate and assist in any filings required to be made with
the National Association of Securities Dealers, Inc.
(n) Upon (i) the filing of the Initial Shelf Registration
Statement and (ii) the effectiveness of the Initial Shelf Registration
Statement, announce the same, in each case by release to Reuters
Economic Services and Bloomberg Business News.
SECTION 4. Holder's Obligations. Each Holder agrees, by acquisition of
the Registrable Securities, that no Holder shall be entitled to sell any of such
Registrable Securities pursuant to a
14
Registration Statement or to receive a Prospectus relating thereto, unless such
Holder has furnished the Company with a Notice and Questionnaire as required
pursuant to Section 2(d) hereof (including the information required to be
included in such Notice and Questionnaire) and the information set forth in the
next sentence. Each Notice Holder 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 such Notice Holder not misleading and any other
information regarding such Notice Holder and the distribution of such
Registrable Securities as the Company may from time to time reasonably request.
Any sale of any Registrable Securities by any Holder shall constitute a
representation and warranty by such Holder that the information relating to such
Holder and its plan of distribution is as set forth in the Prospectus delivered
by such Holder in connection with such disposition, that such Prospectus does
not as of the time of such sale contain any untrue statement of a material fact
relating to or provided by such Holder or its plan of distribution and that such
Prospectus does not as of the time of such sale omit to state any material fact
relating to or provided by such Holder or its plan of distribution necessary to
make the statements in such Prospectus, in the light of the circumstances under
which they were made, not misleading.
SECTION 5. Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with the performance by the Company of its
obligations under Sections 2 and 3 of this Agreement whether or not any
Registration Statement is declared 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 and state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of the Special Counsel in
connection with Blue Sky qualifications of the Registrable Securities under the
laws of such jurisdictions as Notice Holders of a majority of the Registrable
Securities being sold pursuant to a Registration Statement may designate), (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) duplication expenses relating to copies of any
Registration Statement or Prospectus delivered to any Holders hereunder, (iv)
fees and disbursements of counsel for the Company in connection with the Shelf
Registration Statement, (v) reasonable fees and disbursements of the Trustee and
its counsel and of the registrar and transfer agent for the Common Stock and
(vi) any Securities Act liability insurance obtained by the Company in its sole
discretion. In addition, the Company shall pay the internal expenses of the
Company (including, without limitation, all salaries and expenses of officers
and employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with the listing by the
Company of the Registrable Securities on any securities exchange on which
similar securities of the Company are then listed and the fees and expenses of
any person, including special experts, retained by the Company. Notwithstanding
the provisions of this Section 5, each seller of Registrable Securities shall
pay selling expenses, including any underwriting discount and commissions, and
all registration expenses to the extent required by applicable law.
15
SECTION 6. Indemnification and Contribution.
(a) Indemnification by the Company. The Company agrees to indemnify and
hold harmless each Notice Holder, each person, if any, who controls any Notice
Holder within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act, and each affiliate of any Notice Holder within the
meaning of Rule 405 under the Securities Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Holder furnished to the Company in writing by such Holder expressly for use
therein; provided that the indemnification contained in this paragraph shall not
inure to the benefit of any Holder (or to the benefit of any person controlling
such Holder) on account of any such losses, claims, damages or liabilities
caused by any untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus provided in each case the
Company has performed its obligations under Section 3(a) hereof if either (A)
(i) such Holder failed to send or deliver a copy of the Prospectus with or prior
to the delivery of written confirmation of the sale by such Holder to the person
asserting the claim from which such losses, claims, damages or liabilities 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 previously been
furnished by or on behalf of the Company with copies of the Prospectus as so
amended or supplemented, such Holder thereafter fails 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, claims, damages or liabilities arise.
(b) Indemnification by Holders. Each Holder agrees severally and not
jointly to indemnify and hold harmless the Company and its directors, its
officers and each person, if any, who controls the Company (within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act) or
any other Holder, to the same extent as the foregoing indemnity from the Company
to such Holder, but only with reference to information relating to such Holder
furnished to the Company in writing by such Holder expressly for use in such
Registration Statement or Prospectus or amendment or supplement thereto. In no
event shall the liability of any Holder hereunder be greater in amount than the
dollar amount of the proceeds received by such Holder upon the sale of the
Registrable Securities pursuant to the Registration Statement giving rise to
such indemnification obligation.
16
(c) Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to Section 6(a) or
6(b) hereof, such person (the "INDEMNIFIED PARTY") shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the reasonable fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified party shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by, in the case of
parties indemnified pursuant to Section 6(a), the Holders of a majority (with
Holders of Notes deemed to be the Holders, for purposes of determining such
majority, of the number of shares of Underlying Common Stock into which such
Notes are or would be convertible as of the date on which such designation is
made) of the Registrable Securities covered by the Registration Statement held
by Holders that are indemnified parties pursuant to Section 6(a) and, in the
case of parties indemnified pursuant to Section 6(b), the Company. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
17
(d) Contribution. To the extent that the indemnification provided for in
Section 6(a) or 6(b) is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the indemnifying party or
parties on the one hand and of the indemnified party or parties on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company shall be deemed to
be equal to the total net proceeds from the initial placement pursuant to the
Purchase Agreement (before deducting expenses) of the Registrable Securities to
which such losses, claims, damages or liabilities relate. The relative benefits
received by any Holder shall be deemed to be equal to the value of receiving
Registrable Securities that are registered under the Securities Act. The
relative fault of the Holders on the one hand and the Company on the other hand
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Holders or by
the Company, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Holders'
respective obligations to contribute pursuant to this Section 6 are several in
proportion to the respective number of Registrable Securities they have sold
pursuant to a Registration Statement, and not joint.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding this Section 6, no indemnifying party that is a selling Holder
shall be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities sold by it and distributed to
the public were offered to the public exceeds the amount of any damages that
such indemnifying party 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.
18
(e) The remedies provided for in this Section 6 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to an
indemnified party at law or in equity, hereunder, under the Purchase Agreement
or otherwise.
(f) The indemnity and contribution provisions contained in this Section 6
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Holder, any person controlling any Holder or any affiliate of any Holder or
by or on behalf of the Company, its officers or directors or any person
controlling the Company and (iii) the sale of any Registrable Securities by any
Holder.
SECTION 7. Information Requirements. The Company covenants that, if at
any time before the end of the Effectiveness Period the Company is not subject
to the reporting requirements of the Exchange Act, it will cooperate with any
Holder and take such further reasonable action as any Holder may reasonably
request in writing (including, without limitation, making such reasonable
representations as any such Holder may reasonably request), all to the extent
required from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 and Rule 144A under the Securities Act and
customarily taken in connection with sales pursuant to such exemptions. Upon the
written request of any Holder, the Company shall deliver to such Holder a
written statement as to whether it has complied with such filing requirements,
unless such a statement has been included in the Company's most recent report
filed pursuant to Section 13 or Section 15(d) of Exchange Act. Notwithstanding
the foregoing, nothing in this Section 7 shall be deemed to require the Company
to register any of its securities (other than the Common Stock) under any
section of the Exchange Act.
SECTION 8. Miscellaneous.
(a) No Conflicting Agreements. The Company is not, as of the date hereof,
a party to, nor shall it, on or after the date of this Agreement, enter into,
any agreement with respect to its securities that conflicts with the rights
granted to the Holders in this Agreement. The Company represents and warrants
that the rights granted to the Holders hereunder do not in any way conflict with
the rights granted to the holders of the Company's securities under any other
agreements.
(b) 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 Holders of a
majority of the then outstanding Underlying Common Stock constituting
Registrable Securities (with Holders of Notes deemed to be the Holders, for
purposes of this Section, of the number of outstanding shares of Underlying
Common Stock into which such Notes are or would be convertible as of the date on
which such consent is requested). Notwithstanding the foregoing, a waiver or
consent to depart from the
19
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders whose securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect the rights of other
Holders may be given by Holders of at least a majority of the Registrable
Securities being sold by such Holders pursuant to such Registration Statement;
provided that the provisions of this sentence may not be amended, modified or
supplemented except in accordance with the provisions of the immediately
preceding sentence. Notwithstanding the foregoing sentence, this Agreement may
be amended by written agreement signed by the Company and the Initial Purchaser,
without the consent of the Holders of Registrable Securities, to cure any
ambiguity or to correct or supplement any provision contained herein that may be
defective or inconsistent with any other provision contained herein, or to make
such other provisions in regard to matters or questions arising under this
Agreement that shall not adversely affect the interests of the Holders of
Registrable Securities. Each Holder of Registrable Securities outstanding at the
time of any such amendment, modification, supplement, waiver or consent or
thereafter shall be bound by any such amendment, modification, supplement,
waiver or consent effected pursuant to this Section 8(b), whether or not any
notice, writing or marking indicating such amendment, modification, supplement,
waiver or consent appears on the Registrable Securities or is delivered to such
Holder.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, by telecopier, by
courier guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day after
being deposited with such courier, if made by overnight courier or (iv) on the
date indicated on the notice of receipt, if made by first-class mail, to the
parties as follows:
(i) if to a Holder, at the most current address given by such
Holder to the Company in a Notice and Questionnaire or any amendment
thereto;
(ii) if to the Company, to:
Tekelec
26580 West Agoura Road
Calabasas, CA 91302
Attention: General Counsel
Telecopy No.: (818) 880-0176
and
Bryan Cave LLP
120 Broadway, Suite 300
Santa Monica, CA 90401
Attention: Katherine F. Ashton
20
Telecopy No.: (310) 576-2200
(iii) if to the Initial Purchaser, to:
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York
Attention: Equity Capital Markets
Telecopy No.: (212) 761-0538
or to such other address as such person may have furnished to the other persons
identified in this Section 8(c) in writing in accordance herewith.
(d) Approval of Holders. Whenever the consent or approval of Holders of a
specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its affiliates (as such term is
defined in Rule 405 under the Securities Act) (other than the Initial Purchaser
or subsequent Holders if such subsequent Holders are deemed to be such
affiliates solely by reason of their holdings of such Registrable Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.
(e) Successors and Assigns. Any person who purchases any Registrable
Securities from the Initial Purchaser shall be deemed, for purposes of this
Agreement, to be an assignee of the Initial Purchaser. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties and shall inure to the benefit of and be binding upon each Holder
of any Registrable Securities, provided that nothing herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms of the Indenture. If any transferee of any Holder
shall acquire Registrable Securities, in any manner, whether by operation of law
or otherwise, such Registrable Securities shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable Securities,
such person shall be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement and such person shall
be entitled to receive the benefits hereof.
(f) Counterparts. This Agreement may be executed in counterparts, each of
which shall be with the same effect as if the signatures thereto and hereto were
upon the same instrument.
(g) Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
21
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
(i) Severability. If any term, provision, covenant or restriction of this
Agreement is held to be invalid, illegal, 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 thereby, 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
being intended that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.
(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 Registrable Securities. Except as
provided in the Purchase Agreement, 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 respect to
the Registrable Securities. This Agreement supersedes all prior agreements and
undertakings among the parties with respect to such registration rights. No
party hereto shall have any rights, duties or obligations other than those
specifically set forth in this Agreement.
(k) Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Section 4, 5 or 6 hereof and the
obligations to make payments of and provide for liquidated damages under Section
2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
its terms.
22
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
TEKELEC
By: /s/ Frederick M. Lax
----------------------------------------
Name: Frederick M. Lax
Title: Chief Executive Officer and President
By: /s/ Paul J. Pucino
----------------------------------------
Name: Paul J. Pucino
Title: Vice President and
Chief Financial Officer
Confirmed and accepted as of
the date first above written:
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Daniel W. Shaeffer
----------------------------------
Name: Daniel W. Shaeffer
Title: Vice President