EXHIBIT 4(j)
LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT (the "Agreement"), dated as of November 25, 1997, by
and among Clinicor, Inc., a Nevada corporation (the "Company"), X'Xxxxxxx Family
Limited Partnership, a limited partnership (the "Partnership"), Messrs. Xxxxxx
X. Xxxxxx ("Xxxxxx") and Xxxxxx X. X'Xxxxxxx ("X'Xxxxxxx"), each an individual
resident of the State of Texas (Xxxxxx and X'Xxxxxxx, together with the
Partnership, the "Selling Shareholders"), Oracle Partners, L.P., a Delaware
limited partnership ("Oracle") and Sirrom Capital Corporation d/b/a Tandem
Capital, a Tennessee corporation ("Tandem").
WITNESSETH:
WHEREAS, the Company and Tandem have entered into a Preferred Stock
Purchase Agreement, dated November 7, 1997 (the "Stock Purchase Agreement"),
pursuant to which the Company has agreed to issue and sell to Tandem, and its
designated assigns and, subject to the conditions set forth in the Stock
Purchase Agreement, Tandem has agreed to purchase, 50,000 shares of the
Company's Class B Convertible Preferred Stock, without par value (the "Class B
Preferred Stock"), which shares of Class B Preferred Stock are convertible into
shares of the Company's Common Stock par value $.001 per share (the "Common
Stock");
WHEREAS, Oracle and certain persons associated with Oracle are the holders
of shares of the Company's Class A Convertible Preferred Stock, without par
value (the "Class A Preferred Stock"), the terms of which will be modified and
amended as a result of the issuance and sale of the Class B Preferred Stock to
Tandem;
WHEREAS, in order to induce Tandem to enter into the Stock Purchase
Agreement and to induce Oracle and the holders of the Class A Preferred Stock to
agree to the modification of the terms thereof, each of the Selling Shareholders
agrees to restrict the transfer of the shares of capital stock of the Company
registered in the name thereof or beneficially owned thereby;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and in consideration of the
premises and of the mutual covenants herein contained, the parties hereto agree
to be legally bound as follows:
Section 1. Ownership of Shares. Each of the Selling Shareholders
represents and warrants that all shares of capital stock of the Company owned
thereby, and all options, rights, warrants or other securities convertible into,
exchangeable or exercisable for or evidencing any right to purchase or subscribe
for shares of capital stock of the Company (whether owned of record or
beneficially), or any beneficial interest therein, are set forth and described
beside such Selling Shareholder's name on Exhibit A attached hereto (together
with any such shares of capital stock, options, rights, warrant or other
securities subsequently acquired by any of the Selling Shareholders, the
"Covered Securities"). The Company represents and warrants that each such
Selling Shareholder is the owner of record of all Covered Securities set forth
and described beside such Selling Shareholder's name.
Section 2. Lock-Up. Each of the Selling Shareholders hereby acknowledges
and agrees that during the period beginning on the date hereof and ending on the
Termination Date, as hereinafter defined (the "Lock-up Period"), such Selling
Shareholder, without the prior written
consent of Oracle (so long as any shares of the Company's Class A Preferred
Stock or any shares of Common Stock issued upon conversion thereof remain
outstanding and are owned of record or beneficially by Oracle or any affiliate
thereof) and Tandem (so long as any shares of the Company's Class B Preferred
Stock or any shares of Common Stock issued upon conversion thereof remain
outstanding and are owned of record or beneficially by Tandem or any affiliate
thereof), will not (A) directly or indirectly, agree or offer to sell, sell,
contract to sell, grant an option for the purchase or sale of, assign, transfer,
pledge, hypothecate, distribute or otherwise encumber or dispose of (each, a
"Disposition") any Covered Securities owned thereby, except for (i) transfers to
members of his "immediate family" (as defined in Rule 16a-1 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) provided each such
transferee agrees in writing to comply with the provisions of this Agreement as
to the transfer of such securities, (ii) in the case of the Partnership, sales
of shares of Common Stock which realize gross proceeds in the aggregate of not
more than $400,000, provided that Oracle shall have received written notice at
least ninety (90) days prior to any such sale stating the number of shares of
Common Stock to be sold and shall have had the opportunity during such ninety
(90) day period to arrange a private sale to one or more buyers at a price
mutually agreed upon by the Partnership and Oracle and (iii) in the case of
Xxxxxx, sales of shares of Common Stock which realize gross proceeds in the
aggregate of not more than $200,000, provided that Oracle shall have received
written notice at least ninety (90) days prior to any such sale stating the
number of shares of Common Stock to be sold and shall have had the opportunity
during such ninety (90) day period to arrange a private sale to one or more
buyers at a price mutually agreed upon by Xxxxxx and Oracle or (B) engage in any
activities such as short sales, "sales against the box," or any other derivative
activities which create a "put equivalent position" under regulations adopted
under Section 16 of the Exchange Act, or in any other hedging transactions
designed or reasonably likely to result in a Disposition of any Covered
Securities.
