-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TGUZQwWIhzEYsPIZalb7X6xxcBTuzimMCGVD23Lipub3djpfU324XkD/mDhmrM4U KGZ3dHhmUGsZhlz5Y2KxBA== 0000950123-98-010199.txt : 19981124 0000950123-98-010199.hdr.sgml : 19981124 ACCESSION NUMBER: 0000950123-98-010199 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19981123 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CARDIOTECH INTERNATIONAL INC CENTRAL INDEX KEY: 0001011060 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 043186647 STATE OF INCORPORATION: MA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-48655 FILM NUMBER: 98757782 BUSINESS ADDRESS: STREET 1: 78-E OLYMPIA AVENUE CITY: WOBURN STATE: MA ZIP: 01801-4772 BUSINESS PHONE: 781-933-4772 MAIL ADDRESS: STREET 1: 11 STATE ST CITY: WOBURN STATE: MA ZIP: 01801 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DRESDNER KLEINWORT BENSON PRIVATE EQUITY PARTNERS LP CENTRAL INDEX KEY: 0001059086 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 133949246 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 75 WALL STREET CITY: NEW YORK STATE: NY ZIP: 10005 BUSINESS PHONE: 2124292100 MAIL ADDRESS: STREET 1: 75 WALL STREET CITY: NEW YORK STATE: NY ZIP: 10005 SC 13D 1 SCHEDULE 13D 1 OMB APPROVAL OMB Number: 3235-0145 Expires: August 31, 1999 Estimated average burden hours per response 14.90 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 0)* CardioTech International, Inc. (Name of Issuer) Common Stock, par value $.01 per share (Title of Class of Securities) 14160C-10-0 (CUSIP Number) Harvey M. Eisenberg, Esq. O'Sullivan Graev & Karabell, LLP 30 Rockefeller Plaza New York, NY 10112 (212) 408-2400 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) March 31, 1998 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [X]. NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). POTENTIAL PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A CURRENTLY VALID OMB CONTROL NUMBER. 1 2 CUSIP No. 14160C-10-0 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). Dresdner Kleinwort Benson Private Equity Partners LP 13-3949246 2. Check the Appropriate Box if a Member of a Group (See Instructions) (a) (b) X 3. SEC Use Only 4. Source of Funds (See Instructions) WC 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) 6. Citizenship or Place of Organization Delaware Number of Shares Beneficially 7. Sole Voting Power 1,136,484 Owned by Each Reporting Person 8. Shared Voting Power 0 With: 9. Sole Dispositive Power 1,136,484 10. Shared Dispositive Power 0 11. Aggregate Amount Beneficially Owned by Each Reporting Person 1,136,484 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) 13. Percent of Class Represented by Amount in Row (11) 21.01% 14. Type of Reporting Person (See Instructions) PN 2 3 ITEM 1. SECURITY AND ISSUER The name of the issuer is CardioTech International, Inc. (hereinafter referred to as the "Issuer"). The address of the Issuer's principal executive offices is 78E Olympia Avenue, Woburn, MA 01801. This statement relates to the Issuer's Common Stock, $.01 par value (the "Common Stock"). ITEM 2. IDENTITY AND BACKGROUND This statement is being filed by Dresdner Kleinwort Benson Private Equity Partners LP, a Delaware limited partnership (hereinafter referred to as "DKBPEP"), whose principal office is located at 75 Wall Street, New York, New York 10005. DKBPEP is engaged in making private equity investments in the United States. The general partner of DKBPEP is Dresdner Kleinwort Benson Private Equity Managers LLC, a Delaware limited liability company ("DKBPEM"), which is engaged in managing DKBPEP's private equity investment business, and whose principal office is located at the same address as DKBPEP. During the past five years, DKBPEP has not been convicted in a criminal proceeding. During the past five years, DKBPEP has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and was not or is not, as a result of such proceeding, subject to a judgment, decree or final order enjoining any future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. The sole member of DKBPEM is Kleinwort Benson (USA) Inc., whose principal office is located at the same address as DKBPEP. Kleinwort Benson (USA) Inc. is a wholly-owned subsidiary of Kleinwort Benson Holdings, Inc. whose principal office is located at the same address as DKBPEP. Kleinwort Benson Holdings, Inc. is a wholly-owned subsidiary of Inveresk Stockholders Ltd. ("Inveresk"), whose principal office is located at 20 Fenchurch Street, London EC3P 3DB. Inveresk is a wholly-owned subsidiary of Kleinwort Benson Limited, whose address is the same as that of Inveresk. Kleinwort Benson Limited is wholly-owned by Kleinwort Benson Group plc. which is wholly owned by Dresdner Investments (UK) plc, each of which's principal office are located at the same address as Inveresk. Dresdner Investments (UK) plc is wholly owned by Zenon Beteiligungsgesellschaft mbH ("Zenon"), a German corporation with its principal offices located at Juergen-Ponto-Platz 1, D-60301 Frankfurt am Main, Germany. Zenon is wholly-owned by Dresdner Bank AG, a German bank with its principal office at the same address as Zenon. 4 Set forth in Schedule A hereto and incorporated herein by reference are the names, business addresses, principal occupations and employments and citizenship of each director and executive officer of each of the companies described above. Insofar as the requirements of Items 3-6 inclusive of this Schedule 13D Statement require that, in addition to DKBPEP, the information called for therein should be given with respect to each of the persons listed in this Item 2, including the directors and executive officers thereof, the information provided in Items 3-6 with respect to DKBPEP should also be considered fully responsive with respect to the aforementioned persons who have no separate interests in the Issuer's Common Stock which is required to be reported thereunder. Although the definition of "beneficial ownership" in Rule 13d-3 under the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), might also be deemed to constitute these persons beneficial owners of the Issuer's Common Stock acquired by DKBPEP, neither the filing of this statement nor any of its contents shall be deemed an admission that any of such persons is a beneficial owner of the Issuer's Common Stock acquired by DKBPEP or a member of a group together with DKBPEP either for the purpose of Schedule 13D of the Exchange Act or for any other purpose with respect to the Issuer's Common Stock. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION Description of Transactions On March 31, 1998, DKBPEP and the Issuer entered into a Note Purchase Agreement (the "Note Purchase Agreement"). Pursuant to the Note Purchase Agreement, DKBPEP purchased $1,660,000 in aggregate principal amount of a 7% Convertible Senior Secured Note due March 31, 2003 (the "Note"). The aggregate principal amount of the Note is immediately convertible (following applicable notice to the Issuer and subject to applicable regulatory approvals) into 832,080 shares of Common Stock of the Issuer at the initial conversion price of $1.995 per share of Common Stock (subject to certain adjustments as described in the Note). Interest on the Note is payable quarterly by the Issuer at the rate of 7% per annum in the form of either cash or additional Notes ("Additional Notes") at the election of DKBPEP. The Additional Notes are issuable in the identical form as the Note, and the aggregate principal amount thereof is immediately convertible (following applicable notice to the Issuer and subject to applicable regulatory approvals) into Common Stock at the same conversion price as is applicable to the Note. As of November 12, 1998, DKBPEP had received interest payments with respect to the Note in the form of Additional Notes in the aggregate principal amount of $58,608.38. Such Additional Notes are immediately convertible (following applicable notice to the Issuer and subject to applicable regulatory approvals) into 29,377 shares of Common Stock. DKBPEP currently expects to receive additional quarterly payments of interest on the Note in the form of Additional Notes which would also be convertible into additional shares of Common Stock at the same conversion price as is applicable to the Note. -2- 5 The conversion price applicable to the Note and the Additional Notes is subject to certain anti-dilution provisions which, if triggered, would have the effect of increasing the number of shares of Common Stock issuable upon conversion of the Note and the Additional Notes. Such anti-dilution provisions would be triggered by, among other things, the issuance by the Issuer of Common Stock at less than either the conversion price applicable to the Note or the then current market price of the Common Stock (subject to certain exceptions set forth in the Note and the Additional Notes). The conversion price applicable to the Note and the Additional Notes is also subject to certain adjustments upon the occurrence of a change of control of the Issuer or the receipt by DKBPEP of a notice of optional redemption from the Issuer. The effect of such conversion price adjustments also would increase the number of shares of Common Stock issuable upon conversion of the Note and the Additional Notes, as further described therein. The Note and the Additional Notes are secured by a pledge of all of the stock of the Issuer's subsidiary, CardioTech