REGISTRATION RIGHTS AGREEMENT

Exhibit 4.2

 

REGISTRATION RIGHTS AGREEMENT

 

BETWEEN

 

ADVANCED MEDICAL OPTICS, INC.,

 

AS ISSUER,

 

AND

 

MORGAN STANLEY & CO. INCORPORATED,

 

J.P. MORGAN SECURITIES INC.

 

AND

 

UBS SECURITIES LLC,

 

AS INITIAL PURCHASERS,

 

DATED AS OF JULY 18, 2005

REGISTRATION RIGHTS AGREEMENT dated as of July 18, 2005 (this “ Agreement ”), between Advanced Medical Optics, Inc., a Delaware corporation (the “ Company ”), and the several initial purchasers named in SCHEDULE I hereto (the “ Initial Purchasers ”). In order to induce the Initial Purchasers to enter into the Purchase Agreement dated July 13, 2005 (the “ Purchase Agreement ”), among the Company and the Initial Purchasers, the Company has agreed to provide the registration rights set forth in this Agreement.

 

The Company agrees with the Initial Purchasers, (i) for their benefit as Initial Purchasers and (ii) for the benefit of the beneficial owners (including the Initial Purchasers) from time to time of the Notes (as defined herein) and the beneficial owners from time to time of the Underlying Common Stock (as defined herein) issued upon conversion of the Notes (each of the foregoing a “ Holder ” and together the “ Holders ”), as follows:

 

SECTION 1 . Definitions. Capitalized terms used herein without definition shall have their respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

 

“ Additional Interest Amount ” has the meaning set forth in Section 2(e) hereof.

 

“ Affiliate ” means with respect to any specified person, an “ affiliate ,” as defined in Rule 144 (as defined below), of such person.

 

“ Amendment Effectiveness Deadline Date ” has the meaning set forth in Section 2(d) hereof.

 

“ Business Day ” means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in The City of New York are authorized or obligated by law or executive order to close.

 

“ Commission ” means the Securities and Exchange Commission.

 

“ Common Stock ” means the shares of common stock, $0.01 par value per share, of the Company, together with the rights evidenced by such common stock to the extent provided in the Rights Agreement dated as of June 24, 2002, between the Company and Mellon Investor Services LLC, as amended, and any other shares of common stock as may constitute “Common Stock” for purposes of the Indenture (as defined below), including the Underlying Common Stock.

 

“ Conversion Price ” has the meaning assigned such term in the Indenture.

 

“ Damages Accrual Period ” has the meaning set forth in Section 2(e) hereof.

 

“ Damages Payment Date ” means each January 1 and July 1.

 

“ Deferral Notice ” has the meaning set forth in Section 3(h) hereof.

 

“ Deferral Period ” has the meaning set forth in Section 3(h) hereof.

 

“ Effectiveness Deadline Date ” has the meaning set forth in Section 2(a) hereof.

“ Effectiveness Period ” means the period commencing on the date hereof and ending on the earlier of the date that all Registrable Securities have ceased to be Registrable Securities or have ceased to be outstanding.

 

“ Election and Questionnaire ” means a written election delivered to the Company containing substantially the information called for by the Selling Securityholder Election and Questionnaire attached as Annex A to the Offering Memorandum of the Company dated July 13, 2005, relating to the Notes, as such written election may be amended upon the advice of nationally-recognized counsel experienced in such matters, to the extent reasonably necessary to ensure compliance with applicable law.

 

“ Election Holder ” means, on any date, any Holder that has delivered a Election and Questionnaire to the Company on or prior to such date.

 

“ Event ” has the meaning set forth in Section 2(e) hereof.

 

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.

 

“ Filing Deadline Date ” has the meaning set forth in Section 2(a) hereof.

 

“ Fundamental Change ” has the meaning set forth in the Indenture.

 

“ Holder ” has the meaning set forth in the second paragraph of this Agreement.

 

“ Indenture ” means the Indenture, dated as of the date hereof, between the Company and U.S. Bank National Association, as trustee, pursuant to which the Notes shall be issued.

