Draft of December 16, 1996
2,000,000 SHARES
PATIENT INFOSYSTEMS, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
December , 1996
XXXXX & COMPANY
VECTOR SECURITIES INTERNATIONAL, INC.
As Representatives of the several Underwriters
x/x Xxxxx & Xxxxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. Introductory. Patient Infosystems, Inc., a Delaware corporation (the
"Company"), proposes to sell, pursuant to the terms of this Agreement, to
the several underwriters named in Schedule A hereto (the "Underwriters,"
or, each, an "Underwriter"), an aggregate of 2,000,000 shares of Common
Stock, $.01 par value per share (the "Common Stock") of the Company, a
Delaware corporation (the "Company"). The aggregate of 2,000,000 shares so
proposed to be sold is hereinafter referred to as the "Firm Stock". The
Company also proposes to sell to the Underwriters, upon the terms and
conditions set forth in Section 3 hereof, up to an additional 300,000
shares of Common Stock (the "Optional Stock"). The Firm Stock and the
Optional Stock are hereinafter collectively referred to as the "Stock".
Xxxxx & Company ("Cowen") and Vector Securities International, Inc.
("Vector") are acting as representatives of the several Underwriters and in
such capacity are hereinafter referred to as the "Representatives".
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to, and agrees with, the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-07643) in the form
in which it became or becomes effective and also in such form as it
may be when any post-effective amendment thereto shall become
effective with respect to the Stock, including any preeffective
prospectuses included as part of the registration statement as
originally filed or as part of any amendment or supplement thereto, or
filed pursuant to Rule 424 under the Securities Act of 1933, as
amended (the "Securities Act"), and the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission
(the "Commission") thereunder, copies of which have heretofore been
delivered to you, has been carefully prepared by the Company in
conformity with the requirements of the Securities Act and has been
filed with the Commission under the Securities Act; one or more
amendments to such registration statement, including in each case an
amended preeffective prospectus, copies of which amendments have
heretofore been delivered to you, have been so prepared and filed. If
it is contemplated, at the time this Agreement is executed, that a
post-effective amendment to the registration statement will be filed
and must be declared effective before the offering of the Stock may
commence, the term "Registration Statement" as used in this Agreement
means the registration statement as amended by said post-effective
amendment. The term "Registration Statement" as used in this
Agreement shall also include any registration statement relating to
the Stock that is filed and declared effective pursuant to Rule 462(b)
under the Securities Act. The term "Prospectus" as used in this
Agreement means the prospectus in the form included in the
Registration Statement, or, (A) if the prospectus included in the
Registration Statement omits information in reliance on Rule 430A
under the Securities Act and such information is included in a
prospectus filed with the Commission pursuant to Rule 424(b) under the
Securities Act, the term "Prospectus" as used in this Agreement means
the prospectus in the form included in the Registration Statement as
supplemented by the addition of the Rule 430A information contained in
the prospectus filed with the Commission pursuant to Rule 424(b) and
(B) if prospectuses that meet the requirements of Section 10(a) of the
Securities Act are delivered pursuant to Rule 434 under the Securities
Act, then (i) the term "Prospectus" as used in this Agreement means
the "prospectus subject to completion" (as such term is defined in
Rule 434(g) under the Securities Act) as supplemented by (a) the
addition of Rule 430A information or other information contained in
the form of prospectus delivered pursuant to Rule 434(b)(2) under the
Securities Act or (b) the information contained in the term sheets
described in Rule 434(b)(3) under the Securities Act, and (ii) the
date of such prospectuses shall be deemed to be the date of the term
sheets. The term "Preeffective Prospectus" as used in this Agreement
means the prospectus subject to completion in the form included in the
Registration Statement at the time of the initial filing of the
Registration Statement with the Commission, and as such prospectus
shall have been amended from time to time prior to the date of the
Prospectus.
(b) The Commission has not issued or threatened to issue any order
preventing or suspending the use of any Preeffective Prospectus, and,
at its date of issue, each Preeffective Prospectus conformed in all
material respects with the requirements of the Securities Act and did
not include any 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, in light of the circumstances under which they
were made, not misleading; and, when the Registration Statement
becomes effective and at all times subsequent thereto up to and
including each of the Closing Dates (as hereinafter defined), the
Registration Statement and the Prospectus and any amendments or
supplements thereto contained and will contain all material statements
and information required to be included therein by the Securities Act
and conformed and will conform in all material respects to the
requirements of the Securities Act and neither the Registration
Statement nor the Prospectus, nor any amendment or supplement thereto,
included or will include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances
2
under which they were made, not misleading; provided, however, that
the foregoing representations, warranties and agreements shall not
apply to information contained in or omitted from any Preeffective
Prospectus or the Registration Statement or the Prospectus or any such
amendment or supplement thereto in reliance upon, and in conformity
with, written information furnished to the Company by or on behalf of
any Underwriter, directly or through you, specifically for use in the
preparation thereof; there is no franchise, lease, contract, agreement
or document required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration Statement
which is not described or filed therein as required; and all
descriptions of any such franchises, leases, contracts, agreements or
documents contained in the Registration Statement are accurate and
complete descriptions of such documents in all material respects.
(c) Subsequent to the respective dates as of which information is given in
the Registration Statement and Prospectus, and except as set forth or
contemplated in the Prospectus, the Company has not incurred any
liabilities or obligations, direct or contingent, nor entered into any
transactions not in the ordinary course of business, and there has not
been any material adverse change in the condition (financial or
otherwise), properties, business, management, prospects, net worth or
results of operations of the Company or any change in the capital
stock or short-term or long-term debt of the Company.
(d) The financial statements, together with the related notes, set forth
in the Prospectus and elsewhere in the Registration Statement fairly
present, on the basis stated in the Registration Statement, the
financial position and the results of operations and changes in
financial position of the Company at the respective dates or for the
respective periods therein specified. Such statements and related
notes have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis except as may be
set forth in the Prospectus. The selected financial and statistical
data set forth in the Prospectus under the caption "Prospectus
Summary--Summary Financial Data" and "Selected Financial Data" fairly
present, on the basis stated in the Registration Statement, the
information set forth therein.
(e) Deloitte & Touche LLP, who have expressed their opinions on the
audited financial statements included in the Registration Statement
and the Prospectus, are independent public accountants as required by
the Securities Act and the Rules and Regulations.
(f) The Company has been duly organized and is validly existing and in
good standing as a corporation under the laws of its jurisdiction of
organization, with power and authority (corporate and other) to own or
lease its properties and to conduct its business as described in the
Prospectus; the Company is in possession of and operating in
compliance with all franchises, grants, authorizations, licenses,
permits, easements, consents, certificates and orders required for the
conduct of its business, the failure to possess which would have a
material adverse effect upon the Company, all of which are valid and
in full force and effect; and the Company is duly qualified to do
business and in good standing as a foreign
3
corporation in all other jurisdictions where its ownership or leasing
of properties or the conduct of its business requires such
qualification. The Company has all requisite power and authority, and
all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses and permits of and from all
public regulatory or governmental agencies and bodies to own, lease
and operate its properties and conduct its business as now being
conducted and as described in the Registration Statement and the
Prospectus, the failure to possess which would have a material adverse
effect upon the Company, and no such consent, approval, authorization,
order, registration, qualification, license or permit contains a
materially burdensome restriction not adequately disclosed in the
Registration Statement and the Prospectus. The Company has no
subsidiaries (as defined in the Securities Act and the Rules and
Regulations).
(g) The Company's authorized and outstanding capital stock is on the date
hereof, and will be on the Closing Dates, as set forth under the
heading "Capitalization" in the Prospectus; the outstanding shares of
common stock (including the outstanding shares of Stock) of the
Company conform to the description thereof in the Prospectus and have
been duly authorized and validly issued and are fully paid and
nonassessable; are duly listed or approved for listing on the Nasdaq
National Market and have been issued in compliance with all federal
and state securities laws (except with respect to the compliance with
state securities laws of the sale of the Common Stock offered hereby
pursuant to this Agreement, as to which the Company makes no
representation) and were not issued in violation of or subject to any
preemptive rights or similar rights to subscribe for or purchase
securities and conform to the description thereof contained in the
Prospectus. Except as disclosed in and or contemplated by the
Prospectus and the financial statements of the Company and related
notes thereto included in the Prospectus, the Company does not have
outstanding any options or warrants to purchase, or any preemptive
rights or other rights to subscribe for or to purchase any securities
or obligations convertible into, or any contracts or commitments to
issue or sell, shares of its capital stock or any such options,
rights, convertible securities or obligations, except for options
granted subsequent to the date of information provided in the
Prospectus pursuant to the Company's employee and stock option plans
as disclosed in the Prospectus. The description of the Company's
stock option and other stock plans or arrangements, and the options or
other rights granted or exercised thereunder, as set forth in the
Prospectus, accurately and fairly presents the information required to
be shown with respect to such plans, arrangements, options and rights
in all material respects.