International, Ltd. and the proceeds of the Issuer's key-man life insurance with respect to its chief executive officer. The Note and the Additional Notes are subject to (i) optional redemption at the election of the Issuer (subject to payment of a redemption premium), (ii) mandatory redemption at the election of DKBPEP upon either a change of control of the Issuer (subject to payment of a redemption premium) or upon acceleration following an event of default and (iii) repayment in full at maturity on March 31, 2003. The Note Purchase Agreement obligated DKBPEP to purchase additional Notes upon the attainment by the Issuer of certain operating milestones described in the Note Purchase Agreement. On November 12, 1998, pursuant to an amendment to the Note Purchase Agreement and in lieu of purchasing such additional Notes, DKBPEP purchased 500,000 shares of Series A Preferred Stock of the Issuer (the "Preferred Shares") for an aggregate purchase price of $500,000. The Preferred Shares are immediately convertible into 275,027 shares of Common Stock of the Issuer at the initial conversion price of $1.818 per share of Common Stock (subject to certain adjustments as described in the certificate of designations for the Preferred Shares) based on the original cost of the Preferred Shares (plus any accrued but unpaid dividends thereon). The Preferred Shares are subject to optional redemption at the election of the Issuer (subject to payment of a redemption premium) and mandatory redemption at the election of DKBPEP upon a change of control of the Issuer, to the extent such change of control has been approved by the Issuer (subject to payment of a redemption premium). Dividends accrue and cumulate quarterly at a rate of 10% per annum with respect to the original cost of the Preferred Shares (and any accrued but unpaid dividends thereon). Although DKBPEP has the right to elect to receive payment of such dividends in cash, DKBPEP currently expects such dividends to accrue and cumulate. The Preferred Shares will be convertible into additional shares of Common Stock to the extent that dividends continue to accrue, but are unpaid, with respect to such Preferred Shares. -3- 6 The conversion price applicable to the conversion of the Preferred Shares into Common Stock is subject to substantially the same anti-dilution provisions as set forth in the Note and the Additional Notes. In addition, the conversion price applicable to the Preferred Shares is subject to certain adjustments upon the change of control of the Issuer, the commencement of a non-consensual tender offer with respect to Issuer or the receipt by DKBPEP of a notice of optional redemption from the Issuer. The effect of such conversion price adjustments would increase the number of shares of Common Stock issuable upon conversion of the Preferred Shares, as further described in the certificate of designations therefor. Notwithstanding the potential adjustments to the conversion price applicable to the Preferred Shares, in accordance with the rules of the American Stock Exchange (upon which the Common Stock is listed), the aggregate number of shares of Common Stock issuable upon conversion of the Preferred Shares currently is limited to 854,582 shares. The balance of the number of shares of Common Stock which would otherwise be issuable upon conversion of the Preferred Shares would be paid to the holders thereof in cash in an amount equal to the then market price of such shares. The funds DKBPEP used to acquire the Note and the Preferred Shares were from its contributed capital. Disclaimer of Group Status DKBPEP disclaims that it is a member of a group with any other persons either for purposes of this Schedule 13D or for any other purpose related to its beneficial ownership of the Issuer's securities. ITEM 4. PURPOSE OF THE TRANSACTION The acquisition of the Issuer's securities has been made by DKBPEP for investment purposes. Although DKBPEP has no present intention to do so, DKBPEP may make additional purchases of securities either in the open market or in privately negotiated transactions, including transactions with the Issuer, depending on an evaluation of the Issuer's business prospects and financial condition, the market for the Common Stock, other available investment opportunities, money and stock market conditions and other future developments. In addition, DKBPEP may acquire beneficial ownership of additional securities of the Issuer as described in Item 3 above. Depending on these factors, DKBPEP may decide to sell all or part of its holdings of the Issuer's securities in one or more public or private transactions. Pursuant to the Note Purchase Agreement, as long as the Notes are outstanding, the holders of a majority of the then outstanding principal amount of the Notes (initially, DKBPEP) have the right to designate a director for election to the Board of Directors of the Issuer. Such director designee will be a member of the Nominations Committee, Compensation Committee and Executive Committee of the Board of Directors of the Issuer. -4- 7 Except as set forth in this Item 4, DKBPEP has no present plans or proposals that relate to or would result in any of the actions specified in clauses (a) through (j) of Item 3 of Schedule 13D. However, DKBPEP reserves the right to propose or participate in future transactions which may result in one or more of such actions, including but not limited to, an extraordinary corporate transaction, such as a merger, reorganization or liquidation, of a material amount of assets of the Issuer or its subsidiaries, or other transactions which might have the effect of causing the Issuer's Common Stock to cease to be listed on the American Stock Exchange or causing the Common Stock to become eligible for termination of registration, under Section 12(g) of the Exchange Act. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) DKBPEP currently owns no Common Stock of the Issuer. Upon conversion of the Note, the Additional Notes and the Preferred Shares issued as of November 12, 1998, subject to the receipt of applicable regulatory approvals, DKBPEP would acquire 21.01% of the issued and outstanding shares of Common Stock (determined after giving effect to the conversion). (b) Upon conversion of the Note, the Additional Notes and the Preferred Shares, DKBPEP would have sole voting power and dispositive power with respect to the shares of Common Stock acquired upon such conversion. (c) Except as reported in Item 6 below and incorporated herein by reference, there have been no transactions by DKBPEP in the Common Stock during the past sixty days which are required to be reported in this Statement. (d) No person other than DKBPEP has the right to receive or the power to direct the receipt of dividends from or the proceeds from the sale of the Common Stock owned beneficially by DKBPEP. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER Reference is made to the information disclosed under Items 3 and 4 of this Statement which is incorporated by reference in response to this Item. In addition to such information, the following contracts, arrangements, understandings or relationships are reported hereunder. Registration Rights Agreement. Simultaneously with the execution of the Note Purchase Agreement, the Issuer entered into a Registration Rights Agreement dated as of March 31, 1998 (the "Registration Agreement"), with DKBPEP. The Registration Agreement grants DKBPEP certain demand rights with respect to registrations under the Securities Act of 1933 (the "Act") of Common Stock acquired by DKBPEP upon conversion of the Note, the Additional Notes or the Preferred Shares. The Registration Statement also grants certain "piggy-back" rights to DKBPEP to participate in certain -5- 8 registration statements filed by the Issuer. The Issuer has agreed to pay all costs and expenses of all registrations under the Registration Agreement. The Registration Agreement also contains customary terms and conditions with respect to the hold back of shares from public sale or distribution, selection of underwriters and indemnification. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS (1) Note Purchase Agreement dated as of March 31, 1998, between the Issuer and DKBPEP, previously filed as an exhibit to the Issuer's Report on Form 8-K, filed on April 17, 1998 and incorporated herein by reference. (2) 7% Convertible Senior Note dated as of March 31, 1998, issued by the Issuer to DKBPEP, previously filed as an exhibit to the Issuer's Report on Form 8-K, filed on April 17, 1998, and incorporated herein by reference. (3) Registration Rights Agreement dated as of March 31, 1998, between the Issuer and DKBPEP. (4) Amendment dated as of November 12, 1998, to Note Purchase Agreement dated as of March 31, 1998, between the Issuer and the DKBPEP and to Registration Rights Agreement dated as of March 31, 1998, between the Issuer and DKBPEP, previously filed as an exhibit to the Issuer's Quarterly Report on Form 10-Q, filed on November 16, 1998, and incorporated herein by reference. (5) Certificate of Vote of Directors Establishing a Class or Series of Stock, previously filed as an exhibit to the Issuer's Quarterly Report on Form 10-Q, filed on November 16, 1998, and incorporated herein by reference. -6- 9 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: November 23, 1998 DRESDNER KLEINWORT BENSON PRIVATE EQUITY PARTNERS LP By: DRESDNER KLEINWORT BENSON PRIVATE EQUITY MANAGERS LLC, its general partner By: /s/ Jonathan Walker --------------------------------- Name: Jonathan Walker Title: Authorized Signatory -7- 10 SCHEDULE A ITEM 1. INFORMATION FOR OFFICERS AND DIRECTORS DKBPEM EXECUTIVE OFFICERS Person Title ------ ----- Christopher Wright Investment Partner and Board Member Jonathan Walker Investment Partner and Board Member Iain Leigh Investment Partner and Board Member Richard H. Wolf Investment Partner Volkert Doeksen Investment Partner Alexander Coleman Investment Partner Erik Linnes Board Member George Fugelsang Board Member All officers and advisory board members of DKBPEM have the same address: 75 Wall Street, New York, NY 10005-2889, except for Mr. Linnes, who is located at 20 Fenchurch Street, London EC3P 3DB England. 11 Schedule A DIRECTORS & OFFICERS KLEINWORT BENSON GENERAL INVESTMENT COMPANY LIMITED