 

“ Initial Purchasers ” has the meaning set forth in the preamble hereof.

 

“ Initial Shelf Registration Statement ” has the meaning set forth in Section 2(a) hereof.

 

“ Issue Date ” means July 18, 2005.

 

“ Material Event ” has the meaning set forth in Section 3(h) hereof.

 

“ Note Register ” has the meaning set forth in the Indenture.

 

“ Note Registrar ” has the meaning set forth in the Indenture.

 

“ Notes ” means the 1.375% Convertible Senior Subordinated Notes due 2025 of the Company issued and sold pursuant to the Purchase Agreement.

 

“ Purchase Agreement ” has the meaning set forth in the preamble hereof.

 

“ Prospectus ” means the prospectus included in any Registration Statement (as defined below) (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance upon Rule 430A

 

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promulgated under the Securities Act), as amended or supplemented by any amendment or prospectus supplement, including post-effective amendments, and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such Prospectus.

 

“ Record Date ” means each June 15 and December 15.

 

“ Record Holder ” means, with respect to any Damages Payment Date relating to any Notes as to which any Additional Interest Amount has accrued, the registered Holder of such Note on the December 15 immediately preceding a Damages Payment Date occurring on a January 1, and on the June 15 immediately preceding a Damages Payment Date occurring on a July 1.

 

“ Registrable Securities ” means the Notes until such Notes have been converted into or exchanged for the Underlying Common Stock and, at all times subsequent to any such conversion or exchange, the Underlying Common Stock and any securities into or for which such Underlying Common Stock has been converted or exchanged, and any security issued with respect thereto upon any stock dividend, split or similar event until, in the case of any such security, the earliest of:

 

(a) the date on which such security has been registered under the Securities Act and disposed of pursuant to an effective registration statement;

 

(b) the date on which such security is distributed to the public pursuant to Rule 144 under the Securities Act or may be sold or transferred by a person who is not an Affiliate of the Company pursuant to Rule 144(k) under the Securities Act (or any other similar provision then in force) without any volume or manner of sale restrictions thereunder; and

 

(c) the date on which such securities cease to be outstanding (whether as a result of repurchase and cancellation, conversion or otherwise).

 

“ Registration Statement ” means any registration statement of the Company that covers any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such Registration Statement.

 

“ Restricted Securities ” means “ restricted securities ” as defined in Rule 144.

 

“ Rule 144 ” means Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission.

 

“ Rule 144A ” means Rule 144A under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission.

 

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated by the Commission thereunder.

 

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“ Shelf Registration Statement ” has the meaning set forth in Section 2(a) hereof.

 

“ Special Counsel ” means Latham & Watkins LLP or one such other successor counsel as shall be specified by the Holders of a majority of the Registrable Securities and reasonably acceptable to the Company, but which may, with the written consent of the Initial Purchasers (which shall not be unreasonably withheld), be another nationally recognized law firm experienced in securities law matters designated by the Company, the reasonable fees and expenses in connection with Blue Sky qualifications of the Registrable Securities of which will be paid by the Company pursuant to Section 5 hereof. For purposes of determining the Holders of a majority of the Registrable Securities in this definition, Holders of Notes shall be deemed to be the Holders of the number of shares of Underlying Common Stock into which such Notes are or would be convertible as of the date the consent is requested.

 

“ Subsequent Shelf Registration Statement ” has the meaning set forth in Section 2(b) hereof.

 

“ TIA ” means the Trust Indenture Act of 1939, as amended.

 

“ Trustee ” means U.S. Bank National Association, the trustee under the Indenture.

 

“ Underlying Common Stock ” means the Common Stock into which the Notes are convertible or issued upon any such conversion.

