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EXHIBIT 10.35
RIGHTS AGREEMENT
THIS AGREEMENT (this "Agreement") is dated as of April 9. 1998 by and
between Horizon Medical Products, Inc, a Georgia corporation (the "Company"),
and Tapir Investments (Bahamas) Ltd., an international business company
organized under the laws of the Commonwealth of the Bahamas (the "Tapir")
RECITALS
A. Pursuant to two separate Stock Purchase Agreements of even date
herewith and a certain Warrant Purchase Agreement dated March 30, 1998
(collectively, the "Purchase Agreements"), Tapir has agreed to purchase from
Xxx X. Xxxxxxx, Xxxxxxxx X. Xxxx, and Xxxxxxx X. Xxxxxxxx shares of Class A
Common Stock of the Company, and has purchased from NationsCredit Commercial
Corporation ("NationsCredit") a portion of a warrant held by NationsCredit
which is exercisable into shares of Class B Common Stock of the Company (the
"Warrant").
B. The Company believes that Tapir's purchase and ownership of the
above-reference securities will provide a measure of stability to the Company's
stock ownership and are in the best interests of the Company. In order to
induce Tapir to agree to such purchases, and as a condition to Tapir's making
such purchases, the Company is willing to grant Tapir certain registration
rights, all as set forth in this Agreement. In return for said rights, Tapir is
willing to agree to exercise said warrant under certain circumstances and
grant the Company certain first refusal rights as set forth in this Agreement.
NOW, THEREFORE,in consideration of the representations, warranties,
and covenants, and on the terms and subject to the conditions contained in this
Agreement, the parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
In this Agreement, the following terms have the meaning set forth
below:
"Commission" means the U.S. Securities and Exchange Commission.
"Qualified IPO" means any sale of shares of Common stock by and for
the account of the Company pursuant to an underwritten initial public offering
registered under the Securities Act; provided that the proceeds to the Company
(net of underwriters' discount, fees and other expenses incurred by the
"Company" in connection therewith) from such sale of shares exceed $29,000,000.
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"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with Article VII hereof, including (i) all
registration, filing and NASD fees (ii) all fees and expenses of complying with
securities or blue sky laws, (iii) all word processing, duplicating and
printing expenses, (iv) all messenger and delivery expenses, (v) the fees and
disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance, (vi) the
premiums and other costs of policies of insurance (if any) against liabilities
arising out of the public offering of the Shares being registered if the Company
desires such insurance and (vii) any fees and disbursements of underwriters
customarily paid by issuers or sellers of securities, but not including
underwriting discounts and commissions and transfer taxed, if any, provided
that, in any case where Registration Expenses are not to be borne by the
Company, such expenses shall not include (i) salaries of the Company personnel
or general overhead expenses of the Company, (ii) auditing fees, (iii) premiums
or other expenses relating to liability insurance required by underwriters of
the Company or (iv) other expenses for the preparation of financial statements
or other data, to the extent that any of the foregoing either is normally
prepared by the Company in the ordinary course of its business or would have
been incurred by the Company had no public offering taken place.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the U.S. Securities and Exchange Commission thereunder.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Tapir as follows:
2.1 The Company. The amended S-1 Registration Statement dated March
23, 1998, and filed by the Company with the Securities and Exchange Commission
("SEC"), a copy of which has been delivered to Tapir, does not, as of the date
hereof, contain any untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein in light of the circumstances under which they were made,
not misleading. The Company understands that Tapir is relying on the accuracy
of the representations and warranties transactions contemplated in the Purchase
Agreements.
2.2 Execution and Delivery. All consents, approvals, authorizations
and orders necessary for the execution, delivery and performance by the Company
of this Agreement have been duly and lawfully obtained, and the Company has the
full right,
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power, authority and capacity to execute, deliver and perform this Agreement.
The execution, delivery, and performance by the Company of this Agreement have
been duly authorized by all necessary corporate action on the part of the
Company, and this Agreement has been duly executed and delivered by the Company
and constitutes a legal, valid and binding agreement of the Company enforceable
against the Company in accordance with its terms.