NAME EMPLOYMENT ADDRESS CITIZENSHIP POSITION - ---- ---------- ------- ----------- -------- Michael Raymond BALIMAN Kleinwort Benson Limited 20 Fenchurch Street British Director London EC3P 3DB Timothy Gwynne BARKER Kleinwort Benson Limited 20 Fenchurch Street British Director London EC3P 3DB Peter Edwin CHURCHILL-COLEMAN Kleinwort Benson Limited 20 Fenchurch Street British Director London EC3P 3DB Stephen Andrew JACK Kleinwort Benson Limited 20 Fenchurch Street British Chairman London EC3P 3DB Andrew John WHITE Kleinwort Benson Limited 20 Fenchurch Street British Director London EC3P 3DB Audrey MORRISON Kleinwort Benson Limited 20 Fenchurch Street British Secretary London EC3P 3DB
12 Schedule A DIRECTORS & OFFICERS KLEINWORT BENSON LIMITED
NAME EMPLOYMENT ADDRESS CITIZENSHIP POSITION - ---- ---------- ------- ----------- -------- Simon Peter BALL Kleinwort Benson Limited 20 Fenchurch Street British Director London EC3P 3DB Timothy Gwynne BARKER Kleinwort Benson Limited 20 Fenchurch Street British Director London EC3P 3DB Patrick Joseph DALEY Kleinwort Benson Limited 20 Fenchurch Street British Director London EC3P 3DB Alexander Charles DOLBEY Kleinwort Benson Limited 20 Fenchurch Street British Director London EC3P 3DB Robert David Charles HENDERSON Kleinwort Benson Limited 20 Fenchurch Street British Director London EC3P 3DB P.W. LUTHY Kleinwort Benson Limited 20 Fenchurch Street U.S.A. Director London EC3P 3DB Al-Noor RAMJI Kleinwort Benson Limited 20 Fenchurch Street British Director London EC3P 3DB Timothy Anthony SHACKLOCK Kleinwort Benson Limited 20 Fenchurch Street British Director London EC3P 3DB Alan Colin Drake YARROW Kleinwort Benson Limited 20 Fenchurch Street British Director London EC3P 3DB Peter Leonard LONGCROFT Kleinwort Benson Limited 20 Fenchurch Street British Secretary London EC3P 3DB
2 13 Schedule A DIRECTORS & OFFICERS KLEINWORT BENSON GROUP plc
NAME EMPLOYMENT ADDRESS CITIZENSHIP POSITION - ---- ---------- ------- ----------- -------- Gerd Rolf HAEUSLER Dresdner Bank AG Juergen-Ponto-Platz 1 German Deputy Chairman D-60301 Frankfurt am Main, Germany Timothy Gwynne BARKER Kleinwort Benson Limited 20 Fenchurch Street British Vice Chairman London EC3P 3DB Michael James Bay GREEN Kleinwort Benson Limited 20 Fenchurch Street British Vice Chairman London EC3P 3DB Sir Michael Romilly Heald JENKINS Kleinwort Benson Limited 20 Fenchurch Street British Vice Chairman London EC3P 3DB David Holford BENSON Kleinwort Benson Limited 20 Fenchurch Street British Director London EC3P 3DB Jaime CARVAJAL y URQUIJO Kleinwort Benson Limited 20 Fenchurch Street Spanish Director London EC3P 3DB Gerhard EBERSTADT Dresdner Bank AG Juergen-Ponto-Platz 1 German Director D-60301 Frankfurt am Main, Germany Christian Jean-Marie Robert GIACOMOTTO Kleinwort Benson Limited 20 Fenchurch Street French Director London EC3P 3DB Michael Clifford John JACKAMAN Kleinwort Benson Limited 20 Fenchurch Street British Director London EC3P 3DB Jeremy LANCASTER Kleinwort Benson Limited 20 Fenchurch Street British Director London EC3P 3DB Horst Alred Gunter MULLER Kleinwort Benson Limited 20 Fenchurch Street German Director London EC3P 3DB Takeshi OHTA Kleinwort Benson Limited 20 Fenchurch Street Japanese Director London EC3P 3DB
3 14 Schedule A
NAME EMPLOYMENT ADDRESS CITIZENSHIP POSITION - ---- ---------- ------- ----------- -------- The Lord ROCKLEY Kleinwort Benson Limited 20 Fenchurch Street British Director London EC3P 3DB Lawrence McAllister URQUHART Kleinwort Benson Limited 20 Fenchurch Street Britsh Director London EC3P 3DB Peter Edwin CHURCHILL-COLEMAN Kleinwort Benson Limited 20 Fenchurch Street British Secretary London EC3P 3DB
4 15 Schedule A DIRECTORS & OFFICERS DRESDNER INVESTMENTS (UK) PLC
NAME EMPLOYMENT ADDRESS CITIZENSHIP POSITION - ---- ---------- ------- ----------- -------- Dr. Andreas LEIMBACH Kleinwort Benson Limited 20 Fenchurch Street German Director London EC3P 3DB
5 16 Schedule A DIRECTORS & OFFICERS INVERESK STOCKHOLDERS LIMITED
NAME EMPLOYMENT ADDRESS CITIZENSHIP POSITION - ---- ---------- ------- ----------- -------- Stephen Andrew JACK Kleinwort Benson Limited 20 Fenchurch Street British Director London EC3P 3DB Graham Michael LANGLAY-SMITH Kleinwort Benson Limited 20 Fenchurch Street British Director London EC3P 3DB Pia Anne Maria BENTICK-OWENS Kleinwort Benson Limited 20 Fenchurch Street Finnish Secretary London EC3P 3DB
6 17 Schedule A DIRECTORS & OFFICERS ZENON BETEILIGUNGSGESELLSCHAFT mbH
NAME EMPLOYMENT ADDRESS CITIZENSHIP POSITION - ---- ---------- ------- ----------- -------- Manfred SCHAUDWET Dresdner Bank AG Juergen-Ponto-Platz 1 German Director D-60301 Frankfurt am Main Germany
7 18 Schedule A MEMBERS OF THE SUPERVISORY BOARD DRESDNER BANK AG AS OF MAY 15, 1998
NAME EMPLOYMENT ADDRESS CITIZENSHIP POSITION - ---- ---------- ------- ----------- -------- Dr. Alfons Titzrath Dresdner Bank AG Koenigsallee 37 German Chairman of the Supervisory 40002 Duesseldorf Board Germany Klaus Carlin Trade Union HBV Kanzlerstrasse 8 German Member of the Executive 40472 Duesseldorf Board Germany Meinhard Carstensen Dresdner Bank AG Jungfernstieg 22 German Member of the Supervisory 20349 Hamburg Board Germany Reinhard Droenner Federal Executive Board of Johannes-Brahms-Platz 1 German Head of Section Banks and Trade Union DAG 20355 Hamburg Savings Banks Germany Claudia Eggert-Lehmann Dresdner Bank AG Postfach 41 41 German Member of the Supervisory 58041 Hagen Board Germany Bernhard Enseling Dresdner Bank AG Kaiserstrasse 48, German Member of the Supervisory 2. OG Board 60301 Frankfurt am Main Germany Dr. Martin Fruehauf Hoechst AG Postfach 80 03 20 German Chairman of the Supervisory 65926 Frankfurt am Main Board Germany
8 19 Schedule A
NAME EMPLOYMENT ADDRESS CITIZENSHIP POSITION - ---- ---------- ------- ----------- -------- Peter Haimerl Dresdner Bank AG Promenadeplatz 7 German Member of the Supervisory 80273 Munich Board Germany Manfred Karsten Oldenburgische Landesbank AG Filiale Diepholz German Member of the Supervisory 49356 Diepholz Board Germany Ainis Kibermanis Dresdner Bank AG Weserstrasse 31, 1. OG German Member of the Supervisory 60329 Frankfurt am Main Board Germany Bernd Kriegeskorte Dresdner Bank AG Promenadeplatz 7 German Member of the Supervisory 80273 Munich Board Germany Dr. rer. pol. Heinz Kriwet Thyssen AG August-Thyssen-Strasse 1 German Chairman of the Supervisory 40211 Duesseldorf Board Germany Dr. Edward G. Krubasik Siemens AG Wittelsbacherplatz 2 German Member of the Managing 80312 Munich Board of Directors Germany Dr. jur. Dietmar Kuhnt RWE AG Postfach 10 30 61 German Chairman of the Managing 45030 Essen Board of Directors Germany Michel Pebereau Banque Nationale de Paris S.A. 16, Boulevard des Italiens French President, General Director F-75450 Paris France Bernd Pischetsrieder Bayerische Motoren Werke AG Petuelring 130 German Chairman of the Board of 80809 Munich Managing Directors Germany
9 20 Schedule A
NAME EMPLOYMENT ADDRESS CITIZENSHIP POSITION - ---- ---------- ------- ----------- -------- Dipl.-Kfm. Uwe Plucinski Dresdner Bank AG Jungfernstieg 22 German Deputy Chairman of the 20349 Hamburg Supervisory Board Germany Sultan Salam Dresdner Bank AG Gutleutstrasse 26 German Member of the Supervisory 60329 Frankfurt am Main Board Germany Dr. Hans-Juergen Schinzler Muenchener Koeniginstrasse 107 German Chairman of the Board of Rueckversicherungs-Gesellschaft 80802 Munich Managing Directors Germany Dr. jur. Hennig Allianz AG Koeniginstrasse 28 German Chairman of the Board of Schulte-Noelle 80802 Munich Managing Directors Germany
10 21 Schedule A MEMBERS OF THE BOARD OF MANAGING DIRECTORS DRESDNER BANK AG AS OF DECEMBER 31, 1997
NAME EMPLOYMENT ADDRESS CITIZENSHIP POSITION - ---- ---------- ------- ----------- -------- Bernhard Walter Dresdner Bank AG Juergen-Ponto-Platz 1 German Chairman of the Board of 60301 Frankfurt am Main Managing Directors Germany Gerhard Eberstadt Dresdner Bank AG Juergen-Ponto-Platz 1 German Member of the Board of 60301 Frankfurt am Main Managing Directors Germany Dr. Bernd Fahrholz Dresdner Bank AG Juergen-Ponto-Platz 1 German Member of the Board of 60301 Frankfurt am Main Managing Directors Germany Leonhard H. Fischer Dresdner Bank AG Juergen-Ponto-Platz 1 German Deputy Member of the Board 60301 Frankfurt am Main of Managing Directors Germany Dr. Joachim v. Harbou Dresdner Bank AG Juergen-Ponto-Platz 1 German Member of the Board of 60301 Frankfurt am Main Managing Directors Germany Gerd Haeusler Dresdner Bank AG Juergen-Ponto-Platz 1 German Member of the Board of 60301 Frankfurt am Main Managing Directors Germany Prof. Dr. Ernst-Moritz Lipp Dresdner Bank AG Juergen-Ponto-Platz 1 German Member of the Board of 60301 Frankfurt am Main Managing Directors Germany
