EXHIBIT 10.3
SOMNUS MEDICAL TECHNOLOGIES, INC.
RESTATED INVESTORS' RIGHTS AGREEMENT
____________________
April 21, 1997
TABLE OF CONTENTS
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Page
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1. Registration Rights................................................... -1-
1.1 Definitions..................................................... -1-
1.2 Request for Registration........................................ -2-
1.3 Company Registration............................................ -3-
1.4 Obligations of the Company...................................... -4-
1.5 Furnish Information............................................. -5-
1.6 Expenses of Demand Registration................................. -5-
1.7 Expenses of Company Registration................................ -5-
1.8 Underwriting Requirements....................................... -5-
1.9 Delay of Registration........................................... -5-
1.10 Indemnification................................................. -5-
1.11 Reports Under Securities Exchange Act of 1934................... -7-
1.12 Form S-3 Registration........................................... -8-
1.13 Assignment of Registration Rights............................... -8-
1.14 Termination of Registration Rights.............................. -9-
2. Covenants of the Company.............................................. -9-
2.1 Financial Statements and Other Information...................... -9-
2.2 Inspection of Property..........................................-10-
2.3 Right of First Offer............................................-10-
2.4 Positive Covenants..............................................-12-
2.5 Standoff Agreement..............................................-12-
3. Amendment and Restatement.............................................-12-
4. Waiver of Right of First Offer........................................-13-
5. Miscellaneous.........................................................-13-
5.1 Successors and Assigns..........................................-13-
5.2 Governing Law...................................................-13-
5.3 Counterparts....................................................-13-
5.4 Titles and Subtitles............................................-13-
5.5 Notices.........................................................-13-
5.6 Expenses........................................................-13-
5.7 Amendments and Waivers..........................................-13-
5.8 Severability....................................................-14-
5.9 Entire Agreement................................................-14-
SCHEDULES
EXHIBIT A Schedule of Investors
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RESTATED INVESTORS' RIGHTS AGREEMENT
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This RESTATED INVESTORS' RIGHTS AGREEMENT (this "Agreement") is made
as of the 21st day of April, 1997, by and among Somnus Medical Technologies,
Inc., a Delaware corporation (the "Company"), and the investors listed on
Schedule A hereto (each an "Investor" and collectively the "Investors").
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RECITALS
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WHEREAS, the Company and certain of the Investors are parties to that
certain Series B Preferred Stock Purchase Agreement dated September 11, 1996
(the "Series B Purchase Agreement") or are parties to that certain Series C
Preferred Stock Purchase Agreement dated April 21, 1997 (the "Series C Purchase
Agreement");
WHEREAS, the Company now wishes to restate the Investors' Rights
Agreement dated September 11, 1996 (the "Prior Agreement") in conjunction with
its issuance of Series C Convertible Preferred Stock;
WHEREAS, to induce one of the Investors to invest funds in the Company
pursuant to the Series C Purchase Agreement, the parties hereto intend that this
Agreement shall govern the rights of such Investor to cause the Company to
register shares of Common Stock issuable to such investor upon conversion of the
Series C Convertible Preferred Stock, and to restate the Investors' Rights
Agreement dated September 11, 1996;
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the parties hereto agree as follows:
1. Registration Rights. The Company covenants and agrees as
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follows:
1.1 Definitions. For purposes of this Section 1:
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(a) The term "Act" means the Securities Act of 1933, as amended.
(b) The term "Common Stock" means shares of the common stock of
the Company, par value $.001 per share.
(c) The term "Form S-3" means such form under the Act as in
effect on the date hereof or any registration form under the Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial
information by reference to other documents filed by the Company with the SEC.
(d) The term "Holder" means any person owning or having the right
to acquire Registrable Securities or any assignee thereof in accordance with
Section 1.13 hereof.
(e) The term "Major Holder" means any holder of at least 25,000
shares of Series B Preferred Stock or 200,000 shares of any later series of
Preferred Stock.
(f) The term "MRA Common Stock" shall mean Common Stock issued to
Musket Research Associates Inc. ("MRA") upon exercise of options or warrants
hereinafter issuable to MRA pursuant to Section 8 of that certain letter
agreement dated June 6, 1996 between MRA and the Company.
(g) The term "1934 Act" means the Securities Exchange Act of
1934, as amended.
(h) The term "Preferred Stock" means shares of the Company's
Series A Convertible Preferred Stock, par value $.001 per share, the Series B
Convertible Preferred Stock, par value $.001 per share, or the Series C
Convertible Preferred Stock, par value $.001 per share.
(i) The terms "register," "registered," "registration" and
"registration statement" refer to a registration effected by preparing and
filing a registration statement or similar document in compliance with the Act,
and the declaration or ordering of effectiveness of such registration statement
or document.
(j) The term "IPO" means the effective date of the first
registration statement for a public offering of securities of the Company (other
than a registration statement relating either to the sale of securities to
employees of the Company pursuant to a stock option, stock purchase or similar
plan or an SEC Rule 145 transaction).
(k) The term "Registrable Securities" means (i) the Common Stock
issuable or issued upon conversion of the Preferred Stock, (ii) any Common Stock
of the Company issued as (or issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a dividend or other
distribution with respect to, or in exchange for or in replacement of the Common
Stock referenced in preceding clause (i), excluding in all cases, however, any
Registrable Securities sold by a person in a transaction in which his rights
under this Section 1 are not assigned, and (iii) the MRA Common Stock.
(l) The term "SEC" shall mean the Securities and Exchange
Commission.
1.2 Request for Registration.
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(a) If the Company shall receive at any time after the earlier of
(i) December 31, 2001 or (ii) ninety (90) days after the IPO, a written request
from the Holders of securities constituting, directly or upon conversion or
exercise, at least twenty-five percent (25%) of the then Registrable Securities
that the Company file a registration statement under the Act covering the
registration of securities constituting, directly or upon conversion or
exercise, at least twenty-five percent (25%) of the then Registrable Securities,
the Company shall:
(i) within ten (10) days of the receipt thereof, give
written notice, in accordance with Section 5.5 hereof, of such request
to all Holders; and
(ii) file as soon as practicable, and in any event within
sixty (60) days of the receipt of such request, a registration
statement pertaining to all Registrable Securities which the Holders
request to be registered, subject to the limitations of Subsection
1.2(b), and use its best efforts to cause such registration statement
to become effective as soon as practicable.
(b) If the Holders initiating the registration request hereunder
(the "Initiating Holders") intend to distribute the Registrable Securities
covered by their request by means of an
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underwriting, they shall so advise the Company as a part of their request made
pursuant to Subsection 1.2(a) and the Company shall include such information in
the written notice referred to in Subsection 1.2(a)(i). The underwriter will be
selected by the Company and shall be reasonably acceptable to Initiating Holders
holding a majority of the Registrable Securities to be registered (a "majority-
in-interest" of the Initiating Holders). In such event, the right of any Holder
to include his Registrable Securities in such registration shall be conditioned
upon such Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting (unless otherwise mutually
agreed by such Holder and a majority-in-interest of the Initiating Holders) to
the extent provided herein. All Holders proposing to distribute their securities
through such underwriting shall (together with the Company as provided in
Subsection 1.4(e)) enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting. Notwithstanding
any other provision of this Section 1.2, if the underwriter advises the
Initiating Holders in writing that marketing factors require a limitation of the
number of shares to be underwritten, then the Initiating Holders shall so advise
all Holders of Registrable Securities which would otherwise be underwritten
pursuant hereto, and the number of shares of Registrable Securities that may be
included in the underwriting shall be allocated among all Holders thereof,
including the Initiating Holders, in proportion (as nearly as practicable) to
the amount of Registrable Securities owned by each Holder; provided, however,
that the number of shares of Registrable Securities to be included in such
underwriting shall not be reduced unless all other securities are first entirely
excluded from the underwriting.
