EXHIBIT 99.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of October 3, 2000 by and between Thoratec Laboratories Corporation, a
California corporation ("Thoratec"), and Thermo Electron Corporation, a Delaware
corporation ("TEC").
A. Thoratec, Lightning Acquisition Corp., a Massachusetts corporation and
wholly-owned subsidiary of Thoratec ("Merger Sub"), TEC and Thermo Cardiosystems
Inc., a Massachusetts corporation ("TCA"), entered into an Agreement and Plan of
Merger (the "Merger Agreement") under which those parties agreed, upon the terms
and subject to the conditions set forth in the Merger Agreement, to merge Merger
Sub into TCA (the "Merger").
B. By virtue of the Merger, TEC will become the beneficial owner of
Registrable Securities (defined below). Thoratec and TEC desire that Thoratec
grant TEC certain registration rights regarding the Registrable Securities in
order to facilitate TEC's ability to liquidate those securities. The purpose of
this Agreement is to grant those rights.
C. As an inducement and condition to entering into the Merger Agreement,
Thoratec has agreed that TEC will be entitled to the registration rights as set
forth in this Agreement.
ACCORDINGLY, THE PARTIES AGREE AS FOLLOWS:
1. Definitions. For purposes of this Agreement, these terms have these
meanings:
"Business Day" means any Monday, Tuesday, Wednesday, Thursday or
Friday that is not a day on which banking institutions in the City of New
York are authorized by law, regulation or executive order to close.
"Common Stock" means the common stock, no par value, of Thoratec.
"Compulsory Participation Notice" has the meaning set forth in Section
4(b).
"Compulsory Registration" has the meaning set forth in Section 4(a).
"Compulsory Registration Statement" has the meaning set forth in
Section 4(a).
"Delay Notice" has the meaning set forth in Section 7(b).
"Effective Date" means the date of the closing of the Merger.
"Holder" means TEC and any permitted assignee of all or any of TEC's
registration rights under this Agreement.
"Material Development Condition" has the meaning set forth in Section
7(b).
"Merger Agreement" has the meaning set forth in the recitals.
"Other Holders" has the meaning set forth in Section 5.
"Persons" means an individual or entity.
"Prospectus" means the prospectus included in any Registration
Statement, as amended or supplemented.
"Registrable Securities" means the Common Stock issued to TEC in the
Merger and any other securities later issued, as a result of or in
connection with any stock, dividend, stock split or reverse stock split,
combination, recapitalization, reclassification, merger, consolidation,
exchange or distribution in respect of the Common Stock issued to TEC in
the Merger, but only so long as such Common Stock or other securities are
held by TEC or another Holder.
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"Registration Expenses" has the meaning set forth in Section 8.
"Registration Period" has the meaning set forth in Section 4(c).
"Registration Statement" means any registration statement within the
scope of Sections 3,4 or 5 of this Agreement that covers any of the
Registrable Securities, including the Prospectus included therein, all
amendments and supplements to that Registration Statement, including
post-effective amendments, and all exhibits and all materials incorporated
by reference in that Registration Statement.
"Requesting Securityholder" has the meaning set forth in Section 5.
"Restricted Securities" has the meaning set forth in Section 2.
"Rule 144" means Rule 144 adopted under the Securities Act, as amended
from time to time, or any successor rule that may be adopted by the SEC.
"Rule 145" means Rule 145 adopted under the Securities Act, as amended
from time to time, or any successor rule that may be adopted by the SEC.
"Rule 415" means Rule 415 adopted under the Securities Act, as amended
from time to time, or any successor rule that may be adopted by the SEC.
"SEC" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended or any
successor federal statute, and the rules and regulations thereunder, as the
same are in effect from time to time.
"Shareholder Agreement" means the Shareholder Agreement between
Thoratec and TEC dated the same date as the Merger Agreement.
"Shelf Registration Period" has the meaning set forth in Section 3(b).
"Shelf Registration Statements" has the meaning set forth in Section
3(a).
"Underwritten Offering" means a registered offering in which
securities of Thoratec are sold to an underwriter for reoffering to the
public.
Except where expressly indicated otherwise, all references to sections in this
Agreement are to sections of this Agreement.
2. Securities Subject to this Agreement. The securities entitled to the
benefits of this Agreement are the Registrable Securities but, with respect to
any particular Registrable Security, only so long as such securities continue to
be Restricted Securities and only so long as such securities are held by a
Holder. A Registrable Security that has ceased to be a Registrable Security
cannot thereafter become a Registrable Security. A "Restricted Security" is a
Registrable Security (i) which has not been sold pursuant to an effective
Registration Statement in accordance with the intended plan and method of
distribution therefor set forth in the final Prospectus forming part of such
Registration Statement, and (ii) which cannot, at that time, be freely sold by
its Holder publicly without any registration under the Securities Act and
without any restrictions (including, without limitation, restrictions as to
volume or manner of sale) under Rule 144 or Rule 145.
3. Shelf Registrations.
(a) General. Thoratec shall use its reasonable best efforts to cause to
become effective under the Securities Act Registration Statements relating to
the resale, from time to time, of the Registrable Securities in accordance with
the plan and method of distribution set forth in the respective Prospectuses
included in such Registration Statements (the "Shelf Registration Statements")
as follows: (i) on or before four months after the Effective Date a Shelf
Registration Statement relating to the resale of 25% of the Registrable
Securities; (ii) on or before 12 months after the Effective Date a Shelf
Registration Statement relating to an additional 25% of the Registrable
Securities and (iii) on or before 18 months after the Effective Date a Shelf
Registration Statement relating to all previously unregistered Registrable
Securities. The plan and method of
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distribution may include an Underwritten Offering of such Registrable
Securities. Thoratec shall make the initial filing of each Shelf Registration at
least 60 days prior to the date Thoratec is obligated to have such Shelf
Registration effective. Thoratec shall promptly respond to any SEC comments to
such Shelf Registration Statement. Thoratec shall file amendments to the Shelf
Registration Statements to reflect transfers of Registrable Securities to any
Holder.
(b) Effective Period. Thoratec will use its reasonable best efforts to
cause the Shelf Registration Statements to become effective on or before the
dates set forth above and keep the Shelf Registration Statements continuously
effective until the earlier of (i) the fifth anniversary of the Effective Date
(subject to extension as provided in Section 7(b)) and (ii) the date on which
all Registrable Securities covered by the Shelf Registration Statements have
been sold thereunder in accordance with the plan and method of distribution
intended by Holders and disclosed in the respective Prospectuses included in the
Shelf Registration Statements (the "Shelf Registration Period").
(c) Restriction on Transfer. Notwithstanding the effectiveness of the Shelf
Registration Statements, TEC will only distribute Registrable Securities in
compliance with Section 6(c) of the Shareholder Agreement.
4. Compulsory Registration.
(a) Compulsory. Subject to Section 7(b), Thoratec shall file a Registration
Statement on Form S-3 (or any successor form) or any other appropriate form
under the Securities Act for an Underwritten Offering (the "Compulsory
Registration Statement") covering the Registrable Securities that Thoratec has
been requested to register in accordance with Section 4(b) (a "Compulsory
Registration"), provided that no one Compulsory Registration shall include
Registrable Securities constituting more than 10 percent of the total number of
outstanding securities of the class that includes the Registrable Securities and
provided further that (i) no more than one Compulsory Registration Statement
shall be filed during the period commencing four months after the Effective Date
and ending on the first anniversary of the Effective Date; (ii) no more than one
Compulsory Registration shall be filed during the period commencing on the first
anniversary of the Effective Date and ending 18 months after the Effective Date;
(iii) no more than one Compulsory Registration shall be filed during the period
commencing 18 months after the Effective Date and ending on the second
anniversary of the Effective Date; and (iv) commencing 18 months after the
Effective Date no more than one Compulsory Registration Statement filed on or
after 18 months after the Effective Date shall be filed in any twelve month
period. If, at the time of any such registration, there are two or more Holders
and at least two of them wish to register a total of more than that number of
Registrable Securities, they shall allocate the number of Registrable Securities
registered for each of them based on the relative number of Registrable
Securities that each desires to have registered.
(b) Participation Notice. The Holders shall have the right, by giving
written notice (the "Compulsory Participation Notice") to Thoratec not later
than the fifth anniversary of the Effective Date, to elect to have included in
the Compulsory Registration Statement such portion of their Registrable
Securities as is indicated in their Compulsory Participation Notice. A Holder
may, at any time up to five Business Days before the anticipated effective date
of the Compulsory Registration Statement, request that its Registrable
Securities not be included therein by providing a written notice to that effect
to Thoratec. Any such request shall be binding and irrevocable.
(c) Effectiveness of Compulsory Registration Statement. Subject to Section
6(b), Thoratec shall file a Registration Statement relating to any Compulsory
Registration as soon as practicable but no later than 45 calendar days after
receiving the Compulsory Notice and shall use its commercially reasonable
efforts to: (i) cause the Compulsory Registration Statement to become effective
as promptly as practicable and (ii) thereafter keep the Compulsory Registration
Statement effective continuously for the period ending, subject to the second
sentence of Section 6(b) and the second sentence of Section 7(b), on the earlier
of (A) the expiration of six months after the date the Compulsory Registration
Statement is declared effective by the SEC and (B) the date on which all
Registrable Securities covered by such Compulsory Registration Statement have
been sold and the distribution contemplated hereby has been completed (the
"Registration Period").
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(d) Inclusion of Other Securities. Thoratec and any other holder of
Thoratec's securities who has contractual registration rights may include its
securities in the Compulsory Registration effected pursuant to this Section 4,
subject to Section 4(g).
(e) Withdrawal. Subject to Section 7(b), Thoratec will withdraw the
Compulsory Registration Statement upon: (i) the receipt from the SEC of a
written request for withdrawal or (ii) having obtained the written request of
the Holders of a majority of the Registrable Securities covered by that
Registration Statement.
(f) Maximum Number of Compulsory Registrations. Thoratec shall not be
obligated to file and seek effectiveness of more than six Compulsory
Registration Statements. A Compulsory Registration Statement withdrawn at the
request of Thoratec pursuant to Section 4(e) or Section 7(b)(ii), or withdrawn
at the request of Holders if such Holders agree to pay the Registration Expenses
in connection therewith, shall not be counted towards that maximum number of
Compulsory Registration Statements.
(g) Priority on Compulsory Registration. With respect to any Compulsory
Registration, if the managing underwriter or underwriters to which such
Compulsory Registration relates, advise the selling Holders in writing that the
total amount of Registrable Securities and equity securities requested to be
included pursuant to Section 4(d) will in the aggregate materially and adversely
affect the success of such Underwritten Offering, then: (i) first, the amount of
equity securities requested to be included pursuant to Section 4(d) will be
reduced to zero if necessary (pro rata among Thoratec and such other holders on
the basis of the amount of such equity securities to be included therein by
Thoratec and each such holder) and (ii) second, the amount of Registrable
Securities of all Holders who have requested to have Registrable Securities
included in the Compulsory Registration will be reduced, pro rata among such
Holders on the basis of the amount of such Registrable Securities requested to
be included therein by each such Holder, so that, after such reduction, there
will be included in such Underwritten Offering the amount of Registrable
Securities that, in the written opinion of such managing underwriter or
underwriters, can be sold without materially and adversely affecting the success
of the Underwritten Offering.
5. Piggyback Registration. If, on or before the fifth anniversary of the
Effective Date, Thoratec at any time proposes to file a registration statement
with respect to any class of its equity securities, whether for its own account
(other than in connection with the Compulsory Registration Statement
contemplated by Section 4 or a registration statement on Form S-4 or S-8 (or any
successor or substantially similar form), or for the account of a holder of
securities of Thoratec pursuant to demand registration rights granted by
Thoratec to such holder (a "Requesting Securityholder"), or for the registration
of securities for sale by Thoratec on a continuous or delayed basis pursuant to
Rule 415, then Thoratec shall give written notice of such proposed filing to all
Holders at least 20 days before the anticipated filing date of such registration
statement. That notice shall offer to all Holders the opportunity to have any or
all of the Registrable Securities held by the Holders included in that
registration statement. Each Holder desiring to have its Registrable Securities
registered under this Section 4 shall so advise Thoratec in writing within 15
days after the date of receipt of such notice (which request shall set forth the
amount of Registrable Securities for which registration is requested). Thoratec
shall use its commercially reasonable efforts to include in that registration
statement all the Registrable Securities so requested to be included therein.
Notwithstanding the foregoing, if the managing underwriter or underwriters of
any such proposed public offering advises Thoratec in writing that the total
amount or kind of securities which the Holders, Thoratec and any other Persons
(the "Other Holders") intend to be included in such proposed public offering is
sufficiently large to materially and adversely affect the success of such
proposed public offering, then the amount or kind of securities to be offered
for the accounts of Holders and Other Holders shall be reduced as follows: (i)
if such Registration Statement is a primary registration on behalf of Thoratec,
Thoratec will include in such registration (A) first, all securities to be
offered by Thoratec and (B) second, up to the full amount of securities
requested to be included in such registration by the Holders and the Requesting
Securityholders having contractual rights to include securities in such
underwritten offering (allocated pro rata among the Holders and Requesting
Securityholders having contractual rights to include securities in such
underwritten offering on the basis of the amount of securities requested to be
included therein by each such Holder or Requesting Securityholder), so that the
total amount of securities to be included in such offering is the full amount
that, in the written opinion
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of such managing underwriter or underwriters, can be sold without materially and
adversely affecting the success of such offering; and (ii) if such Registration
Statement is an underwritten secondary registration on behalf of such Requesting
Securityholders, Thoratec will include in such registration: (A) first, all
securities of such Requesting Securityholders requested to be included therein
and (B) second, up to the full amount of securities requested to be included in
such registration by the Holders and other persons (allocated pro rata among
such Holders and such other persons on the basis of the amount of securities
requested to be included therein by each such Holder or other person), so that
the total amount of securities to be included in such offering is the full
amount, that in the written opinion of such managing underwriter or
underwriters, can be sold without materially and adversely affecting the success
of the offering. Anything to the contrary in this Agreement notwithstanding,
Thoratec may withdraw or postpone a registration statement referred to in this
Section 5 at any time before it becomes effective or withdraw, postpone or
terminate the offering after it becomes effective without obligation to any
Holder. In addition, this Section 5 is subject to Section 6(c). If an offering
in connection with which a Requesting Securityholder is entitled to registration
under this Section 5 is an underwritten offering, any Requesting Securityholder
whose Registrable Securities are included in the Registration Statement shall,
unless otherwise agreed by Thoratec, offer and sell the Registrable Securities
in an underwritten offering using the same underwriter or underwriters and,
subject to this Agreement, on the same terms and conditions as other shares of
Common Stock included in the underwritten offering.
6. Registration Procedures.
(a) General. Subject to Sections 7(b) and (c), in connection with
Thoratec's registration obligations pursuant to Sections 3 and 4 and, to the
extent applicable, Section 5, Thoratec shall:
(i) prepare and file with the SEC: (A) a new Registration Statement or
such amendments and post-effective amendments to an existing Registration
Statement as may be necessary to keep the Registration Statement effective
for the time period set forth herein, and (B) any amendments and
post-effective amendments to any Shelf Registration Statement, any
Prospectus and any supplements to any Prospectus included in any Shelf
Registration Statement, as may be requested by any Holder of Registrable
Securities to reflect (1) any changes to the plan of distribution contained
in the Prospectus included in such Shelf Registration Statement or (2) the
identity of any transferee of Registrable Securities, provided that, as
soon as practicable, but in no event later than three Business Days before
filing any Registration Statement, any related Prospectus or any amendment
or supplement thereto, other than any amendment or supplement made solely
as a result of incorporation by reference of documents filed with the SEC
subsequent to the filing of such Registration Statement, Thoratec shall
furnish to the Holders of the Registrable Securities covered by the
Registration Statement and the underwriters, if any, copies of all such
documents proposed to be filed;
(ii) notify the selling Holders of Registrable Securities and the
managing underwriters, if any, promptly: (A) when a new Registration
Statement, Prospectus or any Prospectus supplement or post-effective
amendment has been filed and, with respect to any new Registration
Statement or post-effective amendment, when it has become effective, (B) of
any stop order suspending the effectiveness of any Registration Statement
or the initiation of any proceedings for that purpose, (C) of any
suspension of the qualification of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for
such purpose and (D) if there is a misstatement or omission of a material
fact in any Registration Statement, Prospectus or any document incorporated
therein by reference or if any event occurs that requires the making of any
changes in any Registration Statement, Prospectus or any document
incorporated therein by reference in order to make the statements therein
(in the case of any Prospectus, in the light of the circumstances under
which they were made) not misleading; providedthat upon any occurrence
specified in clauses (B), (C) or (D) Thoratec shall use its reasonable best
efforts to, at the earliest practicable date, obtain a withdrawal of any
stop order, the lifting of any suspension of the qualification or exemption
from qualification or amend the Registration Statement, Prospectus or any
document incorporated therein by reference in order to make the statements
therein (in the case of any Prospectus, in the light of the circumstances
under which they were made) not misleading;
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(iii) if reasonably requested by the managing underwriter or
underwriters or a Holder of Registrable Securities being sold in connection
with an Underwritten Offering, promptly incorporate in a Prospectus
supplement or post-effective amendment such information as the managing
underwriters and the Holders of a majority of the Registrable Securities
being sold in such Underwritten Offering agree should be included therein
relating to the sale of the Registrable Securities including, without
limitation, information with respect to the total number of shares of
Registrable Securities being sold to such underwriters, the purchase price
being paid therefor by such underwriters and with respect to any other
terms of the Underwritten Offering of the Registrable Securities to be sold
in such offering, and promptly make all required filings of such Prospectus
supplement or post-effective amendment;
(iv) furnish to each selling Holder of Registrable Securities and each
managing underwriter, if any, without charge, as many conformed copies as
may reasonably be requested of the then effective Registration Statement
and any post-effective amendments thereto, including financial statements
and schedules, all documents incorporated therein by reference and all
exhibits (including those incorporated by reference);
(v) deliver to each selling Holder of Registrable Securities and the
underwriters, if any, without charge, as many copies of the then effective
Prospectus (including each Prospectus subject to completion) and any
amendments or supplements thereto as such Persons may reasonably request;
(vi) use commercially reasonable efforts to register or qualify or
cooperate with the selling Holders of Registrable Securities, the
underwriters, if any, and their respective counsel in connection with the
registration or qualification of such Registrable Securities for offer and
sale under the securities or blue sky laws of such jurisdictions as any
selling Holder of Registrable Securities or underwriter reasonably requests
in writing, provided that Thoratec will not be required to: (A) qualify to
do business in any jurisdiction where it would not otherwise be required to
qualify, but for this paragraph (vi), (B) subject itself to general
taxation in any such jurisdiction or (C) file a general consent to service
of process in any such jurisdiction;
(vii) otherwise use commercially reasonable efforts to comply in all
material respects with all applicable rules and regulations of the SEC
relating to such registration and the distribution of the securities being
offered and make generally available to its securities holders earnings
statements satisfying Section 11(a) of the Securities Act;
(viii) cooperate and assist in any filings required to be made with
the National Association of Securities Dealers, Inc.;
(ix) subject to the proviso in paragraph (vi) above, cause the
Registrable Securities covered by the Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the selling Holders or the
underwriters, if any, to complete the disposition of such Registrable
Securities (other than as may be required by the governmental agencies or
authorities of any foreign jurisdiction and other than as may be required
by a law applicable to a selling Holder by reason of its own activities or
business other than the sale of Registrable Securities);
(x) cooperate with the selling Holders of Registrable Securities, the
underwriters, if any, and their respective counsel, to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be sold, which certificates will not bear any restrictive
legends; and cause such certificates to be in such denominations and
registered in such names as the selling Holders or managing underwriters,
if any, shall request; and
(xi) to the extent requested by the Holders of Registrable Securities
in connection with a proposed Underwritten Offering, but in no event more
than once in any twelve month period commencing on the date of the
immediately preceding request. (A) execute and deliver an underwriting
agreement containing customary terms, including without limitation,
appropriate restrictions on Thoratec's ability to issue or sell any shares
of its Common Stock or securities convertible or exercisable or
exchangeable therefor and any requirement, to the extent permitted by the
applicable Thoratec stock option plans or other agreements, to enforce
available restrictions on the ability of any option holder to exercise
options
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or on any stockholder to sell any shares of Thoratec Common Stock, (B) to
the extent reasonably necessary to facilitate the success of any such
Underwritten Offering, make available the appropriate executive officers of
Thoratec for due diligence and drafting sessions and road show
presentations in connection with such Underwritten Offering and (C) prepare
and file with the SEC a Current Report on Form 8-K with such underwriting
agreement attached as an exhibit thereto. Within 120 days of the execution
of this Agreement, Thoratec will obtain agreements from each of its
executive officers and directors to execute and deliver an agreement
imposing customary restrictions (not exceeding 90 days from the
commencement of the Underwritten Offering) on such executive officer's or
director's ability to sell any shares of Thoratec Common Stock beneficially
owned, if requested by the managing underwriter of any such Underwritten
Offering. Thoratec will require any newly hired or appointed executive
officer or director to enter into a similar agreement upon the commencement
of employment or term as a director. If, in connection with such
Underwritten Offering, Thoratec is not selling any securities, TCA will pay
all out-of-pocket expenses of Thoratec related to any road show
presentation.
As a condition precedent to the participation in any registration
hereunder, Thoratec may require each selling Holder of Registrable
Securities as to which such registration is being effected to furnish to
Thoratec such reasonable information regarding such Person and the
distribution of such securities as Thoratec may from time to time request.
(b) Discontinuance. Each Holder of Registrable Securities shall, upon
receipt of any notice from Thoratec of the happening of any event of the kind
described in Section 6(a)(ii), forthwith discontinue disposition of Registrable
Securities pursuant to the then current Registration Statement until: (A) such
Holder is advised in writing by Thoratec that a new Registration Statement
covering the offer of Registrable Securities has become effective under the
Securities Act or (B) such Holder receives copies of any required supplemented
or amended Prospectus, or until such Holder is advised in writing by Thoratec
that the use of the Registration Statement may be resumed. If Thoratec shall
have given any such notice during a period when a Compulsory Registration is in
effect, Thoratec shall extend the period during which the Registration Statement
shall be maintained effective pursuant to this Agreement by the number of days
during which any such disposition of Registrable Securities is discontinued
pursuant to this Section 6(b). If so directed by Thoratec, on the happening of
such event, each Holder will deliver to Thoratec (at Thoratec's expense) all
copies, other than permanent file copies then in such Holder's possession, of
the Registration Statement covering such Registrable Securities at the time of
receipt of such notice.
(c) Selection of Underwriter. The investment banker or investment bankers
and manager or managers that will manage any Compulsory Registration will be
selected by Thoratec, subject to approval of the selling Holders holding a
majority of the Registrable Securities covered by the Compulsory Registration
Statement that gave the original Compulsory Notice in connection with such
Compulsory Registration, which approval shall not be unreasonably withheld.
7. Certain Limitations on Registration Rights.
(a) Hold-Back Election. In the case of the registration of any underwritten
primary offering initiated by Thoratec (other than any registration by Thoratec
on Form S-4 or Form S-8 (or any successor or substantially similar form, and
other than in connection with (i) an employee stock option, stock purchase or
compensation plan or of securities issued or issuable pursuant to any such plan
or an acquisition of any securities or assets of another entity, or (ii) a
dividend reinvestment plan) or any underwritten secondary offering initiated at
the request of a Requesting Securityholder, each Holder that includes
Registrable Securities therein agrees not to effect any public sale or
distribution of securities of Thoratec, except as part of such underwritten
registration, during the period beginning 15 days prior to the expected date of
execution of an underwriting agreement relating to such underwritten offering
and ending 90 days after such closing date (or such shorter period as may be
agreed to between the underwriters thereof and Thoratec or any other security
holder of Thoratec selling securities in such offering). The parties acknowledge
that the expected date of execution of an underwriting agreement shall be made
in the good faith determination of the managing underwriter of such offering and
communicated in writing to such Holders.
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(b) Material Development Condition. With respect to any Registration
Statement filed or to be filed pursuant to Section 3, if Thoratec determines
that, in its good faith judgment, it would (because of the existence of, or in
anticipation of, any acquisition or corporate reorganization or other
transaction, financing activity, stock repurchase or other development involving
Thoratec or any subsidiary, or the unavailability for reasons substantially
beyond Thoratec's control of any required financial statements) require public
disclosure by Thoratec of material non-public information that is not included
in such Registration Statement and that immediate disclosure of such information
would be seriously detrimental to Thoratec (a "Material Development Condition"),
Thoratec shall, notwithstanding any other provisions of this Agreement, be
entitled, upon the giving of a written notice that a Material Development
Condition has occurred (a "Delay Notice") from Thoratec to any Holder of
Registrable Securities included or to be included in such Registration
Statement: (i) to cause sales of Registrable Securities by such Holder pursuant
to such Registration Statement to cease, or (ii) if no such Registration
Statement has yet been filed or declared effective, to delay the filing or
effectiveness of any such Registration Statement until, in the good faith
judgment of Thoratec, such Material Development Condition no longer exists
(notice of which Thoratec shall promptly deliver to any Holder of Registrable
Securities with respect to which any such Registration Statement has been
filed). Notwithstanding the foregoing: (A) in no event may such cessation or
delay (I) be for a period of more than 60 consecutive days from the giving of
the Delay Notice to a Holder with respect to the Material Development Condition,
as above provided, and (II) exceed 90 days in the aggregate in any 12 month
period and the Shelf Registration Period with respect to such Holder and
Registrable Securities shall be extended by the number of days during the Shelf
Registration Period that such Holder is required to refrain from selling
Registrable Securities.
(c) Limitation on Piggyback Registration Rights. Anything to the contrary
contained in this Agreement notwithstanding, when, in the opinion of reputable
outside securities counsel for Thoratec, the registration of the Registrable
Securities is not required by the Securities Act in connection with a proposed
sale of such Registrable Securities, the Holders shall have no rights pursuant
to Section 5 to request a piggyback registration in connection with such
proposed sale and Thoratec shall promptly provide to the transfer agent and the
Holder's or Holders' broker or brokers in connection with any sale transaction
an opinion to that effect.
8. Registration Expenses. All expenses incident to Thoratec's performance
of or compliance with this Agreement including, without limitation, all
registration and filing fees, fees and expenses of compliance with securities or
blue sky laws (including reasonable fees and disbursements of counsel in
connection with blue sky qualifications or registrations, or the obtaining of
exemptions therefrom, of the Registrable Securities), printing expenses
(including expenses of printing Prospectuses), messenger and delivery expenses,
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), fees and
disbursements of its counsel and its independent certified public accountants,
securities acts liability insurance (if Thoratec elects to obtain such
insurance), fees and expenses of any special experts retained by Thoratec in
connection with any registration fees and expenses of other Persons retained by
Thoratec and reasonable fees and expenses of one counsel for all selling Holders
(all such expenses being referred to as "Registration Expenses") shall be borne
by Thoratec, provided that Registration Expenses shall not include any fees and
expenses of more than one counsel for the Holders, the expenses of any special
audit or accounting review (other than a review or audit of Thoratec's year-end
financial statements), out-of-pocket expenses incurred by the Holders and
underwriting discounts, commissions or fees attributable to the sale of the
Registrable Securities.
9. Indemnification.
(a) Indemnification by Thoratec. Thoratec shall indemnify and hold
harmless, to the full extent permitted by law, but without duplication, each
Holder of Registrable Securities, and each Person who controls such Holder
(within the meaning of the Securities Act), against all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation and
reasonable legal fees and expenses) resulting from any untrue statement of a
material fact in, or any omission of a material fact required to be stated in,
any Registration Statement or Prospectus or necessary to make the statements
therein (in the case of a Prospectus in light of the circumstances under which
they were made) not misleading, except insofar as the same are caused by or
contained in any information furnished in writing to Thoratec or to any
underwriters by any
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Holder expressly for use therein. Thoratec shall also indemnify underwriters
participating in the distribution, their officers, directors, employees,
partners and agents, and each Person who controls such underwriters (within the
meaning of the Securities Act), to the same extent as provided above with
respect to the indemnification of the Holders of Registrable Securities, if so
requested.
(b) Indemnification by Holders of Registrable Securities. In connection
with any Registration Statement in which a Holder of Registrable Securities is
participating, each such Holder will furnish to Thoratec in writing such
information and affidavits as Thoratec reasonably requests for use in connection
with any such Registration Statement or Prospectus and shall indemnify and hold
harmless, to the full extent permitted by law, but without duplication,
Thoratec, its officers, directors, stockholders, employees, advisors and agents,
and each Person who controls Thoratec (within the meaning of the Securities
Act), against all losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation and reasonable legal fees and expenses)
resulting from any untrue statement of material fact in, or any omission of a
material fact required to be stated in, any Registration Statement or Prospectus
or necessary to make the statements therein (in the case of a Prospectus in
light of the circumstances under which they were made) not misleading, to the
extent, but only to the extent, that such untrue statement or omission is
contained in any information or affidavit so furnished in writing by such Holder
to Thoratec specifically for inclusion therein. In no event will 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
giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. Any Person entitled to
indemnification hereunder shall (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel of such
indemnifying party's choice, provided that any Person entitled to
indemnification hereunder shall have the right to employ separate counsel and to
participate in (but not control) the defense of such claim, but the fees and
expenses of such counsel shall be at the expense of such indemnified Person
unless: (A) the indemnifying party shall have failed to assume the defense of
such claim and employ counsel reasonably satisfactory to the indemnified Person
in a timely manner or (B) in the reasonable judgment of any such indemnified
Person, based upon the advice of outside securities counsel, a potential
conflict of interest exists between such indemnified Person and the indemnifying
party with respect to such claim (in which case, if the indemnified Person
notifies the indemnifying party in writing that such indemnified Person elects
to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
on behalf of such indemnified Person). The indemnifying party will not be
subject to any liability for any settlement made without its written consent. No
indemnified Person will be required to consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term given by the
claimant or plaintiff to such indemnified Person of a release from all liability
in respect of such claim. An indemnifying party who is not entitled to, or
elects not to, assume the defense of the claim will not be obligated to pay the
fees and expenses of more than one counsel for all Persons indemnified by such
indemnifying party with respect to such claim.
(d) Contribution. If for any reason the indemnification provided for in
Section 8(a) or Section 8(b) is unavailable to an indemnified Person or
insufficient to hold it harmless as contemplated by Section 8(a) and 8(b), then
the indemnifying party shall contribute to the amount paid or payable by the
indemnified Person as a result of such loss, claim, damage, liability or expense
in such proportion as is appropriate to reflect not only the relative benefits
received by the indemnifying party and the indemnified Person, but also the
relative fault of the indemnifying party and the indemnified Person, as well as
any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement or the omission or alleged omission relates to information
supplied by the indemnifying party or parties on the one hand, or the
indemnified Person or Persons on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or 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 misrepresentations.
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10. Participation in Underwritten Registrations. No Person may participate
in any Underwritten Offering hereunder unless such Person: (i) agrees to sell
such Person's Registrable Securities on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (ii) completes and signs all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements and in form and substance
approved by Thoratec. Nothing in this Section 10 shall be construed to create
any additional rights regarding the registration of Registrable Securities in
any Person otherwise than as set forth herein.
11. Options. The parties acknowledge that TEC has issued options to
purchase 66,700 shares of issued and outstanding Common Stock of TCA owned by
TEC. Upon consummation of the Merger, these options will become exercisable for
shares of Thoratec Common Stock. TEC agrees not to issue any additional
securities exercisable for or convertible into shares of TCA Common Stock.
Thoratec acknowledges that if the options are exercised, the shares of Thoratec
Common Stock issuable upon exercise of the options will not be subject to this
Agreement.
12. Amendments. This Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions may not
be given, unless Thoratec has obtained the written consent of the Holders of a
majority of the Registrable Securities then outstanding.
13. Waivers. Any failure of TEC or another Holder, on one hand, or
Thoratec, on the other hand, to comply with any provision of this Agreement may
be waived by Thoratec or TEC or that Holder, respectively, only by a written
instrument signed by the party granting the waiver, but that waiver or the
failure to insist upon strict compliance with that provision shall not operate
as a waiver of, or estoppel with respect to, any subsequent or other failure.
14. Notices. All notices and other communications hereunder shall be in
writing and shall be delivered personally, by overnight courier or similar means
or sent by facsimile with written confirmation of receipt, to the parties at the
addresses specified below or at such other address for a party as shall be
specified by like notice, provided that notices of a change of address shall be
effective only upon receipt. Any such notice shall be effective upon receipt, if
personally delivered, or on the next business day following transmittal, if sent
by confirmed facsimile. Notices shall be delivered as follows:
(a) If to a Holder other than TEC, at the most current address given
by that Holder to Thoratec, in accordance with this Section 14.
(b) if to Thoratec, to:
Thoratec Laboratories Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: D. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ White & ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: August ▇. ▇▇▇▇▇▇▇, Esq.
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(c) If to TEC, to:
Thermo Electron Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
with copies to:
▇▇▇▇ and ▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
15. Successors and Assigns. This Agreement may not be assigned by TEC to
any Person, provided that TEC may assign rights under this Agreement to any
Person to whom it simultaneously sells or otherwise transfers Registrable
Securities then representing more than 5% of the Voting Power of Thoratec.
"Voting Power" for this purpose has the same meaning that it has in the
Shareholder Agreement that was signed with the Merger Agreement. Any such
assignment shall not be effected unless and until the assignee assumes in
writing all the obligations under this Agreement that correspond to the rights
being assigned to that assignee, as determined in good faith by Thoratec. This
Agreement shall be binding upon any successor to Thoratec (including any entity
issuing securities in exchange for the Registrable Securities).
16. Governing Law. This Agreement shall be governed by the laws of the
State of California without reference to its principles of conflicts of law.
17. 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.
18. Severability. If any provision of this Agreement should be finally
determined to be invalid, illegal or unenforceable in any respect against a
party hereto, it shall be adjusted if possible to effect the intention of the
parties. In any event, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby, and such invalidity, illegality or unenforceability shall only
apply as to such party in the specific jurisdiction where such final
determination shall have been made.
19. Headings. The section headings in this Agreement are solely for the
purpose of reference and shall not in any way affect the meaning or
interpretation of this Agreement. The word "including" shall mean "including
without limitation."
20. Entire Agreement. This Agreement, the Merger Agreement and the
Shareholder Agreement referenced previously embody the entire agreement and
understanding of the parties hereto with respect to the subject matter of this
Agreement.
21. Additional Actions. From time to time, at either party's request and
without further consideration, the other party hereto (and any Holder in
addition to TEC) shall execute and deliver such additional documents and take
such other actions as may be necessary or desirable to effectuate this
Agreement.
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22. Representation of Counsel. Each party to this Agreement has been
represented by counsel during the preparation and negotiation of this Agreement,
and therefore waives any rule of construction that would construe ambiguities
against the party drafting this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
THORATEC LABORATORIES CORPORATION
By: /s/ D. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
Name: D. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President and Chief Executive
Officer
THERMO ELECTRON CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇
Title: Chief Financial Officer
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