11 22 Schedule A
NAME EMPLOYMENT ADDRESS CITIZENSHIP POSITION - ---- ---------- ------- ----------- -------- Dr. Horst Mueller Dresdner Bank AG Juergen-Ponto-Platz 1 German Member of the Board of 60301 Frankfurt am Main Managing Directors Germany Heinz-Joerg Platzek Dresdner Bank AG Juergen-Ponto-Platz 1 German Member of the Board of 60301 Frankfurt am Main Managing Directors Germany Dr. Bernd W. Voss Dresdner Bank AG Juergen-Ponto-Platz 1 German Member of the Board of 60301 Frankfurt am Main Managing Directors Germany
12 EX-99.3 2 REGISTRATION RIGHTS AGREEMENT 1 - -------------------------------------------------------------------------------- REGISTRATION RIGHTS AGREEMENT AMONG CARDIOTECH INTERNATIONAL, INC. AND THE INVESTORS (AS DEFINED HEREIN) DATED MARCH 31, 1998 - -------------------------------------------------------------------------------- 2 REGISTRATION RIGHTS AGREEMENT dated as of March 31, 1998, between CARDIOTECH INTERNATIONAL, INC., a Massachusetts corporation (the "Company"), and the INVESTORS (as defined below). The Investors own or have the right to purchase or otherwise acquire Common Stock of the Company. The Company and the Investors deem it to be in their respective best interests to enter into this Agreement to set forth the rights of the Investors in connection with public offerings and sales of Common Stock of the Company. ACCORDINGLY, in consideration of the foregoing and the covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, the parties hereto hereby agree as follows: 1. DEFINITIONS. As used in this Agreement, the following terms have the following meanings: (a) "Commission" means the Securities and Exchange Commission or any other Federal agency at the time administering the Securities Act. (b) "Common Stock" means the Common Stock, par value $.01, of the Company. (c) "Exchange Act" means the Securities Exchange Act of 1934 or any successor Federal statute, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect from time to time. (d) "Investors" means any Person which holds more than 125,000 shares (as presently constituted and subject to subsequent adjustments for stock splits, dividends, reverse stock splits and the like) of Restricted Securities (and in the case of any person holding the Purchased Notes, on an as converted basis) and which is a party to this Agreement and includes any successor to, or transferee of, any such Person who or which agrees in writing with the Company to be treated as an Investor hereunder and to be bound by the terms and comply with all applicable provisions hereof. (e) "Majority of the Investors" means those Investors who at the time in question hold at least a majority of the Restricted Securities then held by all 3 Investors or if applicable, the Investors participating in a registration hereunder. (f) "Note Purchase Agreement" means the Note Purchase Agreement dated as of the date hereof among the Company and the Investors, as amended or modified from time to time. (g) "Other Shares" means at any time those shares of Common Stock which do not constitute Primary Shares or Registrable Shares. (h) "Person" shall be construed broadly and shall include an individual, a partnership, a corporation, an association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof. (i) "Primary Shares" means at any time the authorized but unissued shares of Common Stock and shares of Common Stock held by the Company in its treasury (but shall not include Registrable Shares). (j) "Registrable Shares" means Restricted Securities which constitute Common Stock. (k) "Reserved Common Shares" shall have the meaning ascribed thereto in the Note Purchase Agreement. (l) "Restricted Securities" means (i) the Reserved Common Shares, (ii) the Purchased Notes, (iii) any other securities of the Company into or for which the Reserved Common Shares or the Purchased Notes may be exchanged, converted or reclassified or which may be issued as a dividend or distribution on or which may be issued as a dividend or distribution on or with respect thereto and (iv) any securities received in respect of the foregoing, in each case in clauses (i) through (iii) which at any time are held by the Investors. As to any particular Restricted Securities, once issued, such Restricted Securities shall cease to be Restricted Securities when (A) they have been registered under the Securities Act, the registration statement in connection therewith has been declared effective and they have been disposed of pursuant to and in the manner described in such effective registration statement, (B) they are sold or distributed pursuant to Rule 144, (C) they can be sold (whether or not so sold) pursuant to Rule 144(k) of the Securities Act or (D) they have ceased to be outstanding. (m) "Rule 144" means Rule 144 promulgated under the Securities Act or any successor rule thereto. -2- 4 (n) "Securities" shall have the meaning ascribed thereto in the Note Purchase Agreement. (o) "Securities Act" means the Securities Act of 1933 or any successor Federal statute, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect from time to time. 2. REQUIRED REGISTRATION. (a) If at any time after the date of this Agreement, the Company shall be requested by a Majority of the Investors to effect the registration under the Securities Act of Registrable Shares that constitute at least 50% of the Restricted Securities, then the Company shall (i) notify each Investor of such request and shall provide each Investor the right (exercisable by notice to the Company delivered within 15 days of notice of such registration) to participate in such registration and (ii) use its best efforts to effect the registration under the Securities Act of the Registrable Shares which the Company is requested to register by the Investors initiating such registration and Investors delivering notices under clause (i) of this Section 2(a). (b) Anything contained in Section s 2(a) to the contrary notwithstanding, the Company shall not be obligated to effect any registration under the Securities Act pursuant to Section s 2(a) in accordance with the following provisions: (i) subject to Section 2(c), the Company shall not be obligated to use its best efforts to file and cause to become effective more than two registration statements initiated pursuant to Section 2(a); (ii) the Company shall not be obligated to use its best efforts to file and cause to become effective any registration statement during any period in which any other registration statement (other than on Form S-4 or Form S-8 promulgated under the Securities Act or any successor forms) pursuant to which Primary Shares, Other Shares or Registrable Shares are to be or were sold has been filed and not withdrawn or has been declared effective within the prior 120 days; (iii) if, at the time of a request for registration pursuant to this Section 2, the Company reasonably determines that such registration and offering (1) would interfere with any material transaction involving the Company or (2) would materially and adversely affect the Company and its stockholders, in the case of either clause (1) or (2), -3- 5 as reasonably determined in good faith by the Board of Directors, then the Company may delay the filing or effectiveness of any registration statement for a period of up to 120 days after the date of a request for registration pursuant to this Section 2; provided that the Company may only so delay the filing or effectiveness of a registration statement with respect to a request for registration pursuant to Section 2(b)(iii) or 2(b)(iv) on one occasion during any twelve month period; (iv) if, at the time of a request for registration pursuant to this Section 2, the Company is engaged, or intends to engage within 60 days of the time of such request, in an underwritten public offering of Primary Shares or Other Shares in which the holders of Registrable Shares may include Registrable Shares pursuant to Section 3 (an "Planned Public Offering") and such plans or intentions have been approved by the Board of Directors of the Company, then the Company may delay the filing or effectiveness of any registration statement with respect to a request for registration pursuant to this Section 2 for a period of up to 120 days after the date of effectiveness of the registration statement with respect such Planned Public Offering; provided that the Company may only so delay the filing or effectiveness of a registration statement with respect to a request for registration pursuant to Section 2(b)(iii) or 2(b)(iv) on one occasion during any twelve month period; (v) with respect to any registration pursuant to this Section 2, the Company may include in such registration any Primary Shares, Registrable Shares or Other Shares; provided that if the managing underwriter advises the Company that the inclusion of all Registrable Shares, Primary Shares and/or Other Shares proposed to be included in such registration would interfere with the successful marketing (including pricing) of the Registrable Shares proposed to be included in such registration, then the number of Registrable Shares, Primary Shares and/or Other Shares proposed to be included in such registration shall be included according to the following priority: first, the Registrable