Exhibit 4.2
FORM OF SUBSCRIPTION AGREEMENT
June 3, 1999
Integral Systems, Inc.
0000 Xxxxxxxxxxxx Xxx, Xxxxx X
Xxxxxx, XX 00000
Ladies/Gentlemen:
1. Subscription, Purchase and Closing; Purchase Price Adjustment.
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1.1 The undersigned ("Subscriber"), intending to be legally bound, hereby
subscribes for and agrees to purchase the number of shares (the "Shares") of the
Common Stock, par value $.01 per share (the "Common Stock"), of Integral
Systems, Inc., a Maryland corporation (the "Company"), indicated on the
signature page hereto, at a price of $18.00 per share (the "Purchase Price") and
upon the terms and conditions set forth in this subscription agreement (this
"Agreement").
1.2 The Shares subscribed for hereby shall not be deemed owned by
Subscriber, nor shall Subscriber be deemed a holder of securities of the Company
until this subscription has been accepted by the Company and the Purchase Price
for the Shares subscribed for has been paid. Subscriber understands and agrees
that the Company reserves the right to reject this subscription for the Shares
in whole or in part, in its sole discretion, at any time through the Closing
Date (as that term is defined in Section 1.5). This subscription is subject to
allotment. If subscription for the Shares is oversubscribed, the Company will
determine which subscriptions shall be accepted, in whole or in part.
1.3 In the event of rejection of this subscription, or in the event the
sale of the Shares is not consummated for any reason (in which event this
Agreement shall be deemed to be rejected), this Agreement shall have no force or
effect.
1.4 Subscriber hereby agrees to deliver the Purchase Price required to
purchase the number of Shares subscribed for hereunder, as that amount may be
reduced pursuant to Section 1.2 hereof, on the Closing Date set by the Company
pursuant to Section 1.5 hereof.
1.5 The closing of the transactions contemplated herein (the "Closing")
shall take place at such time as the Company and Xxxxx & Company Incorporated,
as placement agent (the "Placement Agent"), shall determine. The Placement Agent
shall establish and inform Subscriber of the closing date for such subscription
(the "Closing Date") and the date upon which the Purchase Price shall be
delivered to the Company.
1.6 Payment of the full Purchase Price for the Shares to be purchased
shall be made on the Closing Date by wire transfer of immediately available
funds or at such other time and by such other means as the Company shall
approve. The Company or the Placement Agent will notify Subscriber as to payment
instructions. Upon the Closing Date, certificates representing the Shares
purchased by Subscriber will be delivered by the Company to Subscriber.
2. Representations, Warranties and Agreements of Subscriber. Subscriber
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hereby represents and warrants to the Company, and hereby covenants and agrees
with the Company, as follows:
(a) Subscriber has full power and authority to enter into this Agreement
and to perform its obligations hereunder. All requisite action on the part
of Subscriber necessary for the authorization, execution, delivery and
performance of Subscriber's obligations under this Agreement and for the
purchase of the Shares has been taken, and this Agreement, when executed by
a duly authorized officer of Subscriber, will be a valid and binding
agreement of Subscriber, enforceable in accordance with its terms, except
as such enforceability may be limited by (i) bankruptcy, insolvency,
reorganization or other similar laws and legal and equitable principles
limiting or affecting the rights of creditors generally and/or (ii) general
principles of equity, regardless of whether considered in a proceeding in
equity or at law, and except as rights to indemnification hereunder may be
limited by Federal or state securities laws.
(b) Subscriber has carefully read this Agreement and, to the extent
Subscriber believes necessary, has discussed with Subscriber's counsel and
other professional advisor(s) the representations, warranties, covenants
and agreements which Subscriber makes by signing it, and any applicable
limitations upon Subscriber's transfer of the Shares issuable thereunder.
Subscriber acknowledges that Subscriber has not relied upon the legal
counsel or accountants for the Company regarding the transactions
contemplated by this Agreement, and Subscriber has been advised to engage
separate legal counsel and accountants to represent Subscriber's individual
interest and advise Subscriber regarding the structure of, and risks
associated with, such transactions.
(c) Subscriber understands that as a publicly traded company, the
Company files with the Securities and Exchange Commission (the "SEC")
various reports, including quarterly and annual financial statements,
annual reports to shareholders, and proxy statements, and that all of such
reports, statements and information are available to the public, including
Subscriber, from the SEC and directly from the Company. Subscriber
acknowledges that the Company has delivered to Subscriber within a
reasonable time prior to the execution of this Subscription Agreement a
copy of the following: (i) the Company's Annual Report on Form 10-KSB for
the fiscal year ended September 30, 1998; (ii) the Company's Quarterly
Reports on Form 10-QSB for the fiscal quarters ended December 31, 1998 and
March 31, 1999; (iii) the
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Company's definitive proxy statement dated March 23, 1999 and an amendment
thereto dated April 12, 1999 relating to its 1999 Annual Meeting of
Stockholders; (iv) the Company's press releases since September 30, 1998;
(v) certain Risk Factors relating to the transactions contemplated
hereunder and (vi) such other documents as Subscriber (and Subscriber's
attorney, accountant and/or other advisors) deemed pertinent in order for
Subscriber to make an informed investment decision (the documents
identified in clauses (i) through (v) herein are collectively referred to
herein as the "Documents"). The Documents contain "forward-looking
statements" about business strategies, market potential, future financial
performance and other matters. These forward-looking statements are
predictions. No assurances can be given that the future results indicated,
whether expressed or implied, will be achieved. Consequently, the inclusion
of forward-looking statements in the Documents should not be regarded as a
representation by the Company or any other person that these estimates will
be realized, and actual results may vary materially.
Subscriber further acknowledges that Subscriber is entering into this
Agreement solely on the basis of information contained in the Documents and
not on the basis of any information, representations or agreements made by
any other person, and that no representations or warranties of any nature
have been made to Subscriber with respect to the ultimate economic
consequences or tax consequences of Subscriber's investment in the Company.
Subscriber acknowledges that any forecasted financial data, if any, which
may have been given to Subscriber is for illustration purposes only and no
assurance is given that actual results will correspond with the results
contemplated in any such data.
(d) Subscriber acknowledges that Subscriber has had the opportunity to
ask questions of, and receive answers from, or obtain additional
information from, the executive officers of the Company concerning the
financial and other affairs of the Company, and, to the extent deemed
necessary, Subscriber has asked such questions and received satisfactory
answers and desires to invest in the Company. In evaluating the suitability
of an investment in the Company, the Subscriber has not relied upon any
representations or other information (whether oral or written) other than
as set forth in this Agreement or as contained in any documents delivered
or answers given in writing by the Company to questions furnished to the
Company. Subscriber has been advised and acknowledges that no federal or
state agency has made any finding or determination as to the fairness or
merits of an investment in the Company and that no such agency has made any
recommendation or endorsement whatsoever with respect to such an
investment.
(e) Subscriber is an "accredited investor" as that term is defined in
Rule 501 of Regulation D promulgated by the Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended (the
"Securities Act"). For this purpose, Subscriber understands that an
"accredited investor" includes:
(i) any individual who: (A) has a net worth (with spouse) in
excess of $1 million; or (B) has had an individual income in excess of
$200,000 (or joint income with spouse in excess of $300,000) in each
of the two most recent
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years and who reasonably expects the same income level for the current
year; or (C) who is an executive officer or director of the Company;
(ii) any entity in which all of the equity owners or
partners are "accredited investors"; or
(iii) any corporation or partnership with total assets in
excess of $5,000,000 that was not formed for the specific purpose of
purchasing the securities subscribed hereunder.
(f) Subscriber considers himself/herself/itself to be a sophisticated
investor in companies similarly situated to the Company, and Subscriber has
substantial knowledge and experience in financial and business matters
(including knowledge of finance, securities and investments, generally, and
experience and skill in investments based on actual participation) such
that Subscriber is capable of evaluating the merits and risks of the
prospective investment in the Company.
(g) Subscriber's current address and, if Subscriber is an entity,
Subscriber's state of incorporation or organization, are as set forth on
the signature page hereof. If Subscriber is an entity which does not meet
the classification set forth under Section 2(e)(iii) above, each of
Subscriber's equity owners and/or partners has the same state of residence
as the Subscriber's state of organization and none of Subscriber's equity
owners and/or partners has any present intention of moving from such state
of residency.
(h) Subscriber has been advised and acknowledges that the issuance of
the Shares will not be registered under the Securities Act, in reliance
upon the exemption(s) from registration promulgated thereunder, and,
therefore, are "restricted securities." Subscriber also acknowledges that
the issuance of the Shares will not be registered under the securities laws
of any state. Consequently, Subscriber agrees that the Shares cannot be
resold unless they are registered under the Securities Act and applicable
state securities laws, or unless an exemption from such registration
requirements is available. Subscriber has been advised and acknowledges
that the Company is under no obligation to take any action necessary in
order to make available any exemption for the transfer of the Shares
without registration.
(i) Subscriber is purchasing the Shares solely for Subscriber's own
account and not as nominee for, representative of, or otherwise on behalf
of, any other person. Subscriber is purchasing the Shares with the
intention of holding the Shares for investment, with no present intention
of participating directly or indirectly in a subsequent public distribution
of the Shares unless registered under the Securities Act and applicable
state securities laws, or unless an exemption from such registration
requirements is available. Subscriber shall not make any sale, transfer or
other disposition of the Shares in violation of state or federal law.
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(j) Subscriber has been advised that there is no assurance than an
active market for the Shares will continue in the future. Subscriber is
aware that Subscriber's investment in the Company is speculative and
involves a high degree of risk of loss arising from, among other things,
substantial market, operational, competitive and other risks, and, having
made Subscriber's own evaluation of the risks associated with this
investment, Subscriber is aware and Subscriber has been advised that
Subscriber must bear the economic risks of a purchase of the Shares
indefinitely.
(k) Subscriber acknowledges that the Shares were not offered to
Subscriber by means of any form of general or public solicitation or
general advertising, or publicly disseminated advertisements or sales
literature, including (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media, or
broadcast over television or radio, or (ii) any seminar or meeting to which
Subscriber was invited by any of the foregoing means of communication.
(l) Subscriber understands and agrees that the Company, and all current
and future stockholders of the Company, are relying on the agreements and
representations contained herein.
(m) In connection with the purchase of the Shares by Subscriber,
Subscriber has not and will not pay, and has no knowledge of the payment
of, any commission or other direct or indirect remuneration to any person
or entity for soliciting or otherwise coordinating the purchase of the
Shares, except for fees paid to the Placement Agent.
(n) Subscriber has been advised and agrees that there will be placed on
any certificates representing the Shares, or any substitution(s) thereof, a
legend stating in substance the following (and including any restrictions
or conditions that may be required by any applicable state law), and
Subscriber has been advised and further agrees that the Company will refuse
to permit the transfer of the Shares out of Subscriber's name in the
absence of compliance with the terms of such legend:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or under any state
securities laws and may not be sold, pledged, transferred, assigned or
otherwise disposed of except in accordance with such Act and the rules
and regulations thereunder and in accordance with applicable state
securities laws. The Company will transfer such shares only upon
receipt of evidence satisfactory to the Company, which may include an
opinion of counsel, that the registration provisions of such Act have
been compiled with or that such registration is not required and that
such transfer will not violate any applicable state securities laws."
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(o) Subscriber is aware that the Company may offer and sell additional
shares of Common Stock in the future, thereby diluting Subscriber's
percentage equity ownership of the Company.
3. Representations of the Company. As used in this Section 4, the
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following capitalized terms shall have the meanings set forth below:
"Contract" means any agreement, indenture, lease, sublease, license,
sublicense, promissory note, evidence of indebtedness, insurance policy,
annuity, mortgage, restriction, commitment, obligation or other contract,
agreement or instrument (whether written or oral).
"GAAP" means generally accepted accounting principles in effect in the
United States of America from time to time.
"Material Adverse Change" or "Material Adverse Effect" means, with respect
to any Person, any change or effect that is materially adverse to the financial
condition, business, prospects or results of operations of such Person.
"Person(s)" means any individual, sole proprietorship, partnership, joint
venture, trust, limited liability company, incorporated organization,
association, corporation, institution, public benefit corporation, entity or
government (whether federal, state, county, city, municipal or otherwise,
including, without limitation, any instrumentality, division, agency, body or
department thereof).
Subscriber is subscribing for the Shares based upon the following
representations and warranties of the Company, which the Company hereby confirms
by accepting this subscription:
(a) Organization. The Company is a corporation duly organized, validly
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existing and in good standing under the laws of the State of Maryland and
has the corporate power to own and/or lease its properties and to conduct
its business in the places where such properties are now owned, leased or
operated or such business is presently conducted. The Company is duly
qualified and licensed as a foreign corporation in additional jurisdictions
in which it owns or leases real property or in which its operations or
activities would otherwise require such qualification, except where such
failure to qualify would not have a Material Adverse Effect on the Company.
(b) Authorization. The execution, delivery and performance of this
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Agreement by the Company has been duly and validly authorized and approved
by its Board of Directors, and this Agreement, when executed by a duly
authorized officer of this Company, will be a valid and binding agreement
of the Company, enforceable in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, reorganization
or other similar laws and legal and equitable principles limiting or
affecting the rights of creditors generally and/or (ii) general principles
of equity,
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regardless of whether considered in a proceeding in equity or at law, and
except as rights to indemnification hereunder may be limited by federal or
state securities laws.
(c) Capitalization. The authorized capital stock of the Company consists
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of 40,000,000 shares of Common Stock, $.01 par value per share. All issued
and outstanding shares of capital stock of the Company have been, and as of
the Closing Date will be, duly authorized and validly issued and are fully
paid and non-assessable. As of the date hereof, 5,948,811 shares of Common
Stock are issued and outstanding. The Company has a Stock Option Plan,
pursuant to which the Company has issued options to acquire up to an
aggregate of 868,667 shares of Common Stock to its key employees. As of the
date hereof, 400,451 of such options are exercisable under this plan.
(d) No Violations; Defaults. The execution and delivery of this
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Agreement and the consummation of the transactions contemplated by this
Agreement will not (i) violate, result (with the lapse of time or giving of
notice, or both) in a violation of, conflict with, or constitute a default
under, or permit the termination or acceleration of the maturity of, any
material indebtedness or material obligation of the Company; (ii) violate,
result (with the lapse of time or giving of notice, or both) in a violation
of, conflict with or constitute a default under, any material term of, or
permit the termination of, any material note, mortgage, indenture, license,
agreement, contract, arrangement, understanding or other instrument to
which the Company is a party, or by which it is bound, or the Articles of
Incorporation or By Laws of the Company, or (iii) violate any statute, law,
rule, regulation or ordinance known to the Company, or any judgment,
decree, order, regulation or rule of any court, tribunal, administrative or
governmental agency, body or entity to which the Company or its properties
are subject. The Subscriber is familiar with Regulation M promulgated under
the Securities Exchange Act of 1934, a copy of which is attached hereto as
Exhibit A, and is in full compliance with the provisions thereof with
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respect to the transactions contemplated hereby.
(e) Validity of Securities. The Shares, when issued in accordance with
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the terms and conditions hereof, will be duly authorized, validly issued,
fully paid and non-assessable, and the delivery to Subscriber of the Shares
delivered pursuant to this Agreement shall vest in it good title thereto,
free of any and all liens, options, encumbrances, charges, third-party
rights or claims of any nature whatsoever except for restrictions on
transfers set forth herein or imposed by law.
(f) Disclosure. The Company is aware of no facts which lead it to
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believe that the Documents, as of their respective dates, contain any
untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(g) Material Changes. Except as set forth in the Documents, or as
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otherwise contemplated herein, since September 30, 1998, there has been no
Material Adverse Change in the Company, and there has not been (i) any
direct or indirect redemption, purchase or other acquisition by the Company
of any shares of the Common
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Stock or (ii) declaration, setting aside or payment of any dividend or
other distribution by the Company with respect of the Common Stock.
(h) No Commissions. In connection with the purchase of the Shares
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hereunder, the Company has agreed to pay the Placement Agent a placement
fee and certain expenses relating to the transactions contemplated
hereunder. Except for such placement fee and expenses, the Company has not
incurred any other obligation for any finder's or broker's or agent's fees
or commissions in connection with the sale of the Shares.
(i) Consents/Approvals. No consent, approval, waiver or other action by
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any Person under any Contract to which the Company is a party, or by which
any of its properties or assets are bound, is required or necessary for the
execution, delivery or performance by the Company of this Agreement and the
consummation of the transactions contemplated hereby, except where the
failure to obtain such consents, filings, authorizations, approvals or
waivers or make such filings would not have a Material Adverse Effect on
the Company.
(j) SEC Reports and Nasdaq Compliance. Since September 30, 1997, the
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Company has made, in a timely fashion, all filings (as amended, the "SEC
Reports") required to be made by it under the Exchange Act. The SEC
Reports, when filed, complied in all material respects with all applicable
requirements of the Securities Act and the Exchange Act and the securities
laws, rules and regulations of any state and pursuant to any Requirements
of Law. The Company will use its best efforts to ensure its continued
inclusion in, and the continued eligibility of the Common Stock for trading
on, the Nasdaq National Market under all currently effective and currently
proposed inclusion requirements prior to and after the Closing.
(k) Financial Statements. Each of the balance sheets included in the
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Documents (including any related notes and schedules) fairly presents in
all material respects the financial position of the Company as of its date,
and each of the other financial statements included in the Documents
(including any related notes and schedules) fairly presents in all material
respects the results of operations or other information therein of the
Company for the periods or as of the dates therein set forth in accordance
with GAAP consistently applied during the periods involved (except that the
interim reports are subject to normal recording adjustments which might be
required as a result of year-end audit and except as otherwise stated
therein).
The Company represents that the foregoing representations and warranties are
true and correct as of the date hereof and, unless the Company otherwise
notifies Subscriber prior to the Closing Date, shall be true and correct as of
the Closing Date. The foregoing representations and warranties shall survive
the Closing Date.
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4. Registration Rights.
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4.1 Registration of Shares. As soon as practicable, but in any event no
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later than 30 days after the Closing Date, the Company will file a registration
statement (the "Registration Statement") under the Securities Act of 1933, as
amended, with respect to all of the Shares (collectively, the "Subject Stock"),
and the Company shall use its best efforts to cause such Registration Statement
to become effective as soon as practicable after filing. In connection
therewith, each holder of Shares (each, a "Holder") will provide in a timely
manner all such information and materials pertaining to it as may be required in
order to permit the Company to comply with all applicable requirements of the
Commission and to obtain the acceleration of the effective date of the
Registration Statement. In connection with such registration, the Company shall:
(a) keep the Registration Statement effective until the
earliest of (i) when each Holder has sold its Subject Stock, (ii) two years
following the effective date of the Registration Statement, or (iii) the date
all of the Shares may be sold without volume limitations under Rule 144 under
the Securities Act of 1933;
(b) as expeditiously as possible furnish to each Holder such
reasonable numbers of copies of the prospectus as such Holder may reasonably
request in order to facilitate the public sale or other disposition of the
Subject Stock;
(c) as expeditiously as possible use its best efforts to
register or qualify the Subject Stock under the securities or Blue Sky laws of
such states as Subscriber shall reasonably request, provided, however, that the
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Company shall not be required in connection with this paragraph (c) to qualify
as a foreign corporation or execute a general consent to service of process in
any jurisdiction;
(d) pay all costs and expenses incident to registration
hereunder, except as set forth in Section 5.2.
4.2 Holder's Fees. Each Holder shall pay any and all underwriters'
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discounts, brokerage fees and transfer taxes incident to the sale of the Subject
Stock sold by such Holder pursuant to this Section and the fees and expenses of
its counsel.
5. Indemnification.
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5.1 Indemnification Generally. The Company shall indemnify Subscriber from
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and against any and all losses, damages, liabilities, claims, charges, actions,
proceedings, demands, judgments, settlement costs and expenses of any nature
whatsoever (including, without limitation, attorneys' fees and expenses) or
deficiencies resulting from any material breach of a representation, warranty or
covenant by the Company and all claims, charges, actions or proceedings incident
to or arising out of the foregoing.
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5.2 Indemnification Relating to Registration Rights.
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(a) With respect to any registration, qualification or
compliance effected or to be effected pursuant to Section 4 of this
Agreement, the Company shall indemnify each Holder of the Shares whose
securities are included or are to be included therein, each of such
Holder's directors and officers, each underwriter (as defined in the
Securities Act) of the securities sold by such Holder (if any), and each
Person who controls (within the meaning of the Securities Act) any such
Holder or underwriter (a "Controlling Person") from and against all losses,
damages, liabilities, claims, charges, actions, proceedings, demands,
judgments, settlement costs and expenses of any nature whatsoever
(including, without limitation, attorneys' fees and expenses) or
deficiencies of any such Holder or any such underwriter or Controlling
Person concerning:
(i) any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other
document (including any related registration statement, notification
or the like) incident to any such registration, qualification or
compliance;
(ii) any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make a
statement therein, in the light of the circumstances under which it
was made, not misleading; or
(iii) any violation by the Company of the Securities Act or
any rule or regulation promulgated thereunder applicable to the
Company, or of any blue sky or other state securities laws or any rule
or regulation promulgated thereunder applicable to the Company,
in each case, relating to any action or inaction required of the Company in
connection with any such registration, qualification or compliance, and subject
to Section 5.3 below will reimburse each such Person entitled to indemnity under
this Section for all legal and other expenses reasonably incurred in connection
with investigating or defending any such loss, damage, liability, claim, charge,
action, proceeding, demand, judgment, settlement or deficiency; provided,
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however, that the foregoing indemnity and reimbursement obligation shall not be
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applicable to the extent that any such matter arises out of or is based on any
untrue statement (or alleged untrue statement) or omission (or alleged omission)
made in reliance upon and in conformity with written information furnished to
the Company by or on behalf of such Holder or by or on behalf of such an
underwriter specifically for use in such prospectus, offering circular or other
document.
(b) With respect to any registration, qualification or
compliance effected or to be effected pursuant to this Agreement, each
Holder of the Shares whose securities are included or are to be included
therein, shall indemnify the Company from and against all losses, damages,
liabilities, claims, charges, actions, proceedings, demands, judgments,
settlement costs and expenses of any nature whatsoever (including, without
limitation, attorneys' fees and expenses) or deficiencies of the Company
concerning:
(i) any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus, offering circular or other
document
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(including any related registration statement, notification or the
like) incident to any such registration, qualification or compliance;
(ii) any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the
statement therein, in the light of the circumstances under which it
was made, not misleading; or
(iii) any violation by such Holder of the Securities Act or
any rule or regulation promulgated thereunder applicable to the
Company or such Holder or of any blue sky or other state securities
laws or any rule or regulation promulgated thereunder applicable to
the Company or such Holder,
in each case, relating to any action or inaction required of such Holder in
connection with any such registration, qualification or compliance, and subject
to Section 5.3 below will reimburse the Company for all legal and other expenses
reasonably incurred in connection with investigating or defending any such loss,
damage, liability, claim, charge, action, proceeding, demand, judgment,
settlement or deficiency; provided, however, that, (i) the obligation of the
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Holder hereunder shall be limited to an amount equal to the proceeds to the
Holder of the Shares sold as contemplated hereunder and (ii) the immediately
foregoing indemnity and reimbursement obligation shall be applicable only to the
extent that any such matter arises out of or is based on (a) any untrue
statement (or alleged untrue statement) or omission (or alleged omission) made
in reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Holder specifically for use in such prospectus,
offering circular or other document or (b) any violation by Holder of any rule
or regulation promulgated under the Securities Act applicable to Holder.
5.3 Indemnification Procedures. Each Person entitled to indemnification under
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this Section (an "Indemnified Party") shall give notice as promptly as
reasonably practicable to each party required to provide indemnification under
this Section (an "Indemnifying Party") of any action commenced against or by it
in respect of which indemnity may be sought hereunder, but failure to so notify
an Indemnifying Party shall not relieve such Indemnifying Party from any
liability that it may have otherwise than on account of this indemnity agreement
so long as such failure shall not have materially prejudiced the position of the
Indemnifying Party. Upon such notification, the Indemnifying Party shall assume
the defense of such action if it is a claim brought by a third party, and after
such assumption the Indemnifying Party shall not be entitled to reimbursement of
any expenses incurred by it in connection with such action except as described
below. In any such action, any Indemnified Party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the contrary or (ii) the named
parties in any such action (including any impleaded parties) include both the
Indemnifying Party and the Indemnified Party and representation of both parties
by the same counsel would be inappropriate due to actual or potential differing
or conflicting interests between them. The Indemnifying Party shall not be
liable for any settlement of any proceeding effected without its written consent
(which shall not be unreasonably withheld or delayed by such Indemnifying
Party), but if settled with such consent or if there be final judgment for the
plaintiff,
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the Indemnifying Party shall indemnify the Indemnified Party from and against
any loss, damage or liability by reason of such settlement or judgment.
6. Miscellaneous.
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6.1 Neither this Agreement nor any provisions hereof shall be modified,
discharged or terminated except by an instrument in writing signed by the party
against whom any such waiver, change, discharge or termination is sought to be
enforced.
6.2 Any notice, demand or other communication which any party hereby may
be required or may elect, to give to anyone interested hereunder shall be
sufficiently given if (a) deposited, postage prepaid, in a United States mail
letter box, registered or certified mail, return receipt requested, addressed to
such address as may be given herein three business days after such deposit, or
(b) delivered personally at such address. The Company's address for notices is
set forth on the first page hereof, and the Subscriber's address for notices is
set forth on the signature page.
6.3 This Agreement may be executed through the use of separate signature
pages or in any number of counterparts, and each of such counterparts shall, for
all purposes, constitute one agreement binding on all the parties,
notwithstanding that all parties are not signatories to the same counterpart.
6.4 Except as otherwise provided herein, the agreement shall be binding
upon and inure to the benefit of the parties and their successors, legal
representatives and assigns.
6.5 This Agreement (including the Exhibits attached hereto) contains the
entire agreement of the parties, and there are no representations, covenants or
other agreements except as stated or referred to herein.
6.6 This Agreement is not transferable or assignable by Subscriber except
as may be provided herein.
6.7 This Agreement shall be governed by and construed in accordance with
the law of the State of New York applicable to agreements made and to be
performed in that State.
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IN WITNESS WHEREOF, the parties hereto have caused this Subscription Agreement
to be duly executed and delivered as of the date set forth below.
NAME OF SUBSCRIBER: ADDRESS FOR NOTICES (Please Print):
___________________________ _______________________________________
_______________________________________
SIGNATURE: _______________________________________
Attention:_____________________________
By:________________________ Telecopy:______________________________
Name:
Title: Tax Identification #:__________________
Exact Name to appear on Stock Certificate: ___________________________________
Number of Shares Subscribed For: _____________________________________________
Price = $18 (must be a whole number of shares)
Aggregate Purchase Price (see Section 1.1): $_______________________________
The Investor hereby provides the following additional information:
(a) Excluding the shares of Common Stock subscribed for above, set forth
below is the number of shares of Common Stock and options rights or warrants of
Integral Systems, Inc. ("Options" and together with the Common Stock,
"Securities") which Subscriber beneficially owns or of which Subscriber is the
-----------------
record owner on the date hereof. Please refer to the definition of beneficial
----------
ownership on Exhibit B attached hereto. If none, please so state.
--------- ---------
Number of Shares: __________________ (excluding the Shares subscribed for
above)
Number of Options: __________________
Please indicate by an asterisk (*) above if Subscriber disclaims "beneficial
----------
ownership" of any of the above listed Securities, and indicate in response to
---------
question (b) below who has beneficial ownership.
(b) If Subscriber disclaims "beneficial ownership" in question (a), please
--------------------
furnish the following information with respect to the person(s) other than
Subscriber who is the beneficial owner(s) of the Securities in question. If not
applicable, please check box: [_]
Name of Beneficial Owner:____________________________________
Relationship to Subscriber:__________________________________
Number of Securities Beneficially Owned:_____________________
13
NAME OF SUBSCRIBER:________________________
(c) Are any of the Securities listed in response to question (a) the
subject of a voting agreement, contract or other arrangement whereby others have
voting control over, or any other interest in, any of Subscriber's Securities?
Yes No
If the answer is "Yes", please give details:___________________________________.
(d) Please describe each position, office or other material relationship
which the Investor has had with the Company or any of its affiliates, including
any Subsidiary of the Company, within the past three years. Please include a
description of any loans or other indebtedness, and any contracts or other
arrangements or transactions involving a material amount, payable by Subscriber
to the Company or any of its affiliates, including its Subsidiaries, or by the
Company or any of its affiliates, including its Subsidiaries, to Subscriber .
"Affiliates" of the Company include its directors and executive officers, and
any other person controlling or controlled by the Company. If none, please so
state.
Answer:
(e) Please provide the name and address of other person(s), if any, to whom
any proxy statements, registration statements (including notice of effectiveness
thereof), prospectuses or similar documents and information should be delivered
by the Company on behalf of Subscriber in the future, with respect to
Subscriber's shares:
____________________________ _____________________________
____________________________ _____________________________
____________________________ _____________________________
(f) Please advise of special stock certificate delivery requirements for
closing, if any:
(g) Please advise if a NASD member has placed with you the Shares being
purchased hereunder:
(Name of Member:) __________________________________________
================================================================================
ACCEPTED: INTEGRAL SYSTEMS, INC.
By:_______________________________
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Chief Executive Officer
14
EXHIBIT A
Copy of Regulation M
EXHIBIT B
Explanation of "BENEFICIAL OWNERSHIP"
Securities that are subject to a power to vote or dispose are deemed
beneficially owned by the person who holds such power, directly or indirectly.
This means that the same securities may be deemed beneficially owned by more
than one person, if such power is shared. In addition, the beneficial ownership
rules provide that shares which may be acquired upon exercise of an option or
warrant, or which may be acquired upon the termination of a trust, discretionary
account or similar arrangement, which can be effected within a period of 60 days
from the date of determination, are deemed to be "beneficially" owned.
Furthermore, shares that are subject to rights or powers even though such rights
or powers to acquire are not exercisable within the 60-day period may also be
deemed to be beneficially owned if the rights or powers were acquired "with the
purpose or effect of changing or influencing the control of the issuer or in
connection with or as a participant in any transaction having such purpose or
effect."
In determining whether securities are "beneficially owned," benefits which
are substantially equivalent to those of ownership by virtue of any contract,
understanding, relationship, agreement or other arrangement should cause the
securities to be listed as "beneficially owned."
Thus, for example, securities held for a person's benefit in the name of
others or in the name of any estate or trust in which such person may be
interested should also be listed. Securities held by a person's spouse,
children or other members of such person's family who are such person's
dependents or who live in such person's household should be listed as
"beneficially owned" unless such person does not enjoy benefits equivalent to
those of ownership with respect to such securities.
If a person has a proprietary or beneficial interest in a controlled
corporation, partnership, personal holding company, trust or estate which owns
of record or beneficially any securities, such person should state the amount of
such securities owned by such controlled corporation, partnership, personal
holding company, trust or estate in lieu of allocating such person's proprietary
interest, and by note or otherwise, please indicate that. In any case, the name
of the controlled corporation, partnership, personal holding company, or estate
must be stated.
In all cases the nature of the beneficial ownership should be stated.