Section 3. Termination Date. This Agreement shall terminate on the
earlier to occur of (A) the date on which all issued and outstanding shares of
the Company's Class A Preferred Stock and Class B Preferred Stock are converted
into shares of Common Stock or redeemed or otherwise retired by the Company, (B)
the effective date of any consolidation, merger or statutory share exchange
(other than a merger with a wholly-owned subsidiary of the Company or a
consolidation, merger, share exchange or other business combination in which the
outstanding voting stock of the Company immediately prior to such consolidation,
merger, share exchange or business combination constitutes a majority of the
voting stock of the surviving entity) in which the outstanding shares of capital
stock of the Company are exchanged for securities or other consideration of or
from another corporation, or a sale of all or substantially all the assets or
stock of the Company, provided that the holders of the Company's Class A
Preferred Stock and the Company's Class B Preferred Stock shall receive on the
effective date of such event an amount equal to or greater than the Class A
Liquidation Preference and the Class B Preference Amount, respectively (as such
terms are defined in the Company's Amended and Restated Articles of
Incorporation, as amended (the "Articles of Incorporation")), in cash, readily
marketable securities or other property, (C) the public offering pursuant to a
firm commitment underwriting at a price to the public of at least $5.00 per
share of Common Stock of the Company (as adjusted proportionally for any stock
dividends, combinations or splits) registered in compliance with the Securities
Act of 1933, as amended and applicable rules and regulations thereunder and
registered, qualified or exempt from registration or qualification under or in
compliance with any applicable state securities laws which shall have resulted
in the receipt by the Company of net proceeds of at least $10,000,000 (after the
payment of expenses, including underwriting discounts and commissions but before
any proceeds from the exercise of any underwriter's over-allotment option) for
the Common Stock of the Company offered thereunder or (D) the date which is
twenty-four (24) months from the date hereof (the "Termination Date").
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Section 4. Stop-transfer Order; Securities Legend. Each of the Selling
Shareholders hereby consents to the placing of a stop-transfer order on the
books of the Company or with the transfer agent of the Company's capital stock
with respect to any of the Covered Securities or instruments convertible into or
exchangeable for Covered Securities registered in the name of such Selling
Shareholder or beneficially owned thereby. The Company hereby covenants to
cause all such stop-transfer orders to be placed. Each of the Selling
Shareholders hereby consents to the placing of a legend substantially in the
following form, and covenants to submit (simultaneously with the execution of
this Agreement or promptly upon receipt of any certificate representing Covered
Securities in the future) any such certificates to the Company for the placing
of such legend, on all certificates owned thereby representing shares of Covered
Securities or instruments convertible into or exchangeable for Covered
Securities:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN RESTRICTED IN THE
MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN LOCK-UP AGREEMENT, DATED
NOVEMBER 25, 1997 (AS SUCH AGREEMENT MAY FROM TIME TO TIME BE AMENDED, THE
"LOCK-UP AGREEMENT"), AMONG CLINICOR, INC., X'XXXXXXX FAMILY LIMITED
PARTNERSHIP, MESSRS. XXXXXX X. XXXXXX AND XXXXXX X. X'XXXXXXX, ORACLE PARTNERS,
L.P. AND SIRROM CAPITAL CORPORATION D/B/A TANDEM CAPITAL, AND SUCH SECURITIES
MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF SUCH LOCK-UP
AGREEMENT.
The foregoing legend and any stop-transfer order described in this Section 4
shall only be removed with respect to any of the Covered Securities or
instruments convertible into or exchangeable for Covered Securities, or the
shares represented thereby, upon the advice of counsel to the Company.
Section 5. Governing Law; Amendments. This Agreement shall in all
respects be construed in accordance with and governed by the laws of the State
of Texas applicable to contracts to be wholly performed in such state. This
Agreement may not be amended or modified, nor may any Covered Securities be
released for the operation of this Agreement except in a writing signed by the
party or parties to be charged therewith.
Section 6. Jurisdiction and Venue. Pledgors hereby consent to the
jurisdiction of the courts of the States of Tennessee and New York and the
United States District Court for each of the Middle District of Tennessee and
the Southern District of New York, as well as to the jurisdiction of all courts
from which an appeal may be taken from such courts, for the purpose of any suit,
action or other proceeding arising out of any of its obligations arising under
this Agreement or with respect to the transactions contemplated hereby, and
expressly waives any and all objections it may have as to venue in any of such
courts.
