Exhibit 4.13
REGISTRATION RIGHTS AGREEMENT
by and among
HEALTHCORE MEDICAL SOLUTIONS, INC.
and
XXXX X. XXXXX, individually and
as custodian for XXXXXXX XXXXX
October 12, 1999
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT, dated as of October 12, 1999, is entered into
by and among HealthCore Medical Solutions, Inc., a corporation organized under
the laws of Delaware (the "COMPANY") and Xxxx X. Xxxxx, individually and as
custodian for Xxxxxxx Xxxxx and residing at 00 Xxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxxxx 00000 (collectively, the "SHAREHOLDER").
WITNESSETH:
WHEREAS, on the date hereof, the Company is consummating a
merger with Adatom, Inc., a California corporation; and
WHEREAS, as a condition to the closing of the merger, the
Company has agreed to grant to the Shareholder the registration rights provided
for herein.
NOW, THEREFORE, in consideration of the premises, mutual
covenants and agreements herein contained and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the following terms shall
have the respective meanings set forth below:
"Advice" is as defined in Section 2.05.
"Agreement" means this Agreement, as from time to time
assigned, supplemented, amended or modified in accordance with the terms hereof.
"Company" is as defined in the preamble.
"Demand Registration" is as defined in Section 2.01.
"Demand Request" is as defined in Section 2.01.
"Exchange Act" means the United States Securities Exchange Act
of 1934, as amended, or any similar federal law then in force.
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"Indemnified Person" is as defined in Section 2.09(a).
"Material Adverse Effect" is as defined in Section 2.03(a).
"NASD" is as defined in Section 2.04(p).
"Xxxxx Shares" means (i) the 165,000 shares of Class A Common
Stock $.01 par value, of the Company issued to Shareholder on September 10,
1999; (ii) the shares issued or issuable upon exercise of the warrant to
purchase 142,000 shares of Class A Common Stock $.01 par value of the Company,
which warrant is currently exercisable in full at an exercise price of $1.00 per
share and was issued to Shareholder in September 1997 and expires on September
2007; (iii) the 28,400 shares of Class A Common Stock, $.01 par value, of the
Company issuable upon exchange of a separate warrant to purchase 142,000 shares
of Class A Common Stock $-.01 par value, of the Company, at $1.00 per share,
which warrant IS NOT currently exercisable and was issued to Shareholder in
September, 1997; (iv) 25,200 shares of Class B Common Stock, $.01 par value,
owned by Shareholder, which shares are being released from escrow pursuant to an
escrow termination agreement dated July 1, 1999 between the Company and
Shareholder; and (v) 7,200 shares of Class B Common Stock, $.01 par value, owned
by Shareholder as custodian for Xxxxxxx Xxxxx, which shares also are being
released from escrow pursuant to such escrow termination agreement (together
with any Shares or other securities into which such shares or other securities
may be changed, converted or exchanged).
"Proposed Registration" is as defined in Section 2.02(a).
"SEC" means the United States Securities and Exchange
Commission.
"Securities Act" means the United States Securities Act of
1933, as amended, or any similar federal law then in force.
"Shareholder" is as defined in the preamble.
"Shares" means common stock of the Company, par value $.01 per
share issued or issuable upon exercise of convertible securities, warrants or
options.
"Suspension Notice" is as defined in Section 2.05.
ARTICLE II. REGISTRATION RIGHTS.
SECTION 2.01 DEMAND REGISTRATION.