Shares requested to be included in such registration (reduced pro rata if necessary); second, the Other Shares(reduced pro rata on the basis of the number of Other Shares that had been requested to be included in the registration); and -4- 6 (vi) at any time before the registration statement covering Registrable Shares becomes effective, the Investors which requested such registration may request the Company to withdraw or not to file the registration statement. In that event, if such request of withdrawal shall not have been caused by, or made in response to, a material adverse change in the business, properties, condition, financial or otherwise, or operations of the Company, the Investors shall have used one demand registration right under Section 2(a) unless such Investors initiating such request shall pay to the Company the reasonable out-of-pocket expenses incurred by the Company through the date of such request. (c) A registration requested pursuant to this Section 2 shall not be deemed to have been effected and a registration statement shall not be deemed to have become effective with respect thereto (i) unless such registration statement has been kept continuously effective for a period of at least 60 days (or such shorter period which will terminate when all the Registrable Shares covered by such registration statement have been sold pursuant thereto), (ii) if such registration is interfered with by any stop order, injunction or other order or requirement of the Commission or other governmental agency or court for any reason not attributable to any Investor (or agent or representative thereof) and has not thereafter become effective, or (iii) if the conditions to closing specified in the underwriting agreement, if any, entered into in connection with such registration are not satisfied or waived, other than by reason of a failure on the part of any Investor (or agent or representative thereof). 3. PIGGYBACK REGISTRATION. If the Company at any time proposes for any reason to register Primary Shares or Other Shares under the Securities Act (other than on Form S-4 or Form S-8 promulgated under the Securities Act or any successor forms thereto), it shall promptly give written notice to the Investors of its intention to so register such shares and, upon the written request, delivered to the Company within 30 days after delivery of any such notice by the Company, of any of the Investors to include in such registration Registrable Shares held by such Investor (which request shall specify the number of Registrable Shares requested to be included in such registration), the Company shall use its best efforts to cause all such Registrable Shares to be included in such registration on the same terms and conditions as the securities otherwise being sold in such registration; provided, however, that if the managing underwriter advises -5- 7 the Company that the inclusion of all Registrable Shares requested to be included in such registration would interfere with the successful marketing (including pricing) of the shares proposed to be registered, then the number of Primary Shares, Registrable Shares and Other Shares proposed to be included in such registration shall be included in the order set forth below: (a) if such registration was initiated by one or more holders of Other Shares pursuant to a registration rights agreement with the Company: first, all Other Shares required to be included in such registration by the holders who are parties to such registration rights agreement; second, the Other Shares (held by holders who are not parties to such registration rights agreement) and the Registrable Shares requested to be included in such registration pro rata among the holders thereof, subject to underwriter cut-backs on a pro rata basis (based on the number of Other Shares and Registrable Shares requested to be including in the registration) among the participating holders of such Other Shares and Registrable Shares; and third, the Primary Shares proposed to be registered by the Company. (b) if such registration was initiated by the Company: first, the Primary Shares proposed to be registered by the Company; second, the Other Shares and the Registrable Shares requested to be registered in such registration pro rata among the holders thereof, subject to underwriter cut-backs on a pro rata basis (based on the number of Other Shares and Registrable Shares requested to be included in the registration) among the participating holders of Other Shares and Registrable Shares. The Company shall have the right to postpone or withdraw any registration effectuated under this Section 3 prior to the effective date of any registration statement with respect thereto without obligation to any Investor (other than the Company's obligation to pay the Investors' expenses in accordance in with Section 6 hereof). -6- 8 4. REGISTRATIONS ON FORM S-3. In addition to the rights contained in Section 2, at such time as the Company shall have qualified for the use of Form S-3 promulgated under the Securities Act or any successor form thereto, each of the Investors shall have the right to request in writing an unlimited number of registrations of Registrable Shares on Form S-3 or such successor form thereto, which request or requests shall (i) specify the number of Registrable Shares intended to be sold or disposed of and the holders thereof, (ii) state the intended method of disposition of such Registrable Shares and (iii) relate to Registrable Shares having an anticipated aggregate gross offering price (before underwriting discounts and commissions) of at least $1,000,000. A requested registration on Form S-3 or any such successor form in compliance with this Section 4 shall not count as a registration statement initiated pursuant to Section 2. If a request complying with the requirements of this Section 4 is delivered to the Company, the provisions of Section 2(b)(ii) through (iv) shall apply. If the registration is for an underwritten offering, the provisions of Section 2(b)(v) shall apply. 5. HOLDBACK AGREEMENT. If the Company at any time shall register shares of Common Stock under the Securities Act (including any registration pursuant to Section s 2, 3 or 4) for sale to the public in an underwritten public offering, the Investors shall not sell publicly, make any short sale of, grant any option for the purchase of, or otherwise dispose publicly of, any Common Stock (other than those shares of Common Stock included in such registration pursuant to Section s 2, 3 or 4) without the prior written consent of the Company, for a period designated by the Company in writing to the Investors, which period shall begin not more than 10 days prior to the effectiveness of the registration statement pursuant to which such public offering shall be made and shall not last more than the lesser of (i) 180 days after the closing of sale of shares pursuant to such registration statement and (ii) such period of time as the officers, directors and principal stockholders of the Company (other than John Hancock Mutual Life Insurance Company) are similarly restricted from disposing of their Common Stock pursuant to an agreement with the managing underwriter for such public offering (such lesser period, the "Lock-Up Period"). The Company shall obtain the agreement of any person permitted to sell shares of Common Stock in a registration to be bound by and to comply with this Section 5 as if such person was an Investor hereunder. The Company will agree to customary restrictions on its ability to offer or sell shares during the Lock-Up Period in connection with -7- 9 any underwritten public offering by the Stockholders in which the Company elects not to participate. 6. PREPARATION AND FILING. (a) If and whenever the Company is under an obligation pursuant to the provisions of this Agreement to use its best efforts to effect the registration of any Registrable Shares, the Company shall, as expeditiously as practicable: (i) use its best efforts to cause a registration statement that registers such Registrable Shares to become and remain effective for a period of 60 days (extended by any period during which such registration statement or related prospectus is not available for sales) or until all of such Registrable Shares have been disposed of (if earlier); (ii) furnish, at least five business days before filing a registration statement that registers such Registrable Shares, a prospectus relating thereto or any amendments or supplements relating to such a registration statement or prospectus, to one counsel selected by a Majority of the Investors initiating such registration (counsel in each case referred to herein as the "Investors' Counsel"), copies of all such documents proposed to be filed (it being understood that such five-business-day period need not apply to successive drafts of the same document proposed to be filed so long as such successive drafts are supplied to the Investors' Counsel in advance of the proposed filing by a period of time that is customary and reasonable under the circumstances); (iii) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for at least a period of 60 days (extended by any period during which such registration statement or related prospectus is not available for sales) or until all of such Registrable Shares have been disposed of (if earlier) and to comply with the provisions of the Securities Act with respect to