 

SECTION 2 . Shelf Registration. (a) The Company shall use its reasonable best efforts to prepare and file or cause to be prepared and filed with the Commission, by the date (the “ Filing Deadline Date ”) ninety (90) calendar days after the Issue Date, a Registration Statement for an offering to be made on a delayed or continuous basis pursuant to Rule 415 of the Securities Act (a “ Shelf Registration Statement ”) registering the resale from time to time by Holders thereof of all of the Registrable Securities (the “ Initial Shelf Registration Statement ”). The Initial Shelf Registration Statement shall be on Form S-3 or another appropriate form permitting registration of such Registrable Securities for resale by such Holders in accordance with the methods of distribution elected by the Holders and set forth in the Initial Shelf Registration Statement. The Company shall use its reasonable best efforts to cause the Initial Shelf Registration Statement to be declared effective under the Securities Act by the date that is one hundred eighty (180) calendar days after the Issue Date (the “ Effectiveness Deadline Date ”), and to keep the Initial Shelf Registration Statement (or any Subsequent Shelf Registration Statement) continuously effective under the Securities Act until the expiration of the Effectiveness Period. At the time the Initial Shelf Registration Statement is declared effective, each Holder that became a Election Holder on or prior to the date ten (10) Business Days prior to such time of effectiveness shall be named as a selling securityholder in the Initial Shelf Registration Statement and the related Prospectus in such a manner as to permit such Holder to deliver such Prospectus to purchasers of Registrable Securities in accordance with applicable law. No Holder that is not a Election Holder shall be entitled to be named as a selling securityholder in or have the Registrable Securities held by it covered in a Shelf Registration Statement. The Company shall use its reasonable best efforts to ensure that none of the Company’s securityholders (other than the Holders of Registrable Securities) shall have the right to include any of the Company’s securities in the Shelf Registration Statement.

 

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(b) If the Initial Shelf Registration Statement or any Subsequent Shelf Registration Statement ceases to be effective for any reason at any time during the Effectiveness Period (other than because all Registrable Securities registered thereunder shall have been resold pursuant thereto or shall have otherwise ceased to be Registrable Securities), the Company shall use its reasonable best efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall within thirty (30) days of such cessation of effectiveness amend the Shelf Registration Statement in a manner reasonably expected to obtain the withdrawal of the order suspending the effectiveness thereof, or file an additional Shelf Registration Statement covering all of the securities that as of the date of such filing are Registrable Securities (a “ Subsequent Shelf Registration Statement ”). If a Subsequent Shelf Registration Statement is filed, the Company shall use its reasonable best efforts to cause the Subsequent Shelf Registration Statement to become effective as promptly as is practicable after such filing and to keep such Registration Statement (or subsequent Shelf Registration Statement) continuously effective until the end of the Effectiveness Period.

 

(c) The Company shall supplement and amend the Shelf Registration Statement if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement, if required by the Securities Act or as necessary to name a Election Holder as a selling securityholder pursuant to Section 2(d) below.

 

(d) Each Holder agrees that if such Holder wishes to sell Registrable Securities pursuant to a Shelf Registration Statement and related Prospectus, it will do so only in accordance with this Section 2(d) and Section 3(h) of this Agreement. Following the date that the Initial Shelf Registration Statement is declared effective, each Holder that is not a Election Holder wishing to sell Registrable Securities pursuant to a Shelf Registration Statement and related Prospectus agrees to deliver an Election and Questionnaire to the Company at least fifteen (15) Business Days prior to any intended distribution of Registrable Securities under the Shelf Registration Statement. From and after the date the Initial Shelf Registration Statement is declared effective, the Company shall, as promptly as practicable after the date an Election and Questionnaire is delivered to the Company in accordance with the provisions of Section 8(c), and in any event upon the later of (1) fifteen (15) Business Days after such date or (2) fifteen (15) Business Days after the expiration of any Deferral Period in effect when the Election and Questionnaire is delivered or put into effect within fifteen (15) Business Days of such delivery date:

 

(i) if required by applicable law, file with the Commission a post-effective amendment to the Shelf Registration Statement or prepare and, if required by applicable law, file a supplement to the related Prospectus or a supplement or amendment to any document incorporated therein by reference or file any other required document so that the Holder delivering such Election and Questionnaire is named as a selling securityholder in the Shelf Registration Statement and the related Prospectus in such a manner as to permit such Holder to deliver such Prospectus to purchasers of the Registrable Securities in accordance with applicable law and, if the Company shall file a post-effective amendment to the Shelf Registration Statement, use its reasonable best efforts to cause such post-effective amendment to be declared effective under the Securities Act as promptly as is practicable, but in any event by the date (the “ Amendment Effectiveness Deadline Date ”) that is forty-five (45) days after the date such post-effective amendment is required by this clause to be filed by the Company in accordance with this clause (i);