2.3 No Conflicts. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any term or provision of, or
(with or without notice or passage of time, or both) constitute a default under,
any indenture, mortgage, deed of trust, trust (constructive and other), loan
agreement or other agreement or instrument to which the Company is a party or by
which the Company or any of its properties are bound, or violate any decree,
judgment, order, statute, rule, or regulation applicable to or binding upon the
Company.
2.4 Litigation. There is no action, suit, proceeding, or investigation
pending or, to the best of the Company's knowledge, threatened, against the
Company, that questions the validity of this Agreement or the right of the
Company to enter into it or to perform any of the transactions contemplated by
this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF TAPIR
Tapir hereby represents and warrants to the Company as follows:
3.1 Execution and Delivery. All consents, approvals, authorizations and
orders necessary for the execution, delivery and performance by Tapir of this
Agreement have been duly and lawfully obtained, and Tapir has the full right,
power, authority and capacity to execute, deliver and perform this Agreement.
The execution, delivery and performance by Tapir of this Agreement have been
duly authorized by all necessary corporate action on the part of Tapir, and this
Agreement has been duly executed and delivered by Tapir and constitutes a legal,
valid and binding agreement of Tapir enforceable against Tapir in accordance
with its terms.
3.2 No Conflicts. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any term or provision of, or
(with or without notice or passage of time, or both) constitute a default under,
any indenture, mortgage, deed of trust, trust (constructive and other), loan
agreement or other agreement or instrument to which Tapir is a party or by which
Tapir or any of its properties are bound, or violate any decree, judgment,
order, statute, rule, or regulation applicable to or binding upon Tapir.
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3.3 Litigation. There is no action, suit, proceeding, or investigation
pending or, to the best of Tapir's knowledge, threatened, against Tapir, that
questions the validity of this Agreement or the right of Tapir to enter into it
or to perform any of the transactions contemplated by this Agreement.
ARTICLE IV
REGISTRATION RIGHTS
As inducement for Tapir to purchase shares of Common Stock of the Company,
and in consideration of the agreement of Tapir (as set forth in Article VI of
this Agreement) to exercise the Tapir Warrant (as defined in the Purchase
Agreements) upon the occurrence of a Qualified IPO, the Company hereby agrees to
attach the following registration rights to all shares of Common Stock
(excluding any such shares previously disposed of in a Public Sale (as defined
in the Warrant)) now or hereafter owned by Tapir (the "Shares"):
4.1 Registration on Request.
(a) Commencing at any time or from time to time after September 30,
1999, and subject to the last sentence of this Section 4.1(a), upon the written
request of Tapir, requesting that the Company effect the registration under the
Securities Act of all or part of, but not less than twenty percent (20%) of,
Tapir's Shares and specifying the intended method of disposition thereof, and
thereupon the Company will use its reasonable efforts to effect the registration
under the Securities Act of
(i) the Shares which the Company has been so requested to
register by Tapir for disposition in accordance with the intended method of
disposition stated in such request; and
(ii) all shares of Common Stock which the Company may elect to
register in connection with the offering of the Shares pursuant to this Section
4.1, whether for its own account or for the account of a holder of Common Stock,
all to the extent requisite to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Shares and the additional shares
of Common Stock, if any, to be so registered. Notwithstanding the foregoing,
Tapir shall not be entitled to request the registration of any Shares under this
Section 4.1 if during the immediately preceding six months Tapir was given the
opportunity to register its Shares under Section 4.2
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(b) Registrations under this Section 4.1 shall be on such appropriate
registration form of the Commission (i) as shall be selected by the Company and
(ii) as shall permit the disposition of the Shares in accordance with the
intended method or methods of disposition specified in their request for such
registration. The Company agrees to include in any such registration statement
all information about the holders of the Shares being registered which such
holders shall reasonably request.
(c) The Company will pay all Registration Expenses in connection with one
registration requested pursuant to this Section 4.1, provided that, in any
registration upon request pursuant to which less than 50% of the Shares
requested to be registered by Tapir are registered, but no such registration
shall be counted as a request registration for purposes of this Section 4.1.
The Registration Expenses (and underwriting discounts and commissions and
transfer taxes, if any, allocable to the Shares requested to be registered by
Tapir) in connection with each other registration requested under this Section
4.1 shall be paid for by Tapir requesting such registration.