the sale or other disposition of such Registrable Shares; (iv) notify in writing the Investors' Counsel promptly of (A) the receipt by the Company of any notification with respect to any comments by the Commission with respect to such registration statement or prospectus or any amendment or supplement thereto or any request by the Commission for the amending or -8- 10 supplementing thereof or for additional information with respect thereto, (B) the receipt by the Company of any notification with respect to the issuance by the Commission of any stop order suspending the effectiveness of such registration statement or prospectus or any amendment or supplement thereto or the initiation or threatening of any proceeding for that purpose and (C) the receipt by the Company of any notification with respect to the suspension of the qualification of such Registrable Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purposes; (v) use its best efforts to register or qualify such Registrable Shares under such other securities or blue sky laws of such United States jurisdictions as the Investors who are holders of Registrable Shares included in such registration statement reasonably request and do any and all other acts and things which may be reasonably necessary or advisable to enable the Investors who are holders of Registrable Shares included in such registration statement to consummate the disposition in such United States jurisdictions of the Registrable Shares owned by them; provided, however, that the Company will not be required to qualify generally to do business, subject itself to general taxation or consent to general service of process in any jurisdiction where it would not otherwise be required to do so but for this clause (v) or to make any changes in its By-laws or Certificate of Incorporation; (vi) furnish to the Investors holding such Registrable Shares such number of copies of a summary prospectus, if any, or other prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as such Investors may reasonably request in order to facilitate the public sale or other disposition of such Registrable Shares; (vii) use its best efforts to cause such Registrable Shares to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company to enable the Investors holding such Registrable Shares to consummate the disposition of such Registrable Shares; (viii) notify the Investors holding such Registrable Shares on a timely basis at any time when a prospectus relating to such Registrable Shares is required to be delivered under the Securities Act -9- 11 within the appropriate period mentioned in clause (iii) of this Section 6(a), of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. The Investors shall suspend any further sales of Registrable Shares until the Company advises them that the Registration Statement has been amended. The number of days during which the registration statement shall be effective shall be extended for an additional number of days equal to the number of days during which the Investors' right to sell the Registrable Shares was suspended pursuant to the preceding sentence. Thereafter, at the request of such Investors, the Company shall prepare and furnish to such Investors a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the offerees of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; (ix) subject to the execution of customary confidentiality agreements in form and substance reasonably satisfactory to the Company, make available upon reasonable notice and during normal business hours, for inspection by the Investors holding such Registrable Shares, any underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other agent retained by such Investors or underwriter (collectively, the "Inspectors"), all pertinent financial and other records, pertinent corporate documents and properties of the Company (collectively, the "Records"), as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Company's officers, directors and employees to supply all information (together with the Records, the "Information") reasonably requested by any such Inspector in connection with such registration statement. Any of the Information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, shall not be disclosed by the Inspectors unless (A) the disclosure of such Information is necessary to avoid or correct a misstatement or omission in the registration statement, (B) the release of such Information is ordered pursuant to a subpoena or other order from a -10- 12 court of competent jurisdiction or (C) such Information has been made generally available to the public (through no violation of the terms of this clause (ix) by the Investors or the Inspectors); the Investors holding such Registrable Shares agree that they will, upon learning that disclosure of such Information is sought in a court of competent jurisdiction, give prompt notice to the Company and allow the Company, at the Company's expense, to undertake appropriate action to prevent disclosure of the Information deemed confidential; (x) use its best efforts to obtain from its independent certified public accountants "cold comfort" letters in customary form and at customary times and covering matters of the type customarily covered by cold comfort letters; (xi) use its best efforts to obtain from its counsel an opinion or opinions in customary form naming the Investors holding such Registrable Shares as additional addressees or parties who may rely thereon; (xii) provide a transfer agent and registrar (which may be the same entity and which may be the Company) for such Registrable Shares; (xiii) issue to any underwriter to which the Investors holding such Registrable Shares may sell shares in such offering certificates evidencing such Registrable Shares; (xiv) list such Registrable Shares on any national securities exchange or automated quotation system on which any shares of the Common Stock are listed; or, if the Common Stock is not listed on a national securities exchange, use its best efforts to qualify such Registrable Shares for inclusion on the automated quotation system of the National Association of Securities Dealers, Inc. (the "NASD"), or any national securities exchange; (xv) otherwise use its best efforts to comply with all applicable rules and regulations of the Commission and make available to its securityholders, as soon as reasonably practicable, earnings statements (which need not be audited) covering a period of 12 months beginning within three months after the effective date of the registration statement, which earnings statements shall satisfy the provisions of Section 11(a) of the Securities Act; -11- 13 (xvi) in connection with any underwritten public offering initiated pursuant to Section 2 cooperate and participate in the marketing of such offering as if such registration was an underwritten primary registration (including participating in an appropriate "road show" but only if requested by the underwriter); and (xvii) use its best efforts to take all other steps necessary to effect the registration of such Registrable Shares contemplated hereby. (b) Each holder of the Registrable Shares included in any registration statement, upon receipt of any notice from the Company of any event of the kind described in Section 6(a)(viii) hereof, shall forthwith discontinue disposition of the Registrable Shares pursuant to the registration statement covering such Registrable Shares until such holder's receipt of the copies of the supplemented or amended prospectus contemplated by Section 6(a)(viii) hereof, and, if so directed by the Company, such holder shall deliver to the Company all copies, other than permanent file copies then in such holder's possession, of the prospectus covering such Registrable Shares at the time of receipt of such notice. 7. EXPENSES. All expenses (other than discounts, fees and commissions of underwriters, selling brokers, dealer managers, sales agents and similar securities industry professionals, which shall be borne as provided in the following proviso and applicable transfer taxes, if any) incurred by the Company in complying with Section 6, including, without limitation, all registration and filing fees (including all expenses incident to filing with the AMEX and the NASD), fees and expenses of complying with securities and blue sky laws, printing expenses, fees and expenses of the Company's counsel and accountants, and reasonable fees and expenses of the Investors' Counsel, shall be paid by the Company; provided, however, that all of the foregoing discounts, fees and commissions applicable to the Registrable Shares shall be borne by the holders selling such Registrable Share, in proportion to the number of Registrable Shares sold by each such holder. 