(a) At any time after February 9, 2000, provided the Company
shall not prior to such date have caused a registration statement to have been
declared effective by the SEC pursuant to Section 2.02 covering all of the Xxxxx
Shares, the Shareholder may require the Company (pursuant to a written notice to
the Company) to effect the registration under the Securities Act of Xxxxx Shares
of the Company other than pursuant to a registration statement on Form S-1 (a
"DEMAND REGISTRATION"). Such request (a "DEMAND REQUEST") by the Shareholder
shall (i) specify the class and number of Xxxxx Shares which the Shareholder
intends to sell or dispose of, and (ii) state the intended method or methods by
which the Shareholder intends to sell or dispose of such Xxxxx Shares. In
connection with any underwritten public offering, the underwriter thereof shall
be selected by the Shareholder, subject to the consent of the Company, which
shall not be unreasonably withheld, Upon receipt of a Demand Request, the
Company shall (as requested) cause to be filed, within thirty (30) calendar days
of the date of delivery to the Company of the request, a registration statement
covering such Xxxxx Shares which the Company has been so requested to register,
providing for the registration under the Securities Act of such Xxxxx Shares to
the extent necessary to permit the disposition of such Xxxxx Shares to be
registered in accordance with the intended method of distribution specified in
such request. The Shareholder shall have the right to exercise only one such
Demand Registration; provided, however, if the Shareholder shall not be entitled
to include all of its Xxxxx Shares in a Demand Registration, the Shareholder may
be entitled to make an additional Demand Request, notwithstanding the
registration of certain of the Xxxxx Shares pursuant to the then pending Demand
Registration.
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(b) Notwithstanding the foregoing, the Company shall not be
required to effect any registration statement pursuant to this Section 2.01 (i)
within 90 days after the effective date of any other registration statement of
the Company's securities or (ii) during the pendency of any Demand Blackout
Period.
(c) If any of the Company's investment banker or any
underwriter determines in good faith that the registration statement and
distribution of the Xxxxx Shares (or the use of the registration statement or
related prospectus) would materially interfere with any pending financing,
merger, acquisition or corporate reorganization involving the Company (or would
require premature disclosure thereof), and promptly gives the Shareholder
written notice of such determination following its Demand Request, the Company
shall be entitled to postpone the filing of the registration statement otherwise
required to be prepared and filed by the Company pursuant to Section 2.01 for a
reasonable period of time, not to exceed 90 days (a "Demand Blackout Period").
The Company shall promptly notify the Shareholder of the expiration or earlier
termination of any Demand Blackout Period, and upon such expiration or
termination the Company shall immediately file the registration statement
pursuant to Section 2.01. The rights under this Section 2.01 shall be separate
and distinct from any other rights the Shareholder may have under Section 2.02.
SECTION 2.02 PIGGYBACK RIGHTS.
(a) Each time that the Company proposes for any reason to
register any of its securities under the Securities Act (a "PROPOSED
REGISTRATION"), other than pursuant to a registration statement on Form S-4 or
similar or successor form, the Company shall promptly give written notice of
such Proposed Registration to the Shareholder (which notice shall be given not
less than thirty (30) calendar days prior to the effective date of the Company's
registration statement) and the Shareholder shall have the right to request
inclusion of any of the Polan Shares in the Proposed Registration, unless, in
the case of a Proposed Registration on Form S-8, the Xxxxx Shares are ineligible
for registration on Form S-8. No registration pursuant to this Section 2.02
shall relieve the Company of its obligation to register Xxxxx Shares pursuant to
Section 2.01.
(b) The Shareholder shall have twenty-five (25) calendar days
from the receipt of such notice to deliver to the Company a written request
specifying the number of Xxxxx Shares the Shareholder intends to sell and the
Shareholder's intended method of disposition. The Shareholder shall have the
right to withdraw its request for inclusion of all or a portion of such Xxxxx
Shares in any registration statement pursuant to this Section 2.02 by giving
written notice to the Company of such withdrawal. Subject to Section 2.03 below,
the Company shall include in such registration statement all such Xxxxx Shares
so requested to be included therein; PROVIDED, HOWEVER, that the Company may at
any time withdraw or cease proceeding with any such piggyback registration if it
shall at the same time withdraw or cease proceeding with the registration of all
other equity securities originally proposed to be registered.
(c) In the event that the Proposed Registration by the Company
is, in whole or in part, an underwritten public offering of securities of the
Company, any request under Section 2.02(b) hereof must specify that the Xxxxx
Shares be included in the underwriting on the same terms and conditions as the
shares otherwise being sold through underwriters under such registration.
SECTION 2.03 PRIORITY ON REGISTRATIONS.