(d) A registration requested pursuant to this Section 4.1 shall not be
deemed to have been effected (i) unless a registration statement with respect
thereto has become effective; provided that a registration which does not become
effective after the Company has filed a registration statement with respect
thereto solely by reason of the refusal to proceed by Tapir (other than a
refusal to proceed based upon the advice of counsel relating to a matter with
respect to the Company) shall be deemed to have been effected by the Company at
the request of Tapir, (ii) if, after it has been effective, 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, or
(iii) the conditions to closing specified in the purchase agreement or
underwriting agreement entered into in connection with such registration are
not satisfied.
(e) If a requested registration pursuant to this Section 4.1 involves an
underwritten offering, the underwriter or underwriters thereof shall be
reasonably selected by the Company.
(f) If a requested registration pursuant to this Section 4.1 involves an
underwritten offering, and the managing underwriter shall advise the Company
(with a copy of any such notice to Tapir requesting registration) that, in its
opinion, the number of securities requested to be included in such registration
(including securities proposed to be sold for the account of the Company)
exceeds the number which can be sold in such offering within a price range
acceptable to Tapir, the Company will include in such registration, to the
extent
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of the number which the Company is so advised can be sold in such offering, (i)
first, Shares requested to be included in such registration by Tapir and (ii)
second, all shares proposed to be included by the Company in such registration.
4.2 "PIGGY BACK" REGISTRATION.
(a) If the Company at any time proposes to register any of its
securities under the Securities Act (other than (x) by a registration on Form
S-4 or S-8 or any successor or similar forms or (y) pursuant to Section 4.1)
whether for its own account or for the account of the holder or holders of any
Common Stock other than the Shares ("Other Shares"), it will each such time
give prompt written notice to Tapir of its intention to do so and of Tapir's
rights under this Section 4.2. Upon the written request of Tapir made within 20
days after the receipt of any such notice (which request shall specify the
Shares intended to be disposed of by Tapir and the intended method of
disposition thereof), the Company will use its reasonable efforts to effect the
registration under the Securities Act of all Shares which the Company has been
so requested to register by Tapir, to the extent required to permit the
disposition (in accordance with the intended methods thereof as aforesaid) of
the Shares so to be registered, by inclusion of such Shares in the registration
statement which covers the securities which the Company proposes to register;
provided that if, at any time after giving written notice of its intention to
register any securities and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason either not to register or to delay registration of
such securities, the Company may, at its election, give written notice of such
determination to Tapir and, thereupon, (i) in the case of a determination not
to register, shall be relieved of its obligation to register any Shares in
connection with such registration (but not from its obligation to pay the
Registration Expenses in connection therewith), and (ii) in the case of a
determination to delay registering, shall be permitted to delay registering any
Shares, for the same period as the delay in registering such other securities.
No registration effected under the Section 4.2 shall relieve the Company of its
obligation to effect any registration upon request under Section 4.1, nor shall
any such registration hereunder be deemed to have been effected pursuant to
Section 4.1. The Company will pay all Registration Expenses in connection with
each registration of Shares pursuant to this Section 4.2.
(b) If the Company at any time proposes to register any of its
securities under the Securities Act as contemplated by this Section 4.2 and
such securities are to be distributed by or through one or more underwriters,
the Company will, if requested by Tapir as provided in this Section 4.2, use
its reasonable efforts to arrange for such underwriters to include all the
Shares to be offered and sold by Tapir among the securities to be distributed
by such underwriters, provided that if the managing underwriter of such
underwritten offering shall inform the Company and Tapir any other holders
of Other Shares which shall have exercised, in respect of such
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underwritten offering, registration rights comparable to the rights under this
Section 4.2 by letter of its belief that inclusion in such distribution of all
or a specified number of such securities proposed to be distributed by such
underwriters would interfere with the successful marketing of the securities
being distributed by such underwriters (such letter to state the basis of such
belief and the approximate number of such Shares and such Other Shares proposed
so to be registered which may be distributed without such effect), then the
Company may, upon written notice to Tapir and holders of such Other Shares,
reduce pro rata (if and to the extent stated by such managing underwriter to be
necessary to eliminate such effect) the number of the Shares and Other Shares
the registration of which shall have been requested by each holder thereof so
that the resultant aggregate number of the Shares and Other Shares so included
in such registration, together with the number of securities to be included in
such registration for the account of the Company, shall be equal to the number
of shares stated in such managing underwriter's letter.