(h) The Stock to be issued and sold by the Company to the Underwriters
hereunder has been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly
and validly issued, fully paid and nonassessable and free of any
preemptive or similar rights and will conform to the description
thereof in the Prospectus.
(i) Except as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company is a party or of
which any property of the Company or any affiliate is subject, which,
if determined adversely to the Company, might individually or in the
aggregate (i) prevent or adversely affect
4
the transactions contemplated by this Agreement, (ii) suspend the
effectiveness of the Registration Statement, (iii) prevent or suspend
the use of the Preeffective Prospectus in any jurisdiction or
(iv) result in a material adverse change in the condition (financial
or otherwise), properties, business, management, prospects, net worth
or results of operations of the Company and, to the best knowledge of
the Company, there is no valid basis for any such legal or
governmental proceeding; and to the best of the Company's knowledge no
such proceedings are threatened or contemplated against the Company by
governmental authorities or others. The Company is not a party nor
subject to the provisions of any material injunction, judgment, decree
or order of any court, regulatory body or other governmental agency or
body. The description of the Company's litigation under the heading
"Legal Proceedings" in the Prospectus is true and correct in all
material respects and complies with the Rules and Regulations.
(j) The execution, delivery and performance of this Agreement and the
consummation of the transactions herein contemplated (A) will not
result in any violation of the provisions of the certificate of
incorporation, by-laws or other organizational documents of the
Company, or any law, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or
any of its properties or assets, (B) will not conflict with or result
in a breach or violation of any of the terms or provisions of or
constitute a default under any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company
is a party or by which it or any of its properties is or may be bound,
the Certificate of Incorporation, By-laws or other organizational
documents of the Company, or any law, order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its properties or will result in the creation of a
lien.
(k) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and performance of this Agreement by the Company and the consummation
of the transactions contemplated hereby, except such as have been or
will be obtained under the Securities Act or the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and except such as may be
required by the National Association of Securities Dealers, Inc. (the
"NASD") or under the securities or "Blue Sky" laws of any
jurisdiction.
(l) The Company has the full corporate power and authority to enter into
this Agreement and to perform its obligations hereunder (including to
issue, sell and deliver the Stock), and this Agreement has been duly
and validly authorized, executed and delivered by the Company and is a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent that rights
to indemnity and contribution hereunder may be limited by federal or
state securities laws or the public policy underlying such laws.
(m) The Company is in all material respects in compliance with, and
conducts its business in conformity with, all applicable federal,
state, local and foreign laws, rules and regulations or any court or
governmental agency or body; to the knowledge of the Company,
otherwise than as set forth in the Registration
5
Statement and the Prospectus, no prospective change in any of such
federal or state laws, rules or regulations has been adopted which,
when made effective, would have a material adverse effect on the
operations of the Company.
(n) The Company has filed all necessary federal, state, local and foreign
income, payroll, franchise and other tax returns that are due as of
the date of this Agreement and has paid all taxes shown as due thereon
or with respect to any of its properties, and there is no tax
deficiency that has been, or to the knowledge of the Company is likely
to be, asserted against the Company or any of its properties or assets
that would adversely affect the financial position, business or
operations of the Company.
(o) Except as disclosed in the Registration Statement and the Prospectus,
no person or entity has the right to require registration of shares of
Common Stock or other securities of the Company because of the filing
or effectiveness of the Registration Statement or otherwise, except
for persons and entities who have expressly waived such right or who
have been given proper notice and have failed to exercise such right
within the time or times required under the terms and conditions of
such right.
(p) Neither the Company nor any of its officers, directors or affiliates
has taken or will take, directly or indirectly, any action designed or
intended to stabilize or manipulate the price of any security of the
Company, or which caused or resulted in, or which might in the future
reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company. The Company
has not distributed and, prior to the later to occur of the First
Closing Date and completion of the distribution of the Firm Shares,
will not distribute any offering material in connection with the
offering and sale of the Shares other than the Registration Statement,
the Preeffective Prospectus, the Prospectus or other materials, if
any, permitted by the Securities Act and state securities or Blue Sky
laws.
(q) The Company has provided you with all financial statements since
February 22, 1995 to the date hereof that are available to the
officers of the Company.
(r) The Company owns or possesses the right to use all patents,
trademarks, trademark registrations, service marks, service xxxx
registrations, trade names, copyrights, licenses, inventions, trade
secrets and rights described in the Prospectus as being owned by it or
necessary for the conduct of its respective businesses, and the
Company is not aware of any claim to the contrary or any challenge by
any other person to the rights of the Company with respect to the
foregoing. To the best knowledge of the Company, the Company's
business as now conducted and as proposed to be conducted does not and
will not infringe or conflict with in any material respect patents,
trademarks, service marks, trade names, copyrights, trade secrets,
licenses or other intellectual property or franchise right of any
person. Except as described in the Prospectus, the Company is not
aware of any claim against the Company alleging the infringement by
the Company of any patent, trademark, service xxxx, trade name,
copyright, trade
6
secret, license in or other intellectual property right or franchise
right of any person.
(s) The Company has performed all material obligations required to be
performed by it under all contracts required by Item 601(b)(10) of
Regulation S-K under the Securities Act to be filed as exhibits to the
Registration Statement, and neither the Company nor, to the best of
the Company's knowledge, any other party to such contract is in
default under or in breach of any such obligations. The Company has
not received any notice of such default or breach.
(t) The Company is not involved in any labor dispute nor is any such
dispute threatened. The Company is not aware that (A) any executive,
key employee or significant group of employees of the Company plans to
terminate employment with the Company or (B) any such executive or key
employee is subject to any noncompete, nondisclosure, confidentiality,
employment, consulting or similar agreement that would be violated by
the present or proposed business activities of the Company. The
Company does not have or expect to have any liability for any
prohibited transaction or funding deficiency or any complete or
partial withdrawal liability with respect to any pension, profit
sharing or other plan which is subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), to which the
Company or any subsidiary makes or ever has made a contribution and in
which any employee of the Company or any subsidiary is or has ever
been a participant. With respect to such plans, the Company is in
compliance in all material respects with all applicable provisions of
ERISA.
(u) The Company has obtained the written agreement described in
Section 8(j) of this Agreement from each of its officers, directors
and certain certain holders of the Company's securities.
(v) The Company has, and the Company as of the Closing Dates will have,
good and marketable title in fee simple to all real property and good
and marketable title to all personal property owned or proposed to be
owned by it which is material to the business of the Company, in each
case free and clear of all liens, encumbrances and defects except such
as are described in the Prospectus or such as would not have a
material adverse effect on the Company; and any real property and
buildings held under lease by the Company or proposed to be held after
giving effect to the transactions described in the Prospectus are, or
will be as of each of the Closing Dates, held by it under valid,
subsisting and enforceable leases with such exceptions as would not
have a material adverse effect on the Company, in each case except as
described in or contemplated by the Prospectus.
(w) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as
are customary for companies at 5 similar stages of development and in
businesses similar to the businesses in which the Company is engaged
or proposes to engage after giving effect to the transactions
described in the Prospectus; and the Company does not have any reason
to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar
7
insurers as may be necessary to continue its business at a cost that
would not materially and adversely affect the condition, financial or
otherwise, or the earnings, business or operations of the Company,
except as described in or contemplated by the Prospectus.
(x) Other than as contemplated by this Agreement, there is no broker,
finder or other party that is entitled to receive from the Company any
brokerage or finder's fee or other fee or commission as a result of
any of the transactions contemplated by this Agreement.
(y) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(z) To the Company's knowledge, neither the Company nor any employee or
agent of the Company has made any payment of funds of the Company or
received or retained any funds in violation of any law, rule or
regulation, which payment, receipt or retention of funds is of a
character required to be disclosed in the Prospectus.