 

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(ii) provide such Holder copies of any documents filed pursuant to Section 2(d)(i); and

 

(iii) notify such Holder as promptly as practicable after the effectiveness under the Securities Act of any post-effective amendment filed pursuant to Section 2(d)(i);

 

provided , that if such Election and Questionnaire is delivered during a Deferral Period, the Company shall so inform the Holder delivering such Election and Questionnaire and shall take the actions set forth in clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in accordance with Section 3(h). Notwithstanding anything contained herein to the contrary, (i) the Company shall be under no obligation to name any Holder that is not a Election Holder as a selling securityholder in any Registration Statement or related Prospectus and (ii) the Amendment Effectiveness Deadline Date shall be extended by up to fifteen (15) Business Days from the expiration of a Deferral Period if such Deferral Period shall be in effect on the Amendment Effectiveness Deadline Date.

 

(e) The parties hereto agree that the Holders of Notes that are Registrable Securities will suffer damages, and that it would not be feasible to ascertain the extent of such damages with precision, if, other than as permitted hereunder,

 

(i) the Initial Shelf Registration Statement has not been filed on or prior to the Filing Deadline Date,

 

(ii) the Initial Shelf Registration Statement has not been declared effective under the Securities Act on or prior to the Effectiveness Deadline Date, or

 

(iii) the aggregate duration of Deferral Periods in any period exceeds the number of days permitted in respect of such period pursuant to Section 3(h) hereof.

 

Each event described in any of the foregoing clauses (i) through (iii) is individually referred to herein as an “ Event .” For purposes of this Agreement, each Event set forth above shall begin and end on the dates set forth in the table set forth below:

 

 

For purposes of this Agreement, Events shall begin on the dates set forth in the table above and shall continue until the ending dates set forth in the table above.

 

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Commencing on (and including) any date that an Event has begun and ending on (but excluding) the next date on which there are no Events that have occurred and are continuing (a “ Damages Accrual Period ”), the Company shall pay, as Additional Interest and not as a penalty, to Record Holders of Notes that are Registrable Securities an amount accruing, for each day in the Damages Accrual Period, in respect of any Note, at a rate per annum equal to (A) 0.25% of the aggregate principal amount of such Note to and including the 90th calendar day of the Damages Accrual Period and (B) 0.50% of the aggregate principal amount of such Note from and after the 91st calendar day of the Damages Accrual Period (the “ Additional Interest Amount ”). Notwithstanding the foregoing, no Additional Interest Amount shall accrue as to any Note that is a Registrable Security from and after the earlier of (x) the date such Note is no longer a Registrable Security and (y) expiration of the Effectiveness Period. The rate of accrual of the Additional Interest Amount with respect to any period shall not exceed the rate provided for in this paragraph notwithstanding the occurrence of multiple concurrent Events. Following the cure of all Events relating to any particular Note, the accrual of Additional Interest with respect to such Note shall cease.

 

The Additional Interest Amount shall accrue from the first day of the applicable Damages Accrual Period, and shall be payable on each Damages Payment Date during the Damage Accrual Period (and on the Damages Payment Date next succeeding the end of the Damages Accrual Period if the Damage Accrual Period does not end on a Damages Payment Date) to the Record Holders of Notes that are Registrable Securities entitled thereto; provided , that any Additional Interest Amount accrued with respect to any Note or portion thereof redeemed by the Company on a redemption date, or repurchased by the Company on a repurchase date in connection with a Fundamental Change, in either case that is after a Damages Payment Date and before the next Record Date, shall, in any such event, be paid on the applicable redemption date or repurchase date, as the case may be, instead to the Holder who submitted such Note or portion thereof for redemption on the applicable redemption date or repurchase on the applicable repurchase date; provided, further, that any Additional Interest Amount accrued with respect to any Note or portion thereof converted into Underlying Common Stock in connection with a Fundamental Change shall be paid on the conversion date instead to the Holder that submitted such Note or portion thereof for conversion. The Trustee shall be entitled, on behalf of registered holders of Notes, to seek any available remedy for the enforcement of this Agreement, including for the payment of such Additional Interest Amount. Notwithstanding the foregoing, the parties agree that the sole damages payable for a violation of the terms of this Agreement with respect to which