(a) If the managing underwriter advises the Company that the
inclusion of such Xxxxx Shares in a proposed Registration pursuant to Section
2.02 would materially and adversely affect the price or success of the offering
(a "MATERIAL ADVERSE EFFECT"), the Company will be obligated to include in such
registration statement, as to the Shareholder (subject to the priority rules set
forth below), that portion of the Xxxxx Shares the Shareholder has requested to
be registered equal to the ratio which the Shareholder's requested Xxxxx Shares
bears to the total number of shares requested to be included in such
registration statement by all other persons (other than the Company, if such
registration has been initiated by the Company for securities to be offered by
the Company) who have requested that their shares be included in such
registration statement, provided, however, if in the judgment of the managing
underwriter no such reduction would eliminate such Material Adverse Effect, then
the Company shall have the right to exclude all such Xxxxx Shares from such
registration statement provided no other securities are included and offered for
the account of any other person in such registration statement. It is
acknowledged by the Shareholder that pursuant to the foregoing provision, the
securities to be included in such registration shall be allocated, (1) first, to
the Company if
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it initiated the Proposed Registration or to such other third party who is
exercising demand registration rights, and (2) second, to the Shareholder and to
all other persons requesting securities to be included therein (in accordance
with the above-described ratio). If as a result of the provisions of this
Section 2.03(a) the Shareholder shall not be entitled to include all of its
Xxxxx Shares in a registration that the Shareholder has requested to be so
included, the Shareholder may withdraw the Shareholder's request to include
Xxxxx Shares in such registration statement.
(b) The Shareholder may not participate in any registration
statement hereunder unless the Shareholder completes, executes and delivers all
questionnaires, powers of attorney, indemnities, underwriting agreements, and
other documents reasonably required under the terms of such underwriting
arrangements, including an opinion of its counsel, as are required of any other
shareholders registering shares who are not affiliates of the Company, and shall
furnish such information regarding the Xxxxx Shares and the intended method of
distribution of the Polan Shares as shall be reasonably required to effect such
registration.
SECTION 2.04 REGISTRATION PROCEDURES. Whenever the Shareholder
has requested that any Polan Shares be registered pursuant to the provisions of
this Article II, the Company will use its commercially reasonable efforts to
effect the registration and the sale of such Xxxxx Shares in accordance with the
intended method of disposition thereof as set forth in the written request, and
pursuant thereto the Company shall:
(a) prepare and file with the SEC a registration statement
with respect to such securities on the appropriate forms, and use commercially
reasonable efforts to cause such registration statement(s) to become and remain
effective in accordance with Section 2.04(b) hereof and in accordance with all
laws, rules and regulations applicable thereto;
(b) prepare and file with the SEC such amendments and
supplements to such registration statements and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective until the earlier of (i) the sale of all Xxxxx Shares covered thereby
or (ii) the expiration of twelve months from the effective date of the
registration statement, and to comply with the provisions of the Securities Act
with respect to the sale or other disposition of all Xxxxx Shares covered by
such registration statement;
(c) furnish to the Shareholder pursuant to Section 2.01 or
Section 2.02 such number of copies of any summary prospectus or other
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as the Shareholder
may reasonably request in order to facilitate the public sale or other
disposition of such Xxxxx Shares;
(d) use commercially reasonable efforts to register or qualify
the Shares covered by such registration statement under the securities or blue
sky laws of such jurisdictions as the Shareholder shall reasonably request;
PROVIDED, HOWEVER, that the Company shall not be required to consent to general
service of process for all purposes in any jurisdiction where it is not then
subject to process, qualify to do business as a foreign company where it would
not be otherwise required to qualify or submit to liability for state or local
taxes where it is not otherwise liable for such taxes;
(e) at any time when a prospectus relating thereto covered by
such registration statement is required to be delivered under the Securities Act
within the appropriate period mentioned in Section 2.04(b) hereof, promptly
notify the Shareholder and each underwriter and (if requested by the
Shareholder) confirm such notice in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed and, with
respect to a registration statement or any post-effective amendment, when the
same has become effective, (ii) of the issuance by any state securities or other
regulatory authority of any order suspending the qualification or exemption from
qualification of any of the Xxxxx Shares under state securities or blue sky laws
or the initiation of any proceedings for that purpose, and (iii) of the
happening of any event as a result of which the prospectus included in such
registration, 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 and, at the request of the Shareholder, prepare, file and furnish to