(aa) The Company is not or, after application of the net proceeds of this
offering as described under the caption "Use of Proceeds" in the
Prospectus, will not become an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended.
(bb) Each certificate signed by any officer of the Company and delivered to
the Underwriters or counsel for the Underwriters shall be deemed to be
a representation and warranty by the Company as to the matters covered
thereby.
(cc) The Company has not received nor is it aware of any communication
(written or oral) relating to the termination or modification or
threatened termination or modification of the agreements described or
referred to in the Prospectus under the caption "Risk
Factors--Terminability of Agreements; Exclusivity Provisions" and
"Business--Customer Agreements" nor is it aware of any communication
(written or oral) relating to any determination or threatened
determination not to renew or extend any agreement described or
referred to under such caption at the end of the current term of any
such agreement.
3. PURCHASE BY, AND SALE AND DELIVERY TO, UNDERWRITERS -- CLOSING DATES. The
Company agrees to sell to the Underwriters the Firm Stock; and on the basis
of the representations, warranties, covenants and agreements herein
contained, but subject to the terms and conditions herein set forth, the
Underwriters agree, severally and not jointly, to purchase the Firm Stock
from the Company, the number of shares of Firm Stock to be purchased
8
by each Underwriter being set opposite its name in Schedule A, subject to
adjustment in accordance with Section 12 hereof.
The purchase price per share to be paid by the Underwriters to the Company
will be the price per share set forth in the table on the cover page of the
Prospectus under the heading "Proceeds to Company" (the "Purchase Price").
The Company will deliver the Firm Stock to the Representatives for the
respective accounts of the several Underwriters (in the form of definitive
certificates, issued in such names and in such denominations as the
Representatives may direct by notice in writing to the Company given at or
prior to 12:00 Noon, New York Time, on the second full business day
preceding the First Closing Date (as defined below) or, if no such
direction is received, in the names of the respective Underwriters or in
such other names as Cowen may designate (solely for the purpose of
administrative convenience) and in such denominations as Cowen may
determine, against payment of the aggregate Purchase Price therefor by
certified or official bank check or checks in immediately available (same
day) funds, payable to the order of the Company, all at the offices of
Xxxxx Xxxxxxxxxx, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
The time and date of the delivery and closing shall be at 10:00 A.M., New
York Time, on December , 1996, in accordance with Rule 15c6-1 of the
Exchange Act. The time and date of such payment and delivery are herein
referred to as the "First Closing Date". The First Closing Date and the
location of delivery of, and the form of payment for, the Firm Stock may be
varied by agreement between the Company and Cowen. The First Closing Date
may be postponed pursuant to the provisions of Section 12.
The Company shall make the certificates for the Stock available to the
Representatives for examination on behalf of the Underwriters not later
than 10:00 A.M., New York Time, on the business day preceding the First
Closing Date at the offices of Xxxxx & Company, Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
It is understood that Cowen or Vector, individually and not as
Representatives of the several Underwriters, may (but shall not be
obligated to) make payment to the Company on behalf of any Underwriter or
Underwriters, for the Stock to be purchased by such Underwriter or
Underwriters. Any such payment by Xxxxx or Vector shall not relieve such
Underwriter or Underwriters from any of its or their other obligations
hereunder.
The several Underwriters agree to make an initial public offering of the
Firm Stock at the initial public offering price as soon after the
effectiveness of the Registration Statement as in their judgment is
advisable. The Representatives shall promptly advise the Company of the
making of the initial public offering.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus,
the Company hereby grants to the Underwriters an option to purchase,
severally and not jointly, up to an aggregate of 300,000 shares of Optional
Stock. The price per share to be paid for the Optional Stock shall be the
Purchase Price. The option granted hereby may be exercised as to all or
any part of the Optional Stock at any time, and from time to time, not more
than thirty (30) days subsequent to the effective date of this Agreement.
No Optional Stock shall be sold and delivered unless the Firm Stock
previously has been, or simultaneously is, sold and
9
delivered. The right to purchase the Optional Stock or any portion thereof
may be surrendered and terminated at any time upon notice by the
Underwriters to the Company.
The option granted hereby may be exercised by the Underwriters by giving
written notice from Xxxxx to the Company setting forth the number of shares
of the Optional Stock to be purchased by them and the date and time for
delivery of and payment for the Optional Stock. Each date and time for
delivery of and payment for the Optional Stock (which may be the First
Closing Date, but not earlier) is herein called the "Option Closing Date"
and shall in no event be earlier than two (2) business days nor later than
ten (10) business days after written notice is given. (The Option Closing
Date and the First Closing Date are herein called the "Closing Dates".)
All purchases of Optional Stock from the Company shall be made on a pro
rata basis. Optional Stock shall be purchased for the account of each
Underwriter in the same proportion as the number of shares of Firm Stock
set forth opposite such Underwriter's name in Schedule A hereto bears to
the total number of shares of Firm Stock (subject to adjustment by the
Underwriters to eliminate odd lots). Upon exercise of the option by the
Underwriters, the Company agrees to sell to the Underwriters the number of
shares of Optional Stock set forth in the written notice of exercise and
the Underwriters agree, severally and not jointly and subject to the terms
and conditions herein set forth, to purchase the number of such shares
determined as aforesaid.
The Company will deliver the Optional Stock to the Underwriters (in the
form of definitive certificates, issued in such names and in such
denominations as the Representatives may direct by notice in writing to the
Company given at or prior to 12:00 Noon, New York Time, on the second full
business day preceding the Option Closing Date or, if no such direction is
received, in the names of the respective Underwriters or in such other
names as Xxxxx may designate (solely for the purpose of administrative
convenience) and in such denominations as Xxxxx may determine, against
payment of the aggregate Purchase Price therefor by certified or official
bank check or checks in immediately available (same day) funds payable to
the order of the Company, all at the offices of Xxxxx Xxxxxxxxxx, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The Option Closing Date
and the location of delivery of, and the form of payment for, the Option
Stock may be varied by agreement between the Company and Xxxxx. The Option
Closing Date may be postponed pursuant to the provisions of Section 12.
4. COVENANTS AND AGREEMENTS OF THE COMPANY. The Company covenants and agrees
with the several Underwriters that:
(a) The Company will (i) if the Company and the Representatives have
determined not to proceed pursuant to Rule 430A of the Rules and
Regulations, use its best efforts to cause the Registration Statement
to become effective, (ii) if the Company and the Representatives have
determined to proceed pursuant to Rule 430A of the Rules and
Regulations, use its best efforts to comply with the provisions of and
make all requisite filings with the Commission pursuant to Rule 430A
and Rule 424 of the Rules and Regulations and (iii) if the Company and
the Representatives have determined to deliver Prospectuses pursuant
to Rule 434 of the Rules and Regulations, to use its best efforts to
comply with all the applicable provisions thereof. The Company will
advise the Representatives promptly as to the time at which the
Registration Statement becomes effective, will advise the
10
Representatives promptly of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of
the institution of any proceedings for that purpose, and will use its
best efforts to prevent the issuance of any such stop order and to
obtain as soon as possible the lifting thereof, if issued. The
Company will advise the Representatives promptly of the receipt of any
comments of the Commission or any request by the Commission for any
amendment of or supplement to the Registration Statement or the
Prospectus or for additional information and will not at any time file
any amendment to the Registration Statement or supplement to the
Prospectus which shall not previously have been submitted to the
Representatives a reasonable time prior to the proposed filing thereof
or to which the Representatives shall reasonably object in writing or
which is not in compliance with the Securities Act and the Rules and
Regulations.
(b) The Company will prepare and file with the Commission, promptly upon
the request of the Representatives, any amendments or supplements to
the Registration Statement or the Prospectus which in the opinion of
the Representatives may be necessary to enable the several
Underwriters to continue the distribution of the Stock and will use
its best efforts to cause the same to become effective as promptly as
possible.