4.3 Registration Procedures.
(a) When the Company is required to effect the registration of
any Shares under the Securities Act as provided in Sections 4.1 and 4.2, the
Company shall, as expeditiously as possible:
(i) prepare and (within 75 days after the end of the
period within which requests for registration may be given to the Company or in
any event as soon thereafter as possible; provided that, in the case of a
registration pursuant to Section 4.1, such filing to be made within 75 days
after the initial request of Tapir or in any event as soon thereafter as
possible) file with the Commission the requisite registration statement to
effect such registration (including such audited financial statements as may be
required by the Securities Act) and thereafter use its best efforts to cause
such registration statement to become and remain effective for the Distribution
Period as provided below; provided further that the Company may discontinue any
registration of its securities which are not Shares at any time prior to the
effective date of the registration statement relating thereto; provided further
that before filing such registration statement or any amendments thereto, the
Company will furnish to the counsel selected by Tapir which are to be included
in such registration copies of all such documents proposed to be filed, which
documents will be subject to the review of such counsel;
(ii) 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 and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such registration
statement for the Distribution Period (for purposes hereof,
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opinion dated the date of the closing under the
underwriting agreement), reasonably satisfactory in
form and substance to counsel for the underwriters and
counsel to Tapir, and
(y) a "comfort" letter, dated the effective date of
such registration statement (and, if such registration
includes an underwritten public offering, a letter dated
the date of the closing under the underwriting agreement),
signed by the independent public accountants who have
certified the Company's financial statements included in
such registration statement,
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of the
accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuers counsel
and in accountants" letters delivered to the underwriters in underwritten
public offerings of securities;
(vii) notify Tapir and the managing underwriter or
underwriters, if any, promptly and confirm such advice in writing promptly
thereafter:
(A) when the registration statement, the prospectus
or any prospectus supplement related thereto or post-effective amendment to the
registration statement has been filed, and, with respect to the registration
statement or any post-effective amendment thereto, when the same has become
effective;
(B) of any request by the Commission for amendments
or supplements to the registration statement or the prospectus or for
additional information;
(C) of the issuance by the Commission of any stop
order suspending the effectiveness of the registration or the initiation of any
proceedings by any person or entity for that purpose; and
(D) of the receipt by the Company of any notification
with respect to the suspension of the qualification of any Shares for sale
under the securities or blue sky laws of any jurisdiction or the initiation or
threat of any proceeding for such purpose;
(viii) notify Tapir covered by such registration statement,
at any time when a prospectus relating thereto is required to be delivered
under the
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"Distribution Period" shall mean (i) in a firm commitment underwritten public
offering, the period of time until each underwriter has completed the
distribution of all securities purchased by it and (ii) for any other
registration, the period of time until the earlier of (x) the sale of all Shares
covered by such registration or (y)(1) in the case of a registration pursuant to
Section 4.1, the expiration of 120 days after such registration statement
becomes effective, or (2) in the case of a registration pursuant to Section 4.2,
the expiration of 90 days after such registration statement becomes effective);
(iii) furnish to Tapir and each underwriter, if any, of the
securities being sold by Tapir such number of conformed copies of such
registration statement and of each such amendment and supplement thereto (in
each case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary prospectus
and any summary prospectus) and any other prospectus filed under Rule 424 under
the Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, as such seller and underwriter, if any, may
reasonably request in order to facilitate the public sale or other disposition
of the Shares;
(iv) use reasonable efforts to register or qualify all Shares
and other securities covered by such registration statement under blue sky or
similar laws of such jurisdictions as any underwriter of the securities being
sold shall reasonably request, to keep such registrations or qualifications in
effect for so long as such registration statement remains in effect, and take
any other action which may be reasonably necessary or advisable to enable such
underwriter to consummate the disposition in such jurisdictions of such
securities, except that the Company shall not for any such purpose be required
to qualify generally to do business as a foreign corporation in any jurisdiction
wherein it would not but for the requirements of this subdivision (iv) be
obligated to be so qualified, to subject itself to taxation in any such
jurisdiction or to consent to general service of process in any such
jurisdiction;
(v) use reasonable efforts to cause all Shares covered by such
registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable Tapir to
consummate the disposition of such shares;
(vi) furnish to Tapir a signed counterpart, addressed to Tapir
and the underwriters, if any, of
(x) an opinion of counsel for the Company, dated the
effective date of such registration statement (and, if such
registration includes an underwritten public offering, an
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Securities Act, upon the Company's discovery that, or upon 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 any material fact required to be stated therein or necessary
to make the statements therein not misleading in the light of the circumstances
then existing, and at the request of Tapir promptly prepare and furnish to
Tapir and each underwriter, if any, 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 purchasers of such securities, 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 the light of the circumstances then existing;
(ix) make every reasonable effort to obtain the withdrawal
of any order suspending the effectiveness of the registration statement at the
earliest possible moment;
(x) otherwise use reasonable efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months, but not more than eighteen
months, beginning with the first full calendar quarter after the effective date
of such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act;
(xi) make available for inspection by a representative of
Tapir, any underwriter participating in any disposition pursuant to the
registration and any attorney or accountant retained by Tapir or underwriter
(each, an "Inspector"), all financial and other records, pertinent corporate
documents and properties of the Company (the "Records"), and cause the
Company's officers, directors and employees to supply all information
reasonably requested by any such Inspector in connection with such
registration; provided that the Company shall not be required to comply with
this subdivision (xi) if there is a reasonable likelihood, in the judgment of
the Company, that such delivery could result in the loss of any attorney-client
privilege related thereto; and provided further that Records which the Company
determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors (other
than to Tapir) unless (x) such Records have become generally available to the
public or (y) the disclosure of such Records may be necessary or appropriate
(A) to comply with any law, rule, regulation or order applicable to any such
Inspectors or holder of the Shares, (B) in response to any subpoena or other
legal process or (C) in connection with any litigation to which such Inspectors
or any holder of the Shares is a party (provided that the Company is
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provided with reasonable notice of such proposed disclosure and a reasonable
opportunity to seek a protective order or other appropriate remedy with respect
to such Records);
(xii) provide and cause to be maintained a transfer agent
and registrar for all Shares covered by such registration statement from and
after a date not later than the effective date of such Registration Statement;
(xiii) use reasonable efforts to list all Shares covered by
such registration statement on any securities exchange on which any of the
Common Stock is then listed and, if not so listed, to be listed on the NASD
automated quotation system and, if listed on the NASD automated quotation
system, use its best efforts to secure designation of all such Shares covered by
such registration statement as a NASDAQ "national market system security"
within the meaning of Rule 11Aa2-1 of the Commission or, failing that, to secure
NASDAQ authorization for such Shares and, without limiting the generality of the
foregoing, to arrange for at least two market makers to register as such with
respect to such Shares with the NASD; and
(xiv) use reasonable efforts to provide a CUSIP number for
the Shares, not later than the effective date of the registration.
The Company may require Tapir to furnish the Company with such information
regarding Tapir and the distribution of such securities as the Company may from
time to time reasonably request in writing for purposes of preparing the
relevant registration statement and amendments and supplements thereto.
(b) Tapir agrees by acquisition of such Shares that, upon
receipt of any notice from the Company of the occurrence of any event of the
kind described in subdivision (viii) of Section 4.3(a), Tapir will forthwith
discontinue Tapir's disposition of the Shares pursuant to the registration
statement relating to such Shares until Tapir's receipt of the copies of the
supplemented or amended prospectus contemplated by subdivision (viii) of Section
4.3(a). In the event the Company shall give any such notice, the periods
specified in subdivision (ii) of Section 4.3(a) shall be extended by the length
of the period from and including the date when Tapir shall have received such
notice to the date on which Tapir has received the copies of the supplemented or
amended prospectus contemplated by subdivision (viii) of Section 4.3(a).
(c) If any such registration or comparable statement
refers to Tapir by name or otherwise as the holder of any securities of the
Company, then Tapir shall have the right to require, in the event that such
reference to such holder by name or otherwise is not required by the Securities
Act or any similar federal statute then in force, the deletion of the reference
to such holder.
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4.4 UNDERWRITTEN OFFERINGS.
(a) If requested by the underwriters for any underwritten
offering by Tapir pursuant to a registration statement under Section 4.1, the
Company will enter into an underwriting agreement with such underwriters for
such offering, such agreement to be satisfactory in substance and form to the
Company and the underwriters, and to contain such representations and warranties
by the Company and such other terms as are generally prevailing in agreements of
such type, including, without limitation, indemnities to the effect and to the
extent provided in Section 4.5
(b) Tapir agrees by acquisition of the Shares not to
sell, make any short sale of, loan, grant any option for the purchase of, effect
any public sale or distribution of or otherwise dispose of any equity securities
of the Company, during the ten days prior to and the 180 days after the
effective date of any underwritten registration pursuant to Section 4.1 or 4.2,
except as part of such underwritten registration, whether or not Tapir
participates in such registration, and except as otherwise permitted by the
managing underwriter of such underwriting (if any). Tapir agrees that the
Company may instruct its transfer agent to place stop transfer notations in its
records to enforce this Section 4.4(b).
(c) Tapir may not participate in any underwritten
offering hereunder unless Tapir (i) agrees to sell Tapir's securities on the
basis provided in any underwriting arrangements approved, subject to the terms
and conditions hereof, by the person or entity or a majority of the persons or
entities entitled to approve such arrangements and (ii) completes and executes
all agreements, questionnaires, indemnities and other documents (other than
powers of attorney) required under the terms of such underwriting arrangements.
4.5 INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless
Tapir whose Shares are covered by any registration statement, its directors and
officers and each other person or entity, if any, who controls such holder
within the meaning of the Securities Act (collectively, the "Indemnified
Parties"), against any losses, claims, damages or liabilities, joint or several,
to which any Indemnified Party may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Company will reimburse each of the Indemnified
Parties for any
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legal or any other expenses reasonably incurred by them in connection with
Investigating or defending any such loss, claim, liability, action or
proceeding; provided that the Company shall not be liable in any such case to
the extent that any such loss, claim, damage, liability (or action or proceeding
in respect thereof) or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such holder
specifically for use in the preparation thereof. In addition, the Company shall
indemnify any underwriter of such offering and each other person or entity, if
any, who controls any such underwriter within the meaning of the Securities Act
in substantially the same manner and to substantially the same extent as the
indemnity herein provided to the Indemnified Parties. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf Of such holder or any such director, officer, underwriter or controlling
person and shall survive the transfer of such securities by such holder.
(b) Tapir shall indemnify and hold harmless (in the same
manner and to the same extent as set forth in subdivision (a) of this Section
4.5) the Company, each director of the Company, each officer of the Company and
each other person, if any, who controls the Company within the meaning of the
Securities Act, with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereof, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of Tapir
specifically for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement. Any such indemnity shall remain in full force and effect, regardless
of any Investigation made by or on behalf of the Company or any such director,
officer or controlling person and shall survive the transfer of such securities
by such seller.
(c) Promptly after receipt by an indemnified party of
notice of the commencement of any action or proceeding involving a claim
referred to in the preceding subdivisions of this Section 4.5, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action;
provided that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under the
preceding subdivisions of this Section 4.5, except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be
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entitled to participate and to assume the defense thereof, jointly with any
other indemnifying party similarly notified, to the extent that the indemnifying
party 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
liable to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof. No indemnifying
party shall, without the consent of the indemnified party, consent to entry of
any judgment or enter into any settlement of any such action which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect to such
claim or litigation. No indemnified party shall consent to entry of any judgment
or enter info any settlement of any such action the defense of which has been
assumed by an indemnifying party without the consent of such indemnifying party.
(d) If the indemnification provided for in the preceding
subdivisions of this Section 4.5 is unavailable to an indemnified party in
respect of any expense, loss, claim, damage or liability referred to therein,
then each indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such expense, loss, claim, damage or liability (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the holder or underwriters, as the case may be, on the other
from the distribution of the Shares or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
holder or underwriter, as the case may be, on the other in connection with the
statements or omissions which resulted in such expense, loss, damage or
liability, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the holder or underwriter,
as the case may be, on the other in connection with the distribution of the
Shares shall be deemed to be in the same proportion as the total net proceeds
received by the Company from the initial sale of the Shares by the Company to
the Seller bear to the gain realized by Tapir or the underwriting discounts and
commissions received by the underwriter, as the case may be. The relative fault
of the Company on the one hand and of the holder or underwriter, as the case may
be, on the other shall be determined by reference to, among other things whether
the untrue or alleged untrue statement of a material fact or omission to state a
material fact relates to information supplied by the Company, by the holder or
by the underwriter and parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
provided that the foregoing contribution agreement shall not inure to the
benefit of any indemnified party if indemnification would be unavailable to such
indemnified party by reason of the proviso contained in the first sentence of
subdivision (a) of this Section 4.5 and in no event shall the obligation of any
Indemnifying party to contribute under this subdivision (d) exceed the amount
that such
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indemnifying party would been obligated to pay by way of indemnification if the
indemnification provided for under subdivisions (a) or (b) of this Section 4.5
had been available under the circumstances.
The Company and Tapir agree that it would not be just and equitable if
contribution pursuant to this subdivision (d) were determined by pro rata
allocation (even if Tapir and any underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph
and subdivision (c) of this Section 4.5. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim.
Notwithstanding one provisions of this subdivision (d), no underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares purchased by it and distributed to the public
were offered to the public exceeds, in any such case, the amount of any damages
that such holder or underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission. No person or entity guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
4.6 RULE 144: RULE 144A.
(a) If the Company shall have filed a registration
statement pursuant to Section 12 of the Exchange Act or a registration statement
pursuant to the Securities Act, the Company will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder and will take such further
action as Tapir may reasonably request, all to the extent required from time to
time to enable Tapir to sell the Shares without registration under the
Securities Act within the limitation of the exemptions provided by (a) Rule 144
under the Securities Act, as such Rule may be amended from time to time, or (b)
any similar rule or regulation hereafter adopted by the Commission. Upon the
request of Tapir, the Company will deliver to Tapir a written statement as to
whether it has complied with such requirements.
(b) The Company represents and warrants that as of the
date hereof, the Common Stock is not, and is not part of a class of securities
that is, listed on a national securities exchange registered under Section 6 of
the Exchange Act or quoted in an automated inter-dealer quotation system. For so
long as any Shares are restricted securities within the meaning of Rule
144(a)(3) under the Securities Act, the Company covenants and agrees that it
shall, during any period in which it is not subject
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to Section 13 or 15(d) of the Exchange Act, make available to Tapir in
connection with the sale of the Shares and any prospective Tapir of the Shares
from such, in each case upon request, the information specified in, and meeting
the requirements of, Rule 144A(d)(4) under the Securities Act.
ARTICLE V
RIGHT OF FIRST REFUSAL
5.1 If Tapir (the "Offeror") desires to sell or otherwise transfer
more than 20% of the Shares held by Tapir to any person or entity other than the
Company (a "Proposed Transferee"), Tapir shall first give to the Company written
notice (the "Notice of Proposed Transfer") fifteen (15) days prior to the
proposed transfer specifying the name and address of the Proposed Transferee,
the identity and total number of shares which Tapir desires to sell or transfer
to the Proposed Transferee (the "Offered Shares"), all of the terms, including
the price, upon which Tapir proposes to sell or transfer the Offered Shares to
the Proposed Transferee (or, if the transfer does not involve a sale, the nature
of the proposed transfer), and stating that the Company has the rights of
refusal set forth in this Agreement.
5.2 For a period of fifteen (15) days (the "Refusal Period") after
receipt of the Notice of Proposed Transfer, the Company (which for purposes of
this Article VIII shall include any designee of the Company) shall have the
right, exercisable by written notice to Tapir, to agree to purchase all or any
portion of the Offered Shares at a price per share equal to the purchase price
set forth in the Notice of Proposed Transfer.
5.3 If the Company elects to purchase less than all of the Offered
Shares, after the Refusal Period, Tapir shall have the right to sell or
otherwise transfer the portion of the Offered Shares that the Company has not
agreed to purchase pursuant to Section 5.2 to the Proposed Transferee on the
same terms specified in the Notice of Proposed Transfer. If for any reason the
Offered Shares are not so sold to the Proposed Transferee within thirty (30)
days after the end of the Refusal Period, the provisions of this Section 5 shall
continue to be applicable to the Offered Shares.
5.4 Upon the election by the Company to purchase all or any
portion of the Offered Shares, within thirty (30) days after the end of the
Refusal Period, the Company shall be obligated to tender payment for the Offered
Shares at the offices of the Company, and Tapir shall be obligated to tender
delivery of the Offered Shares with proper endorsements for transfer or
accompanied by properly executed stock powers. The purchase price for the
Offered Shares shall be paid on the terms provided in the Notice of Proposed
Transfer.
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ARTICLE VI
WARRANT EXERCISE
After the completion of a Qualified IPO, Tapir agrees to exercise the
Tapir Warrant in its entirety; and promptly after such event, Tapir agrees to
tender to the Company the Tapir Warrant together with the full amount of the
exercise price owing. The Company hereby confirms and agrees that Tapir shall
have the right to convert all shares of Class B Common Stock issuable upon
exercise of the Tapir Warrant into an equal number of shares of Class A Common
Stock.
ARTICLE VII
MISCELLANEOUS
7.1 SUCCESSORS AND ASSIGNS. The provisions of this Agreement will
be binding upon, and inure to the benefit of, the successors and assigns of the
parties hereto.
7.2 SURVIVAL OF WARRANTIES. All warranties contained herein will
survive the execution and delivery of this Agreement and the closing of the
transactions contemplate hereby.
7.3 NOTICES. All notices, requests, consents, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by telecopied (with written confirmation of receipt), if a
copy is mailed by registered mall, return receipt requested, or (c) when
received by the addressee, if sent by an internationally recognized overnight
delivery service (receipt requested), in each case to the appropriate addresses
and telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate by notice to the other parties):
Tapir Tapir Investments (Bahamas) Ltd.
x/x Xxxxx & Xxxxxxx
Xxxxxxxxxxx Xxxxx
00 Xxxxxx Xxxxxx
P.O. Box N-3247
Nassau, Bahamas
Attention: Xxxxxxxx Deal
Facsimile No.: (000) 000-0000
with a copy to: Xxxxxx Xxxxx, L.L.P.
0000 X Xxxxxx, X.X.
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Washington, D.C. 20037
Attention: Xxxxx X. Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
The Company: Horizon Medical Products. Inc.
Seven North Parkway Square
0000 Xxxxxxxxx Xxxxxxx, X.X
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
Facsimile No. (000) 000-0000
With a copy to: King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxx X. Xxxxxx. Jr.
Facsimile No.: (000) 000-0000
and: Xxxxxxxxx & Virgin
Xxxxx 0000
000 Xxxxxx Xxxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxxxx X. Xxxxxxxxx, III
Facsimile No.: (000) 000-0000
7.4 BROKERS. The Seller and Tapir each (a) represents and warrants
to the other that it has retained no finder or broker in connection with the
transactions contemplated by this Agreement, and (b) will indemnify and save the
other harmless from and against any and all claims, liabilities, or obligations
with respect to brokerage or finder's fees or commissions in connection with the
transactions contemplated by this Agreement asserted by any person on the basis
of any statement or representation alleged to have been made by such
indemnifying party.
7.5 ENTIRE AGREEMENT. This Agreement embodies the entire agreement
and understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to its
subject matter.
7.6 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
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7.7 HEADINGS. The headings of the sections, subsections, and
paragraphs of this Agreement have been added for convenience only and will not
be deemed to be a part of this Agreement.
7.8 SEVERABILITY. The invalidity or unenforceability of any provision
of this Agreement will not affect the validity or enforceability of any other
provision.
7.9 GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of Georgia.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of
the day and year first above written.
HORIZON MEDICAL PRODUCTS, INC.
By: /s/ Xxxxxxxx X. Xxxx
--------------------------------------------
Title: CEO & Chairman
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TAPIR INVESTMENTS (BAHAMAS) LTD.
By: /s/ Unreadable
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Title: DIRECTOR
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