the Shareholder 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 shares, such prospectus shall not include an untrue statement
of a
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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;
(f) if the Company has delivered preliminary or final
prospectuses to the Shareholder and after having done so the prospectus is
amended to comply with the requirements of the Securities Act, the Company shall
promptly notify the Shareholder and, if requested, the Shareholder shall
immediately cease making offers of Xxxxx Shares and return all prospectuses to
the Company. The Company shall promptly provide the Shareholder with revised
prospectuses and, following receipt of the revised prospectuses, the Shareholder
shall be free to resume making offers of the Polan Shares;
(g) if any proposed registration effected pursuant to Section
2.01 or Section 2.02 involves an underwritten public offering cause all Shares
to be listed for trading on the principal national securities exchange (if any)
where the Company's common stock is listed for trading;
(h) before filing a registration statement or amendment
thereto, furnish to each Shareholder and its counsel and other representatives
and the underwriters, if any, copies of each such registration statement or
amendment proposed to be filed, which documents shall be made available on a
timely basis for review and comment by the Shareholder, the underwriters (if
any) and their respective representatives;
(i) cooperate with the Shareholder and the managing
underwriter to facilitate the timely preparation and delivery of certificates
(which shall not bear any restrictive legends unless required under applicable
law) representing securities sold under any registration statement (if any), and
enable such securities to be in such denominations and registered in such names
as the managing underwriter or such sellers may request and keep available and
make available to the Company's transfer agent prior to the effectiveness of
such registration statement a supply of such certificates;
(j) in the event that the Shareholder may be considered to be
a "control person," promptly make available for inspection by the Shareholder,
any underwriter participating in any disposition pursuant to any registration
statement, and any attorney, accountant or other agent or representative
retained by any the Shareholder or underwriter (collectively, the "Inspectors"),
all 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 reasonably
requested by any such Inspector in connection with such registration statement;
PROVIDED, that, unless the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in the registration statement or the release
of such Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, the Company shall not be required to provide any
information under this subparagraph (n) if (i) the Company believes, after
consultation with counsel for the Company, that to do so would cause the Company
to forfeit an attorney-client privilege that was applicable to such information
or (ii) if either (A) the Company has requested and been granted from the SEC
confidential treatment of such information contained in any filing with the SEC
of documents provided supplementally or otherwise or (B) the Company reasonably
determines in good faith that such Records are confidential and so notifies the
Inspectors in writing unless prior to furnishing any such information with
respect to (i) or (ii) the Shareholder requesting such information agrees to
enter into a confidentiality agreement in customary form and subject to
customary exceptions; and PROVIDED, FURTHER, that the Shareholder agrees that it
will, upon learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company at its
expense, to undertake appropriate action and to prevent disclosure of the
Records deemed confidential;
(k) provide, if required, a CUSIP number for the Shares
included in any registration statement not later than the effective date of such
registration statement;
(l) cooperate with the Shareholder and each underwriter
participating in the disposition of such Shares and their respective counsel in
connection with any filings required to be made with the National Association of
Securities Dealers, Inc. ("NASD");
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(m) during the period when the prospectus is required to be
delivered under the Securities Act, promptly file all documents required to be
filed with the SEC pursuant to Sections 13(a), 13(c) or 14 of the Exchange Act;
(n) notify the Shareholder promptly of any request by the SEC
for the amending or supplementing of such registration statement or prospectus
or for additional information;
(o) prepare and file with the SEC promptly any amendments or
supplements to such registration statement or prospectus which, in the opinion
of counsel for the Company is required in connection with the distribution of
the Shares;
(p) advise the Shareholder, promptly after it shall have
received notice or obtain knowledge thereof, of the issuance of any stop order
by the SEC suspending the effectiveness of such registration statement or the
initiation or threatening of any proceeding for such purpose and promptly use
its best efforts to prevent the issuance of any stop order or to obtain its
withdrawal at the earliest possible moment if such stop order should be issued;
and
(q) in the case of a Demand Request pursuant to Section 2.01
if the Shareholder so requests, to request acceleration of effectiveness of the
registration statement from the SEC, PROVIDED at the time of such request the
Company does not, in good faith, believe it is necessary to amend further the
registration statement in order to comply with the provisions of Section 2.04.