(c) If at any time after the effective date of the Registration Statement
when a prospectus relating to the Stock is required to be delivered
under the Securities Act any event relating to or affecting the
Company occurs as a result of which the Prospectus or any other
prospectus as then in effect would include an untrue statement of a
material fact, or omit to state any material fact necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading, or if it is necessary at any time to amend
the Prospectus to comply with the Securities Act, the Company will
promptly notify the Representatives thereof and will prepare an
amended or supplemented prospectus which will correct such statement
or omission; and in case any Underwriter is required to deliver a
prospectus relating to the Stock nine (9) months or more after the
effective date of the Registration Statement, the Company upon the
request of the Representatives and at the expense of such Underwriter
will prepare promptly such prospectus or prospectuses as may be
necessary to permit compliance with the requirements of Section
10(a)(3) of the Securities Act.
(d) The Company will deliver to the Representatives, at or before the
Closing Dates, signed copies of the Registration Statement, as
originally filed with the Commission, and all amendments thereto
including all financial statements and exhibits thereto, and will
deliver to the Representatives such number of copies of the
Registration Statement, including such financial statements but
without exhibits, and all amendments thereto, as the Representatives
may reasonably request. The Company will deliver or mail to or upon
the order of the Representatives, from time to time until the
effective date of the Registration Statement, as many copies of the
Preeffective Prospectus as the Representatives may reasonably request.
The Company will deliver or mail to or upon the order of the
Representatives on the date of the initial public offering, and
thereafter from time to time during the period when delivery of a
prospectus relating to the
11
Stock is required under the Securities Act, as many copies of the
Prospectus, in final form or as thereafter amended or supplemented as
the Representatives may reasonably request; provided, however, that
the expense of the preparation and delivery of any prospectus required
for use nine (9) months or more after the effective date of the
Registration Statement shall be borne by the Underwriters required to
deliver such prospectus.
(e) The Company will make generally available to its shareholders as soon
as practicable, but not later than fifteen (15) months after the
effective date of the Registration Statement, an earning statement
which will be in reasonable detail (but which need not be audited) and
which will comply with Section 11(a) of the Securities Act, covering a
period of at least twelve (12) months beginning after the "effective
date" (as defined in Rule 158 under the Securities Act) of the
Registration Statement.
(f) The Company will cooperate with the Representatives to enable the
Stock to be registered or qualified for offering and sale by the
Underwriters and by dealers under the securities laws of such
jurisdictions as the Representatives may designate and at the request
of the Representatives will make such applications and furnish such
consents to service of process or other documents as may be required
of it as the issuer of the Stock for that purpose; provided, however,
that the Company shall not be required to qualify to do business or to
file a general consent (other than that arising out of the offering or
sale of the Stock) to service of process in any such jurisdiction
where it is not now so subject. The Company will, from time to time,
prepare and file such statements and reports as are or may be required
of it as the issuer of the Stock to continue such qualifications in
effect for so long a period as the Representatives may reasonably
request for the distribution of the Stock. The Company will advise
the Representatives promptly after the Company becomes aware of the
suspension of the qualifications or registration of (or any such
exception relating to) the Common Stock of the Company for offering,
sale or trading in any jurisdiction or of any initiation or threat of
any proceeding for any such purpose, and in the event of the issuance
of any orders suspending such qualifications, registration or
exception, the Company will, with the cooperation of the
Representatives use its best efforts to obtain the withdrawal thereof.
(g) The Company will furnish to its shareholders annual reports containing
financial statements certified by independent public accountants and
at its option with quarterly summary financial information in
reasonable detail which may be unaudited. During the period of five
(5) years from the date hereof, the Company will deliver to the
Representatives and, upon request, to each of the other Underwriters,
as soon as they are available, copies of each annual report of the
Company and each other report furnished by the Company to its
shareholders and will deliver to the Representatives, (i) as soon as
they are available, copies of any other reports (financial or other)
which the Company shall publish or otherwise make available to any of
its shareholders as such, (ii) as soon as they are available, copies
of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange and (iii) from time to
time such other information concerning the Company as you may request.
12
(h) The Company will use its best efforts to list the Stock, subject to
official notice of issuance, on the Nasdaq National Market
concurrently with the effectiveness of the Registration Statement.
(i) The Company will maintain a transfer agent and registrar for its
Common Stock.
(j) Prior to filing its quarterly statements on Form 10-Q, the Company
will have its independent auditors perform a limited quarterly review
of its quarterly financial statements.
(k) The Company will not offer, sell, assign, transfer, encumber, contract
to sell, grant an option to purchase or otherwise dispose of, other
than by operation of law, gifts, pledges or dispositions by estate
representatives, any shares of Common Stock or securities convertible
into or exercisable or exchangeable for Common Stock (including,
without limitation, Common Stock of the Company which may be deemed to
be beneficially owned by the Company in accordance with the Rules and
Regulations) during the 180 days following the date on which the price
of the Common Stock to be purchased by the Underwriters is set (the
"Lock-Up Period"), other than the Company's sale of Common Stock
hereunder and the Company's issuance of Common Stock upon the exercise
of warrants and stock options which are presently outstanding and
described in the Prospectus or the grant of options under the
Company's Stock Option Plan as such is described in the Prospectus,
provided such options are not exercisable during the Lock-Up Period.
(l) Prior to filing with the Commission any reports on Form SR pursuant to
Rule 463 of Rules and Regulations, the Company will furnish a copy
thereof to the counsel for the Underwriters and receive and consider
its comments thereon, and will deliver promptly to the Representatives
a signed copy of each report on Form SR filed by it with the
Commission.
(m) The Company will apply the net proceeds from the sale of the Stock as
set forth in the description under "Use of Proceeds" in the
Prospectus, which description complies in all respects with the
requirements of Item 504 of Regulation S-K.
(n) The Company will supply you with copies of all correspondence to and
from, and all documents issued to and by, the Commission in connection
with the registration of the Stock under the Securities Act.
(o) Prior to each of the Closing Dates the Company will furnish to you, as
soon as they have been prepared, copies of any unaudited interim
consolidated financial statements of the Company for any periods
subsequent to the periods covered by the financial statements
appearing in the Registration Statement and the Prospectus.
(p) Prior to each of the Closing Dates the Company will issue no press
release or other communications directly or indirectly and hold no
press conference with respect to the Company, the financial condition,
results of operations, business, prospects, assets or liabilities of
the Company, or the offering of the Stock,
13
without your prior written consent. For a period of twelve (12)
months following the first Closing Date, the Company will use its best
efforts to provide to you copies of each press release or other public
communications with respect to the financial condition, results of
operations, business, prospects, assets or liabilities of the Company
at least simultaneously with the public issuance thereof or such
longer advance period as may reasonably be practicable.
(q) During the period of five (5) years hereafter, the Company will
furnish to the Representatives, and upon request of the
Representatives, to each of the Underwriters: (i) as soon as
practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheet of the Company as
of the close of such fiscal year and statements of income,
stockholders' equity and cash flows for the year then ended and the
opinion thereon of the Company's independent public accountants;
(ii) as soon as practicable after the filing thereof, copies of each
proxy statement, Annual Report on Form 10-K, Quarterly Report on Form
10-Q, Report on Form 8-K or other report filed by the Company with the
Commission, or the NASD or any securities exchange; and (iii) as soon
as available, copies of any report or communication of the Company
mailed generally to holders of its Common Stock.
5. Payment of Expenses.
(a) The Company will pay (directly or by reimbursement) all costs, fees
and expenses incurred in connection with expenses incident to the
performance of its obligations under this Agreement and in connection
with the transactions contemplated hereby, including but not limited
to (i) all expenses and taxes incident to the issuance and delivery of
the Stock to the Representatives; (ii) all expenses incident to the
registration of the Stock under the Securities Act; (iii) the costs of
preparing stock certificates (including printing and engraving costs);
(iv) all fees and expenses of the registrar and transfer agent of the
Stock; (v) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Stock to the
Underwriters; (vi) fees and expenses of the Company's counsel and the
Company's independent accountants; (vii) all costs and expenses
incurred in connection with the preparation, printing filing, shipping
and distribution of the Registration Statement, each Preeffective
Prospectus and the Prospectus (including all exhibits and financial
statements) and all amendments and supplements provided for herein,
the "Agreement Among Underwriters" between the Representatives and the
Underwriters, the Master Selected Dealers' Agreement, the
Underwriters' Questionnaire and the Blue Sky memoranda (including
related fees and expenses of counsel to the Underwriters) and this
Agreement; (viii) all filing fees, attorneys' fees and expenses
incurred by the Company or the Underwriters in connection with
exemptions from the qualifying or registering (or obtaining
qualification or registration of) all or any part of the Stock for
offer and sale and determination of its eligibility for investment
under the Blue Sky or other securities laws of such jurisdictions as
the Representatives may designate; (ix) all fees and expenses paid or
incurred in connection with filings made with the NASD, including the
fees and expenses of counsel to the Underwriters; and (x) all other
costs and expenses incident to the
14
performance of its obligations hereunder which are not otherwise
specifically provided for in this Section.