(c) Notwithstanding the foregoing, if the Company shall furnish
to the Initiating Holders a certificate signed by the Chief Executive Officer of
the Company stating that, in the good faith judgment of the Board of Directors
of the Company, it would be seriously detrimental to the Company and its
stockholders for such registration statement to be filed and it is therefore
essential to defer the filing of such registration statement, the Company shall
have the right to defer taking action with respect to such filing for a period
of not more than 60 days after receipt of the request of the Initiating Holders;
provided, however, that the Company may not utilize this right more than once in
any 12 month period.
(d) In addition, the Company shall not be obligated to effect, or
to take any action to effect, any registration pursuant to this Section 1.2:
(i) After the Company has effected two (2) registrations
pursuant to this Section 1.2, excluding any registrations effected on
Form S-3, and such registrations have been declared or ordered
effective;
(ii) If the Initiating Holders propose to dispose of shares
of Registrable Securities that may be immediately registered on Form
S-3 pursuant to a request made pursuant to Section 1.12 below; or
(iii) If the Company delivers to the Initiating Holders an
opinion, in form and substance acceptable to such Initiating Holders,
of counsel satisfactory to the Initiating Holders that the Registrable
Securities requested to be registered by the Initiating Holders may be
sold or transferred pursuant to Rule 144(k) of the Act.
1.3 Company Registration. If (but without any obligation to do so)
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the Company proposes to register (including for this purpose a registration
effected by the Company for its stockholders other than the Holders) any of its
stock or other securities under the Act in connection with a public offering of
such securities (other than a registration relating solely to the sale of
securities to participants in a Company stock plan, a registration relating
solely to a Rule 145 transaction, a registration on any form which does not
include substantially the same information as would be required to be included
in a registration statement covering the sale of the Registrable Securities or a
registration in which the only Common Stock
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being registered is Common Stock issuable upon conversion of debt securities
which are also being registered), the Company shall, at such time, promptly give
each Holder written notice of such registration in accordance with Section 5.5.
Upon the written request of each Holder to the Company given within twenty (20)
days following receipt of such notice by the Company, the Company shall, subject
to the provisions of Section 1.8, cause to be registered under the Act all of
the Registrable Securities that each such Holder has requested to be registered.
1.4 Obligations of the Company. Whenever required under this
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Section 1 to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and keep such registration statement
effective for a period of up to 120 days or until the distribution contemplated
in the Registration Statement has been completed, whichever first occurs;
provided, however, that such 120 day period shall be extended for a period of
time equal to the period the Holder refrains from selling any securities
included in such registration at the request of an underwriter of any securities
of the Company, and provided further that in the case of any registration of
Registrable Securities on Form S-3 that are intended to be offered on a
continuous or delayed basis, such 120 day period shall be extended until all
such Registrable Securities are sold, if applicable rules under the Act
governing the obligation to file a post-effective amendment permit, in lieu of
filing a post-effective amendment which (i) includes any prospectus required by
Section 10(a)(3) of the Act or (ii) reflects facts or events representing a
material or fundamental change in the information set forth in the registration
statement, the incorporation by reference of information required to be included
in (i) and (ii) above to be contained in periodic reports filed pursuant to
Section 13 or 15(d) of the 1934 Act in the registration statement.
(b) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with such
registration statement as, in the opinion of counsel to the Company, may be
necessary to comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration statement.
(c) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders;
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions, unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Act.
(e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then
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in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing.
(g) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange (or on the Nasdaq Stock
Market, as the case may be) on which similar securities issued by the Company
are then listed.
(h) Provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration.
1.5 Furnish Information. It shall be a condition precedent to the
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obligations of the Company to take any action pursuant to this Section 1 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities.
1.6 Expenses of Demand Registration. All expenses other than
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underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 1.2, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company and the
reasonable fees and disbursements of one counsel for the selling Holders shall
be borne by the Company.
1.7 Expenses of Company Registration. The Company shall bear and
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pay all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 1.3 for each Holder, including (without limitation) all
registration, filing, and qualification fees, printers' and accounting fees
relating or apportionable thereto and the reasonable fees and disbursements of
one counsel for the selling Holders, but excluding underwriting discounts and
commissions relating to Registrable Securities.
1.8 Underwriting Requirements. In connection with any offering
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involving an underwriting of shares of the Company's capital stock, the Company
shall not be required under Section 1.3 to include any of a Holder's securities
in such underwriting unless such Holder accepts the terms of the underwriting as
agreed upon between the Company and the underwriters selected by it (or by other
persons entitled to select the underwriters), and then only in such quantity as
the underwriters determine in their sole discretion will not jeopardize the
success of the offering by the Company. If the total amount of securities,
including Registrable Securities, requested by stockholders to be included in
such offering exceeds the amount of securities sold other than by the Company
that the underwriters determine in their sole discretion is compatible with the
success of the offering, then the Company shall be required to include in the
offering only that number of such securities, including Registrable Securities,
which the underwriters determine in their sole discretion will not jeopardize
the success of the offering (the securities so included to be apportioned pro
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rata among the Holders according to the total amount of Registrable Securities
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entitled to be included therein owned by each Holder or in such other
proportions as shall mutually be agreed to by the Holders); provided, however,
that the number of shares of Registrable Securities to be included in such
underwriting shall not be so reduced unless the securities of other selling
stockholders are first entirely excluded from the underwriting. For purposes of
the preceding parenthetical concerning apportionment, for any Holder that is a
partnership or corporation, the partners, retired partners and stockholders of
such Holder, or the estates and family members of any such partners and retired
partners and any trusts for the benefit of any of the foregoing persons shall be
deemed to be a single Holder, and any pro rata reduction with respect
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to such Holder shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
Holder, as defined in this sentence.
1.9 Delay of Registration. No Holder shall have any right to obtain
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or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 1.