8. INDEMNIFICATION. (a) In connection with any registration of any Registrable Shares under the Securities Act pursuant to this Agreement, the Company shall indemnify and hold harmless the holders of such Registrable Shares, each underwriter, broker or any other Person acting on behalf of the holders of such -12- 14 Registrable Shares and each other Person, if any, who controls any of the foregoing Persons within the meaning of the Securities Act against any losses, claims, damages or liabilities, joint or several (or actions in respect thereof), to which any of the foregoing Persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or allegedly untrue statement of a material fact contained in the registration statement under which such Registrable Shares were registered under the Securities Act, any preliminary prospectus or final prospectus contained therein or otherwise filed with the Commission, any amendment or supplement thereto or any document incident to registration or qualification of such Registrable Shares, or arise out of or are based upon 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, with respect to any prospectus, necessary to make the statements therein in light of the circumstances under which they were made not misleading, or any violation by the Company of the Securities Act or state securities or blue sky laws applicable to the Company and relating to action or inaction required of the Company in connection with such registration or qualification under the Securities Act or such state securities or blue sky laws; and shall reimburse the holders of such Registrable Shares, such underwriter, such broker or such other Person acting on behalf of the holders of such Registrable Shares and each such controlling Person for any legal or other expenses reasonably incurred by any of them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action (including any legal or other expenses incurred) arises out of or is based upon an untrue statement or allegedly untrue statement or omission or alleged omission made in said registration statement, preliminary prospectus, final prospectus, amendment, supplement or document incident to registration or qualification of any Registrable Shares in reliance upon and in conformity with written information furnished to the Company by such holder of Registrable Shares or such underwriter, or an agent or representative thereof, specifically for use in the preparation thereof; provided further, however, that the foregoing indemnity agreement is subject to the condition that, insofar as it relates to any untrue statement, allegedly untrue statement, omission or alleged omission made in any preliminary prospectus but eliminated or remedied in the final prospectus (filed pursuant to Rule 424 of the Securities Act), such indemnity agreement shall not inure to the benefit of any Investor, underwriter, broker or other Person acting on behalf of -13- 15 holders of the Registrable Shares from whom the Person asserting any loss, claim, damage, liability or expense purchased the Registrable Shares which are the subject thereof, if a copy of such final prospectus had been made available to such Person and such Investor, underwriter, broker or other Person acting on behalf of holders of the Registrable Shares and such final prospectus was not delivered to such Person with or prior to the written confirmation of the sale of such Registrable Shares to such Person. (b) In connection with any registration of Registrable Shares under the Securities Act pursuant to this Agreement, each holder of Registrable Shares included in such registration statement shall severally and not jointly indemnify and hold harmless the Company, each director of the Company, each officer of the Company who shall sign such registration statement, each underwriter, broker or other Person acting on behalf of the holders of Registrable Shares and each Person who controls any of the foregoing Persons within the meaning of the Securities Act against any losses, claims, damages or liabilities, joint or several (or actions in respect thereof), to which any of the foregoing Persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or based upon any untrue statement of a material fact contained in such registration statement, any preliminary prospectus or final prospectus contained therein or otherwise filed with the Commission, any amendment or supplement thereto or any document incident to registration or qualification of any Registrable Shares, or arise out of or are based upon 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, with respect to any prospectus, necessary to make the statements therein in light of the circumstances under which they were made not misleading, in each case if such statement or omission was made in reliance upon and in conformity with written information furnished to the Company or such underwriter by such holder of Registrable Shares, or an agent or representative thereof, specifically for use in connection with the preparation of such registration statement, preliminary prospectus, final prospectus, amendment, supplement or document; provided, however, that the maximum amount of liability in respect of such indemnification shall be limited, in the case of each seller of Registrable Shares, to an amount equal to the net proceeds actually received by such holder of Registrable Shares from the sale of Registrable Shares effected pursuant to such registration; provided further, however, that the foregoing indemnity agreement is subject to the condition that, insofar as it relates to any untrue statement, allegedly -14- 16 untrue statement, omission or alleged omission made in any preliminary prospectus but eliminated or remedied in the final prospectus (filed pursuant to Rule 424 of the Securities Act), such indemnity agreement shall not inure to the benefit of the Company, any officer or director thereof, any underwriter, broker or other Person acting on behalf of holders of the Registrable Shares from whom the Person asserting any loss, claim, damage, liability or expense purchased the Registrable Shares which are the subject thereof, or any Person who controls any of the foregoing, if a copy of such final prospectus had been made available and such final prospectus was not delivered to such Person with or prior to the written confirmation of the sale of such Registrable Shares to such Person. (c) Promptly after receipt by an indemnified party of notice of the commencement of any action involving a claim referred to in the preceding paragraphs of this Section 8, such indemnified party will, if a claim in respect thereof is made against an indemnifying party, give written notice to the latter of the commencement of such action. In case any such action is brought against an indemnified party, the indemnifying party will be entitled to participate in and to assume the defense thereof, jointly with any other indemnifying party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be responsible for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof; provided, however, that if any indemnified party shall have reasonably concluded that there may be one or more legal or equitable defenses available to such indemnified party which are additional to or conflict with those available to the indemnifying party, or that such claim or litigation involves or could have an effect upon matters beyond the scope of the indemnity agreement provided in this Section 8, the indemnifying party shall not have the right to assume the defense of such action on behalf of such indemnified party and such indemnifying party shall reimburse such indemnified party and any Person controlling such indemnified party for that portion of the fees and expenses of any counsel retained by the indemnified party which is reasonably related to the matters covered by the indemnity agreement provided in this Section 8. No indemnified party shall consent to the entry of any judgment or settle such claim or litigation without the prior written consent of the indemnifying party, which consent shall not be unreasonably withheld. Any such consent or settlement shall include, as an unconditional term thereof, the giving by the claimant or plaintiff to such indemnified party of a release from all liability in -15- 17 respect to such claim or litigation. Each indemnified party shall furnish such information regarding itself or the claim in question as an indemnifying party may reasonably request in writing and as shall be reasonably required in connection with the defense of such claim and litigation resulting therefrom (subject to the indemnifying party's reimbursement of the indemnified party for any expenses associated with furnishing such information). (d) If the indemnification provided for in this Section 8 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, claim, damage, liability or action referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amounts paid or payable by such indemnified party as a result of such loss, claim, damage, liability or action 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 which resulted in such loss, claim, damage, liability or action 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 or alleged 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. Notwithstanding the provisions of this Section 8(d), no Investor shall be required to contribute an amount greater than the dollar amount by which the net proceeds received by such Investor with respect to the sale of any Registrable Shares under the registration statement exceeds the amount of damages which such Investor has otherwise been required to pay by reason of any statements in or omissions from such registration statement. For purposes of the immediately preceding sentence, the amount which a Investor has otherwise been required to pay shall be deemed to include any legal or other fees or expenses incurred by such Investor in connection with investigating or defending any action or claim in respect of such registration statement. 9. UNDERWRITING AGREEMENT. Notwithstanding the provisions of Section s 5, 6, 7 and 8 to the extent that one or more of the Investors shall enter into an underwriting or similar agreement, which agreement contains provisions covering one or more issues addressed in such Section s, the provisions contained in such agreement addressing such issue or issues shall control with -16- 18 respect to such Investors and the other parties to such agreement; provided, however, that any such agreement to which the Company is not a party shall not be binding upon the Company. No such underwriting or similar agreement shall contain indemnification provisions which are more onerous with respect to one Investor than to any other Investor. 10. UNDERWRITTEN REGISTRATIONS. If any of the Registrable Shares covered by any Registration Statement are to be sold in an underwritten offering pursuant to Section s 2 or 4 hereof, the investment banker or bankers and manager or managers that will manage the offering will be selected by Investors holding a majority of the Registrable Shares to be registered pursuant to such Registration Statement and be reasonably acceptable to the Company. If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the right to registration hereunder for any Investor shall be conditioned upon such Investor's participation in such underwriting, the inclusion of such Investor's Registrable Shares in the underwriting to the extent provided herein and such Investor entering into an underwriting agreement in customary form with the representations of the underwriter. 11. INFORMATION BY HOLDER. As soon as practicable but in no event later than five business days following receipt of a written request from the Company, the Investors requesting inclusion of Registrable Shares in a registration statement shall furnish to the Company such written information regarding such Investors and the distribution proposed by such Investors as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration, qualification or compliance referred to in this Agreement. The Company shall not be obligated to register the Registrable Shares of any Investor that fails to promptly provide to the Company such information as the Company may reasonably request at the time to enable the Company to comply with applicable laws or regulations to facilitate any registration, qualification or compliance referred to in this Agreement. Each Investor shall notify the Company within five (5) business days of completion of its disposition of its Registrable Shares. 12. AGREEMENT OF HOLDER. Each Investor agrees that a request by such Investor pursuant to Section 2, 3 or 4 of this Agreement for -17- 19 inclusion of Registrable Shares in a registration statement shall be deemed to be a commitment to convert any Restricted Securities which are convertible into such Registrable Shares upon sale thereof under such registration statement. 13. EXCHANGE ACT COMPLIANCE. The Company shall comply with all of the reporting requirements of the Exchange Act required to be complied with by it and shall comply with all other public information reporting requirements of the Commission required to be complied with by it which are conditions to the availability of Rule 144 for the sale of the Common Stock. The Company shall cooperate with the Investors in supplying such information as may be necessary for the Investors to complete and file any information reporting forms presently or hereafter required by the Commission as a condition to the availability of Rule 144. 14. MERGERS, ETC. The Company shall not, directly or indirectly, enter into any merger, consolidation or reorganization in which the corporation shall not be the surviving corporation unless the surviving corporation shall, prior to such merger, consolidation or reorganization, agree in writing to assume the obligations of the Company under this Agreement, and for that purpose references hereunder to "Registrable Shares" shall be deemed to include the shares of common stock, if any, which the Investors would be entitled to receive in exchange for Common Stock under any such merger, consolidation or reorganization, provided that, to the extent the Investors receive securities that are by their terms convertible into shares of common stock of the issuer thereof, then any such shares of common stock as are issued or issuable upon conversion of said convertible securities shall be included within the definition of "Registrable Shares." 15. NO CONFLICT OF RIGHTS. The Company shall not, after the date hereof, grant any registration rights which conflict with the registration rights granted hereby. 16. TERMINATION. This Agreement shall terminate and be of no further force or effect when there shall no longer be any securities outstanding that meet the definition of "Registrable Shares"; provided, however, that Section s 1, 8, 25 and this -18- 20 Section 16 shall not be so terminated but shall survive without limitation. 17. SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the benefit of the Company and the Investors and, subject to Section 16, the respective successors and assigns of the Company and the Investors. 18. ASSIGNMENT. Each Investor may assign its rights hereunder to any transferee of Restricted Securities; provided, however, that such transferee shall, as a condition to the effectiveness of such assignment, be required to execute a counterpart to this Agreement agreeing to be treated as an Investor, whereupon such transferee shall have the benefits of and shall be subject to the restrictions contained in this Agreement as if such transferee was originally included in the definition of an Investor and had originally been a party hereto. 19. SEVERABILITY. It is the desire and intent of the parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court of competent jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction. 20. ENTIRE AGREEMENT. This Agreement and the Note Purchase Agreement, and the other writings referred to herein or delivered pursuant hereto, contain the entire agreement among the parties with respect to the subject matter thereof and supersede all -19- 21 prior and contemporaneous arrangements or understandings with respect thereto. 21. NOTICES. All communications hereunder to any party shall be deemed to be sufficient if contained in a written instrument delivered in person or sent by telecopy (with receipt confirmed), nationally-recognized overnight courier or first class registered or certified mail, return receipt requested, postage prepaid, addressed to such party at its address below or such other address as such party may hereafter designate in writing: (a) if to the Company, to: CardioTech International, Inc. 11 State Street Woburn, Massachusetts 01801 Telephone: (781) 933-4772 Telecopier: (781) 933-3933 Attention: John Mattern, Chief Financial Officer; (b) with a copy to: Mintz Levin Cohn Ferris Glovsky and Popeo PC One Financial Center Boston, Massachusetts 02111 Telephone: (617) 542-6000 Telecopier: (617) 542-2241 Attention: Michael Fantozzi; (c) if to any Investor, to it at its address set forth on Schedule I, with a copy to: Dresdner Kleinwort Benson Private Equity Partners LP 75 Wall Street, 24th Floor New York, NY 10005 Telephone: (212) 429-3200 Telecopier: (212) 429-3139 Attention: Christopher Hammond and with a copy to: O'Sullivan Graev & Karabell, LLP 30 Rockefeller Plaza New York, New York 10112 Attention: Harvey M. Eisenberg, Esq. Telephone: (212) 408-2400 Telecopy: (212) 408-2420; and -20- 22 All such notices, requests, consents and other communications shall be deemed to have been delivered (i) in the case of personal delivery, on the date of such delivery, (ii) in the case of delivery by telecopy, on the date of confirmation of receipt, (iii) in the case of dispatch by nationally-recognized overnight courier, on the next business day following such dispatch and (iv) in the case of mailing, on the third business day after the posting thereof. 22. MODIFICATIONS; AMENDMENTS; WAIVERS. The terms and provisions of this Agreement may not be modified or amended, nor may any provision be waived, except pursuant to a writing signed by the Company and a Majority of the Investors. 23. COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be executed in any number of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement. Facsimile counterpart signatures to this Agreement shall be acceptable at the Closing (as defined in the Note Purchase Agreement) if the originally executed counterpart is delivered within a reasonable period thereafter. 24. HEADINGS. The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement. 25. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed wholly therein. * * * * * -21- 23 IN WITNESS WHEREOF, the undersigned have duly executed this Registration Rights Agreement as of the date first written above. CARDIOTECH INTERNATIONAL, INC. By: /s/ Michael Szycher ----------------------------------------- Name: Title: DRESDNER KLEINWORT BENSON PRIVATE EQUITY PARTNERS LP By: Dresdner Kleinwort Benson Private Equity Managers LLC, its general partner By: /s/ Jonathan Walker ----------------------------------------- Name: Jonathan Walker Title: Authorized Signatory 24 SCHEDULE I Dresdner Kleinwort Benson Private Equity Partners LP 75 Wall Street, 24th Floor New York, NY 10005 Telephone: (212) 429-3200 Telecopier: (212) 429-3139 Attention: Jonathan S. Walker -----END PRIVACY-ENHANCED MESSAGE-----