Section 7. Waiver of Trial by Jury. EACH OF THE PARTIES HERETO HEREBY
WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDINGS, CLAIMS OR COUNTER-CLAIMS,
WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY
RELATING TO THIS AGREEMENT.
Section 8. Notices. All communications provided for hereunder shall be
in writing and shall be delivered personally, or mailed by registered mail, or
by prepaid overnight air courier, or by facsimile communication, in each case
addressed:
If to the Company: Clinicor, Inc.
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0000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
with a copy to: Graves, Dougherty, Xxxxxx & Xxxxx
000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxxxxxx, Esq.
If to Xxxxxx: Xxxxxx X. Xxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
If to Partnership
or X'Xxxxxxx: Xxxxxx X. X'Xxxxxxx
0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
with a copy to: Akin, Gump, Strauss, Xxxxx and Xxxx, L.L.P.
1900 Frost Bank Plaza
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxx
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
If to Oracle: Oracle Partners, L.P.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
with a copy to: Xxxx Xxxxxxx, P.C.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
If to Tandem: Tandem Capital, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxx
with a copy to: Xxxxxxxx & Xxx, PLC
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Fax: (000) 000-0000
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Attention: Xxxxxx I.N. XxXxxxxx, Esq.
or such other address as any party may designate to the other parties hereto in
writing, provided, however, that a notice sent by overnight air courier shall
only be effective if delivered at a street address designated for such purpose
by such person and a notice sent by facsimile communication shall only be
effective if made by confirmed transmission at a telephone number designated for
such purpose by such person.
Section 9. Headings. Section numbers and headings used herein are for
convenience only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
or have caused this Agreement to be duly executed by a duly authorized officer,
all as of the day first above written.
CLINICOR:
CLINICOR, INC.,
a Nevada corporation
By: /s/ XXXXX X. XXXXX, XX.
TREASURER & CFO
-----------------------------------
Name: Xxxxx X. Xxxxx, Xx.
-----------------------------------
Its: TREASURER AND CFO
-----------------------------------
WITNESS: SELLING SHAREHOLDERS:
/s/ XXXXXX X. DAY /s/ XXXXXX X. XXXXXX
------------------------------ ----------------------------------------
Xxxxxx X. Xxxxxx
/s/ XXXX XXXXXXXX /s/ XXXXXX X. X'XXXXXXX
-------------------------------- ----------------------------------------
Xxxxxx X. O'Xxxxxxx
X'XXXXXXX FAMILY LIMITED PARTNERSHIP
By Its General Partner:
X'XXXXXXX PARTNERSHIP
MANAGEMENT CORP.
By: /s/ XXXXXXXX XXXXX X'XXXXXXX
-----------------------------
Name: Xxxxxxxx Xxxxx X'Xxxxxxx
---------------------------
Its: President
----------------------------
ORACLE:
ORACLE PARTNERS, L.P.,
a Delaware limited partnership
By: /s/ XXXXX X. XXXXXXXX
-------------------------------------
Name: Xxxxx Xxxxxxxx
-----------------------------------
Title: Managing General Partner
----------------------------------
QUASAR INTERNATIONAL PARTNERS, C.V.
By: /s/ XXXXX X. XXXXXXXX
-------------------------------------
Name: Xxxxx Xxxxxxxx, as President of
-----------------------------------
Title: Oracle Management, Inc.,
Investment Advisor
----------------------------------
ORACLE INSTITUTIONAL PARTNERS, L.P.
By: /s/ XXXXX X. XXXXXXXX
-------------------------------------
Name: Xxxxx Xxxxxxxx
-----------------------------------
Title: Managing General Partner
----------------------------------
GSAM ORACLE FUND, INC.
By: /s/ XXXXX X. XXXXXXXX
-------------------------------------
Name: Xxxxx Xxxxxxxx, as President of
-----------------------------------
Title: Oracle Management,Inc.,
Investment Advisor
----------------------------------
TANDEM:
SIRROM CAPITAL CORPORATION,
a Tennessee corporation
d/b/a Tandem Capital, Inc.
By: /s/ XXXXX XXXXXX
-------------------------------------
Xxxxx Xxxxxx
Vice President
SCHEDULE A
X'Xxxxxxx Family Limited 787,536 common shares owned
Partnership
Xxxxxx X. Xxxxxx 700,000 common shares owned
33,334 exercisable options
116,666 unexercisable options
Xxxxxx X. X'Xxxxxxx 33,334 exercisable options
116,666 unexercisable options