(b) In addition to its other obligations under Section 6(a) hereof, the
Company agrees that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other proceeding arising out
of or based upon (i) any statement or omission or any alleged
statement or omission, (ii) any act or failure to act or any alleged
act or failure to act or (iii) any breach or inaccuracy in its
representations and warranties, it will reimburse each Underwriter on
a quarterly basis for all reasonable legal or other expenses incurred
in connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and
enforceability of the Company's obligation to reimburse each
Underwriter for such expenses and the possibility that such payments
might later be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim reimbursement
payment is so held to have been improper, each Underwriter shall
promptly return it to the Company, together with interest, compounded
daily, determined on the basis of the prime rate (or other commercial
lending rate for borrowers of the highest credit standing) announced
from time to timed by the Chase Manhattan Bank, N.A., New York, New
York (the "Prime Rate"). Any such interim reimbursement payments
which are not made to an Underwriter in a timely manner as provided
below shall bear interest at the Prime Rate from the due date for such
reimbursement. This expense reimbursement agreement will be in
addition to any other liability which the Company may otherwise have.
The request for reimbursement will be sent to the Company.
(c) In addition to its other obligations under Section 6(b) hereof, each
Underwriter severally agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other
proceeding arising out of or based upon any statement or omission, or
any alleged statement or omission, described in Section 6(b) hereof
which relates to information furnished to the Company pursuant to
Section 6(b) hereof, it will reimburse the Company (and, to the extent
applicable, each officer, director and controlling person) on a
quarterly basis for all reasonable legal or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the
absence of a judicial determination as to the propriety and
enforceability of the Underwriters' obligation to reimburse the
Company (and, to the extent applicable, each officer, director or
controlling person) for such expenses and the possibility that such
payments might later be held to have been improper by a court of
competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Company
(and, to the extent applicable, each officer, director or controlling
person) shall promptly return it to the Underwriters together with
interest, compounded daily, determined on the basis of the Prime Rate.
Any such interim reimbursement payments which are not made to the
Company within thirty (30) days of a request for reimbursement shall
bear interest at the Prime Rate from the date of such request. This
indemnity agreement will be in addition to any liability which such
Underwriter may otherwise have.
15
(d) It is agreed that any controversy arising out of the operation of the
interim reimbursement arrangements set forth in paragraph (b) and/or
(c) of this Section 5, including the amounts of any requested
reimbursement payments and the method of determining such amounts,
shall be settled by arbitration conducted under the provisions of the
Constitution and Rules of the Board of Governors of the New York Stock
Exchange, Inc. or pursuant to the Code of Arbitration Procedure of the
NASD. Any such arbitration must be commenced by service of a written
demand for arbitration or written notice of intention to arbitrate,
therein electing the arbitration tribunal. In the event the party
demanding arbitration does not make such designation of an arbitration
tribunal in such demand or notice, then the party responding to said
demand or notice is authorized to do so. Such an arbitration would be
limited to the operation of the interim reimbursement provisions
contained in paragraph (b) and/or (c) of this Section 5 and would not
resolve the ultimate propriety or enforceability of the obligation to
reimburse expenses which is created by the provisions of Section 6.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls such Underwriter within the meaning
of the Securities Act and the respective officers, directors,
partners, employees, representatives and agents of each such
Underwriter (collectively, the "Underwriter Indemnified Parties" and,
each, an "Underwriter Indemnified Party"), against any losses, claims,
damages, liabilities or expenses (including the reasonable cost of
investigating end defending against any claims therefor and counsel
fees incurred in connection therewith), joint or several, which may be
based upon the Securities Act, or any other statute or at common law,
(i) on the ground or alleged ground that any Preeffective Prospectus,
the Registration Statement or the Prospectus (or any Preeffective
Prospectus, the Registration Statement or the Prospectus as from time
to time amended or supplemented) includes or allegedly includes an
untrue statement of a material fact or omits 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, unless such statement or omission was made
in reliance upon, and in conformity with, written information
furnished to the Company by any Underwriter, directly or through the
Representatives, specifically for use in the preparation thereof or
(ii) for any act or failure to act or any alleged act or failure to
act by any Underwriter in connection with, or relating in any manner
to, the Stock or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage,
liability or expense arising out of or based upon matters covered by
clause (i) above (provided that the Company shall not be liable under
this clause (ii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim,
damage, or liability or expense resulted directly from any such acts
or failures to act undertaken or omitted to be taken by such
Underwriter through its gross negligence or willful misconduct). The
Company will be entitled to participate at its own expense in the
defense or, if it so elects, to assume the defense of any suit brought
to enforce any such liability, but if the Company elects to assume the
defense, such defense shall be conducted by counsel chosen by it and
reasonably
16
acceptable to the Underwriters. In the event the Company elects to
assume the defense of any such suit and retain such counsel, any
Underwriter Indemnified Parties, defendant or defendants in the suit,
may retain additional counsel but shall bear the fees and expenses of
such counsel unless (i) the Company shall have specifically authorized
the retaining of such counsel or (ii) the parties to such suit include
any such Underwriter Indemnified Parties, and the Company and such
Underwriter Indemnified Parties at law or in equity have been advised
by counsel to the Underwriters that one or more legal defenses may be
available to it or them which may not be available to the Company, in
which case the Company shall not be entitled to assume the defense of
such suit notwithstanding its obligation to bear the fees and expenses
of such counsel. This indemnity agreement is not exclusive and will
be in addition to any liability which the Company might otherwise have
and shall not limit any rights or remedies which may otherwise be
available at law or in equity to each Underwriter Indemnified Party.
(b) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers
who have signed the Registration Statement and each person, if any,
who controls the Company within the meaning of the Securities Act
(collectively, the "Company Indemnified Parties") against any losses,
claims, damages, liabilities or expenses (including, unless the
Underwriter or Underwriters elect to assume the defense, the
reasonable cost of investigating and defending against any claims
therefor and counsel fees incurred in connection therewith), joint or
several, which arise out of or are based in whole or in part upon the
Securities Act, the Exchange Act or any other federal, state, local or
foreign statute or regulation, or at common law, on the ground or
alleged ground that any Preeffective Prospectus, the Registration
Statement or the Prospectus (or any Preeffective Prospectus, the
Registration Statement or the Prospectus, as from time to time amended
and supplemented) includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading, but only
insofar as any such statement or omission was made in reliance upon,
and in conformity with, written information furnished to the Company
by such Underwriter, directly or through the Representatives,
specifically for use in the preparation thereof; provided, however,
that in no case is such Underwriter to be liable with respect to any
claims made against any Company Indemnified Party against whom the
action is brought unless such Company Indemnified Party shall have
notified such Underwriter in writing within a reasonable time after
the summons or other first legal process giving information of the
nature of the claim shall have been served upon the Company
Indemnified Party, but failure to notify such Underwriter of such
claim shall not relieve it from any liability which it may have to any
Company Indemnified Party otherwise than on account of its indemnity
agreement contained in this paragraph. Such Underwriter shall be
entitled to participate at its own expense in the defense, or, if it
so elects, to assume the defense of any suit brought to enforce any
such liability, but, if such Underwriter elects to assume the defense,
such defense shall be conducted by counsel chosen by it. In the event
that any Underwriter elects to assume the defense of any such suit and
retain such counsel, the Company Indemnified
17
Parties and any other Underwriter or Underwriters or controlling
person or persons, defendant or defendants in the suit, shall bear the
fees and expenses of any additional counsel retained by them,
respectively. The Underwriter against whom indemnity may be sought
shall not be liable to indemnify any person for any settlement of any
such claim effected without such Underwriter's consent. This
indemnity agreement is not exclusive and will be in addition to any
liability which such Underwriter might otherwise have and shall not
limit any rights or remedies which may otherwise be available at law
or in equity to any Company Indemnified Party.