If the Company wishes to further amend the registration statement prior to
requesting acceleration, it shall have such time as is reasonable given the
nature of the amendment to so amend prior to requesting acceleration.
SECTION 2.05 SUSPENSION OF DISPOSITIONS. The Shareholder
agrees that upon receipt of any notice (a "SUSPENSION NOTICE") from the Company
of the happening of any event of the kind described in Section 2.04(e)(iii), the
Shareholder will forthwith discontinue disposition of Polan Shares that have
been registered under this Article 2 until the Shareholder's receipt of the
copies of the supplemented or amended prospectus, or until it is advised in
writing (the "ADVICE") by the Company that the use of the prospectus may be
resumed, and has received copies of any additional or supplemental filings which
are incorporated by reference in the prospectus, and, if so directed by the
Company, the Shareholder will deliver to the Company all copies, other than
permanent file copies then in the Shareholder's possession, of the prospectus
covering such Shares current at the time of receipt of such Suspension Notice.
In the event the Company shall give any such Suspension Notice, the time period
regarding the effectiveness of registration statements set forth in Section
2.04(b) hereof shall be extended by the number of days during the period from
and including the date of the giving of the Suspension Notice to and including
the date when each seller of Shares covered by such registration statement shall
have received the copies of the supplemented or amended prospectus or the
Advice. The Company shall use its commercially reasonable efforts and take such
actions as are reasonably necessary to render the Advice as promptly as
practicable.
SECTION 2.06 COOPERATION UPON A REGISTRATION. The Shareholder
and the Company agree that, in connection with any exercise of registration
rights pursuant to this Article 2, the Shareholder will authorize, and will
authorize and direct the Company to take, such actions as are necessary or
appropriate to effectuate such registration. In addition, the Shareholder agrees
to cooperate fully with the Company and the underwriters of any underwritten
public offering in the preparation of all documentation necessary or desirable
to effectuate any registration of any Polan Shares under the Securities Act
pursuant to this Article 2, or registration or qualification of any Xxxxx Shares
pursuant to Section 2.04(d) hereof. In addition, the Shareholder shall notify
the Company, at any time when a prospectus is required to be delivered under
applicable law, of the happening of any event as a result of which the
prospectus included in the applicable registration statement, as then in effect,
in each case with respect to the information provided by the Shareholder,
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 Shareholder
shall thereafter take the actions required by Section 2.05.
SECTION 2.07 EXPENSES. The Company shall pay all expenses
incurred by the Company in complying with Sections 2.01, 2.02 and 2.04 hereof,
including, without limitation, all registration and filing fees (including all
expenses incident to filing with the NASD), fees and expenses of complying with
the securities or blue sky
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laws of all such jurisdictions in which the Shares are proposed to be offered
and sold (including reasonable fees and disbursements of counsel in connection
with blue sky qualification of Shares), rating agency fees, printing expenses,
messenger and delivery expenses, the Company's internal expenses (including
without limitation all salaries and expenses of its officers and employees
performing legal or accounting duties), fees and expenses incurred in connection
with any listing of the Shares, fees and expenses of counsel for the Company and
its independent certified public accountants (including the expenses of any
special audit or cold comfort letters required by or incident to such
performance), securities act liability insurance (if the Company elects to
obtain such insurance) and fees and disbursements of underwriters (to the extent
the Company is liable therefor under the terms of any underwriting agreement),
whether or not any registration statement becomes effective; PROVIDED, HOWEVER,
that all underwriting discounts and selling commissions applicable to the Shares
covered by registrations effected pursuant to Section 2.01 or Section 2.02
hereof shall be borne by the Shareholder, in proportion to the number of Shares
sold by the Shareholder, and except as expressly provided in this Section 2.07,
in no event shall the Company pay any fees or expenses of or attributable to the
Shareholder or any counsel, accountants or other persons retained or employed by
the Shareholder.
SECTION 2.08 INDEMNIFICATION.
(a) In the event of any registration of any Shares under the
Securities Act pursuant to this Article 2 or registration or qualification of
any Shares pursuant to Section 2.04(d) hereof, the Company shall indemnify and
hold harmless the Shareholder, each director, officer, employee, trustee, and
partner of the Shareholder and each other person, if any, who controls any of
the foregoing persons, within the meaning of the Securities Act (each, an
"INDEMNIFIED PERSON"), against any losses, claims, damages, liabilities or
expenses, joint or several, 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, are related
to, result from or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any registration statement under which
such Shares were registered under the Securities Act, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereto,
or any document incident to registration or qualification of any Shares pursuant
to Section 2.04(d) hereof, or arise out of, are related to, result from 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 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 such
state securities or blue sky laws. The Company shall reimburse on demand each
Indemnified Person for any legal or any other costs and expenses reasonably
incurred by any of them in connection with investigating, preparing for,
defending or settling any such loss, claim, damage, liability or action by any
governmental agency or body; PROVIDED, HOWEVER, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in said
registration statement, preliminary or final prospectus or amendment or
supplement thereto or any document incident to registration or qualification of
any Shares pursuant to Section 2.04(d) hereof, in reliance upon and in
conformity with written information furnished to the Company by the Shareholder,
underwriter, broker, other person or controlling person specifically for use in
the preparation thereof or arises out of or is based upon the Indemnified
Person's failure to deliver a copy of the registration statement or prospectus
or any amendments or supplements thereto after the Company has furnished such
Indemnified Person with a sufficient number of copies of the same.
(b) Before Shares shall be included in any registration
pursuant to this Article II, the Shareholder will furnish to the Company in
writing such information and affidavits as the Company reasonably requests for
use in connection with any such registration statement and prospectus, and the
Shareholder shall have agreed to indemnify and hold harmless (in the same manner
and to the same extent as set forth in paragraph (a) above) the Company, each
member of the Board of Directors of the Company, each officer of the Company who
signs such registration statement, every other participating shareholder and any
person who controls the Company within the meaning of the Securities Act, with
respect to any untrue statement or omission from such registration statement,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, if such untrue statement or omission was made
in reliance upon and in conformity with such written information furnished to
the
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Company by the Shareholder or such underwriter for use in the preparation of
such registration statement, preliminary prospectus, final prospectus or
amendment or supplement; PROVIDED, HOWEVER, that the maximum amount of liability
in respect of such indemnification shall be limited to an amount equal to the
net proceeds actually received by the Shareholder from the sale of Shares
effected pursuant to such registration.
(c) Promptly after receipt by an Indemnified Person of notice
of the commencement of any action involving a claim referred to in Section
2.08(a) or (b) hereof, such Indemnified Person will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 2.08,
give written notice to the latter of the commencement of such action (provided
that the failure to give such notice shall not limit the rights of such
Indemnified Person to the extent that such failure or delay in notifying the
indemnifying party does not prevent the indemnifying party from presenting a
proper defense against the claim). In case any such action is brought against an
Indemnified Person, 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 Person, and, after notice to such Indemnified
Person from the indemnifying party of its election to assume the defense
thereof; PROVIDED, HOWEVER, that, if any Indemnified Person shall have
reasonably concluded that there may be one or more legal defenses available to
such Indemnified Person which are different from, in conflict with or additional
to 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 2.08, or if the indemnifying party fails to
take diligent action to defend such claim within twenty (20) calendar days
following notice thereof from the Indemnified Person, the indemnifying party
shall not have the right to assume the defense of such action on behalf of such
Indemnified Person, and such indemnifying party shall reimburse such Indemnified
Person and any person controlling such Indemnified Person for the fees and
expenses of counsel retained by the Indemnified Person which are reasonably
related to the matters covered by the indemnity agreement provided in this
Section 2.08. If the indemnifying party does assume its own defense as permitted
hereunder, from such time the Indemnified Person shall bear the expenses of its
own separate counsel. If such defense is not assumed by the indemnifying party
as permitted hereunder, the indemnifying party will not be subject to any
liability for any settlement made by the Indemnified Person without its written
consent, which consent shall not be unreasonably withheld. If such defense is
assumed by the indemnifying party pursuant to the provisions hereof, such
indemnifying party shall not make any settlement of the applicable claim
indemnified against hereunder without the written consent of the Indemnified
Person or persons, which consent shall not be unreasonably withheld. An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim will not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with respect to
such claim, unless in the reasonable judgment of any Indemnified Person, a
conflict of interest may exist between such Indemnified Person and any other
such Indemnified Person with respect to such claim, in which event the
indemnifying party shall be obligated to pay the reasonable fees and
disbursements of such additional counsel or counsels.
(d) In order to provide for just and equitable contribution to
joint liability under the Securities Act in any case in which an Indemnified
Person makes a claim for indemnification pursuant to this Section 2.08, but it
is judicially determined that such indemnification may not be enforced in such
case notwithstanding the fact that this Section 2.08 provides for
indemnification in such case, then the Company and the Shareholder will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject as is appropriate to reflect, as between the Company and the
Shareholder, on the one hand, and the underwriter on the other hand, the
relative fault of the Company and the Shareholder in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, it being understood that the parties acknowledge that the
overriding equitable consideration to be given effect in connection with this
provision is the ability of one party or the other to correct the statement or
omission which resulted in such losses, claims, damages or liabilities, and that
it would not be just and equitable if contribution pursuant hereto were to be
determined by pro rata allocation or by any other method of allocation which
does not take into consideration the foregoing equitable considerations.
Notwithstanding the foregoing, (i) the Shareholder will not be required to
contribute any amount in excess of the net proceeds to it of all Shares sold by
it pursuant to such registration statement, and (ii) no person guilty of
fraudulent misrepresentation, within the meaning of Section 11(f) of the
Securities Act, shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation. If indemnification is available
under this Section 2.08, the indemnifying parties shall indemnify each
Indemnified Person to the full extent provided in Section 2.08(a) and Section
2.08(b) without regard to the relative
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fault of said indemnifying party or Indemnified Person or any other equitable
consideration provided for in this Section 2.08(d).
(e) Notwithstanding any of the foregoing, if in connection
with an underwritten public offering of any Shares, the Company, the Shareholder
and the underwriters enter into an underwriting or purchase agreement relating
to such offering which contains provisions covering indemnification among the
parties, the indemnification provided thereunder shall be in lieu of the
indemnification provided to the Shareholders hereunder.
(f) The indemnification and contribution required by this
Section 2.09 shall be made by periodic payment of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred; PROVIDED, that the party
receiving such indemnification or contribution provides a bond or other form of
security reasonably acceptable to the indemnifying or contributing party and
PROVIDED, FURTHER, if a court of competent jurisdiction finally determines that
any Indemnified Person which has received payments hereunder does not have an
indemnification right under this Section 2.08 for any reason, then such
Indemnified Person shall within five (5) calendar days of such final
determination, refund all amounts received hereunder to the Company or the
Shareholder, as the case may be.
(g) The indemnification and contribution provided for
hereunder will remain in full force and effect regardless of any investigation
made by or on behalf of any Indemnified Person and will survive the transfer of
Shares.
ARTICLE III. MISCELLANEOUS.
SECTION 3.01 NOTICES. Any and all notices, consents, offers,
acceptances, or any other communication provided for herein shall be sufficient
if given in writing and deemed received when delivered by first class,
registered or certified mail, postage prepaid or overnight courier or hand
delivery, or when sent by facsimile transmission (confirmed by facsimile machine
report and with a confirmation letter sent by first class mail, postage prepaid)
which shall be addressed, or sent to the address or telecopier number of the
party set forth below its signature hereto or, in each case, such other address
or telecopier number, as the case may be, as such party may from time to time
designate in writing to the other parties.
SECTION 3.02 AMENDMENT AND WAIVER. No change or modification
of, or waiver of compliance with, this Agreement shall be valid unless the same
shall be in writing and signed by all of the parties hereto.
SECTION 3.03 TERMINATION. This Agreement will terminate at the
earlier of the date on which all the Polan Shares have been sold by the
Shareholder (or a permitted assignee hereunder) or the second anniversary of the
date hereof.
SECTION 3.04 NO WAIVER. No failure or delay on the part of the
Company or the Shareholder in exercising any right, between the Company and the
Shareholder shall operate as a waiver thereof nor shall any single or partial
exercise of any right, power or privilege hereunder preclude the simultaneous or
later exercise of any other right, power or privilege. The rights and remedies
herein expressly provided are cumulative and not exclusive of any rights or
remedies which the Company or the Shareholder would otherwise have. No notice to
or demand on the Company or the Shareholder, as the case may be, in any case
shall entitle the Company or the Shareholder, as the case may be, to any other
or further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Company or the Shareholder to take any other or
further action in any circumstances without notice or demand.
SECTION 3.05 SPECIFIC PERFORMANCE. Each party to this
Agreement acknowledges that the other parties will suffer irreparable injury in
the event of any breach of any provision of this Agreement and that therefore
the remedy at law for any breach or threatened breach of any such provision of
this Agreement will be inadequate. Accordingly, upon a breach or threatened
breach of any such provision of this Agreement by any party hereto, the other
parties shall, in addition and without prejudice to any of the rights and
remedies they may have, be entitled as a matter of right, without proof of
actual damages, to seek specific performance of such provisions of this
Agreement and to
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such other injunctive or equitable relief to enforce, or prevent any violations
(whether anticipatory, continuing or future) of, such provisions of this
Agreement.
SECTION 3.06 COUNTERPARTS AND HEADINGS. This Agreement may be
executed in two or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same
instrument. All headings and any cover page are inserted for convenience or
reference only and shall not affect its meaning or interpretation.
SECTION 3.07 NOUNS AND PRONOUNS. Whenever the context may
require, any pronouns used herein shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural and vice-versa.
SECTION 3.08 EXPENSES. Except as provided in Section 2.08
hereto, each of the parties to this Agreement shall bear its own expenses,
including, without limitation, the fees and disbursements of its respective
counsel, in connection with the negotiation and execution of this Agreement and
the consummation of the transactions contemplated hereby.
SECTION 3.09 GOVERNING LAW. This Agreement will be governed
by, and construed and enforced in accordance with, the laws of the State of New
York, U.S.A., without regard to its conflict of law rules.
SECTION 3.10 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and shall inure to the benefit of the Company and its successors,
and the Shareholder and its successors and assigns; PROVIDED that the rights and
obligations of the Shareholder hereunder shall inure to the benefit of and be
binding upon any transferee of the Shareholder only if such transferee (i) is a
spouse or child or a trust established for the benefit of the Shareholder's
spouse, child or children, or a limited liability company or limited
partnership, the members or partners of which are members of the Shareholder's
immediate family, and (ii) agrees in writing to be bound by the provisions of
this Agreement.
SECTION 3.11 SEVERABILITY. In the event that any provision of
this Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, invalid or unenforceable, the remaining provisions hereof shall
nevertheless continue in full force and effect as though the illegal, invalid or
unenforceable provisions were not a part hereof, and the parties shall exert
their best efforts to amend this Agreement to include a provision which is
legal, valid and enforceable, or to take such other action, which in either case
carries out the original intent of the parties.
SECTION 3.12 COMPLETE AGREEMENT. This Agreement contains the
entire agreement among the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous arrangements or understandings, whether
written or oral, between or among any of the parties hereto, with respect to the
subject matter hereof.
SECTION 3.13 FURTHER ASSURANCES. Each of the parties to this
Agreement agrees to execute such other documents and take such other action as
may be reasonably necessary to implement and carry out the intent of this
agreement.
IN WITNESS WHEREOF, the parties hereto have signed this
Agreement as of the day and year first above written.
HEALTHCORE MEDICAL SOLUTIONS, INC.
By:
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
Notice Address:
00000 Xxxx Xxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chairman
Telecopier:
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with a copy to:
Xxxxxxx X. Xxxxxx
Adatom, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
XXXX X. XXXXX,
individually and as custodian
for Xxxxxxx Xxxxx
-----------------------------------
----------------------
Notice Address:
00 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
AGREED AND ACCEPTED
ADATOM, INC.
By:
------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
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