 

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Additional Interest are expressly provided shall be such Additional Interest. Nothing shall preclude any Holder from pursuing or obtaining specific performance or other equitable relief with respect to this Agreement.

 

All of the Company’s obligations set forth in this Section 2(e) to pay any Additional Interest Amount that is outstanding with respect to any Note that is a Registrable Security at the time such Note ceases to be a Registrable Security shall survive until such time as all such obligations with respect to such Note have been satisfied in full (notwithstanding termination of this Agreement pursuant to Section 8(k) hereof).

 

The parties hereto agree that the Additional Interest provided for in this Section 2(e) constitute a reasonable estimate of the damages that may be incurred by Holders of Notes that are Registrable Securities by reason of the failure of the Shelf Registration Statement to be filed or declared effective or available for effecting resales of Notes that are Registrable Securities in accordance with the provisions hereof.

 

SECTION 3 . Registration Procedures. In connection with the registration obligations of the Company under Section 2 hereof, during the Effectiveness Period the Company shall:

 

(a) Before filing any Registration Statement or Prospectus or any amendments or supplements thereto with the Commission (other than any supplements that do nothing more substantive than name one or more Election Holders as selling securityholders), furnish to the Initial Purchasers and the Special Counsel of such offering, if any, copies of all documents proposed to be filed at least three (3) Business Days prior to the filing of such Registration Statement or amendment thereto or Prospectus or supplement thereto.

 

(b) Subject to Section 3(h) hereof, prepare and file with the Commission such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement continuously effective for the applicable period specified in Section 2(a) hereof; cause the related Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act; and use its reasonable best efforts to comply with the provisions of the Securities Act applicable to it with respect to the disposition of all securities covered by such Registration Statement during the Effectiveness Period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement as so amended or such Prospectus as so supplemented.

 

(c) As promptly as practicable give notice to the Election Holders, (i) when any Prospectus or Registration Statement has been filed with the Commission and, with respect to a Registration Statement, when the same has been declared effective; provided , however , that the Company shall not be required by this clause (i) to notify any Election Holder of the filing of a supplement to any Prospectus that does nothing more substantive than name one or more other Election Holders as selling securityholders, (ii) of any request, following the effectiveness of the Initial Shelf Registration Statement under the Securities Act, by the Commission or any other federal or state governmental authority for amendments or supplements to any Registration Statement or related Prospectus or for additional information related thereto, (iii) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending the effectiveness of any Registration Statement or the initiation or threatening of any

 

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proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, (v) of the occurrence of, but not the nature of or details concerning, a Material Event ( provided , that no notice by the Company shall be required pursuant to this clause (v) in the event that the Company either promptly files a supplement to update the Prospectus or a Current Report on Form 8-K or other appropriate Exchange Act report that is incorporated by reference into the Registration Statement, which, in any case, contains the requisite information with respect to such Material Event that results in such Registration Statement no longer containing any untrue statement of a material fact or omitting to state a material fact necessary to make the statement contained therein not misleading) and (vi) of the determination by the Company that a post-effective amendment to a Registration Statement will be filed with the Commission, which notice may, at the discretion of the Company (or as required pursuant to Section 3(h)), state that it constitutes a Deferral Notice, in which event the provisions of Section 3(h) shall apply.

 

(d) Use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction in which they have been qualified for sale, in either case as promptly as practicable, and provide prompt notice to each Election Holder and the Initial Purchasers of the withdrawal of any such order.

 

(e) As promptly as practicable furnish to each Election Holder, the Special Counsel and the Initial Pu