(c) If the indemnification provided for in this Section 6 is unavailable
or insufficient to hold harmless an indemnified party under subsection
(a) or (b) above in respect of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to
herein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters
on the other from the offering of the Stock. If, however, the
allocation provided by the immediately preceding sentence is not
permitted by applicable law, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company on the one hand
and the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities
or expenses (or actions in respect thereof), as well as any other
relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company
or the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it
would not be just and equitable if contribution were determined by pro
rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above. The
amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or expenses (or actions in
respect thereof) referred to above shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating, defending, settling or compromising
any such claim. Notwithstanding the provisions of this subsection
(c), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the shares of
the Stock underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by
18
reason of such untrue or alleged untrue statement or omission or
alleged omission. The Underwriters' obligations to contribute are
several in proportion to their respective underwriting obligations and
not joint. 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 was not guilty of such fraudulent
misrepresentation.
7. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company and the several Underwriters, as set forth in
this Agreement or made by them respectively, pursuant to this Agreement,
shall remain in full force and effect, regardless of any investigation made
by or on behalf of any Underwriter, the Company or any of its officers or
directors or any controlling person, and shall survive delivery of and
payment for the Stock.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations of the
several Underwriters hereunder shall be subject to the accuracy, at and
(except as otherwise stated herein) as of the date hereof and at and as of
each of the Closing Dates, of the representations and warranties made
herein by the Company, to compliance at and as of each of the Closing Dates
by the Company with its covenants and agreements herein contained and other
provisions hereof to be satisfied at or prior to each of the Closing Dates,
and to the following additional conditions:
(a) The Registration Statement shall have become effective and no stop
order suspending the effectiveness thereof shall have been issued and
no proceedings for that purpose shall have been initiated or, to the
knowledge of the Company or the Representatives, shall be threatened
by the Commission, and any request for additional information on the
part of the Commission (to be included in the Registration Statement
or the Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of the Representatives. Any filings of the
Prospectus, or any supplement thereto, required pursuant to Rule
424(b) or Rule 434 of the Rules and Regulations, shall have been made
in the manner and within the time period required by Rule 424(b) and
Rule 434 of the Rules and Regulations, as the case may be.
(b) The Representatives shall have been satisfied that there shall not
have occurred any change prior to each of the Closing Dates in the
condition (financial or otherwise), properties, business, management,
prospects, net worth or results of operations of the Company, or any
change in the capital stock, short-term or long-term debt of the
Company, such that (i) the Registration Statement or the Prospectus,
or any amendment or supplement thereto, contains an untrue statement
of fact which, in the opinion of the Representatives, is material, or
omits to state a fact which, in the opinion of the Representatives, is
required to be stated therein or is necessary to make the statements
therein not misleading, or (ii) it is unpracticable in the reasonable
judgment of the Representatives to proceed with the public offering or
purchase the Stock as contemplated hereby.
(c) No legal or governmental action, suit or proceeding affecting the
Company which is material and adverse to the Company or which affects
or may affect the
19
Company's ability to perform their respective obligations under this
Agreement shall have been instituted or threatened and there shall
have occurred no material adverse development in any existing such
action, suit or proceeding.
(d) At the time of execution of this Agreement, the Representatives shall
have received from Deloitte & Touche LLP, independent certified public
accountants, a letter, dated the date hereof, in form and substance
satisfactory to the Underwriters.
(e) The Representatives shall have received from Deloitte & Touche LLP,
independent certified public accountants, letters, dated each of the
Closing Dates, to the effect that such accountants reaffirm, as of
each of the Closing Dates, and as though made on each of the Closing
Dates, the statements made in the letter furnished by such accountants
pursuant to paragraph (d) of this Section 8.
(f) The Representatives shall have received from Crummy, Del Deo, Dolan,
Griffinger & Veccione, counsel for the Company, opinions, dated each
of the Closing Dates, to the effect set forth in Exhibit I hereto.
(g) The Representatives shall have received from Xxxxx Xxxxxxxxxx, counsel
for the Underwriters, their opinions dated each of the Closing Dates
with respect to the validity of the Common Stock, the Registration
Statement and the Prospectus and such other related matters as it may
reasonably request, and the Company shall have furnished to such
counsel such documents as they may request for the purpose of enabling
them to pass upon such matters.
(h) The Representatives shall have received a certificate, dated each of
the Closing Dates, of the chief executive officer or the President and
the chief financial or accounting officer of the Company to the effect
that:
(i) No stop order suspending the effectiveness of the
Registration Statement has been issued, and, to the
best of the knowledge of the signers, no proceedings
for that purpose have been instituted or are pending or
contemplated under the Securities Act;
(ii) Neither any Preeffective Prospectus, as of its date,
nor the Registration Statement nor the Prospectus, nor
any amendment or supplement thereto, as of the time
when the Registration Statement became effective and at
all times subsequent thereto up to the delivery of such
certificate, included any untrue statement of a
material fact or omitted to state any material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under
which they were made, not misleading;
(iii) Subsequent to the respective dates as of which
information is given in the Registration Statement
and
20
the Prospectus, and except as set forth or
contemplated in the Prospectus, the Company has
not incurred any material liabilities or
obligations, direct or contingent, nor entered
into any material transactions not in the ordinary
course of business and there has not been any
material adverse change in the condition
(financial or otherwise), properties, business,
management, prospects, net worth or results of
operations of the Company, or any change in the
capital stock, short-term or long-term debt of the
Company;
(iv) The representations and warranties of the Company
in this Agreement are true and correct at and as
of each of the Closing Dates, and the Company has
complied with all the agreements and performed or
satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing
Dates; and
(v) Since the respective dates as of which information
is given in the Registration Statement and the
Prospectus, and except as disclosed in or
contemplated by the Prospectus, (i) there has not
been any material adverse change or a development
involving a material adverse change in the
condition (financial or otherwise), properties,
business, management, prospects, net worth or
results of operations of the Company; (ii) the
business and operations conducted by the Company
have not sustained a loss by strike, fire, flood,
accident or other calamity (whether or not
insured) of such a character as to interfere
materially with the conduct of the business and
operations of the Company; (iii) no legal or
governmental action, suit or proceeding is pending
or threatened against the Company which is
material to the Company, whether or not arising
from transactions in the ordinary course of
business, or which may materially and adversely
affect the transactions contemplated by this
Agreement; (iv) since such dates and except as so
disclosed, the Company has not incurred any
material liability or obligation, direct,
contingent or indirect, made any change in its
capital stock (except pursuant to its stock
plans), made any material change in its short-term
or funded debt or repurchased or otherwise
acquired any of the Company's capital stock; and
(v) the Company has not declared or paid any
dividend, or made any other distribution, upon its
outstanding capital stock payable to stockholders
of record on a date prior to the Closing Date.
21
(i) The Company shall have furnished to the Representatives such
additional certificates as the Representatives may have
reasonably requested as to the accuracy, at and as of each of the
Closing Dates, of the representations and warranties made herein
by it and as to compliance at and as of each of the Closing Dates
by it with its covenants and agreements herein contained and
other provisions hereof to be satisfied at or prior to each of
the Closing Dates, and as to satisfaction of the other conditions
to the obligations of the Underwriters hereunder.
(j) Cowen shall have received the written agreements, substantially
in the form of Exhibit II hereto, of the officers, directors and
holders of Common Stock listed in Schedule B that each will not
offer, sell, assign, transfer, encumber, contract to sell, grant
an option to purchase or otherwise dispose of, other than by
operation of law, gifts, pledges or dispositions by estate
representatives, any shares of Common Stock (including, without
limitation, Common Stock which may be deemed to be beneficially
owned by such officer, director or holder in accordance with the
Rules and Regulations) during the 180 days following the date of
the final Prospectus.
The Nasdaq National Market shall have approved the Stock for listing,
subject only to official notice of issuance.
All opinions, certificates, letters and other documents will be in
compliance with the provisions hereunder only if they are satisfactory in
form and substance to the Representatives. The Company will furnish to the
Representatives conformed copies of such opinions, certificates, letters
and other documents as the Representatives shall reasonably request. If
any of the conditions hereinabove provided for in this Section shall not
have been satisfied when and as required by this Agreement, this Agreement
may be terminated by the Representatives by notifying the Company of such
termination in writing or by telegram at or prior to each of the Closing
Dates, but Cowen, on behalf of the Representatives, shall be entitled to
waive any of such conditions.