1.10 Indemnification. In the event any Registrable Securities are
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included in a registration statement under this Section 1:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Holder, the officers and directors of each Holder
participating in such registration, any underwriter (as defined in the Act) for
such Holder and each person, if any, who controls such Holder or underwriter
within the meaning of the Act or the 1934 Act, against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Act, or the 1934 Act, or otherwise insofar as such losses, claims,
damages, or liabilities (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or violations
(collectively a "Violation"): (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Act, the 1934 Act, or any rule or regulation
promulgated under the Act, or the 1934 Act, and the Company will pay to each
such Holder, underwriter or controlling person, as incurred, any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this Subsection 1.10(a) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability,
or action if such settlement is effected without the consent of the Company,
which consent shall not be unreasonably withheld, nor shall the Company be
liable in any such case for any such loss, claim, damage, liability, or action
to the extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by any such Holder, underwriter or
controlling person.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each person, if any, who
controls the Company within the meaning of the Act, any underwriter, any other
Holder selling securities in such registration statement and any controlling
person of any such underwriter or other Holder, against any losses, claims,
damages, or liabilities (joint or several) to which any of the foregoing persons
may become subject, under the Act, or the 1934 Act, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereto) arise out of or
are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder expressly for use in connection
with such registration; and each such Holder will pay, as incurred, any legal or
other expenses reasonably incurred by any person intended to be indemnified
pursuant to this Subsection 1.10(b), in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided, however,
that the indemnity agreement contained in this Subsection 1.10(b) shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Holder,
which consent shall not be unreasonably withheld; provided, that, in no event
shall any selling Holder's liability under this Subsection 1.10(b) exceed the
proceeds received by such Holder from the offering (net of any underwriting
discounts and commissions).
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(c) Promptly after receipt by an indemnified party under this
Section 1.10 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 1.10, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
1.10, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 1.10.
(d) If the indemnification provided for in this Section 1.10 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) The obligations of the Company and Holders under this Section
1.10 shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 1, and otherwise.
1.11 Reports Under Securities Exchange Act of 1934. With a view to
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making available to the Holders the benefits of Rule 144 promulgated under the
Act and any other rule or regulation of the SEC that may at any time permit a
Holder to sell securities of the Company to the public without registration or
pursuant to a registration on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, at all times after the effective
date of the IPO;
(b) use their best efforts to take such action as is necessary to
enable the Holders to utilize Form S-3 pursuant to Section 1.12 for the sale of
their Registrable Securities, such action to be taken concurrently with the IPO;
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(c) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(d) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of SEC Rule 144 (at
any time after the effective date of the IPO), the Act and the 1934 Act (at any
time after it has become subject to such reporting requirements), (ii) a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (iii) such other information as may
be reasonably requested in availing any Holder of any rule or regulation of the
SEC which permits the selling of any such securities without registration or
pursuant to such form.
1.12 Form S-3 Registration. In case the Company shall receive at any
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time after the completion of the IPO, a written request from the Holders of
securities constituting, directly or upon conversion or exercise, at least one
percent (1%) of the then Registrable Securities, that the Company effect a
registration on Form S-3 and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Holder or
Holders, the Company will:
(a) promptly give written notice pursuant to Section 5.5 of the
proposed registration, and any related qualification or compliance, to all other
Holders; and
(b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holders'
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within
twenty (20) days following receipt of notice from the Company; provided,
however, that the Company shall not be obligated to effect any such
registration, qualification or compliance, pursuant to this Section 1.12: (i) if
the Holder or Holders requesting registration do not propose to dispose of
shares of Registrable Securities which they reasonably anticipate will have an
aggregate disposition price (before deduction of underwriting discounts and
expenses of sale) of at least one million dollars ($1,000,000); (ii) if Form S-3
is not available for such offering by the Holders; (iii) if the Company shall
furnish to the Holders a certificate signed by the President of the Company
stating that, in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its stockholders
for such Form S-3 registration to be effected at such time, in which event the
Company shall have the right to defer the filing of the Form S-3 registration
statement for a period of not more than 60 days after receipt of the request of
the Holder or Holders under this Section 1.12; provided, however, that the
Company shall not utilize this right more than once in any 12 month period; (iv)
if the Company has already effected four registrations on Form S-3, or any
equivalent successor form, for the Holders pursuant to this Section 1.12; or (v)
in any particular jurisdiction in which the Company would be required on account
of such registration, qualification or compliance to qualify to do business or
to execute a general consent to service of process.
(c) Subject to the foregoing, the Company shall file a
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. All expenses incurred in connection with a
registration requested pursuant to this Section 1.12, including, without
limitation, all registration, filing, qualification, printers' and accounting
fees and the reasonable fees and disbursements of one counsel for the selling
Holder or Holders and counsel for the Company, but excluding any underwriting
discounts or commissions associated with Registrable Securities, shall be borne
by the Company. Registrations effected pursuant to this Section 1.12 shall not
be counted as registrations effected pursuant to Sections 1.2 or 1.3.
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(d) The Company shall not be obligated to effect any registration
pursuant to this Section 1.12 if the Company delivers to the Holders requesting
registration under this Section 1.12 an opinion, in form and substance
acceptable to such Holders, of counsel satisfactory to such Holders, that the
Registrable Securities so requested to be registered may be sold or transferred
pursuant to Rule 144(k) under the Act.
1.13 Assignment of Registration Rights. The rights to cause the
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Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to any partner or
stockholder of such Holder or, in the case of a Holder that is an investment
company registered under the Investment Company Act of 1940, to another such
investment company (a "Related Mutual Fund") that has the same investment
advisor as the transferring investment company, without restriction or
requirement as to number of shares, or to a transferee or assignee of such
securities who, as a result of such assignment or transfer, acquires at least
25,000 of such transferring Holder's shares of Registrable Securities (subject
to appropriate adjustment for stock splits, stock dividends, combinations,
recapitalizations and any similar events), provided: (a) the Company is, within
a reasonable time after such transfer, furnished with written notice of the name
and address of such transferee or assignee and the securities with respect to
which such registration rights are being assigned; (b) such transferee or
assignee agrees in writing to be bound by and subject to the terms and
conditions of this Agreement, including without limitation the provisions of
Section 1.14 below; and (c) such assignment shall be effective only if
immediately following such transfer the further disposition of such securities
by the transferee or assignee is restricted under the Act.
1.14 Termination of Registration Rights. No Holder shall be entitled
----------------------------------
to exercise any right provided for in this Section 1 after five (5) years
following the consummation of the sale of the Company's securities pursuant to a
registration statement filed by the Company under the Act in connection with a
firm commitment underwritten offering of its securities to the general public
resulting in gross proceeds to the Company of at least $15,000,000 and at a
price per share to the public of at least $6.00 (as adjusted for stock splits,
combinations and similar transactions) (a "Qualified Public Offering").
2. Covenants of the Company.
------------------------
2.1 Financial Statements and Other Information. Except as otherwise
------------------------------------------
set forth below in this Section 2.1, until the Company is subject to the
reporting requirements of the 1934 Act, the Company will deliver to each Major
Holder:
(a) as soon as available, but in any event within 30 days, after
the end of each quarterly accounting period in each fiscal year, unaudited
consolidated statements of operations and cash flows of the Company and its
subsidiaries for such quarterly period and for the period from the beginning of
the fiscal year to the end of such quarter, and consolidated balance sheets of
the Company and its subsidiaries as of the end of such quarterly period, setting
forth in each case comparisons to the annual budget and to the corresponding
period in the preceding fiscal year, all such statements to be prepared in
accordance with generally accepted accounting principles, consistently applied
(except for the absence of notes and subject to normal year-end audit
adjustments);
(b) as promptly as possible, but in any event within 90 days,
after the end of each fiscal year, consolidated statements of operations and
cash flows of the Company and its subsidiaries for such fiscal year, and a
consolidated balance sheet and statement of stockholders' equity of the Company
and its subsidiaries as of the end of such fiscal year, setting forth
comparisons to the annual budget and to the preceding fiscal year, all prepared
in accordance with generally accepted accounting principles, consistently
applied, and accompanied by an unqualified opinion (except for qualifications
regarding
-9-
specified contingent liabilities) of an independent accounting firm selected by
the Company's Board of Directors;
(c) prior to the end of each fiscal year, an annual budget
(approved by the Board of Directors) prepared on a monthly, consolidated basis
for the Company and its subsidiaries for the succeeding fiscal year (displaying
detailed anticipated statements of operations and cash flows and balance
sheets), and promptly upon preparation thereof any other significant budgets
which the Company prepares and any revisions of such annual or other budgets;
(d) promptly (and in any event within 30 days) after the
discovery or receipt of notice of any event or circumstance affecting the
Company or its subsidiaries that is determined in good faith by the Company to
be material to the Company and its subsidiaries, taken as a whole, including,
but not limited to, the filing of any material litigation against the Company or
its subsidiaries, acquisitions, mergers, substantial sales of assets,
significant regulatory or legal developments, the commencement of voluntary or
involuntary bankruptcy proceedings, natural or other disasters, significant
changes in management or directors, changes in auditors, and execution or
termination of, or defaults under, material contracts, a letter from the Chief
Executive Officer or Chief Financial Officer of the Company specifying the
nature and period of existence thereof and, in the case of material litigation,
what actions the Company and its subsidiaries have taken and propose to take
with respect thereto;
(e) promptly after transmission thereof, copies of all financial
statements, proxy statements, reports and any other written communications which
the Company sends to its stockholders generally and copies of all registration
statements and all regular, special or periodic reports which it files with the
SEC or with any securities exchange on which any of its securities are then
listed, and copies of all press releases and other statements made available
generally by the Company to the public;
(f) a notice specifying the terms of all sales of the Company's
securities, promptly following the consummation thereof;
(g) within fifteen (15) days after the end of each month, an
income statement for such month and a balance sheet of the Company for and as of
the end of such month, together with such other business and financial data as
may be reasonably requested by each Investor; and
(h) notice of the effectiveness under the Act of the registration
covering the Company's IPO, such notice to be provided by telecopier immediately
following the SEC's notification to the Company of such effectiveness.
Each of the financial statements referred to in this Section 2.1 shall
be true and correct in all material respects and shall fairly present the
Company's consolidated financial position and results of operations as of the
dates and for the periods stated therein, subject in the case of the unaudited
financial statements to changes resulting from normal year-end audit adjustments
(none of which would, alone or in the aggregate, be materially adverse to the
Company's financial condition, operating results or business prospects). The
Company's obligation to provide to the Major Holders the materials described in
Subsection (e) above will continue after the Company is subject to the reporting
requirements of the 1934 Act.
2.2 Inspection of Property. Until the Company is subject to the
----------------------
reporting requirements of the 1934 Act, the Company will permit each Holder, or
any representative designated by a Holder, upon reasonable notice and during
normal business hours or at such other times as such Holder may reasonably
request, to (a) visit and inspect any of the properties of the Company and its
subsidiaries, (b) examine the
-10-
corporate and financial records of the Company and its subsidiaries and make
copies thereof or extracts therefrom, (c) discuss the affairs, finances and
accounts of the Company and its subsidiaries with the directors, senior
management and independent accountants of the Company and its subsidiaries, and
(d) consult with and advise the management of the Company and its subsidiaries
as to their affairs, finances and accounts, provided, however, that the Company
shall not be obligated to provide any information that it considers in good
faith to be a trade secret or to contain confidential or classified information
unless such Investor is a member of the Company's Board of Directors or agrees
to execute a reasonable covenant or agreement regarding the maintenance of the
confidentiality of such information.
2.3 Right of First Offer. Subject to the terms and conditions
--------------------
specified in this Section 2.3, the Company hereby grants to each Major Holder a
right of first offer with respect to future sales by the Company of its Shares
(as hereinafter defined). A Major Holder shall be entitled to apportion the
right of first offer hereby granted it among itself and its partners and
affiliates and, in the case of a Major Holder that is a registered investment
company, among itself and its Related Mutual Funds, in such proportions as it
deems appropriate.
Each time the Company proposes to offer any shares of, or securities
convertible into or exercisable for any shares of, any class of its capital
stock ("Shares"), the Company shall first make an offering of such Shares to
each Major Holder in accordance with the following provisions:
(a) The Company shall give notice to all Major Holders stating
(i) its bona fide intention to offer such Shares, (ii) the number of such Shares
to be offered, and (iii) the price and terms, if any, upon which it proposes to
offer such Shares.
(b) By written notice to the Company, within 20 calendar days
after giving of the Company's Notice, the Major Holder may elect to purchase or
obtain, at the price and on the terms specified in the Notice, up to that
portion of such Shares which equals the proportion that the number of shares of
Common Stock issued and held and issuable upon conversion of the Series B and
Series C Preferred Stock then held by such Major Holder bears to the total
number of shares of Common Stock of the Company then outstanding (assuming full
conversion of all convertible securities) ("Pro Rata Share"). To the extent a
Major Holder does not elect to purchase or obtain the full amount of its Pro
Rata Share, the unsubscribed portion of such Major Holder's Pro Rata Share may
be purchased or obtained by any other Major Holder(s), on a pro rata basis, at
--- ----
the price and on the terms specified in the Company's notice, provided that such
purchase shall be consummated within forty-five (45) days after giving of such
notice.
(c) If all Shares referred to in the Notice which Major Holders
are entitled to obtain pursuant to Subsection 2.3(b) are not elected to be
obtained as provided in Subsection 2.3(b) hereof, the Company may, during the 60
day period following the expiration of the period provided in Subsection 2.3(b)
hereof, offer the remaining unsubscribed portion of such Shares to any person or
persons at a price not less than, and upon terms no more favorable to the
offeree than those specified in the Notice. If the Company does not enter into
an agreement for the sale of the Shares within such period, or if such agreement
is not consummated within thirty (30) days of the execution thereof, the rights
provided to Major Holders hereunder shall be deemed to be revived and such
Shares shall not be offered unless first reoffered to the Major Holders in
accordance herewith.
(d) The right of first offer in this Section 2.3 shall not be
applicable to:
(i) shares of Common Stock issuable or issued to employees,
advisors, consultants or outside directors of the Company directly or
pursuant to a stock option plan or restricted stock plan approved by
the Board of Directors of the Company;
-11-
(ii) Common Stock issued or issuable upon conversion of the
Company's Preferred Stock; or
(iii) Common Stock issued or issuable in connection with a
merger, acquisition or consolidation as a result of which the holders
of the Company's outstanding securities immediately prior to the
consummation of such transaction hold securities in excess of fifty
percent (50%) of the voting power of the surviving or resulting
entity.
(e) The right of first offer set forth in this Section 2.3 may
not be assigned or transferred, except that (i) such right is assignable by each
Holder to any wholly-owned subsidiary or parent of, or to any corporation or
entity that is, within the meaning of the Act, controlling, controlled by or
under common control with, any such Holder and (ii) such right may be assigned
by an Investor that is a registered investment company to a Related Mutual Fund.
(f) The right of first offer set forth in this Section 2.3 are
hereby made subject and subordinate to the rights of first offer granted to the
Investor in the Series C Purchase Agreement.
2.4 Positive Covenants. As soon as practicable following execution
------------------
of this Agreement, and so long as any shares of the Series B Preferred Stock or
the Series C Preferred Stock are outstanding, the Company agrees as follows:
(a) The Company will retain independent public accountants of
recognized national standing who shall certify the Company's financial
statements at the end of each fiscal year. In the event the services of the
independent public accountants so selected, or any firm of independent public
accountants hereafter employed by the Company are terminated, the Company will
promptly thereafter notify the Holders and will request the firm of independent
public accountants whose services are terminated to deliver to the Holders a
letter from such firm setting forth the reasons for the termination of their
services. In the event of such termination, the Company will promptly
thereafter engage another firm of independent public accountants of recognized
national standing. In its notice to the Holders the Company shall state whether
the change of accountants was recommended or approved by the Board of Directors
of the Company or any committee thereof.
(b) The Company will cause senior management personnel and key
employees now or hereafter employed by it or any subsidiary to enter into a
proprietary information and inventions agreement.
(c) The Company's Board of Directors will meet at least once
every fiscal quarter.
(d) The Company shall, promptly following the date of this
Agreement, obtain, and thereafter maintain in full force and effect, fire,
casualty, workmen's compensation and liability insurance policies, with extended
coverage, in such amounts and with such coverage as are carried by companies in
a position similar to that of the Company.
(e) The Company will, in good faith, continue its search for
qualified individuals to be employed as the Company's Chief Executive Officer
and Chief Financial Officer. Any candidate selected by the Company, and the
terms of his or her employment, shall be approved by a majority of the Company's
Board of Directors, and a majority of the non-employee directors.
-12-
(f) At the Company's next Board of Directors meeting, the Company
shall establish (i) an Executive Search Committee, consisting of βββββ ββββββββ,
ββββββ βββββββ and βββββ ββββββ, which will oversee the Company's search for
qualified individuals to be employed as the Company's Chief Executive Officer
and Chief Financial Officer and (ii) a Compensation Committee, consisting of
ββββββ βββββββ βββββ βββββββββββ and βββββ ββββββ with the responsibility of
reviewing and providing prior approval of all future offers of options to
purchase stock under the Company's Stock Option Plan.
2.5 Standoff Agreement. Each Holder agrees, in connection with the
------------------
Company's IPO, not to sell, make any short sale of, pledge, grant any option for
the purchase of, or otherwise dispose of any Registrable Securities (other than
those included in such registration) without the prior written consent of the
Company or the underwriters of such IPO for such period of time as may be
required by such underwriters (not to exceed one hundred eighty (180) days) from
the effective date of such registration; provided, that the officers, directors
of the Company who own the Company's capital stock and the holders of 5% or more
of the Company's capital stock are also subject to such restrictions.
3. Amendment and Restatement. This Agreement amends and restates
-------------------------
the Investors' Rights Agreement originally dated September 11, 1996 effective
upon the date this Agreement has been executed by the Company and the Holders of
securities constituting, directly or upon conversion or exercise, two-thirds of
the Registrable Securities thereunder.
4. Waiver of Right of First Offer. Each Major Holder under the
------------------------------
Prior Agreement shall be deemed to have waived and hereby waives its right of
first offer with regard to the issuance of the Series C Preferred Stock being
issued under the Series C Agreement.
5. Miscellaneous.
-------------
5.1 Successors and Assigns. Except as otherwise provided herein,
----------------------
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any shares of Registrable Securities). Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
5.2 Governing Law. This Agreement shall be governed by and
-------------
construed under the laws of the State of California, without reference to the
conflicts of laws provisions thereof.
5.3 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.4 Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
5.5 Notices. Unless otherwise provided, any notice required or
-------
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or four (4)
days after deposit with the United States Post Office or air courier in the case
of non-U.S. parties, by registered or certified mail, postage prepaid and
addressed to the party to be notified at the address indicated for such party on
the signature page hereof, or at such other address as such party may designate
by 10 days' advance written notice to the other parties.
-13-
5.6 Expenses. If any action at law or in equity is necessary to
--------
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
5.7 Amendments and Waivers. Any term of this Agreement may be
----------------------
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holders of
securities constituting, directly or upon conversion or exercise, at least sixty
percent (60%) of the then Registrable Securities, except Section 2.3, the terms
of which may be amended and the observance of any term of which may be waived
with the written consent of the Company and Major Holders holding securities
constituting, directly or upon conversion or exercise, at least sixty percent
(60%) of the then Registrable Securities of all Major Holders. Any amendment or
waiver effected in accordance with this Section 5.7 shall be binding upon each
Holder of any securities constituting, directly or upon conversion or exercise,
Registrable Securities. Notwithstanding the foregoing, no amendment or waiver
that adversely affects any rights for certain Registrable Securities of certain
Holders of Registrable Securities (but does not so equally affect all other
securities constituting Registrable Securities) or that alters any special
rights and privileges for such certain Registrable Securities or of such Holders
will be effective or binding unless it is approved by at least sixty percent
(60%) of the Registrable Securities adversely affected.
5.8 Severability. If one or more provisions of this Agreement are
------------
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
5.9 Entire Agreement. This Agreement constitutes the full and
----------------
entire understanding and agreement between the parties with regard to the
subjects hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
SOMNUS MEDICAL TECHNOLOGIES, INC.
βββ β. βββββ ββββ
βββββββββ, ββββββββββ βββββ
By: /s/ ββββββ β. βββββββ
------------------------------------
ββββββ β. βββββββ, President
and Chief Executive Officer
-14-
INVESTORS:
/s/ ββββββ ββββββββ
-------------------------------
ββββββ ββββββββ, M.D.
/s/ Theo. β. ββββββ
-------------------------------
ββββββββ β. ββββββ
/s/ ββββββββ β. ββββββββ for
-------------------------------
ββββββ β. ββββ (Power of Attorney)
-------------------------------
ββββββ β. ββββ
/s/ βββββ β. βββββββββ
-------------------------------
βββββ β. βββββββββ
B & D PARTNERS
BY: /s/ ββββ ββββββββ
----------------------------
NAME: ββββ ββββββββ
--------------------------
TITLE: General Partner
-------------------------
CARDIOVASCULAR MEDICINE AND
CORONARY INTERVENTIONS 401(K)
SAVINGS PLAN FBO DR. ββββββ
βββββββ
BY: /s/ βββββ βββββββ
----------------------------
NAME: βββββ βββββββ
--------------------------
TITLE: Trustee
-------------------------
/s/ ββββββ β. ββββββββ
-------------------------------
ββββββ ββββββββ
CMCA PROFIT SHARING PLAN
BY: /S/ βββββ ββββββ
----------------------------
NAME:
--------------------------
TITLE: Trustee
-------------------------
-------------------------------
βββββββββββ β. COMFORT, D.D.S.
/s/ βββββββ ββββββββββ
-------------------------------
βββββββ ββββββββββ, M.D.
/s/ ββββββ β. βββββββ
-------------------------------
ββββββ β. βββββββ
/s/ ββββββ β. ββββ
-------------------------------
ββββββ β. ββββ
ES PARTNERS
BY: /s/ ββββ ββββββββ
----------------------------
NAME: ββββ ββββββββ
--------------------------
TITLE: Managing General Partner,
-------------------------
President of Easton Capital Corp.
---------------------------------
/s/ ββββ β. ββββ
-------------------------------
ββββ β. ββββ
/s/ ββββ Fast
-------------------------------
ββββ FAST
/s/ βββββ β. ββββββββ
-------------------------------
βββββ β. ββββββββ
THE βββββββ FAMILY
REVOCABLE TRUST DATED 9/14/71,
AS AMENDED AND RESTATED
8/14/91
BY: /s/ ββββββ β. βββββββ
----------------------------
NAME:
--------------------------
TITLE: Trustee
-------------------------
/s/ βββββββ βββββ
-------------------------------
βββββββ βββββ
/s/ E. βββ ββββββ
-------------------------------
E. βββ ββββββ
GBP TRUST
BY: /s/ G. B. βββββ
----------------------------
NAME: G. B. βββββ
--------------------------
TITLE: Trustee
-------------------------
/s/ βββββββ β. ββββββββ
-------------------------------
βββββββ β. ββββββββ
/s/ ββββββββ β. ββββββββ for
-------------------------------
βββββββββ β. ββββββββ (Power of Attorney)
-----------------------------------------
βββββββββ β. ββββββββ
/s/ ββββββββ β. ββββββββ
-------------------------------
ββββββββ β. ββββββββ AS
CUSTODIAN FOR ββββββ β.
ββββββββ
/s/ ββββββββ ββββββββ
-------------------------------
ββββββββ ββββββββ
/s/ βββββββ β. ββββββββ
-------------------------------
βββββββ β. ββββββββ
/s/ βββββββ ββββββββββ
-------------------------------
βββββββ ββββββββββ
/s/ ββββββ β. ββββββββββ
-------------------------------
ββββββ β. ββββββββββ
/s/ ββββββ ββββ, TTEE
-------------------------------
ββββββ ββββ, AS TRUSTEE OF
THE ββββ FAMILY TRUST U/A/D
8/3/89
/s/ ββββββ β. ββββββββ
-------------------------------
ββββββ β. ββββββββ
HPB ASSOCIATES, L.P.
By: /s/ ββββββ β. βββββββββ
----------------------------
Name: ββββββ β. βββββββββ
--------------------------
Title: Sr. Managing Member of the
-------------------------------
General Partner, HPB Group, LLC
-------------------------------
ββββββ β. βββββββ, M.D. AND
ββββ β. ββββ, M.D. MONEY
PENSION PLAN
BY: /s/ ββββββ β. βββββββ
----------------------------
NAME: ββββββ β. βββββββ
-------------------------
TITLE: Trustee
-------------------------
/s/ βββββββ β. βββββ
-------------------------------
βββββββ β. βββββ, M.D.
/s/ βββββββ β. βββ
-------------------------------
βββββββ β. βββ
/s/ ββββββ β. βββ
-------------------------------
ββββββ β. βββ
/s/ ββββ βββββββ
-------------------------------
ββββ βββββββ
-------------------------------
βββββ βββββββ, M.D.
/s/ βββββββββ βββββββββ
-------------------------------
βββββββββ βββββββββ
/s/ βββββββ βββββββββ
-------------------------------
βββββββ βββββββββ
THE MARCUS FAMILY TRUST
DATED 7/14/93
BY: /s/ ββββββ β. ββββββ
----------------------------
NAME: ββββββ β. ββββββ
-------------------------
TITLE: Trustee
------------------------
/s/ J. βββββ βββββββ
-------------------------------
J. βββββ βββββββ
/s/ βββββββ ββββ
-------------------------------
βββββββ ββββ
MEDCAP I. CORP.
BY: /s/ βββββ β. ββββββ
---------------------------
NAME: βββββ β. ββββββ
-------------------------
TITLE: Managing Member
------------------------
MEDTRONIC ASSET
MANAGEMENT, INC.
BY: /s/ βββββββ β. βββββββ
----------------------------
NAME: βββββββ β. βββββββ
--------------------------
TITLE: Vice President
-------------------------
ββββ FOREST VENTURE VI
BY: /s/ βββββ β. ββββββββββ, ββ.
----------------------------
NAME: βββββ β. ββββββββββ, ββ.
--------------------------
TITLE: Venture Manager
-------------------------
/s/ βββββββ ββββββ
-------------------------------
βββββββ ββββββ
/s/ βββββ β. ββββββ
-------------------------------
βββββ β. ββββββ
OCH-ZIFF CAPITAL MANAGEMENT
BY: /s/ ββββββ β. Och
----------------------------
NAME: ββββββ β. Och
--------------------------
TITLE: Managing Member
-------------------------
/s/ ββββββ β. ββββ
-------------------------------
ββββββ β. ββββ
βββββββ βββββββ βββ
BY: /s/ βββββββ β. βββββββ
----------------------------
NAME: βββββββ β. βββββββ
--------------------------
TITLE:
-------------------------
THE PHOENIX INSURANCE
COMPANY
BY: /s/ βββββ β. ββββββββ
----------------------------
NAME: βββββ β. ββββββββ
--------------------------
TITLE: Second Vice President
-------------------------
PIRATE SHIP & CO.
BY THE GLOBAL HEALTH
SCIENCES FUND
BY: /s/ ββββ β. βββββ
----------------------------
NAME: ββββ β. βββββ
--------------------------
TITLE: Secretary
-------------------------
PROMED PARTNERS, L.P.
BY: /s/ βββββ β. ββββββ
----------------------------
NAME: βββββ β. ββββββ
--------------------------
TITLE: Managing Member
-------------------------
RIVER EDGE PARTNERS, INC.
BY: /s/ β. β. Ciffilillo
----------------------------
NAME: β. β. Ciffilillo
--------------------------
TITLE: President
-------------------------
/s/ βββββββ ββββ
-------------------------------
βββββββ ββββ
ββββββββ βββββββ βββ
BY: /s/ ββββββββ ββββββββ
----------------------------
NAME: ββββββββ ββββββββ
--------------------------
TITLE:
-------------------------
/s/ ββββββ β. and βββββ βββ ββββββββ
-------------------------------
ββββββ β. AND βββββ βββ
ββββββββ
THE ββββββββ FAMILY TRUST
U/D/T DTD 8/15/90
BY: /s/ βββββββ β. ββββββββ, ββ.
----------------------------
NAME:
--------------------------
TITLE: Trustee
-------------------------
/s/ βββββββ β. ββββββββ, ββ.
-------------------------------
βββββββ β. ββββββββ, ββ.
/s/ βββββ β. ββββββββ
-------------------------------
βββββ β. ββββββββ
THIRD POINT PARTNERS
BY: /s/ βββ ββββ
----------------------------
NAME: βββ ββββ
--------------------------
TITLE: Managing Member
-------------------------
THE TRAVELERS INDEMNITY
COMPANY
BY: /s/ βββββ β. ββββββββ
----------------------------
NAME: βββββ β. ββββββββ
--------------------------
TITLE: Second Vice President
-------------------------
THE TRAVELERS INSURANCE
COMPANY
BY: /s/ βββββ β. ββββββββ
----------------------------
NAME: βββββ β. ββββββββ
--------------------------
TITLE: Second Vice President
-------------------------
THE TRAVELERS LIFE AND
ANNUITY COMPANY
BY: /s/ βββββ β. ββββββββ
----------------------------
NAME: βββββ β. ββββββββ
--------------------------
TITLE: Second Vice President
-------------------------
VIKING MEDICAL VENTURES LTD.
BY: /s/ βββββββ β. βββββββ
----------------------------
NAME: βββββββ β. βββββββ
--------------------------
TITLE: Director
-------------------------
/s/ βββββ ββββββ
-------------------------------
βββββ ββββββ
β. ββββββ, β. ββββ, β. βββββ, β.
ββββββββ & β. βββββ TTEE
CARD MED & CARD PSP
U/A DTD 9/1/84 FBO. β.
ββββββ
BY: /s/ β. ββββββ
------------------------------------
NAME:
----------------------------------
TITLE: Trustee
---------------------------------
WS INVESTMENTS 96A
BY: /s/ ββββ βββ βββββββ
------------------------------------
NAME: ββββ βββ βββββββ
----------------------------------
TITLE: Acting Administration
---------------------------------
WSGR RETIREMENT PLAN FBO J.
βββββ βββββββ
BY: /s/ β.β. βββββββ /s/ β.β. ββββββ
------------------------------------
NAME: β.β. βββββββ & β.β. ββββββ
----------------------------------
TITLE: Trustee, WSGR Retirement Plan
---------------------------------
WTI VENTURES
BY: /s/ S. βββββ βββββββ
------------------------------------
NAME: S. βββββ βββββββ
----------------------------------
TITLE: Gen. Part.
---------------------------------
---------------------------------------
βββββ β. βββββββββ, M.D.
EXHIBIT A
---------
SCHEDULE OF INVESTORS
I. SERIES A PREFERRED STOCK INVESTORS SHARES PURCHASED
ββββ β. ββββββ 50,000
βββ ββββ βββββ ββββ
βββ βββββ, ββ βββββ
ββββββ β. ββββ 12,500
c/o ββββββββ ββββββββ
ββββ ββββββ ββββ
βββββββ βββββ, ββ βββββ
β. ββββββ, β. ββββ, β. βββββ, β. ββββββββ & 50,000
β. βββββ, TTEE CARD MED & CARD PSP U/A
dtd 9/1/84 fbo β. ββββββββ
βββ βββββ ββββ, βββββ βββ
ββββ ββββ, ββ βββββ
B & D Partners 6,000
Attn: ββββ ββββββββ
βββ βββββββββ βββββ
βββββββββ, ββ βββββ
βββββ βββββββββ 25,000
ββββ βββββ ββ. #βββ
ββββββββ ββββ, ββ βββββ
ββββββ ββββββββ 30,000
βββββ ββββββββββ ββββ
βββ βββββ, ββ βββββ
βββββββββββ β. Comfort, DDS 50,000
βββ ββ ββββββ ββββ
βββββββββ, ββ βββββ
ββββββ β. βββββββ 13,660
βββ βββββββββ βββββ
βββββββ ββββββ, ββ βββββ
ββββββ β. ββββ 50,000
ββββ ββββββ βββββ ββ.
ββββββ, ββ βββββ
ββββ β. ββββ 25,000
βββ βββββββ ββ.
βββββ ββββ, ββ βββββ
ββββ Fast 100,000
β.β. βββ ββββββ
βββ ββββ, ββ βββββ-ββββ
ββββββ β. βββββββ, M.D., Trustee of the 50,000
Fogarty Family Revocable Trust dated 9/14/71
as amended and restated 8/14/91
ββββ ββββββ ββββ
βββββββ ββββββ, ββ βββββ
βββββββ βββββ 50,000
ββββ βββββββββββ βββ β.β. #βββ
ββββββββββ, β.β. βββββ
E. βββ ββββββ 10,000
ββββ ββββββββ βββββ
βββ ββββ, ββ βββββ
GBP Trust 78,000
Attn: ββββββ β. βββββ
c/o CPS Realty Group
ββββ ββββββββββ βββββ, #βββ
βββ ββββ, ββ βββββ
ββββββββ β. ββββββββ as custodian for ββββββ 12,500
β. ββββββββ under the UTMA until age twenty-one
ββββ ββββββ ββββ
βββββββ βββββ, ββ βββββ
βββββββ β. ββββββββ 12,500
ββββ ββββββ ββββ
βββββββ βββββ, ββ βββββ
βββββββββ β. ββββββββ 12,500
ββββ ββββββ ββββ
βββββββ βββββ, ββ βββββ
ββββββββ β. ββββββββ 100,000
ββββ ββββββ ββββ
βββββββ βββββ, ββ βββββ
βββββββ ββββββββ 50,000
ββββ ββββββ βββ.
ββββββ, ββ βββββ
-2-
βββββββ ββββββββββ 40,000
βββ ββββ βββ.
βββ βββββββββ, ββ βββββ
ββββββ ββββββ ββββββββββ 10,000
βββ ββββ βββ.
βββ βββββββββ, ββ βββββ
ββββββ β. βββββββ, M.D. and ββββ β. ββββ, M.D. 50,000
Money Pension Plan, PaineWebber, Inc.
Attn.: ββββ Neusstadt, ββ.
β ββββ βββ βββββ
β.β. βββ βββββ
Houston, TX 77227-7828
βββββββ β. βββββ, M.D. 50,000
ββββ ββββββ ββββββ ββββ
βββββββ, ββ βββββ
ββββββ β. βββ 50,000
β.β. βββ ββββ
βββ βββββ, ββ βββββ-ββββ
βββββββ β. βββ 50,000
ββββ βββββββββ ββ., #βββ
ββββββ, ββ βββββ
βββββββββ β. βββββββββ 50,000
βββββ βββ ββββββ βββββ
βββββββ, ββ βββββ
βββββββ β. βββββββββ 50,000
1154 The Dune at ββ ββββ βββββ
β.β. βββ ββββ
ββββββ βββββ, ββ βββββ
ββββββ β. ββββββ and ββββββ β. ββββββ 50,000
of the Marcus Family Trust DTD 7/14/93
ββββ βββββββββ ββ.
βββ βββββ, ββ βββββ
J. βββββ βββββββ 25,000
βββ ββββ ββββ ββββ
ββββ ββββ, ββ βββββ
βββββ β. ββββββ 25,000
c/o MRA
βββ βββββββββ ββββ ββ.
-β-
βββββββββ, ββ βββββ
ββββββ β. ββββ 50,000
βββββ βββββββ ββββ.
ββββββββ, ββ βββββ
MLPF & S FBO βββββββ βββββββ βββ 50,000
ββ βββββββββ ββββββ
ββββββββ, ββ βββββ
βββββββ β. ββββββββ, ββ. and ββββ βββββββ ββββββββ, 50,000
Trustees of the ββββββββ Family Trust
U/D/T dtd 8/15/90
βββ ββββββ βββββ ββ.
βββββββ ββββββ, ββ βββββ
βββββββ β. ββββββββ, ββ. 7,500
βββ ββββββ βββββ ββ.
βββββββ ββββββ, ββ βββββ
βββββ β. Stockrnan 25,000
β/β βββββββββ & βββββ
One ββββ Street, 16th Fl.
βββ βββββββββ, ββ βββββ
βββββ β. ββββββ, Trustee 70,000
CMCA Profit Sharing Plan
βββ βββββ ββββ, #βββ
ββββ ββββ, ββ βββββ
βββββ β. ββββββ 175,000
ββββ ββ. βββββββ ββ.
ββββ ββββ, ββ βββββ
WS Investments 96A 35,000
ββββββ βββββββ ββββββββ & ββββββ
βββ ββββ ββββ ββββ
ββββ ββββ, ββ βββββ
WTI Ventures 50,000
Attn: S. βββββ βββββββ
ββββ ββ ββββββ ββββ, βββββ βββ
βββββ ββββ, ββ βββββ
βββββ β. βββββββββ, M.D. 25,000
βββ βββββ ββββ
ββββββββ, ββ βββββ
-4-
II. SERIES B PREFERRED STOCK INVESTORS SHARES PURCHASED
Pirate Ship & Co. 1,000,000
By The Global Health Sciences Fund
Attn: ββββ ββββββββ
INVESCO Trust Co.
ββββ ββββ βββββ ββββββ
βββββ ββββ
ββββββ, ββ βββββ
(βββ) βββ-ββββ
The Travelers Insurance Company 450,000
βββ βββββββ
The Travelers Companies
βββ βββββ ββββββ
ββββββββ, ββ βββββ
(βββ) βββ-ββββ
The Travelers Indemnity Company 440,000
βββ βββββββ
The Travelers Companies
βββ βββββ ββββββ
ββββββββ, ββ βββββ
(βββ) βββ-ββββ
The Phoenix Insurance Company 60,000
βββ βββββββ
The Travelers Companies
βββ βββββ ββββββ
ββββββββ, ββ βββββ
(βββ) βββ-ββββ
The Travelers Life and Annuity Company 50,000
βββ βββββββ
The Travelers Companies
βββ βββββ ββββββ
ββββββββ, ββ βββββ
(βββ) βββ-ββββ
HPB Associates, L.P. 666,667
ββββββ βββββββββ
HPB Associates, L.P.
βββ βββββββ ββββββ
βββ ββββ, ββ βββββ
(βββ) βββ-ββββ
-5-
Och-Ziff Capital Management 166,667
βββ βββ
Och-Ziff Capital Management
βββ ββββ ββββ
ββββ βββββ
βββ ββββ, ββ βββββ
(βββ) βββ-ββββ
βββββββ ββββ 100,000
β β/β ββββ βββββββ ββββ
βββββββββ, ββ βββββ
(βββ) βββ-ββββ
ES Partners 26,000
ββββ ββββββββ
Easton Capital
βββ βββββββ ββββββ
ββββ βββββ
βββ ββββ, ββ βββββ
(βββ) βββ-ββββ
Third Point Partners, L.P. 16,667
βββ ββββ
βββ ββββ ββββββ
ββββ βββββ
βββ ββββ, ββ βββββ
(βββ) βββ-ββββ
Viking Medical Ventures Ltd. 33,333
βββββββ β. βββββββ
β βββββββββ βββββ
βββββ ββββββ
ββ. ββββββ, ββββββ, βββ
βββ
Channel Islands
011-44-1534-22787
βββββ β. ββββββ 60,000
Musket Research Assoc.
βββ βββββββββββββ βββββ
βββββββββ, ββ βββββ
(βββ) βββ-ββββ
ProMed Partners, L.P. 30,000
βββββ β. ββββββ
Musket Research Assoc.
βββ βββββββββββββ βββββ
βββββββββ, ββ βββββ
-6-
(βββ) βββ-ββββ
βββββββ ββββ 33,333
βββ βββββ ββββ
ββββ ββββ, ββ βββββ
(βββ) βββ-ββββ
Home - (βββ) βββ-ββββ
ββββ ββββ 16,667
ββ βββββ βββββ
βββββββ ββββββ, ββ βββββ
(βββ) βββ-ββββ
ββββββ β. and βββββ βββ ββββββββ 8,333
ββ βββ ββββββ ββββ
βββββββββ βββββ, ββ βββββ
(βββ) βββ-ββββ
III. SECOND CLOSING PURCHASERS
MedCap I Corp. 85,600
βββββ β. ββββββ
Musket Research Associates, Inc.
βββ βββββββββββββ βββββ
βββββββββ, ββ βββββ
(βββ) βββ-ββββ
ProMed Partners, L.P. 2,100
βββββ β. ββββββ
Musket Research Associates, Inc.
βββ βββββββββββββ βββββ
βββββββββ, ββ βββββ
(βββ) βββ-ββββ
River Edge Partners, L.P. 16,667
ββββββ ββββββββββ
ββ βββββββ ββββββ
ββββββ, ββ βββββ
Cardiovascular Medicine and 30,000
Coronary Interventions
401 (K) Savings Plan FBO
Dr. ββββββ βββββββ
ββββ βββββββ ββββ, βββββ βββ
βββββββ ββββ, ββ βββββ
(βββ) βββ-ββββ
-7-
ββββ Forest Venture VI 79,631
βββββ ββββββββββ
β ββββ ββββββ βββββ
βββββββ, ββ βββββ
(βββ) βββ-ββββ
βββββ βββββββ, M.D. 8,334
βββ βββββ ββββββββ βββ.
βββ βββββββ, ββ βββββ
(βββ) βββ-ββββ
ββββββββ βββββββ βββ 8,333
ββ βββββββ ββββββ
ββββββββββ, ββ βββββ
(βββ)βββ-ββββ
ββββββ ββββββββ 8,333
Advanced Health
βββ βββββ ββββββ ββββ
ββββββ βββββ
βββββββββ, ββ βββββ
(βββ) βββ-ββββ
βββββ ββββββββ 33,334
Oracle Partners
βββ βββββ ββββββ, ββββ βββ.
βββ ββββ, ββ βββββ
(βββ) βββ-ββββ
ββββ ββββββββ 16,667
Oracle Partners
βββ βββββ ββββββ, ββ βββ.
βββ ββββ, ββ βββββ
(βββ) βββ-ββββ
ββββββ ββββββββ, M.D. 8,334
βββ ββββ ββββββ
βββ ββββ, ββ βββββ
(βββ) βββ-ββββ
βββββ ββββββββββ, M.D. 8,334
βββ ββββ ββββββ
βββ ββββ, ββ βββββ
(βββ) βββ-ββββ
-8-
βββββββ ββββββ 33,333
BetaInvest
ββββββ βββββββββ β
ββββββββ ββββ
βββββββββββ
011-41-21-212-2383
Trustee, WSGR Retirement Plan fbo J. βββββ βββββββ 3,333
ββββββ βββββββ ββββββββ & ββββββ
βββ ββββ ββββ ββββ
ββββ ββββ, ββ βββββ-ββββ
(βββ) βββ-ββββ
III. SERIES C PREFERRED STOCK INVESTOR SHARES PURCHASED
Medtronic Asset Management, Inc. 714,286
Corporate Center
ββββ βββββββ ββββββ β.β.
βββββββββββ, ββ βββββ
Attention: General Counsel
Ph. (βββ) βββ-ββββ
Fax (βββ) βββ-ββββ
-9-