9. EFFECTIVE DATE. This Agreement shall become effective immediately as to
Sections 5, 6, 7, 9, 10, 11, 13, 14, 15, 16 and 17 and, as to all other
provisions, shall become effective at 11:00 a.m. New York City time on the
first full business day following the effectiveness of the Registration
Statement or at such earlier time after the Registration Statement becomes
effective as the Representatives may determine on and by notice to the
Company or by release of any of the Stock for sale to the public. For the
purposes of this Section 9, the Stock shall be deemed to have been so
released upon the release for publication of any newspaper advertisement
relating to the Stock or upon the release by you of telegrams (i) advising
Underwriters that the shares of Stock are released for public offering or
(ii) offering the Stock for sale to securities dealers, whichever may occur
first.
10. TERMINATION. This Agreement (except for the provisions of Section 5) may
be terminated by the Company at any time before it becomes effective in
accordance with Section 9 by notice to the Representatives and may be
terminated by the Representatives at any time before it becomes effective
in accordance with Section 9 by notice to the Company. In the event of any
termination of this Agreement under this or any other provision of this
22
Agreement, there shall be no liability of any party to this Agreement to
any other party, other than as provided in Sections 5, 6 and 11 and other
than as provided in Section 12 as to the liability of defaulting
Underwriters.
This Agreement may be terminated after it becomes effective by the
Representatives by notice to the Company (i) if at or prior to the First
Closing Date trading in securities on any of the New York Stock Exchange,
American Stock Exchange or Nasdaq National Market System shall have been
suspended or minimum or maximum prices shall have been established on any
such exchange or market, or a banking moratorium shall have been declared
by New York or United States authorities; (ii) trading of any securities of
the Company shall have been suspended on any exchange or in any
over-the-counter market; (iii) if at or prior to the First Closing Date
there shall have been (A) an outbreak or escalation of hostilities between
the United States and any foreign power or of any other insurrection or
armed conflict involving the United States or (B) any change in financial
markets or any calamity or crisis which, in the judgment of the
Representatives, makes it impractical or inadvisable to offer or sell the
Stock on the terms contemplated by the Prospectus; (iv) if there shall have
been any development or prospective development involving particularly the
business or properties or securities of the Company or the transactions
contemplated by this Agreement, which, in the judgment of the
Representatives, makes it impracticable or inadvisable to offer or deliver
the Stock on the terms contemplated by the Prospectus; (v) if there shall
be any litigation or proceeding, pending or threatened, which, in the
judgment of the Representatives, makes it impracticable or inadvisable to
offer or deliver the Stock on the terms contemplated by the Prospectus; or
(vi) if there shall have occurred any of the events specified in the
immediately preceding clauses (i) through (v) together with any other such
event that makes it, in the judgment of the Representatives, impractical or
inadvisable to offer or deliver the Stock on the terms contemplated by the
Prospectus.
11. REIMBURSEMENT OF UNDERWRITERS. Notwithstanding any other provisions
hereof, if this Agreement shall not become effective by reason of any
election of the Company pursuant to the first paragraph of Section 10 or
shall be terminated by the Representatives under Section 8 or Section 10,
the Company will bear and pay the expenses specified in Section 5 hereof
and, in addition to its obligations pursuant to Section 6 hereof, the
Company will reimburse the reasonable out-of-pocket expenses of the several
Underwriters (including reasonable fees and disbursements of counsel for
the Underwriters) incurred in connection with this Agreement and the
proposed purchase of the Stock, and promptly upon demand the Company will
pay such amounts to you as Representatives.
12. SUBSTITUTION OF UNDERWRITERS. If any Underwriter or Underwriters shall
default in its or their obligations to purchase shares of Stock hereunder
and the aggregate number of shares which such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed ten percent
(10%) of the total number of shares underwritten, the other Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the shares which such defaulting Underwriter or
Underwriters agreed but failed to purchase. If any Underwriter or
Underwriters shall so default and the aggregate number of shares with
respect to which such default or defaults occur is more than ten percent
(10%) of the total number of shares underwritten and arrangements
satisfactory to the Representatives and the Company for the purchase of
such shares by
23
other persons or a reduction in the number of shares to be offered are not
made within forty-eight (48) hours after such default, this Agreement shall
terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a
defaulting Underwriter or Underwriters as provided in this Section 12,
(i) the Company shall have the right to postpone the Closing Dates for a
period of not more than five (5) full business days in order that the
Company may effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees promptly to file any amendments to the
Registration Statement or supplements to the Prospectus which may thereby
be made necessary, and (ii) the respective numbers of shares to be
purchased by the remaining Underwriters or substituted Underwriters shall
be taken as the basis of their underwriting obligation for all purposes of
this Agreement. Nothing herein contained shall relieve any defaulting
Underwriter of its liability to the Company or the other Underwriters for
damages occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section 12 shall be without liability on the
part of any non-defaulting Underwriter or the Company, except for expenses
to be paid or reimbursed pursuant to Section 5 and except for the
provisions of Section 6.
13. NOTICES. All communications hereunder shall be in writing and, if sent to
the Underwriters shall be mailed, delivered or telegraphed and confirmed to
you, as their Representatives c/o Cowen & Company at Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 except that notices given to an Underwriter pursuant
to Section 6 hereof shall be sent to such Underwriter at the address
furnished by the Representatives or, if sent to the Company, shall be
mailed, delivered or telegraphed and confirmed c/o Xx. Xxxxxx X. Xxxxxxxx,
President and Chief Executive Officer, Patient Infosystems, Inc., 00 Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000.
14. SUCCESSORS. This Agreement shall inure to the benefit of and be binding
upon the several Underwriters, the Company and their respective successors
and legal representatives. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person other than
the persons mentioned in the preceding sentence any legal or equitable
right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained, this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person; except that
the representations, warranties, covenants, agreements and indemnities of
the Company contained in this Agreement shall also be for the benefit of
the person or persons, if any, who control any Underwriter or Underwriters
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, and the indemnities of the several Underwriters shall also be
for the benefit of each director of the Company, each of its officers who
has signed the Registration Statement and the person or persons, if any,
who control the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act.
15. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
24
16. AUTHORITY OF THE REPRESENTATIVES. In connection with this Agreement, you
will act for and on behalf of the several Underwriters, and any action
taken under this Agreement by Cowen, as Representative, will be binding on
all the Underwriters.
17. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any
section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other section, paragraph or provision
hereof. If any section, paragraph or provision of this Agreement is for
any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are
necessary to make it valid and enforceable.
18. GENERAL. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect
the construction or interpretation of this Agreement. This Agreement may
be amended or modified, and the observance of any term of this Agreement
may be waived, only by a writing signed by the Company and the
Representatives.
19. COUNTERPARTS. This Agreement may be signed in two (2) or more
counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
25
If the foregoing correctly sets forth our understanding, please indicate your
acceptance thereof in the space provided below for that purpose, whereupon this
letter and your acceptance shall constitute a binding agreement between us.
Very truly yours,
PATIENT INFOSYSTEMS, INC.
By:
--------------------------------
President
Accepted and delivered in
New York, New York, as of
the date first above written.
XXXXX & COMPANY
VECTOR SECURITIES INTERNATIONAL,
INC.
Acting on their own behalf and as
Representatives of the several Underwriters
referred to in the foregoing Agreement.
By: XXXXX & COMPANY
By: Cowen Incorporated, its general partner
By:
-----------------------------------
Xxxx X. Xxxxxx
Managing Director - Syndicate
26
SCHEDULE A
Number of Number of
Firm Shares Optional
to be Shares to be
Purchased Purchased
Name ----------- -------------
Xxxxx & Company . . . . . . . . . . . . . . .
Vector Securities International, Inc. . . . .
----------- ----------
Total 2,000,000 300,000
----------- ----------
----------- ----------
A-1
[Form of Opinion of Issuer's Counsel] Exhibit I
[Date]
Xxxxx & Company
Vector Securities International, Inc.
As representatives of the several
Underwriters named in Schedule A
x/x Xxxxx & Xxxxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Patient Infosystems, Inc.
2,000,000 Shares of Common Stock
Dear Sirs:
We have acted as counsel for Patient Infosystems, Inc., a Delaware
corporation (the "Company"), in connection with the sale by the Company and
purchase of 2,000,000 shares of Common Stock, par value .01 per share, of the
Company (the "Shares") by the several Underwriters listed in Schedule A to the
Underwriting Agreement, dated among the Company, Xxxxx & Company and Vector
Securities International, Inc., as representatives of the several Underwriters
named therein (the "Underwriting Agreement"). This opinion is being furnished
pursuant to Section 8(f) of the Underwriting Agreement. All defined terms not
defined herein shall have the meanings ascribed to them in the Underwriting
Agreement.
We are of the opinion that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification, and has all
corporate power and authority necessary to own or hold its properties and
conduct the business in which it is engaged;
2. The Company has an authorized capitalization a set forth in the Prospectus,
and all of the issued shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and nonassessable and all of the
Shares to be issued and sold by the Company to the Underwriters pursuant to the
Underwriting Agreement have been duly and validly authorized and, when issued
and delivered against payment therefor as provided for in the Underwriting
Agreement, shall be duly and validly issued, fully paid and non-assessable.
3. There are no preemptive or other rights to subscribe for or to purchase, nor
any restriction upon the voting or transfer of, any of the Shares pursuant to
the Company's Certificate of
Incorporation, By-Laws, or any contract or agreement which is made an exhibit to
the Registration Statement, or to our knowledge any other contract, agreement or
other instrument;
4. To our knowledge, there are no legal or governmental proceedings pending to
which the Company is a party or of which any property or assets of the Company
is the subject which, if determined adversely to the Company, could have a
material adverse effect on the Company; and, to the best of our knowledge, no
such proceedings are threatened or contemplated by governmental authorities or
other third parties;
5. To our knowledge, the Company owns or possesses all patents, trademarks,
trademark registrations, service marks, service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights described in the
Prospectus as being owned by it or necessary for the conduct of its business,
and we are not aware of any claim to the contrary or any challenge by any other
person to the rights of the Company with respect to the foregoing. To our
knowledge, the Company's business as now conducted and as proposed to be
conducted does not and will not infringe or conflict with any patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses or
other intellectual property or franchise right of any person;
6. Any real property and buildings held under lease by the Company or proposed
to be held after giving effect to the transactions described in the Prospectus
are, or will be as of the Closing Dates, to the best of our knowledge, held by
them under valid, subsisting and enforceable leases with such exceptions as
would not have a material adverse effect on the Company considered as a whole;
7. The Company has full corporate power and authority to enter into the
Underwriting Agreement and to perform its obligations thereunder (including to
issue, sell and deliver the Shares), and the Underwriting Agreement has been
duly and validly authorized, executed and delivered by the Company and is a
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that rights to indemnification
and contribution thereunder may be limited by federal or state securities laws
or the public policy underlying such laws;
8. The execution, delivery and performance of the Underwriting Agreement and
the consummation of the transactions therein contemplated will not result in a
breach or violation of any of the terms or provisions of, result in the creation
of a lien under, or constitute a default under, any indenture, mortgage, deed of
trust, note agreement or other agreement or instrument to which the Company is a
party or by which it or any of its properties is or may be bound which is made
an exhibit to the Registration Statement, the Certificate of Incorporation,
By-laws or other organizational documents of the Company or any law, order, rule
or regulation of any court or governmental agency or body having jurisdiction
over the Company or any of its properties or, to our knowledge any other
contract, agreement or other instrument;
9. No consent, approval, authorization or order of any court or governmental
agency or body is required for the consummation by the Company of the
transactions contemplated by the Underwriting Agreement, except such as have
been obtained under the Securities Act and the Exchange Act and except such as
may be required by the NASD or under the Securities Act or the securities or
"Blue Sky" laws of any jurisdiction in connection with the purchase and
distribution of the Shares by the Underwriters;
10. To the best of our knowledge, the Company is in compliance with, and
conduct their businesses in conformity with, all applicable federal, state,
local and foreign laws, rules and regulations, including, but not limited to,
those of any governmental agency, court or tribunal and to the best of our
knowledge, no prospective change in any of such federal, state, local or foreign
laws, rules or regulations has been adopted which, when made effective, would
have a material adverse effect on the operations of the Company.
11. The Registration Statement was declared effective under the Securities Act
as of December , 1996, the Prospectus was filed with the Commission pursuant
to Rule 424(b) of the Rules and Regulations on December , 1996 and we have no
knowledge that any stop order suspending the effectiveness of the Registration
Statement has been issued and we have no knowledge that any proceeding for that
purpose is pending or, to the best of our knowledge, threatened by the
Commission;
12. The Registration Statement and the Prospectus and any amendments or
supplements thereto comply as to form in all respects with the requirements of
the Securities Act and the Rules and Regulations;
13. To the best of our knowledge, there are no contracts or other documents
which are required by the Securities Act or by the Rules and Regulations to be
described in the Prospectus or filed as exhibits to the Registration Statement
which have not been described in the Prospectus or filed as exhibits to the
Registration Statement;
14. To the best of our knowledge, other than as described in the Prospectus,
there are no contracts, agreements or understandings between the Company and any
person granting such person the right (other than rights which have been waived
or satisfied) to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Company under the Securities Act;
15. The descriptions in the Registration Statement and Prospectus of statutes,
rules, regulations, legal or governmental proceedings, contracts, agreements and
other documents are accurate and such descriptions fairly present the
information required to be disclosed; and to the best of our knowledge, there
are no legal or governmental proceedings, statutes, ruler or regulations, or any
contracts or documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described and filed as required;
16. The Company is not, nor will it be immediately after receiving the proceeds
from the sale of the Shares, an "investment company" or an entity "controlled"
by an "investment company" as such terms are defined in the Investment Company
Act of 1940, as amended.
17. The form of certificate for the Shares conforms to the requirements of the
Delaware General Corporation Law;
The foregoing opinion is limited to matters governed by the Federal laws of the
United States of America, the general corporate law of the State of Delaware and
the laws of the State of New York.
We have acted as counsel to the Company on a regular basis and have acted as
counsel to the Company in connection with the preparation and filing of the
Registration Statement and the Prospectus, and based on the foregoing, no facts
have come to our attention which lead us to believe that the Registration
Statement or any amendment thereto, as of the Effective Date, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein not
misleading, or that the Prospectus contains any untrue statement of a material
fact or omits 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.
Very truly yours,
[Form of Lock-Up Agreement] Exhibit II
[Date]
Xxxxx & Company
Vector Securities International, Inc.
AS REPRESENTATIVES OF THE SEVERAL
UNDERWRITERS
x/x Xxxxx & Xxxxxxx
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Patient Infosystems, Inc.
2,000,000 Shares of Common Stock
Dear Sirs:
In order to induce Xxxxx & Company ("Cowen") and Vector Securities
International, Inc. ("Vector" and, together with Cowen, the "Representatives"),
to enter in to a certain underwriting agreement with Patient Infosystems, Inc.,
a Delaware corporation (the "Company"), with respect to the public offering of
shares of the Company's Common Stock, par value $.01 per share ("Common Stock"),
the undersigned hereby agrees that for a period of 180 days following the date
of the final prospectus filed by the Company with the Securities and Exchange
Commission in connection with such public offering, the undersigned will not,
without the prior written consent of Cowen, directly or indirectly, offer, sell,
assign, transfer, encumber, pledge, contract to sell, grant an option to
purchase or otherwise dispose of, other than by operation of law, any shares of
Common Stock (including, without limitation, Common Stock which may be deemed to
be beneficially owned by the undersigned in accordance with the rules and
regulations promulgated under the Securities Act of 1933, as the same may be
amended or supplemented from time to time (such shares, the "Beneficially Owned
Shares")).
Anything contained herein to the contrary notwithstanding, any person to whom
shares of Common Stock or Beneficially Owned Shares are transferred from the
undersigned shall be bound by the terms of this Agreement.
In addition, the undersigned hereby waives, from the date hereof until the
expiration of the one-year period following the date of the Company's final
Prospectus, any and all rights, if any, to request or demand registration
pursuant to the Securities Act of any shares of Common Stock that are registered
in the name of the undersigned or that are Beneficially Owned Shares.
In order to enable the aforesaid covenants to be enforced, the undersigned
hereby consents to the placing of legends and/or stop-transfer orders with the
transfer agent of the Common Stock with respect to any shares of Common Stock or
Beneficially Owned Shares.
[Signatory]
By:
------------------------------
Name:
Title:
