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2,000,000 SHARES
INFOCURE CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
_______ __, 1997
Xxxxxxxxxx Xxxx & Xxxx Incorporated
Cruttenden Xxxx Incorporated
c/o Xxxxxxxxxx Xxxx & Xxxx Incorporated
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
On behalf of the Several
Underwriters named in
Schedule I attached hereto.
Ladies and Gentlemen:
InfoCure Corporation, a Delaware corporation (the "Company"), proposes
to sell to you and the other underwriters named in Schedule I attached hereto
(the "Underwriters"), for whom you are acting as the representatives (the
"Representatives"), an aggregate of 2,000,000 shares (the "Firm Shares") of the
Company's Common Stock, par value $.001 per share (the "Common Stock"), all of
which are to be issued and sold by the Company. In addition, those certain
stockholders of the Company set forth on Schedule II attached hereto (the
"Selling Stockholders"), propose to grant to the Underwriters an option to
purchase up to an additional 300,000 shares of Common Stock (the "Option
Shares") solely for the purpose of covering over-allotments in connection with
the sale of the Firm Shares. The obligation of each Selling Stockholder to sell
Option Shares to the Underwriters under this Agreement shall be as set forth
opposite his name on Schedule II attached hereto. The Firm Shares and the Option
Shares are together called the "Shares."
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1. Sale and Purchase of the Shares.
On the basis of the representations, warranties and agreements
contained in, and subject to the terms and conditions of, this Agreement:
(a) The Company agrees to issue and sell the Firm Shares
to the several Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase at the purchase price per share
of Common Stock of $_____ (the "Initial Price"), the aggregate number
of Firm Shares set forth opposite such Underwriter's name on Schedule I
attached hereto. The Underwriters agree to offer the Firm Shares to the
public as set forth in the Prospectus (as hereinafter defined).
(b) The Selling Stockholders grant to the several
Underwriters an option to purchase, severally and not jointly, all or
any part of the number of the Option Shares at the Initial Price. The
number of Option Shares to be purchased by each Underwriter shall be
the same percentage (adjusted by the Representatives to eliminate
fractions) of the total number of Option Shares to be purchased by the
Underwriters as such Underwriter is purchasing of the Firm Shares. Such
option may be exercised only to cover over-allotments in the sales of
the Firm Shares by the Underwriters and may be exercised in whole or in
part at any time on or before 12:00 noon, New York City time, on the
business day before the Firm Shares Closing Date (as hereinafter
defined), and from time to time thereafter within 30 days after the
date of this Agreement, upon written, telecopy or telegraphic notice,
or verbal or telephonic notice confirmed by written, telecopy or
telegraphic notice, by the Representatives to the Company no later than
12:00 noon, New York City time, on the business day before the Firm
Shares Closing Date or at least two business days before any Option
Shares Closing Date (as hereinafter defined), as the case may be,
setting forth the number of Option Shares to be purchased and the time
and date (if other than the Firm Shares Closing Date) of such purchase.
(c) On the Firm Shares Closing Date (as defined below),
the Company shall issue and sell to Xxxxxxxxxx Xxxx & Xxxx Incorporated
("Josephthal") and Cruttenden Xxxx Incorporated ("Cruttenden"),
individually and not as Representatives of the Underwriters, for an
aggregate purchase price of $.001 per warrant, warrants representing
the right of the Representatives to purchase an aggregate number of
shares of Common Stock (the "Warrant Shares") equal to 10% of the Firm
Shares (which warrants shall be evidenced in the form set forth as an
exhibit to the Registration Statement) (the "Representatives'
Warrants"). The Representatives' Warrants shall be allocated between
each of the Representatives as the Company shall be advised in writing
by Josephthal.
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2. Delivery and Payment.
Delivery by the Company of the Firm Shares to the
Representatives for the respective accounts of the Underwriters, and
payment of the purchase price by certified or official bank check or
checks payable in New York Clearing House (next day) funds or same-day
wire transfer to the Company, as designated in writing by the Company
no later than two business days before the Firm Shares Closing Date (as
hereinafter defined), shall take place at the offices of Squadron,
Ellenoff, Plesent & Xxxxxxxxx, LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, at 10:00 a.m., New York City time, on the third business
day following the date on which the public offering of the Shares
commences (unless such date is postponed in accordance with the
provisions of Section 10(b) hereof), or at such time and place on such
other date, not later than ten business days after the date of this
Agreement, as shall be agreed upon by the Company and the
Representatives (such time and date of delivery and payment are called
the "Firm Shares Closing Date"). The public offering of the Shares
shall be deemed to have commenced at the earlier of (a) the time, after
the Registration Statement (as hereinafter defined in Section 4)
becomes effective, of the release by you for publication of the first
newspaper advertisement which is subsequently published relating to the
Firm Shares or (b) the time, after the Registration Statement becomes
effective, when the Firm Shares are first released by you for offering
by the Underwriters or dealers by letter, telecopy or telegram.
In the event the option with respect to the Option Shares is
exercised, delivery by the Selling Stockholders of the Option Shares to
the Representatives for the respective accounts of the Underwriters and
payment of the purchase price by certified or official bank check or
checks payable in New York Clearing House (next day) funds or same-day
wire transfer to the Selling Stockholders, as designated in writing by
the Company no later than two business days before the Option Shares
Closing Date (as hereinafter defined), shall take place at the offices
of Josephthal, at the address specified above, or such other place as
the parties may mutually agree upon, at the time and on the date (which
may be the same date as, but in no event shall be earlier than, the
Firm Shares Closing Date) specified in the notice referred to in
Section 1(b) (such time and date of delivery and payment is called the
"Option Shares Closing Date(s)"). The Firm Shares Closing Date and the
Option Shares Closing Date(s) are called, individually, a "Closing
Date" and, together, the "Closing Dates."
Certificates evidencing the Shares shall be registered in such
names and shall be in such denominations as the Representatives shall
request at least two business days before the Firm Shares Closing Date
or the Option Shares Closing Date(s), as the case may be, and shall be
made available to the Representatives for checking and packaging, at
such place as is designated by the Representatives, on the business day
before the Firm Shares Closing Date or the Option Shares Closing
Date(s), as the case may be.
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3. Public Offering.
The Company and the Selling Stockholders understand that the
Underwriters propose to make a public offering of the Shares, as set forth in
and pursuant to the Prospectus (as hereinafter defined in Section 4), as soon
after the effective date of the Registration Statement and the date of this
Agreement as the Representatives deem advisable. The Company and the Selling
Stockholders hereby confirm that the Underwriters and dealers have been
authorized to distribute or cause to be distributed each preliminary prospectus
and are authorized to distribute the Prospectus (as from time to time amended or
supplemented if the Company furnishes amendments or supplements thereto to the
Underwriters).
4. Representations and Warranties of the Company and the Selling
Stockholders.
(a) The Company represents and warrants to, and agrees
with, the several Underwriters that:
(i) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration
statement, and may have filed one or more amendments thereto,
on Form SB-2 (Registration No. 333-18923), including in such
registration statement, and each such amendment, a related
preliminary prospectus (a "Preliminary Prospectus"), for the
registration of the Firm Shares and the Option Shares, in
conformity with the requirements of the Securities Act of 1933
(the "Act"). The Company may also file a related registration
statement with the Commission pursuant to Rule 462(b) under
the Act for the purpose of registering certain additional
Shares, which registration shall be effective upon filing with
the Commission. As used in this Agreement, the term "Original
Registration Statement" means such registration statement, as
amended, on file with the Commission at the time such
registration statement becomes effective (including the
prospectus, financial statements, exhibits, and all other
documents filed as a part thereof or incorporated by reference
directly or indirectly therein), provided that such
registration statement, at the time it becomes effective, may
omit such information as is permitted to be omitted from a
registration statement when it becomes effective pursuant to
Rule 430A of the General Rules and Regulations promulgated
under the Act (the "Regulations"), which information ("Rule
430A Information") shall be deemed to be included in such
registration statement when a final prospectus is filed with
the Commission in accordance with Rules 430A and 424(b)(1) or
(4) of the Regulations; the term "Rule 462(b) Registration
Statement" means any registration statement filed with the
Commission pursuant to Rule 462(b) under the Act (including
the Original Registration Statement and any Preliminary
Prospectus or Prospectus incorporated therein at the time the
Original Registration Statement becomes effective); the term
"Registration Statement" includes both the Original
Registration Statement and any Rule 462(b) Registration
Statement; the term "Preliminary Prospectus"
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means each prospectus included in the Registration Statement,
or any amendments thereto, before it becomes effective under
the Act, the form of prospectus omitting Rule 430A Information
included in the Registration Statement when it becomes
effective, if applicable (the "Rule 430A Prospectus"), and any
prospectus filed by the Company with your consent pursuant to
Rule 424(a) of the Regulations; and the term "Prospectus"
means the final prospectus included as part of the
Registration Statement, except that if the prospectus relating
to the securities covered by the Registration Statement in the
form first filed on behalf of the Company with the Commission
pursuant to Rule 424(b) of the Regulations shall differ from
such final prospectus, the term "Prospectus" shall mean the
prospectus as filed pursuant to Rule 424(b) from and after the
date on which it shall have first been used.
(ii) When the Registration Statement becomes
effective, and at all times subsequent thereto to and
including the Closing Dates, and during such longer period as
the Prospectus may be required to be delivered in connection
with sales by the Underwriters or a dealer, and during such
longer period until any post-effective amendment thereto shall
become effective, the Registration Statement (and any
post-effective amendment thereto) and the Prospectus (as
amended or as supplemented if the Company shall have filed
with the Commission any amendment or supplement to the
Registration Statement or the Prospectus) will contain all
statements which are required to be stated therein in
accordance with the Act and the Regulations, will comply with
the Act and the Regulations, and will not contain 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 not misleading, and no event will have
occurred which should have been set forth in an amendment or
supplement to the Registration Statement or the Prospectus
which has not then been set forth in such an amendment or
supplement; if a Rule 430A Prospectus is included in the
Registration Statement at the time it becomes effective, the
Prospectus filed pursuant to Rules 430A and 424(b)(1) or (4)
will contain all Rule 430A Information; and each Preliminary
Prospectus, as of the date filed with the Commission, did not
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 not misleading;
except that no representation or warranty is made in this
Section 4(a)(ii) with respect to statements or omissions made
in reliance upon and in conformity with written information
furnished to the Company as stated in Section 7(c) with
respect to any Underwriter by or on behalf of such Underwriter
through the Representatives expressly for inclusion in any
Preliminary Prospectus, the Registration Statement, or the
Prospectus, or any amendment or supplement thereto.
(iii) If the Company has elected to rely on Rule
462(b) and the Rule 462(b) Registration Statement has not been
declared effective, then (i) the
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Company has filed a Rule 462(b) Registration Statement in
compliance with and that is effective upon filing pursuant to
Rule 462(b) and has received confirmation of its receipt and
(ii) the Company has given irrevocable instructions for
transmission of the applicable filing fee in connection with
the filing of the Rule 462(b) Registration Statement, in
compliance with Rule 111 promulgated under the Act or the
Commission has received payment of such filing fee.
(iv) Neither the Commission nor the "blue sky" or
securities authority of any jurisdiction has issued an order
(a "Stop Order") suspending the effectiveness of the
Registration Statement, preventing or suspending the use of
any Preliminary Prospectus, the Prospectus, the Registration
Statement, or any amendment or supplement thereto, refusing to
permit the effectiveness of the Registration Statement, or
suspending the registration or qualification of the Firm
Shares or the Option Shares nor has any of such authorities
instituted or threatened to institute any proceedings with
respect to a Stop Order.
(v) Any contract, agreement, instrument, lease, or
license required to be described in the Registration Statement
or the Prospectus has been properly described therein. Any
contract, agreement, instrument, lease, or license required to
be filed as an exhibit to the Registration Statement has been
filed with the Commission as an exhibit to or has been
incorporated as an exhibit by reference into the Registration
Statement.
(vi) The Company is a corporation duly organized,
validly existing, and in good standing under the laws of the
State of Delaware, with full corporate power and authority,
and all necessary consents, authorizations, approvals, orders,
licenses, certificates, and permits of and from, and
declarations and filings with, all federal, state, local, and
other governmental authorities and all courts and other
tribunals, to own, lease, license, and use its properties and
assets and to carry on its business as now being conducted and
in the manner described in the Prospectus. The Company does
not own, lease or license any property or conduct any business
outside the United States of America. The Company has no
subsidiary or subsidiaries and does not control, directly or
indirectly, any corporation, partnership, joint venture,
association or other business organization, except for those
listed on Schedule III attached hereto, those permitted to be
excluded pursuant to Item 601, Exhibit 21 of Regulation S-B
and, on or after the Firm Shares Closing Date, the Founding
Businesses (as hereinafter defined) (each such corporation a
"Subsidiary" and collectively, the "Subsidiaries"). Each of
the Subsidiaries has been duly organized and is validly
existing as a corporation in good standing under the laws of
its jurisdiction of incorporation, as listed on Schedule III
attached hereto or, with respect to the Founding Businesses on
or after the Firm Shares Closing Date, as listed on Schedule
IV hereto. Each of the Company and the Subsidiaries is duly
qualified and in good standing as a foreign
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corporation in each jurisdiction in which the character or
location of its or any of their properties (owned, leased or
licensed) or the nature of its or any of their businesses
makes such qualification necessary except for such
jurisdictions where the failure to so qualify would not,
either singly or in the aggregate, have a material adverse
effect on the assets or properties, business, financial
condition or results of operations of the Company or any of
the Subsidiaries.
(vii) The authorized capital stock of the Company
consists of 25,000,000 shares of Common Stock, of which
___________ shares are outstanding, and 5,000,000 shares of
preferred stock, par value $.001 per share (the "Preferred
Stock"), none of which shares are outstanding. Each
outstanding share of Common Stock and each outstanding share
of capital stock of each Subsidiary has been duly and validly
authorized and issued, fully paid, and is non-assessable,
without any personal liability attaching to the ownership
thereof and has not been issued and is not owned or held in
violation of any preemptive rights of stockholders. There is
no commitment, plan, preemptive right or arrangement to issue,
and no outstanding option, warrant, or other right calling for
the issuance of, shares of capital stock of the Company or of
any Subsidiary or any security or other instrument which by
its terms is convertible into, exercisable for, or
exchangeable for capital stock of the Company or of any
Subsidiary, except as may be properly described in the
Prospectus. There is outstanding no security or other
instrument which by its terms is convertible into or
exchangeable for capital stock of the Company or of any
Subsidiary, except as may be properly described in the
Prospectus.
(viii) The financial statements of the Company and
each of the Founding Businesses included in the Registration
Statement and the Prospectus fairly present in all material
respects, with respect to the Company and each of the Founding
Businesses, the financial position, the results of operations,
and the other information purported to be shown therein at the
respective dates and for the respective periods to which they
apply. Such financial statements have been prepared in
accordance with generally accepted accounting principles
(except to the extent that certain footnote disclosures
regarding any stub period may have been omitted in accordance
with the applicable rules of the Commission under the
Securities Exchange Act of 1934 (the "Exchange Act"))
consistently applied throughout the periods involved and are
in accordance with the books and records of the Company and
the Founding Businesses, as applicable. The accountants whose
reports on the audited financial statements of the Company and
the Founding Businesses are filed with the Commission as a
part of the Registration Statement are, and during the periods
covered by their report(s) included in the Registration
Statement and the Prospectus were, independent certified
public accountants with respect to the Company and each of the
Founding Businesses within the meaning of the Act and the
Regulations. No other financial statements
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are required by Form SB-2 or otherwise to be included in the
Registration Statement or the Prospectus. There has at no time
been a material adverse change in the financial condition,
results of operations, business, properties, assets,
liabilities, or future prospects of the Company or any of the
Founding Businesses from the latest information set forth in
the Registration Statement or the Prospectus, except as may be
properly described in the Prospectus.
(ix) There is no litigation, arbitration, claim,
governmental or other proceeding (formal or informal), or
investigation before any court or before any public body or
board pending, threatened, or in prospect (or any basis
therefor) with respect to the Company or any Subsidiary, or
any of its respective operations, business, properties, or
assets, except as may be properly described in the Prospectus
or such as individually or in the aggregate do not now have
and will not in the future have a material adverse effect upon
the operations, business, properties, assets or financial
condition of the Company or any Subsidiary. Neither the
Company nor any Subsidiary is involved in any labor dispute,
nor is such dispute threatened, which dispute would have a
material adverse effect upon the operations, business,
properties, assets or financial condition of the Company or
any of the Subsidiaries. Neither the Company nor any
Subsidiary is in violation of, or in default with respect to,
any law, rule, regulation, order, judgment, or decree which
violation or default would have a material adverse effect upon
the operations, business, properties, assets or financial
condition of the Company or any Subsidiary; nor is the Company
or any Subsidiary required to take any action in order to
avoid any such violation or default.
(x) Except as described in the Prospectus, neither
the Company nor any Subsidiary maintains, sponsors or
contributes to any program or arrangement that is an "employee
pension benefit plan," an "employee welfare benefit plan," or
a "multiemployer plan" as such terms are defined in Sections
(2), 3(1) and 3(37), respectively, of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") (the
foregoing are collectively, "ERISA Plans"). Neither the
Company nor any Subsidiary maintains or contributes, now or at
any time previously, to a defined benefit plan, as defined in
Section 3(35) of ERISA. No ERISA Plan (or any trust created
thereunder) has engaged in a "prohibited transaction" within
the meaning of Section 406 of ERISA or Section 4975 of the
Code, which could subject the Company or any Subsidiary to any
tax penalty on prohibited transactions and which has not
adequately been corrected. Each ERISA Plan is in compliance
with all material reporting, disclosure and other requirements
of the Code and ERISA as they relate to any such ERISA Plan.
Determination letters have been received from the Internal
Revenue Service with respect to each ERISA Plan which is
intended to comply with Code Section 401(a), stating that such
ERISA Plan and the attendant trust are
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qualified thereunder. Neither the Company nor any Subsidiary
has ever completely or partially withdrawn from a
"multiemployer plan."
(xi) Each of the Company and the Subsidiaries does
not own any real property and has good title to all other
properties and assets which the Prospectus indicates are owned
by it, and has valid and enforceable leasehold interests in
each of such items, free and clear of all liens, security
interests, pledges, charges, encumbrances, and mortgages
(collectively, "Encumbrances") (except Encumbrances which do
not materially interfere with the use of the property or the
conduct of the business except as may be properly described in
the Prospectus). No real property owned, leased, licensed or
used by the Company or any Subsidiary lies in an area which
is, or to the knowledge of the Company will be, subject to
zoning, use or building code restrictions which would
prohibit, and no state of facts relating to the actions or
inaction of another person or entity or his or its ownership,
leasing, licensing or use of any real or personal property
exists or will exist which would prevent the continued
effective ownership, leasing, licensing or use of such real
property in the business of the Company and each Subsidiary as
presently conducted or as the Prospectus indicates it
contemplates conducting (except as may be properly described
in the Prospectus).
(xii) Each of the Company and the Subsidiaries, and
to the best knowledge of the Company, any other party, is not
now or reasonably expected by the Company to be in violation
or breach of, or in default with respect to, complying with
any term, obligation or provision of any contract, agreement,
instrument, lease, license, indenture, mortgage, deed of
trust, note, arrangement or understanding which is material to
the Company or any Subsidiary or by which any of its
respective properties or business may be bound or affected,
and no event has occurred which with notice or lapse of time
or both would constitute such a default, and each such
contract, agreement, instrument, lease, license, indenture,
mortgage, deed of trust, note, arrangement or understanding is
in full force and is the legal, valid and binding obligation
of the parties thereto and is enforceable as to them in
accordance with its terms. Each of the Company and the
Subsidiaries enjoys peaceful and undisturbed possession under
all leases and licenses under which it is operating. Neither
the Company nor any Subsidiary is a party to or bound by any
contract, agreement, instrument, lease, license, indenture,
mortgage, deed of trust, note, arrangement or understanding,
or subject to any charter or other restriction, which has had
or may in the future have a material adverse effect on the
financial condition, results of operations, business,
properties, assets, liabilities or future prospects of the
Company or any Subsidiary. Neither the Company nor any
Subsidiary is in violation or breach of, or in default with
respect to, any term of their respective certificates of
incorporation (or other charter document) or by-laws.
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(xiii) The Company and each of the Subsidiaries have
filed all federal, state, local and foreign tax returns which
are required to be filed through the date hereof, or have
received extensions thereof, and have paid all taxes shown on
such returns and all assessments received by them to the
extent that the same are material and have become due.
(xiv) No transfer tax, stamp duty or other similar
tax is payable by or on behalf of the Underwriters in
connection with (i) the issuance by the Company or sale by the
Selling Stockholders of the Shares, (ii) the purchase by the
Underwriters of the Shares from the Company and/or the Selling
Stockholders and the purchase by the Representatives of the
Representatives' Warrants from the Company, (iii) the
consummation by the Company and the Selling Stockholders of
any of its or their obligations under this Agreement, or (iv)
resales of the Shares in connection with the distribution
contemplated hereby.
(xv) Each of the Company and the Subsidiaries
maintains insurance policies, including, but not limited to,
general liability and property insurance, which insures the
Company, any Subsidiary and their respective employees,
against such losses and risks generally insured against by
comparable businesses. Neither the Company nor any Subsidiary
(A) has failed to give notice or present any insurance claim
with respect to any matter, including but not limited to the
Company's or any Subsidiary's business, property or employees,
under the insurance policy or surety bond in a due and timely
manner, (B) has any disputes or claims against any underwriter
of such insurance policies or surety bonds or has failed to
pay any premiums due and payable thereunder, or (C) has failed
to comply with all conditions contained in such insurance
policies and surety bonds. There are no facts or circumstances
under any such insurance policy or surety bond which would
relieve any insurer of its obligation to satisfy in full any
valid claim of the Company or any Subsidiary.
(xvi) All patents, patent applications, trademarks,
trademark applications, trade names, service marks,
copyrights, copyright applications, franchises, and other
intangible properties and assets including trade secrets,
know-how, inventions, designs, processes, works of authorship,
computer programs and technical data and information
(collectively, the "Intangibles") that each of the Company and
the Subsidiaries owns, possesses or has pending, or under
which it is licensed, are in good standing and uncontested.
There is no right under any Intangible necessary to the
business of the Company or any Subsidiary as presently
conducted or as the Prospectus indicates the Company and the
Subsidiaries have that the Company and the Subsidiaries do not
have (except as may be so described in the Prospectus).
Neither the Company nor any
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Subsidiary has infringed, is infringing, in any material
respect, or has received any notice of infringement with
respect to asserted Intangibles of others. To the best
knowledge of the Company, there is no infringement by others
of Intangibles of the Company or any Subsidiary. To the best
knowledge of the Company, there is no Intangible of others
which is expected to have a material adverse effect on the
financial condition, results of operations, business,
properties, assets, liabilities or future prospects of the
Company or any of the Subsidiaries.
(xvii) Each of the Company and the Subsidiaries has
taken reasonable security measures to protect the secrecy,
confidentiality and value of all its Intangibles in all
material respects.
(xviii) Neither the Company nor any Subsidiary or any
director, officer, agent, employee or other person associated
with or acting on behalf of the Company or any Subsidiary has,
directly or indirectly, used any corporate funds for unlawful
contributions, gifts, entertainment, or other unlawful
expenses relating to political activity; made any unlawful
payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or
campaigns from corporate funds; violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or made any
bribe, rebate, payoff, influence payment, kickback, or other
unlawful payment. No transaction required to be disclosed in
the Prospectus has occurred between or among the Company, any
Subsidiary, and any of their respective officers or directors
or any affiliates or affiliates of any such officer or
director, except as described in the Prospectus.
(xix) The Company has all requisite power and
authority to execute, deliver and perform this Agreement and
the Representatives' Warrants (collectively, the "Company
Documents"). All necessary corporate proceedings of the
Company have been duly taken to authorize the execution,
delivery and performance of the Company Documents. This
Agreement has been duly authorized, executed, and delivered by
the Company, is the legal, valid and binding obligation of the
Company, and is enforceable as to the Company in accordance
with its terms subject to applicable bankruptcy, insolvency
reorganization laws and other similar laws of general
application relating to the enforcement of creditors' rights.
No consent, authorization, approval, order, license,
certificate or permit of or from, or declaration or filing
with, any federal, state, local or other governmental
authority or any court or other tribunal is required by the
Company or any Subsidiary for the execution, delivery or
performance by the Company of this Agreement (except filings
under the Act which have been or will be made before the
applicable Closing Date and such consents consisting only of
consents under "blue sky" or securities laws which have been
obtained at or prior to the date of this Agreement). No
consent of any party to any contract, agreement, instrument,
lease, license, indenture, mortgage,
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deed of trust, note, arrangement or understanding to which the
Company or any Subsidiary is a party, or to which any of their
respective properties or assets are subject, is required for
the execution, delivery or performance of this Agreement, and
the execution, delivery and performance of this Agreement will
not violate, result in a breach of, conflict with, accelerate
the due date of any payments under, or (with or without the
giving of notice or the passage of time or both) entitle any
party to terminate or call a default under any such contract,
agreement, instrument, lease, license, indenture, mortgage,
deed of trust, note, arrangement, or understanding, or violate
or result in a breach of any term of the certificate of
incorporation (or other charter document) or by-laws of the
Company or any Subsidiary, or violate, result in a breach of,
or conflict with any law, rule, regulation, order, judgment or
decree binding on the Company or any Subsidiary or to which
any of its respective operations, business, properties or
assets are subject.
(xx) The Firm Shares and the Option Shares are duly
and validly authorized. The Firm Shares and the Option Shares,
when delivered in accordance with this Agreement will be duly
and validly issued, fully paid, and non-assessable, without
any personal liability attaching to the ownership thereof, and
will not be issued in violation of any preemptive rights of
stockholders, optionholders, warrantholders and any other
persons, and the Underwriters will receive good title to the
Firm Shares purchased by them, respectively, free and clear of
all liens, security interests, pledges, charges, encumbrances,
stockholders' agreements and voting trusts.
(xxi) The Representatives' Warrants are duly and
validly authorized and, when delivered in accordance with this
Agreement, will be duly and validly issued, without any
personal liability attaching to the ownership thereof, and
will not be issued in violation of any preemptive rights of
stockholders, optionholders, warrantholders and any other
persons. The Warrant Shares are validly authorized and
reserved for issuance and, when issued and delivered upon
exercise of the Representatives' Warrants, will be validly
issued, fully paid and non-assessable, without any personal
liability attaching to the ownership thereof, and will not be
issued in violation of any preemptive rights of stockholders,
optionholders, warrantholders and any other persons. The
holders of the Representatives' Warrants will receive good
title to the securities purchased by them, respectively, free
and clear of all liens, security interests, pledges, charges,
encumbrances, stockholders' agreements and voting trusts.
(xxii) The Firm Shares, the Option Shares, the
Representatives' Warrants, the Preferred Stock, and the Common
Stock conform to all statements relating thereto contained in
the Registration Statement or the Prospectus.
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(xxiii) Subsequent to the respective dates as of
which information is given in the Registration Statement and
the Prospectus, and except as may otherwise be properly
described therein, there has not been any material adverse
change in the assets or properties, business or results of
operations or financial condition of the Company or any
Subsidiary, whether or not arising from transactions in the
ordinary course of business; neither the Company nor any
Subsidiary has sustained any material loss or interference
with its business or properties from fire, explosion,
earthquake, flood or other calamity, whether or not covered by
insurance; since the date of the latest balance sheet included
in the Registration Statement and the Prospectus, except as
reflected therein, neither the Company nor any Subsidiary has
undertaken any liability or obligation, direct or contingent,
except for liabilities or obligations undertaken in the
ordinary course of business; and neither the Company nor any
Subsidiary has (A) issued any securities or incurred any
liability or obligation, primary or contingent, for borrowed
money, (B) entered into any transaction not in the ordinary
course of business, or (C) declared or paid any dividend or
made any distribution on any of its capital stock or redeemed,
purchased or otherwise acquired or agreed to redeem, purchase
or otherwise acquire any shares of its capital stock.
(xxiv) Neither the Company nor any Subsidiary or any
of their respective officers, directors or affiliates (as
defined in the Regulations) or any of the Selling
Stockholders, has taken or will take, directly or indirectly,
prior to the termination of the underwriting syndicate
contemplated by this Agreement, any action designed to
stabilize or manipulate the price of any security of the
Company, or which has 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, to facilitate the sale or resale of any of the
Firm Shares or the Option Shares.
(xxv) The Company has obtained from its executive
officers, directors and principal stockholders, his or its
enforceable written agreement, in form and substance
satisfactory to counsel for the Underwriters, that for a
period of 180 days from the date on which the public offering
of the Shares commences he or it will not, without the prior
written consent of Josephthal, on behalf of the Underwriters,
offer, pledge, sell, contract to sell, grant any option for
the sale of, or otherwise dispose of, directly or indirectly,
any shares of Common Stock or other securities of the Company
(or any security or other instrument which by its terms is
convertible into, exercisable for, or exchangeable for shares
of Common Stock or other securities of the Company, including,
without limitation, any shares of Common Stock issuable under
any employee stock options), beneficially owned by him or it.
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(xxvi) Neither the Company nor any Subsidiary is, or
intends to conduct its business in a manner in which it would
be, an "investment company" as defined in Section 3(a) of the
Investment Company Act of 1940 (the "Investment Company Act").
(xxvii) All offers and sales of the Company's capital
stock prior to the date hereof, other than offers and sales
made pursuant to the Acquisitions (as hereinafter defined),
were at all relevant times exempt from the registration
requirements of the Act and were the subject of an available
exemption from the registration requirements of all applicable
state securities or blue sky laws. The offers and sales of the
Company's capital stock made pursuant to the Acquisitions were
made in compliance with Rule 145(a) under the Act.
(xxviii) 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.
(xxix) Except as may be set forth in the Prospectus,
neither the Company nor any Subsidiary has incurred any
liability for a fee, commission or other compensation on
account of the employment of a broker or finder in connection
with the transactions contemplated by this Agreement.
(xxx) No transaction has occurred between or among
the Company, any Subsidiary, and any of their respective
officers or directors or any affiliates of any such officer or
director, that is required to be described in and is not
described in the Registration Statement and the Prospectus.
(xxxi) The Common Stock, including the Shares, are
authorized for quotation on the American Stock Exchange upon
official notice of issuance.
(xxxii) Any certificate signed by any officer of the
Company or any officer of any Subsidiary, and delivered to the
Underwriters or to Underwriters' Counsel (as defined herein)
shall be deemed a representation and warranty by the Company
to the Underwriters as to the matters covered thereby.
(xxxiii) Each of the minute books of the Company and
any Subsidiary has been made available to the Underwriters and
contains a complete summary of all meetings and actions of the
directors and stockholders of the Company and any Subsidiary,
respectively, since the time of its respective incorporation,
and reflects all transactions referred to in such minutes
accurately in all respects.
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(xxxiv) The Company has filed with Commission a
registration statement, and may have filed one or more
amendments thereto, on Form S-4 (Registration No. 333-20571)
(the "Merger Registration Statement"), for the registration of
3,678,844 shares of Common Stock, in conformity with the
requirements of the Act. When the Merger Registration
Statement becomes effective, and during such longer period
until any post-effective amendment thereto shall become
effective, the Merger Registration Statement (and any
post-effective amendment thereto) and the prospectus included
as part thereof (the "Merger Prospectus") (as amended or as
supplemented if the Company shall have filed with the
Commission any amendment or supplement to the Merger
Registration Statement or the Merger Prospectus) will contain
all statements which are required to be stated therein in
accordance with the Act and the Regulations, will comply with
the Act and the Regulations, and will not contain 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 not misleading, and no event will have
occurred which should have been set forth in an amendment or
supplement to the Merger Registration Statement or the Merger
Prospectus which has not then been set forth in such an
amendment or supplement. Neither the Commission nor the "blue
sky" or securities authority of any jurisdiction has issued a
Stop Order suspending the use of any preliminary prospectus,
the Merger Prospectus, the Merger Registration Statement, or
any amendment or supplement thereto, refusing to permit the
effectiveness of the Merger Registration Statement, or
suspending the registration or qualification of the shares of
Common Stock registered thereunder nor has any of such
authorities instituted or threatened to institute any
proceedings with respect to a Stop Order.
(xxxv) American Medcare Corporation ("AMC") is the
record holder and sole beneficial owner of all of the issued
and outstanding stock of each of International Computer
Solutions, Inc. ("ICS"), Xxxxxxx-Xxxxx, Inc. ("Xxxxxxx-Xxxxx")
and Health Care Division, Inc. ("HCD"), which owns
substantially all of the assets used in connection with the
business of the former Healthcare Division of Info Systems of
North Carolina, Inc. The Company has entered into the
agreements listed on Schedule IV hereto (the "Acquisition
Agreements") with respect to the acquisitions (the
"Acquisitions") of AMC, DR Software, Inc. ("DR Software"),
KComp Management Systems, Inc. ("KComp"), and Rovak, Inc.
("Rovak") (AMC, ICS, Xxxxxxx-Xxxxx, HCD, DR Software, KComp
and Rovak are collectively referred to herein as the "Founding
Businesses"). The Company has all requisite power and
authority to execute, deliver and perform each of the
Acquisition Agreements. All necessary corporate proceedings of
the Company have been duly taken to authorize the execution,
delivery and performance of the Acquisition Agreements. Each
of the Acquisition Agreements has been duly authorized,
executed and delivered by the Company, is the legal valid and
binding
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obligation of the Company, and is enforceable as to the
Company in accordance with its terms.
(xxxvi) Neither the Company nor any Subsidiary or any
of their respective affiliates is presently doing business
with the government of Cuba or with any person or affiliate
located in Cuba. If, at any time after the date that the
Registration Statement is declared effective with the
Commission or with the Florida Department of Banking and
Finance (the "Florida Department"), whichever date is later,
and prior to the end of the period referred to in the first
clause of Section 4(a)(ii) hereof, the Company commences
business with the government of Cuba or with any person or
affiliate located in Cuba, the Company will so inform the
Florida Department within ninety days after such commencement
of business in Cuba, and during the period referred to in
Section 4(a)(ii) hereof will inform the Florida Department
within ninety days after any change occurs with respect to
previously reported information.
(b) Each of the Selling Stockholders severally, and not
jointly, represents and warrants to, and agrees with, the several
Underwriters that:
(i) Such Selling Stockholder has all requisite power
and authority to execute, deliver, and perform this Agreement.
This Agreement has been duly executed and delivered by or on
behalf of such Selling Stockholder, is the legal, valid and
binding obligation of such Selling Stockholder, and is
enforceable as to such Selling Stockholder in accordance with
its terms subject to applicable bankruptcy, insolvency,
reorganization laws and other similar laws of general
application relating to the enforcement of creditor's rights.
No consent, authorization, approval, order, license,
certificate, or permit of or from, or declaration or filing
with, any federal, state, local or other governmental
authority or any court or other tribunal is required by such
Selling Stockholder for the execution, delivery or performance
of this Agreement (except filings under the Act which have
been made before the applicable Closing Date and such consents
consisting only of consents under "blue sky" or securities
laws which have been obtained at or prior to the date of this
Agreement) by such Selling Stockholder. No consent of any
party to any contract, agreement, instrument, lease, license,
indenture, mortgage, deed of trust, note, arrangement or
understanding to which such Selling Stockholder is a party, or
to which any of such Selling Stockholder's properties or
assets are subject, is required for the execution, delivery or
performance of this Agreement; and the execution, delivery and
performance of this Agreement will not violate, result in a
breach of, conflict with, or (with or without the giving of
notice or the passage of time or both) entitle any party to
terminate or call a default under any such contract,
agreement, instrument, lease, license, indenture, mortgage,
deed of trust, note, arrangement or understanding, or violate,
result in a breach of, or conflict with, any law, rule,
regulation, order,
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judgment or decree binding on such Selling Stockholder or to
which any of such Selling Stockholder's operations, business,
properties, or assets are subject.
(ii) Such Selling Stockholder has good title to the
Option Shares to be sold by such Selling Stockholder pursuant
to this Agreement, free and clear of all liens, security
interests, pledges, charges, encumbrances, stockholders'
agreements and voting trusts, and when such Option Shares are
delivered in accordance with this Agreement, the Underwriters
will receive good title to such Option Shares from such
Selling Stockholder, free and clear of all liens, security
interests, pledges, charges, encumbrances, stockholders'
agreements and voting trusts.
(iii) Certificates in negotiable form for all Option
Shares to be sold by such Selling Stockholder under this
Agreement, together with a stock power or powers duly endorsed
in blank by such Selling Stockholder, have been placed in
custody with ________________ (the "Custodian") for the
purpose of effecting delivery hereunder and thereunder.
(iv) Neither such Selling Stockholder nor any of such
Selling Stockholder's affiliates (as defined in the
Regulations) has taken or will take, directly or indirectly,
prior to the termination of the underwriting syndicate
contemplated by this Agreement, any action designed to
stabilize or manipulate the price of any security of the
Company, or which has 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, to facilitate the sale or resale of any of the
Option Shares.
(v) All information furnished or to be furnished to
the Company by or on behalf of such Selling Stockholder for
use in connection with the preparation of the Registration
Statement and the Prospectus is true in all respects and does
not and will not 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 not
misleading.
(vi) Except as may be set forth in the Prospectus,
such Selling Stockholder has not incurred any liability for a
fee, commission or other compensation on account of the
employment of a broker or finder in connection with the
transactions contemplated by this Agreement.
(vii) Such Selling Stockholder has no knowledge that,
and does not believe that, any representation or warranty of
the Company contained in Section 4(a) of this Agreement is
incorrect.
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(viii) Such Selling Stockholder has not, directly or
indirectly, used any corporate funds for unlawful
contributions, gifts, entertainment, or other unlawful
expenses relating to political activity; made any unlawful
payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or
campaigns from corporate funds; violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or made any
bribe, rebate, payoff, influence payment, kickback, or other
unlawful payment from corporate funds.
(ix) No transaction has occurred between or among
such Selling Stockholder and the Company, any Subsidiary or
any other Selling Stockholder that is required to be described
in the Registration Statement or the Prospectus and is not so
properly described.
(x) There is not pending or threatened against such
Selling Stockholder any action, suit or proceeding (or
circumstances that may give rise to the same) which (i)
questions the validity of this Agreement or any action taken
or to be taken by such Selling Stockholder pursuant to or in
connection with the foregoing, or (ii) which is required to be
disclosed in the Registration Statement and the Prospectus
which is not so disclosed, and such proceedings which are
summarized in the Registration Statement and the Prospectus,
if any, are accurately summarized in all material respects.
(xi) No stamp duty or similar tax is payable by or on
behalf of the Underwriters in connection with (i) the sale of
the Option Shares to be sold by such Selling Stockholder, (ii)
the purchase by the Underwriters of the Option Shares to be
sold by such Selling Stockholders, (iii) the consummation by
such Selling Stockholder of any of its obligations under this
Agreement or (iv) resales of the Option Shares in connection
with the distribution contemplated hereby.
(xii) Such Selling Stockholder does not have any
registration rights or other similar rights with respect to
any securities of the Company; and such Selling Stockholder
does not have any right of first refusal or other similar
right to purchase any securities of the Company upon the
issuance or sale thereof by the Company or upon the sale
thereof by any other stockholder of the Company.
(xiii) Any certificate signed by or on behalf of such
Selling Stockholder and delivered to the Underwriters or to
counsel for the Underwriters shall be deemed a representation
and warranty by such Selling Stockholders to the Underwriters
as to the matters covered thereby.
5. Conditions of the Underwriters' Obligations.
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The obligations of the Underwriters under this Agreement are several
and not joint. The respective obligations of the Underwriters to purchase the
Shares are subject, in the Representatives' sole discretion, to each of the
following terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a)(i) of this Agreement; if the
Original Registration Statement or any amendment thereto filed prior to
the Firm Closing Date has not been declared effective as of the time of
execution hereof, the Original Registration Statement or such amendment
and, if the Company has elected to rely upon Rule 462(b), the Rule
462(b) Registration Statement shall have been declared effective not
later than the earlier of (i) 11:00 a.m. New York time, on the date on
which the amendment to the registration statement originally filed with
respect to the Shares or to the Registration Statement, as the case may
be, containing information regarding the public offering price of the
Shares has been filed with the Commission, and (ii) the time
confirmations are sent or given as specified by Rule 462(b)(2) or, with
respect to the Original Registration Statement, such later time and
date as shall have been consented to by the Representatives.
(b) No order preventing or suspending the use of any
preliminary prospectus, the Prospectus or the Merger Prospectus shall
have been or shall be in effect and no order suspending the
effectiveness of the Registration Statement or the Merger Registration
Statement shall be in effect, and no proceedings for such purpose shall
be pending before or threatened by the Commission, and any requests for
additional information on the part of the Commission (to be included in
the Registration Statement, the Merger Registration Statement, the
Prospectus or the Merger Prospectus or otherwise) shall have been
complied with to the satisfaction of the Representatives.
(c) The representations and warranties of the Company and
the Selling Stockholders contained in this Agreement and in the
certificates delivered pursuant to Section 5(d) shall be true and
correct when made and on and as of each Closing Date as if made on such
date, and the Company and the Selling Stockholders shall have performed
all covenants and agreements and satisfied all the conditions contained
in this Agreement required to be performed or satisfied by them at or
before such Closing Date.
(d) The Representatives shall have received on each
Closing Date (i) a certificate, addressed to the Representatives and
dated such Closing Date, of the chief executive or chief operating
officer and the chief financial officer of the Company to the effect
that the persons executing such certificate have carefully examined the
Registration Statement, the Prospectus and this Agreement and that the
representations and warranties of the Company contained in this
Agreement are true and correct on and as of such Closing Date with the
same effect as if made on such Closing Date and the Company has
performed all covenants and agreements and satisfied all conditions
contained in this Agreement required to be performed or satisfied by it
at or prior to such Closing Date and (ii) a certificate, addressed to
the Representatives and dated such Closing Date, of
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each of the Selling Stockholders to the effect that the representations
and warranties of such Selling Stockholder are true and correct on and
as of such Closing Date and such Selling Stockholder has performed all
covenants and agreements and satisfied all conditions contained in this
Agreement required to be performed or satisfied by such Selling
Stockholder at or prior to such Closing Date.
(e) At the time this Agreement is executed, the
Underwriters shall have received a letter, dated the date hereof,
addressed to the Underwriters in form and substance satisfactory
(including the non-material nature of the changes or decreases, if any,
referred to in clause (iii) below) in all respects to the Underwriters
and Underwriters' Counsel, from BDO Xxxxxxx, LLP:
(i) confirming that they are independent certified
public accountants with respect to the Company and the
Subsidiaries within the meaning of the Act and the applicable
Rules and Regulations;
(ii) stating that it is their opinion that the
consolidated financial statements and supporting schedules of
the Company and the Subsidiaries included in the Registration
Statement comply as to form in all material respects with the
applicable accounting requirements of the Act and the Rules
and Regulations thereunder and that the Representatives may
rely upon the opinion of____________ with respect to the
financial statements and supporting schedules included in the
Registration Statement;
(iii) stating that, on the basis of a limited review
which included a reading of the latest available unaudited
interim consolidated financial statements of the Company and
the Subsidiaries (with an indication of the date of the latest
available unaudited interim financial statements), a reading
of the latest available minutes of the stockholders and board
of directors and the various committees of the boards of
directors of the Company and the Subsidiaries, consultations
with officers and other employees of the Company and the
Subsidiaries responsible for financial and accounting matters
and other specified procedures and inquiries, nothing has come
to their attention which would lead them to believe that (A)
the pro forma financial information contained in the
Registration Statement and Prospectus does not comply as to
form in all material respects with the applicable accounting
requirements of the Act and the Rules and Regulations or is
not fairly presented in conformity with generally accepted
accounting principles applied on a basis consistent with that
of the audited consolidated financial statements of the
Company or the unaudited pro forma financial information
included in the Registration Statement, (B) the unaudited
financial statements and supporting schedules of the Company
and the Subsidiaries included in the Registration Statement do
not comply as to form in all material respects with the
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applicable accounting requirements of the Act and the Rules
and Regulations or are not fairly presented in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited consolidated
financial statements of the Company and the Subsidiaries
included in the Registration Statement, or (C) at a specified
date not more than five (5) days prior to the effective date
of the Registration Statement, there has been any change in
the capital stock or long-term debt of the Company and the
Subsidiaries, or any decrease in the stockholders' equity or
net current assets or net assets of the Company and the
Subsidiaries as compared with amounts shown in the balance
sheet included in the Registration Statement, other than as
set forth in or contemplated by the Registration Statement,
or, if there was any change or decrease, setting forth the
amount of such change or decrease, and (D) during the period
from ________ to a specified date not more than five (5) days
prior to the effective date of the Registration Statement,
there was any decrease in net revenues, net earnings or
increase in net earnings per common share of the Company and
the Subsidiaries, in each case as compared with the
corresponding period beginning __________other than as set
forth in or contemplated by the Registration Statement, or, if
there was any such decrease, setting forth the amount of such
decrease;
(iv) setting forth at a date not later than five (5)
days prior to the date of the Registration Statement, the
amount of liabilities of the Company and the Subsidiaries
(including a break-down of commercial paper and notes payable
to banks);
(v) stating that they have compared specific dollar
amounts, numbers of shares, percentages of revenues and
earnings, statements and other financial information
pertaining to the Company and the Subsidiaries set forth in
the Prospectus in each case to the extent that such amounts,
numbers, percentages, statements and information may be
derived from the general accounting records, including work
sheets, of the Company and the Subsidiaries and excluding any
questions requiring an interpretation by legal counsel, with
the results obtained from the application of specified
readings, inquiries and other appropriate procedures (which
procedures do not constitute an examination in accordance with
generally accepted auditing standards), set forth in the
letter and found them to be in agreement;
(vi) stating that they have not during the
immediately preceding five (5) year period brought to the
attention of any of the Company's or the Subsidiaries'
management any "weakness", as defined in Statement of Auditing
Standard No. 60 "Communication of Internal Control Structure
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Related Matters Noted in an Audit," in any of the Company's or
the Subsidiaries' internal controls;
(vii) stating that they have in addition carried out
certain specified procedures, not constituting an audit, with
respect to certain pro forma financial information which is
included in the Registration Statement and the Prospectus and
that nothing has come to their attention as a result of such
procedures that caused them to believe such unaudited pro
forma financial information does not comply in form in all
respects with the applicable accounting requirements of Rule
11-02 of Regulation S-X or that the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of that information; and
(viii) statements as to such other matters incident
to the transaction contemplated hereby as the Representatives
may request.
At the Firm Shares Closing Date and each Option Shares Closing
Date, if any, the Underwriters shall have received from BDO Xxxxxxx,
LLP a letter, dated as of the Firm Shares Closing Date or the Option
Shares Closing Date, as the case may be, to the effect that they
reaffirm the statements made in the letter furnished pursuant to
subsection (e) of this Section, except that the specified date referred
to shall be a date not more than five days prior to Firm Shares Closing
Date or the Option Shares Closing Date, as the case may be, and, if the
Company has elected to rely on Rule 430A of the Rules and Regulations,
to the further effect that they have carried out procedures as
specified in clause (v) of subsection (e) of this Section with respect
to certain amounts, percentages and financial information as specified
by the Representatives and deemed to be a part of the Registration
Statement pursuant to Rule 430A(b) and have found such amounts,
percentages and financial information to be in agreement with the
records specified in such clause (v).
References to the Registration Statement and the Prospectus in
this paragraph (e) are to such documents as amended and supplemented at
the date of such letter.
(f) The Representatives shall have received on each
Closing Date from Glass, XxXxxxxxxx, Xxxxxxxx & Xxxxxxx, LLP, counsel
for the Company, an opinion, addressed to the Representatives and dated
such Closing Date, and in form and scope satisfactory to counsel for
the Underwriters, with reproduced copies or signed counterparts thereof
for each of the Underwriters, to the effect that:
(i) The Company is a corporation duly organized,
validly existing, and in good standing under the laws of the
State of Delaware, with full corporate power and authority to
own, lease, license and use its properties and assets and to
conduct its business in the manner described in the
Prospectus. To the knowledge
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of such counsel, the Company has all necessary consents,
authorizations, approvals, orders, certificates and permits of
and from, and declarations and filings with, all federal,
state, local and other governmental authorities and all courts
and other tribunals, to own, lease, license and use its
properties and assets and to conduct its business in the
manner described in the Prospectus. To the knowledge of such
counsel, the Company does not own, lease or license any
property or conduct any business outside the United States of
America. The Company has no subsidiary or subsidiaries and
does not control, directly or indirectly, any corporation,
partnership, joint venture, association or other business
organization, except for those listed on Schedule III attached
hereto, those permitted to be excluded pursuant to Item 601,
Exhibit 21 of Regulation S-B and, on or after the Firm Shares
Closing Date, the Founding Businesses. Each of the
Subsidiaries has been duly organized and is validly existing
as a corporation in good standing under the laws of its
jurisdiction of incorporation, as listed on Schedule III
attached hereto or, with respect to the Founding Businesses on
or after the Firm Shares Closing Date, as listed on Schedule
IV hereto. Each of the Company and the Subsidiaries is duly
qualified and in good standing as a foreign corporation in
each jurisdiction in which the character or location of its or
any of their properties (owned, leased or licensed) or the
nature of its or any of their businesses makes such
qualification necessary except for such jurisdictions where
the failure to so qualify would not, either singly or in the
aggregate, have a material adverse effect on the assets or
properties, business, financial condition or results of
operations of the Company or any of the Subsidiaries.
(ii) The Company has authorized, issued and
outstanding capital stock as set forth in the capitalization
table under the caption "Capitalization" in the Prospectus.
The certificates evidencing the Shares are in due and proper
legal form. Each outstanding share of Common Stock and each
outstanding share of capital stock of each Subsidiary has been
duly and validly authorized and issued, fully paid, and is
non-assessable, without any personal liability attaching to
the ownership thereof, and has not been issued and is not
owned or held in violation of any preemptive right of
stockholders. To the knowledge of such counsel, there is no
commitment, plan, or arrangement to issue, and no outstanding
option, warrant, or other right calling for the issuance of,
any share of capital stock of the Company or of any Subsidiary
or any security or other instrument which by its terms is
convertible into, exercisable for, or exchangeable for capital
stock of the Company or of any Subsidiary, except as may be
properly described in the Prospectus. To the knowledge of such
counsel, there is outstanding no security or other instrument
which by its terms is convertible into, exercisable for or
exchangeable for capital stock of the Company, except as may
be properly described in the Prospectus.
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(iii) To the knowledge of such counsel, there is no
litigation, arbitration, claim, governmental or other
proceeding (formal or informal), or investigation before any
court or before any public body or board pending, threatened,
or in prospect (or any basis therefor) with respect to the
Company, any Subsidiary, or any of their respective
operations, businesses, properties, assets, or financial
condition except as may be properly described in the
Prospectus or such as individually or in the aggregate do not
now have and will not in the future have a material adverse
effect upon the operations, business, properties, assets, or
financial condition of the Company or any of the Subsidiaries.
To the knowledge of such counsel, neither the Company nor any
Subsidiary is involved in any labor dispute, nor is such
dispute threatened, which dispute would have a material
adverse effect upon the operations, business, properties,
assets or financial condition of the Company or any
Subsidiary. To the knowledge of such counsel, neither the
Company nor any Subsidiary is in violation of, or in default
with respect to, any law, rule, regulation, order, judgment,
or decree, except as may be properly described in the
Prospectus or such as in the aggregate do not now have and
will not in the future have a material adverse effect upon the
operations, business, properties, assets, or financial
condition of the Company or any of the Subsidiaries; nor is
the Company or any Subsidiary required to take any action in
order to avoid any such violation or default.
(iv) To the knowledge of such counsel, neither the
Company nor any Subsidiary or any other party is now or is
reasonably expected by the Company or any Subsidiary to be in
violation or breach of, or in default with respect to,
complying with any term, obligation or provision of any
contract, agreement, instrument, lease, license, indenture,
mortgage, deed of trust, note, arrangement or understanding
which is material to the Company or any Subsidiary or by which
any of their respective properties or businesses may be bound
or affected and to the knowledge of such counsel no event has
occurred which with notice or lapse of time or both would
constitute such a default.
(v) Neither the Company nor any Subsidiary is in
violation or breach of, or in default with respect to, any
term of their certificates of incorporation (or other charter
documents) or by-laws.
(vi) The Company has all requisite power and
authority to execute, deliver and perform this Agreement and
each of the Acquisition Agreements, to issue and sell the
Shares and to issue and sell the Representatives' Warrants.
All necessary corporate proceedings of the Company have been
taken to authorize the execution, delivery and performance by
the Company of the Company Documents and the Acquisition
Agreements. Each of the Company Documents and each of the
Acquisition Agreements has been duly authorized, executed and
delivered by the Company, and is the legal, valid and binding
obligation of the Company
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enforceable against the Company in accordance with its terms,
except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws
now or hereafter in effect relating to or affecting creditors'
rights generally and court decisions with respect thereto. No
consent, authorization, approval, order, license, certificate
or permit of or from, or declaration or filing with, any
federal state, local or other governmental authority or any
court or other tribunal is required by the Company or any
Subsidiary, for the execution, delivery or performance by the
Company of the Company Documents and the Acquisition
Agreements (except filings under the Act which have been made
prior to the Closing Date and filings or consents under "blue
sky" or securities laws, as to which such counsel need express
no opinion). To the knowledge of such counsel, no consent of
any party to any contract, agreement, instrument, lease,
license, indenture, mortgage, deed of trust, note, arrangement
or understanding to which the Company or any Subsidiary is a
party, or to which any of their respective properties or
assets are subject, is required for the execution, delivery or
performance of this Agreement (except filings made under the
rules of the NASD as to which such counsel need express no
opinion); and the execution, delivery and performance of this
Agreement will not violate, result in a breach of, conflict
with, or (with or without the giving of notice or the passage
of time or both) entitle any party to terminate or call a
default under any such contract, agreement, instrument, lease,
license, indenture, mortgage, deed of trust, note, arrangement
or understanding, in each case known to such counsel, or
violate or result in a breach of any term of the certificate
of incorporation (or other charter document) or bylaws of the
Company or any Subsidiary, or violate, result in a breach of,
or conflict with any law, rule, regulation, order, judgment,
or decree binding on the Company or any Subsidiary or to which
any of their respective operations, businesses, properties or
assets are subject.
(vii) The Representatives' Warrants have been duly
and validly authorized for issuance. Such opinion delivered at
the Firm Shares Closing Date shall state that the
Representatives' Warrants to be delivered on that date have
been duly and validly issued, fully paid, and non-assessable,
with no personal liability attaching to the ownership thereof,
and will not have been issued in violation of any preemptive
rights of stockholders, optionholders, warrantholders and any
other persons. The Warrant Shares are validly authorized and
reserved for issuance and, upon issuance, delivery and payment
therefor, as described in the Representatives' Warrants, will
be validly issued, fully paid and non-assessable, without any
personal liability attaching to the ownership thereof, and
will not be issued in violation of any preemptive rights of
stockholders, optionholders, warrantholders and any other
persons. The holders of the Representatives' Warrants will
receive good title to the securities purchased by them,
respectively, free and clear of all liens, security interests,
pledges, charges, encumbrances, stockholders' agreements and
voting trusts. The Warrant Shares and the
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Representatives' Warrants conform substantially and in all
material respects to the descriptions thereof contained in the
Registration Statement and the Prospectus.
(viii) The Firm Shares and the Option Shares are duly
and validly authorized. Such opinion delivered at each Closing
Date shall state that each such Share to be delivered on that
date is duly and validly issued, fully paid, and
non-assessable, with no personal liability attaching to the
ownership thereof, and is not issued in violation of any
preemptive rights of stockholders, optionholders,
warrantholders and any other persons. Such opinion delivered
at the Firm Shares Closing Date shall state that the
Underwriters have received good title to the Shares purchased
by them from the Company, for the consideration contemplated
herein and in good faith and without notice of any adverse
claim within the meaning of the Uniform Commercial Code, free
and clear of any liens, security interests, pledges, charges,
encumbrances, stockholders' agreements, voting trusts and
other claims. The Common Stock, the Preferred Stock, the Firm
Shares and the Option Shares conform to all statements
relating thereto contained in the Registration Statement or
the Prospectus.
(ix) To the knowledge of such counsel, any contract,
agreement, instrument, lease or license required to be
described in the Registration Statement or the Prospectus has
been properly described therein. To the knowledge of such
counsel, any contract, agreement, instrument, lease or license
required to be filed as an exhibit to the Registration
Statement has been filed with the Commission as an exhibit to
or has been incorporated as an exhibit by reference into the
Registration Statement.
(x) Insofar as statements in the Prospectus purport
to summarize the status of litigation or the provisions of
laws, rules, regulations, orders, judgments, decrees,
contracts, agreements, instruments, leases or licenses, such
statements have been prepared or reviewed by such counsel and
to the knowledge of such counsel, accurately reflect the
status of such litigation and provisions purported to be
summarized and are correct in all material respects.
(xi) Neither the Company nor any Subsidiary is an
"investment company" as defined in Section 3(a) of the
Investment Company Act and, if each of the Company and the
Subsidiaries conducts its business as set forth in the
Prospectus, will not become an "investment company" and will
not be required to be registered under the Investment Company
Act.
(xii) To the knowledge of such counsel, 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
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except such persons or entities from whom written waivers of
such rights have been received prior to the Closing Date.
(xiii) The Registration Statement has become
effective under the Act. No Stop Order has been issued and no
proceedings for that purpose has been instituted or are
threatened, pending, or to such counsel's knowledge,
contemplated.
(xiv) The Registration Statement, any Rule 430A
Prospectus, and the Prospectus, and any amendment or
supplement thereto (other than financial statements and other
financial data and schedules which are or should be contained
in any thereof, as to which such counsel need express no
opinion), comply as to form in all material respects with the
requirements of the Act and the Regulations. The conditions
for the use of Form SB-2 have been satisfied with respect to
the Registration Statement.
(xv) To the knowledge of such counsel, since the
effective date of the Registration Statement, no event has
occurred which is required to be set forth in an amendment or
supplement to the Registration Statement or the Prospectus
which has not been set forth in such an amendment or
supplement.
(xvi) The agreement of each officer, director,
principal stockholder of the Company and each Subsidiary,
stating that for a period of 180 days from the date on which
the public offering of the Shares commences, such officer,
director and principal stockholder will not, without the prior
written consent of Josephthal, on behalf of the Underwriters,
offer, pledge, sell, contract to sell, grant any option for
the sale of, or otherwise dispose of, directly or indirectly,
any shares of Common Stock (or any other securities of the
Company or any security or other instrument which by its terms
is convertible into, exercisable for, or exchangeable for
shares of Common Stock or other securities of the Company,
including, without limitation, any shares of Common Stock
issuable under any employee stock options) beneficially owned
by such person (assuming due authorization, execution and
delivery by such individual and execution by the other parties
thereto) constitutes the legal, valid and binding obligation
of such individual enforceable against such person in
accordance with its terms.
(xvii) Except as described in the Prospectus, there
are no claims, payments, issuances, arrangements or
understandings for services in the nature of a finders or
origination fee with respect to the sale of the Shares
hereunder or financial consulting arrangement or any other
arrangements, agreements, understandings, payments or
issuances that may affect the Underwriters' compensation, as
determined by the NASD;
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(xviii) Except as described in the Prospectus,
neither the Company nor any Subsidiary (A) maintains, sponsors
or contributes to any ERISA Plans, (B) maintains or
contributes, now or at any time previously, to a defined
benefit plan, as defined in Section 3(35) of ERISA, and (C)
has ever completely or partially withdrawn from a
"multiemployer plan".
In addition, such counsel shall state that such counsel has
participated in the preparation of the Registration Statement, any Rule
430A Prospectus, or the Prospectus, or any amendment or supplement
thereto (other than financial statements and other financial data and
schedules which are or should be contained in any thereof, as to which
such counsel need express no opinion) and in conferences with officers
and other representatives of the Company, each Subsidiary and each
Selling Stockholder, representatives of the Representatives and
representatives of the independent accountants of the Company, at which
conferences the contents of the Registration Statement, any Rule 430A
Prospectus, the Prospectus and related matters were discussed and,
although such counsel has not independently verified and is not passing
upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement, the Prospectus, any Rule 430A Prospectus, or
any amendment or supplement thereto (except as specified in the
foregoing opinion), on the basis of the foregoing and relying as to
materiality upon the representations of executive officers of the
Company, each Subsidiary and each Selling Stockholder after conferring
with such executive officers and Selling Stockholders, no facts have
come to the attention of such counsel which lead such counsel to
believe that the Registration Statement at the time it became effective
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus, except for
the financial statements and other financial and statistical data
included therein as to which counsel need express no opinion, as
amended or supplemented on the date thereof contained any untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering its opinion as aforesaid, counsel may rely upon
an opinion or opinions, each dated the Closing Date, of other counsel
retained by the Company as to laws of any jurisdiction other than the
Federal laws of the United States, the General Corporate Law of the
state of Delaware and the laws of the state of Georgia, provided that
(1) each such local counsel is reasonably acceptable to the
Representatives and (2) such reliance is expressly authorized by each
opinion so relied upon and a copy of each such opinion is addressed to
the Representatives and is in form and substance reasonably
satisfactory to them and their counsel. In addition, such counsel may
rely, as to matters of fact, to the extent such counsel deems proper,
on certificates of responsible officers of the Company and the
Subsidiaries, provided that executed copies of such certificates are
provided to the Representatives.
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(g) The Representatives shall have received on each
Option Shares Closing Date from the respective counsel for each of the
Selling Stockholders, an opinion, addressed to the Representatives, and
dated such Closing Date, to the effect that:
(i) Such Selling Stockholder has all requisite
power and authority to execute, deliver and perform this
Agreement and to sell his Option Shares. This Agreement has
been duly authorized, executed and delivered by such Selling
Stockholder, and is the legal, valid and binding obligation of
such Selling Stockholder enforceable as to such Selling
Stockholder in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights
generally and court decisions with respect thereto. No
consent, authorization, approval, order, license, certificate
or permit of or from, or declaration or filing with, any
federal state, local or other governmental authority or any
court or other tribunal is required by such Selling
Stockholder, for the execution, delivery or performance by
such Selling Stockholder of this Agreement (except filings
under the Act which have been made prior to the Closing Date
and filings or consents under "blue sky" or securities laws,
as to which such counsel need express no opinion). To the
knowledge of such counsel, no consent of any party to any
contract, agreement, instrument, lease, license, indenture,
mortgage, deed of trust, note, arrangement or understanding to
which such Selling Stockholder is a party, or to which his
property or assets are subject, is required for the execution,
delivery or performance of this Agreement; and the execution,
delivery and performance of this Agreement will not violate,
result in a breach of, conflict with, or (with or without the
giving of notice or the passage of time or both) entitle any
party to terminate or call a default under any such contract,
agreement, instrument, lease, license, indenture, mortgage,
deed of trust, note, arrangement or understanding, in each
case known to such counsel.
(ii) Such opinion delivered at each of the Option
Shares Closing Dates shall state that such Selling Stockholder
has, pursuant to this Agreement, transferred to each of the
several Underwriters who has purchased such Option Shares in
good faith and without actual notice of any lien, encumbrance,
equity or adverse claim within the meaning of the Uniform
Commercial Code, good and valid title to such Selling
Stockholder Shares free and clear of all liens, encumbrances,
equities or claims.
In rendering its opinion as aforesaid, counsel may rely upon
an opinion or opinions, each dated the Closing Date, of local counsel
retained by such Selling Stockholder, provided that (1) each such local
counsel is reasonably acceptable to the Representatives and (2) such
reliance is expressly authorized by each opinion so relied upon and a
copy of each such opinion is addressed to the Representatives and is in
form
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and substance reasonably satisfactory to them and their counsel. In
addition, such counsel may rely, as to matters of fact, to the extent
such counsel deems proper, on a certificates of such Selling
Stockholder, provided that executed copies of such certificates are
provided to the Representatives.
(h) All proceedings taken in connection with the sale of
the Firm Shares and the Option Shares as herein contemplated shall be
satisfactory in form and substance to the Representatives and its
counsel, and the Underwriters shall have received from Squadron,
Ellenoff, Plesent & Xxxxxxxxx, LLP, a favorable opinion, addressed to
the Representatives and dated such Closing Date, with respect to the
Shares, the Registration Statement and the Prospectus, and such other
related matters, as the Representatives may reasonably request, and the
Company and the Selling Stockholders shall have furnished to Squadron,
Ellenoff, Plesent & Xxxxxxxxx, LLP, such documents as they may
reasonably request for the purpose of enabling them to pass upon such
matters.
(i) On the Firm Shares Closing Date, the Company shall
have issued to the Representatives the Representatives' Warrants equal
to 10% of the Firm Shares.
(j) On the Firm Shares Closing Date, each of the
Acquisitions shall have been consummated in accordance with the terms
and conditions of the respective Acquisition Agreements.
6. Covenants of the Company and the Selling Stockholders.
(a) The Company covenants and agrees as follows:
(i) The Company shall use its best efforts to cause
the Registration Statement to become effective as promptly as
possible. If the Registration Statement has become or becomes
effective with a form of prospectus omitting Rule 430A
information, or filing of the Prospectus is otherwise required
under Rule 424(b), the Company will file the Prospectus,
properly completed, pursuant to Rule 424(b) within the time
period prescribed and will provide evidence satisfactory to
you of such timely filing. The Company shall notify you
immediately, and confirm such notice in writing, (A) when the
Registration Statement and any post-effective amendment
thereto become effective, (B) of the receipt of any comments
from the Commission or the "blue sky" or securities authority
of any jurisdiction regarding the Registration Statement, any
post-effective amendment thereto, the Prospectus, or any
amendment or supplement thereto, and (C) of the receipt of any
notification with respect to a Stop Order. The Company shall
not file any amendment of the Registration Statement or
supplement to the Prospectus unless the Company has furnished
the Representatives a copy for their review prior to filing
and shall not file any such proposed amendment or supplement
to which the Representatives reasonably
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object. The Company shall use its best efforts to prevent the
issuance of any Stop Order and, if issued, to obtain as soon
as possible the withdrawal thereof.
(ii) During the time when a Prospectus relating to
the Shares is required to be delivered hereunder or under the
Act or the Regulations, comply so far as it is able with all
requirements imposed upon it by the Act, as now existing and
as hereafter amended, and by the Regulations, as from time to
time in force, so far as necessary to permit the continuance
of sales of or dealings in the Shares in accordance with the
provisions hereof and the Prospectus. If, at any time when a
prospectus relating to the Shares is required to be delivered
under the Act and the Regulations, any event as a result of
which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements
therein in the light of the circumstances under which they
were made not misleading, or if it shall be necessary to amend
or supplement the Prospectus to comply with the Act or the
Regulations, the Company promptly shall prepare and file with
the Commission, subject to the third sentence of paragraph (i)
of this Section 6(a), an amendment or supplement which shall
correct such statement or omission or an amendment which shall
effect such compliance.
(iii) The Company shall make generally available to
its security holders and to the Representatives as soon as
practicable, but not later than 45 days after the end of the
12-month period beginning at the end of the fiscal quarter of
the Company during which the Effective Date (or 90 days if
such 12-month period coincides with the Company's fiscal
year), an earnings statement (which need not be audited) of
the Company, covering such 12-month period, which shall
satisfy the provisions of Section 11(a) of the Act or Rule 158
of the Regulations.
(iv) The Company shall furnish to the Representatives
and counsel for the Underwriters, without charge, signed
copies of the Registration Statement (including all exhibits
and amendments thereto) and to each other Underwriter a copy
of the Registration Statement (without exhibits thereto) and
all amendments thereof and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the
Act or the Regulations, as many copies of any preliminary
prospectus and the Prospectus and any amendments thereof and
supplements thereto as the Representatives may reasonably
request.
(v) The Company shall cooperate with the
Representatives and its counsel in endeavoring to qualify the
Shares for offer and sale under the laws of such jurisdictions
as the Representatives may designate and shall maintain such
qualifications in effect so long as required for the
distribution of the Shares; provided, however, that the
Company shall not be required in connection therewith, as a
condition thereof, to qualify as a foreign corporation or to
execute
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a general consent to service of process in any jurisdiction or
subject itself to taxation as doing business in any
jurisdiction.
(vi) During a period of seven years after the date
hereof, the Company will furnish to its stockholders, as soon
as practicable, annual reports (including financial statements
audited by independent public accountants) and unaudited
quarterly reports of earnings, and will deliver to the
Representatives:
a) concurrently with furnishing such quarterly
reports to its stockholders, statements of
income of the Company and the Subsidiaries for
each quarter in the form furnished to the
Company's stockholders and certified by the
Company's principal financial or accounting
officer;
b) concurrently with furnishing such annual
reports to its stockholders, a balance sheet of
the Company and the Subsidiaries as at the end
of the preceding fiscal year, together with
statements of operations, stockholders equity,
and cash flows of the Company and the
Subsidiaries for such fiscal year, accompanied
by a copy of the certificate thereon of
independent certified public accountants;
c) as soon as they are available, copies of all
reports (financial or other) mailed to
stockholders;
d) as soon as they are available, copies of all
reports and financial statements furnished to
or filed with the Commission, the NASD or any
securities exchange;
e) every press release and every material news
item or article of interest to the financial
community in respect of the Company, the
Subsidiaries or their respective affairs which
was released or prepared by or on behalf of the
Company or the Subsidiaries; and
f) any additional information of a public
nature concerning the Company or the
Subsidiaries (and any future subsidiaries) or
any of their respective businesses which the
Representatives may request.
During such seven-year period, if the Company has
active subsidiaries, the foregoing financial statements will
be on a consolidated basis to the extent
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that the accounts of the Company and its subsidiaries are
consolidated, and will be accompanied by similar financial
statements for any significant subsidiary which is not so
consolidated.
(vii) The Company will maintain a transfer agent and,
if necessary under the jurisdiction of incorporation of the
Company, a Registrar (which may be the same entity as the
transfer agent) for its Common Stock.
(viii) Without the prior written consent of
Josephthal, on behalf of the Underwriters, for a period of 180
days from the date on which a public offering of the Shares
commences, the Company shall not issue, sell or register with
the Commission or otherwise dispose of, directly or
indirectly, any securities of the Company (or any securities
convertible into or exercisable or exchangeable for securities
of the Company), except for the issuance of the Shares
pursuant to the Registration Statement, the issuance of shares
of Common Stock pursuant to the Merger Registration Statement
and the issuance of shares of Common Stock pursuant to
outstanding stock options and warrants.
(ix) If the Company elects to rely on Rule 462(b),
the Company shall both file a Rule 462(b) Registration
Statement with the Commission in compliance with Rule 462(b)
and pay the applicable fees in accordance with Rule 111
promulgated under the Act by the earlier of (i) 10:00 p.m.,
New York City time, on the date of this Agreement and (ii) the
time confirmations are sent or given, as specified by Rule
462(b)(2).
(x) The Company shall make all filings required , as
applicable, to be made under applicable securities laws and by
the American Stock Exchange on or before the last Closing
Date.
(xi) Prior to each Closing Date and for a period of
25 days thereafter, the Representatives shall be given
reasonable written prior notice of any press release or other
direct or indirect communication and of any press conference
with respect to the Company, the financial conditions, results
of operations, business, properties, assets, liabilities of
the Company, or this public offering of the Shares.
(xii) Until expiration of the Representatives'
Warrants, the Company shall keep reserved sufficient shares of
Common Stock for issuance upon exercise thereof.
(xiii) The Company shall make all filings required to
be made under the Exchange Act and such filings shall comply
in all material respects with the requirements of the Exchange
Act and the rules and regulations thereunder.
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(xiv) The Company shall arrange and participate in
conference calls on a quarterly basis in connection with the
release of its quarterly earnings for a period of three years
from the Firm Shares Closing Date, and the Company shall
provide the Representatives with appropriate notification of
such conference calls at least three business days prior to
all such conference calls.
(xv) None of the Company, any Subsidiary, nor any of
their respective officers, directors, stockholders (including,
but not limited to, the Selling Stockholders), nor any of
their respective affiliates (within the meaning of the Rules
and Regulations) will take, directly or indirectly, any action
designed to, or which might in the future reasonably be
expected to cause or result in, stabilization or manipulation
of the price of any securities of the Company.
(xvi) The Company shall apply the net proceeds from
the sale of the Shares in the manner, and subject to the
conditions, set forth under "Use of Proceeds" in the
Prospectus. No portion of the net proceeds will be used,
directly or indirectly, to acquire any securities issued by
the Company or any Subsidiary.
(xvii) The Company shall furnish to the
Representatives as early as practicable prior to each of the
date hereof, the Firm Shares Closing Date and the Option
Shares Closing Date, if any, but no later than two (2) full
business days prior thereto, a copy of the latest available
unaudited interim financial statements of the Company (which
in no event shall be as of a date more than thirty (30) days
prior to the date of the Registration Statement) which have
been read by the Company's independent public accountants.
(xviii) For a period of five (5) years from the Firm
Shares Closing Date, the Company shall furnish to the
Representatives at the Company's sole expense (i) daily
consolidated transfer sheets relating to the Common Stock,
(ii) the list of holders of all of the Company's securities
and (iii) a Blue Sky "Trading Survey" for secondary sales of
the Company's securities prepared by counsel to the Company.
(xix) As soon as practicable (i) but in no event more
than 10 business days before the effective date of the
Registration Statement, file a Form 8-A with the Commission
providing for the registration under the Exchange Act of the
Shares, and (ii) but in no event more than 30 days from the
effective date of the Registration Statement, take all
necessary and appropriate actions to be included in Standard
and Poors Corporation Descriptions and Moodys OTC Manual and
to continue such inclusion for a period of not less than seven
(7) years.
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(xx) The Company hereby agrees that it will not for a
period of thirteen (13) months from the effective date of the
Registration Statement, adopt, propose to adopt or otherwise
permit to exist any employee, officer, director, consultant or
compensation plan or arrangement permitting (i) the grant,
issue, sale or entry into any agreement to grant, issue or
sell any option, warrant or other contract right (x) at an
exercise price that is less than the greater of the public
offering price of the Shares set forth herein and the fair
market value on the date of grant or sale or (y) to any of its
executive officers or directors or to any holder of 5% or more
of the Common Stock; and (ii) the maximum number of shares of
Common Stock or other securities of the Company purchasable at
any time pursuant to options or warrants issued by the Company
to exceed ______shares; (iii) the payment for such securities
with any form of consideration other than cash, or (iv) the
existence of stock appreciation rights, phantom options or
similar arrangements.
(xxi) For a period equal to the lesser of (i) seven
(7) years from the date hereof, and (ii) the sale to the
public of the Warrant Shares, the Company will not take any
action or actions which may prevent or disqualify the
Company's use of Form S-1 (or other appropriate form) for the
registration under the Act of the Warrant Shares.
(b) The Company and the Selling Stockholders agree to
pay, or reimburse if paid by the Representatives, whether or not the
transactions contemplated hereby are consummated or this Agreement is
terminated, all costs and expenses (except certain costs and expenses
of the Representatives as set forth below) relating to the registration
and public offering of the Shares including those relating to: (i) the
preparation, printing, filing and distribution of the Registration
Statement including all exhibits thereto, each preliminary prospectus,
the Prospectus, all amendments and supplements to the Registration
Statement and the Prospectus, and any documents required to be
delivered with any Preliminary Prospectus or the Prospectus, and the
printing, filing and distribution of the Agreement Among Underwriters,
this Agreement and related documents; (ii) the preparation and delivery
of certificates for the Shares to the Underwriters; (iii) the
registration or qualification of the Shares for offer and sale under
the securities or Blue Sky laws of the various jurisdictions referred
to in Section 6(a)(v), including the fees and disbursements of counsel
for the Underwriters in connection with such registration and
qualification and the preparation, printing, distribution and shipment
of preliminary and supplementary Blue Sky memoranda; (iv) the
furnishing (including costs of shipping and mailing) to the
Representatives and to the Underwriters of copies of each preliminary
prospectus, the Prospectus and all amendments or supplements to the
Prospectus, and of the several documents required by this Section to be
so furnished, as may be reasonably requested for use in connection with
the offering and sale of the Shares by the Underwriters or by dealers
to whom Shares may be sold; (v) the filing fees of the
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National Association of Securities Dealers, Inc. in connection with its
review of the terms of the public offering; (vi) the furnishing
(including costs of shipping and mailing) to the Representatives and to
the Underwriters of copies of all reports and information required by
Section 6(a)(vi); (vii) inclusion of the Shares for listing on the
American Stock Exchange; (viii) advertising costs and expenses,
including but not limited to costs and expenses in connection with the
"road show", information meetings and presentations, bound volumes and
prospectus memorabilia and "tomb-stone" advertisement expenses; (ix)
costs and expenses in connection with Company counsel's due diligence
investigations, including but not limited to the fees of any
independent counsel or consultant retained; and (x) all transfer taxes,
if any, with respect to the sale and delivery of the Shares by the
Company and the Selling Stockholders to the Underwriters. Without
limiting the obligations of the Company and the Selling Stockholders
set forth above, the Company and each Selling Stockholder agree to pay
all of their other costs and expenses incident to the performance of
their respective obligations under this Agreement and the sale of the
Shares by them hereunder.
[(c) The Company further agrees that, in addition to the
expenses payable pursuant to subsection (b) of this Section 6, it will
pay to the Representatives on the Closing Date by certified or bank
cashiers check or, at the election of the Representatives, by deduction
from the proceeds of the offering contemplated herein a non-accountable
expense allowance equal to one and three quarters percent (1 3/4%) of
the gross proceeds received by the Company from the sale of the Firm
Shares, $_______ of which has been paid to date. In the event the
Representatives elect to exercise the over-allotment option described
in Section 2(a) hereof, each of the Selling Stockholders agree to pay
to the Representatives on the Option Shares Closing Date (by certified
or bank cashiers check or, at the Representatives' election, by
deduction from the proceeds of the offering) a non-accountable expense
allowance equal to one and three-quarters percent (1 3/4%) of the gross
proceeds received by each of the Selling Stockholders from the sale of
the Option Shares.]
7. Indemnification.
(a) The Company and each of the Selling Stockholders,
jointly and severally, agree to indemnify and hold harmless each of
the Underwriters (for purposes of this Section 7 "Underwriter" shall
include the officers, directors, stockholders, partners, employees,
agents and counsel of the Underwriter, including specifically each
person who may be substituted for an Underwriter as provided in Section
10 hereof), and each person, if any, who controls the Underwriter (a
"controlling person") within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, from and against any and all losses,
claims, damages, expenses or liabilities, joint or several (and
actions in respect thereof), whatsoever (including but not limited to
any and all expenses whatsoever incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
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whatsoever), as such are incurred, to which the Underwriter or such
controlling person may become subject under the Act, the Exchange Act
or any other statute or at common law or otherwise or under the laws of
foreign countries, arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained (i) in any
Preliminary Prospectus, the Registration Statement or the Prospectus
(as from time to time amended and supplemented); (ii) in any
post-effective amendment or amendments or any new registration
statement and prospectus in which is included securities of the Company
issued or issuable upon exercise of the Shares; or (iii) in any
application or other document or written communication (in this Section
7 collectively called "application") executed by the Company or based
upon written information furnished by the Company in any jurisdiction
in order to qualify the Shares under the securities laws thereof or
filed with the Commission, any state securities commission or agency,
the American Stock Exchange or any other securities exchange; or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading (in the case of the Prospectus, in the light of the
circumstances under which they were made), unless such statement or
omission was made exclusively in reliance upon and in conformity with
written information furnished to the Company with respect to any
Underwriter by or on behalf of such Underwriter expressly for use in
any Preliminary Prospectus, the Registration Statement or Prospectus,
or any amendment thereof or supplement thereto, or in any application,
as the case may be.
The indemnity agreement in this subsection (a) shall be in
addition to any liability which the Company or the Selling Stockholders
may have at common law or otherwise.
(b) Each of the Underwriters agrees severally, but not
jointly, to indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the Registration
Statement, and each other person, if any, who controls the Company
[and/or each of the Sellers] within the meaning of the Act, to the
same extent as the foregoing indemnity from the Company and each of the
Selling Stockholders to the Underwriters but only with respect to
statements or omissions, if any, made in any Preliminary Prospectus,
the Registration Statement or Prospectus or any amendment thereof or
supplement thereto or in any application made in reliance upon, and in
strict conformity with, written information furnished to the Company
with respect to any Underwriter by such Underwriter expressly for use
in such Preliminary Prospectus, the Registration Statement or
Prospectus or any amendment thereof or supplement thereto or in any
such application, provided that such written information or omissions
only pertain to disclosures in the Preliminary Prospectus, the
Registration Statement or Prospectus directly relating to the
transactions effected by the Underwriters in connection with this
Offering. Each of the Company and the Selling Stockholders acknowledge
that the statements with respect to the public offering of the Shares
set forth under the heading "Underwriting" and the
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stabilization legend in the Prospectus have been furnished by the
Underwriters expressly for use therein and constitute the only
information furnished in writing by or on behalf of the Underwriters
for inclusion in the Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, suit or
proceeding , such indemnified party shall, if a claim in respect
thereof is to be made against one or more indemnifying parties under
this Section, notify each party against whom indemnification is to be
sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it from any liability
which it may have under this Section 7 except to the extent that it has
been prejudiced in any material respect by such failure or from any
liability which it may have otherwise). In case any such action is
brought against any indemnified party, and it notifies an indemnifying
party or parties of the commencement thereof, the indemnifying party or
parties will be entitled to participate therein, and to the extent it
may elect by written notice delivered to the indemnified party promptly
after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party. Notwithstanding the foregoing, the indemnified party
or parties shall have the right to employ its or their own counsel in
any such case but the fees and expenses of such counsel shall be at the
expense of such indemnified party or parties unless (i) the employment
of such counsel shall have been authorized in writing by the
indemnifying party in connection with the defense of such action at the
expense of such indemnifying party, (ii) the indemnifying party shall
not have employed counsel reasonably satisfactory to such indemnified
party to have charge of the defense of such action within a reasonable
period of time after notice of commencement of the action, or (iii)
such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from
or additional to those available to one or all of the indemnifying
parties (in which case the indemnifying parties shall not have the
right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events such fees and expenses of
additional counsel shall be borne by the indemnifying parties. Anything
in this Section 7 to the contrary notwithstanding, an indemnifying
party shall not be liable for any settlement of any claim or action
effected without its written consent; provided, however, that such
consent was not unreasonably withheld.
8. Contribution.
In order to provide for just and equitable contribution in any
case in which (i) an indemnified party makes a claim for
indemnification pursuant to Section 7 hereof, but it is judicially
determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not
be enforced in such case
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notwithstanding the fact that the express provisions of Section 7
hereof provide for indemnification in such case, or (ii) contribution
under the Act may be required on the part of any indemnified party,
then each indemnifying party shall contribute to the amount paid as a
result of such losses, claims, damages, expenses or liabilities (or
actions in respect thereof) (A) in such proportion as is appropriate to
reflect the relative benefits received by each of the contributing
parties, on the one hand, and the party to be indemnified on the other
hand, from the offering of the Shares or (B) if the allocation provided
by clause (A) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above, but also the relative fault of each of
the contributing parties, on the one hand, and the party to be
indemnified on the other hand, in connection with the statements or
omissions that resulted in such losses, claims, damages, expenses or
liabilities, as well as any other relevant equitable considerations. In
any case where each of the Company or the Selling Stockholders is a
contributing party and the Underwriters are the indemnified party, the
relative benefits received by each of the Company or the Selling
Stockholders 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 of the Shares (before deducting expenses) bear to the
total underwriting discounts received by the Underwriters hereunder, in
each case as set forth in the table on the cover page of the
Prospectus. 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, the Selling
Stockholders or by the Underwriters, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, expenses
or liabilities (or actions in respect thereof) referred to above in
this Section 8 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 8 the Underwriters shall not be required
to contribute any amount in excess of the underwriting discount
applicable to the Shares purchased by the Underwriters hereunder. No
person guilty of fraudulent misrepresentation (within the meaning of
Section ll(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For
purposes of Section 7 hereof, each person, if any, who controls the
Company within the meaning of the Act, each officer of the Company who
has signed the Registration Statement, and each director of the Company
shall have the same rights to contribution as the Company, subject in
each case to this Section 8. Any party entitled to contribution will,
promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect to which a claim for
contribution may be made against another party or parties under this
Section 8, notify such party or parties from whom contribution may be
sought, but the omission so to notify such party or parties shall not
relieve the party or parties from whom
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contribution may be sought from any obligation it or they may have
hereunder or otherwise than under this Section 8, or to the extent that
such party or parties were not adversely affected by such omission. The
contribution agreement set forth above shall be in addition to any
liabilities which any indemnifying party may have at common law or
otherwise.
9. Termination.
This Agreement may be terminated by the Representatives with
respect to the Shares to be purchased on any Closing Date by notifying
the Company and the Selling Stockholders at any time prior to the
purchase of the Shares:
(a) in the absolute discretion of the Representatives at
or before any Closing Date: (i) if on or prior to such date, any
domestic or international event or act or occurrence has materially
disrupted, or in the opinion of the Representatives will in the future
materially disrupt, the securities markets; (ii) if there has occurred
any new outbreak or material escalation of hostilities or other
calamity or crisis the effect of which on the financial markets of the
United States is such as to make it, in the judgment of the
Representatives, inadvisable to proceed with the offering of the
Shares; (iii) if there shall be such a material adverse change in
general financial, political or economic conditions or the effect of
international conditions on the financial markets in the United States
such as to make it, in the judgment of the Representatives, inadvisable
or impracticable to market the Shares; (iv) if trading in the Shares
has been suspended by the Commission or trading generally on the New
York Stock Exchange, Inc., the American Stock Exchange or the NASDAQ
National Market System has been suspended or limited, or minimum or
maximum ranges for prices for securities shall have been fixed, or
maximum ranges for prices for securities have been required, by said
exchanges or by order of the Commission, the National Association of
Securities Dealers, Inc., or any other governmental or regulatory
authority; or (v) if a banking moratorium has been declared by any
state or federal authority; or
(b) at or before any Closing Date, if any of the
conditions specified in Section 5 shall not have been fulfilled when
and as required by this Agreement.
If this Agreement is terminated pursuant to any of its
provisions, neither the Company nor the Selling Stockholders shall be
under any liability to any Underwriter, and no Underwriter shall be
under any liability to the Company or the Selling Stockholders, except
that (i) if this Agreement is terminated by the Representatives or the
Underwriters because of any failure, refusal or inability on the part
of the Company or the Selling Stockholders to comply with the terms or
to fulfill any of the conditions of this Agreement, the Company will
reimburse the Underwriters for all out-of-pocket expenses (including
the reasonable fees and disbursements of the Representatives' counsel)
incurred by them in connection with the proposed purchase and sale of
the
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Shares or in contemplation of performing their obligations hereunder;
and (ii) no Underwriter who shall have failed or refused to purchase
the Shares agreed to be purchased by it under this Agreement, without
some reason sufficient hereunder to justify cancellation or termination
of its obligations under this Agreement, shall be relieved of liability
to the Company and the Selling Stockholders or to the other
Underwriters for damages occasioned by its failure or refusal. In
addition, the Company shall remain liable for all Blue Sky counsel fees
and expenses and Blue Sky filing fees. Notwithstanding any contrary
provision contained in this Agreement, any election hereunder or any
termination of this Agreement (including, without limitation, pursuant
to Sections 5, 9 and 10 hereof), and whether or not this Agreement is
otherwise carried out, the provisions of Section 6 and Section 7 shall
not be in any way affected by such election or termination or failure
to carry out the terms of this Agreement or any part hereof.
10. Substitution of Underwriters.
If one or more of the Underwriters shall fail (other than for
a reason sufficient to justify the cancellation or termination of this
Agreement under Section 5 or Section 9) to purchase on any Closing Date
the Shares agreed to be purchased on such Closing Date by such
Underwriter or Underwriters, the Representatives may find one or more
substitute underwriters to purchase such Shares or make such other
arrangements as the Representatives may deem advisable or one or more
of the remaining Underwriters may agree to purchase such Shares in such
proportions as may be approved by the Representatives, in each case
upon the terms set forth in this Agreement. If no such arrangements
have been made by the close of business on the business day following
such Closing Date:
(a) if the number of Shares to be purchased by the
defaulting Underwriters on such Closing Date does not exceed 10% of the
Shares that all the Underwriters are obligated to purchase on such
Closing Date, then each of the nondefaulting Underwriters shall be
obligated to purchase such Shares on the terms herein set forth in
proportion to their respective obligations hereunder; provided,
however, that in no event shall the maximum number of Shares that any
Underwriter has agreed to purchase pursuant to Section 1 be increased
pursuant to this Section 10 by more than one-ninth of such number of
Shares without the written consent of such Underwriter; or
(b) if the number of Shares to be purchased by the
defaulting Underwriters on such Closing Date shall exceed 10% of the
Shares that all the Underwriters are obligated to purchase on such
Closing Date, then the Company and the Selling Stockholders shall be
entitled to an additional business day within which they may, but are
not obligated to, find one or more substitute underwriters reasonably
satisfactory to the Representatives to purchase such Shares upon the
terms set forth in this Agreement.
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In any such case, either the Representatives or the Company
and the Selling Stockholders shall have the right to postpone the
applicable Closing Date for a period of not more than five business
days in order that necessary changes and arrangements (including any
necessary amendments or supplements to the Registration Statement or
Prospectus) may be effected by the Representatives, the Company and the
Selling Stockholders. If the number of Shares to be purchased on such
Closing Date by such defaulting Underwriter or Underwriters shall
exceed 10% of the Shares that all the Underwriters are obligated to
purchase on such Closing Date, and none of the nondefaulting
Underwriters or the Company shall make arrangements pursuant to this
Section 10 within the period stated for the purchase of the Shares that
the defaulting Underwriters agreed to purchase, this Agreement shall
terminate with respect to the Shares to be purchased on such Closing
Date without liability on the part of any nondefaulting Underwriter to
the Company and the Selling Stockholders and without liability on the
part of the Company and the Selling Stockholders, except in both cases
as provided in Sections 6(b), 7, 8, 9 and 10. The provisions of this
Section 10 shall not in any way affect the liability of any defaulting
Underwriter to the Company or the Selling Stockholders or the
nondefaulting Underwriters arising out of such default. A substitute
underwriter hereunder shall become an Underwriter for all purposes of
this Agreement.
11. Miscellaneous.
The respective agreements, representations, warranties,
indemnities and other statements of the Company or its officers, of the
Selling Stockholders and of the Underwriters set forth in or made
pursuant to this Agreement shall remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter
or the Company or the Selling Stockholders or any of the officers,
directors or controlling persons referred to in Sections 7 and 8
hereof, and shall survive delivery of and payment for the Shares. The
provisions of Sections 6(b), 7, 8, 9 and 10 shall survive the
termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the
Underwriters, the Company and the Selling Stockholders and their
respective heirs, executors, administrators, personal representatives,
successors and assigns and, to the extent expressed herein, for the
benefit of persons controlling any of the Underwriters, the Selling
Stockholders or the Company, and directors and officers of the Company,
and their respective successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. The
term "successors and assigns" shall not include any purchaser of Shares
from any Underwriter merely because of such purchase.
All notices and communications hereunder shall be in writing
and mailed or delivered, or by telefax or telegraph if subsequently
confirmed by letter, (a) if to the Representatives, to Xxxxxxxxxx Xxxx
& Xxxx Incorporated, 000 Xxxx Xxxxxx, 00xx
-00-
00
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Xxxx, Esq.,
telecopy: (000) 000-0000, with a copy to Cruttenden Xxxx Incorporated,
00000 Xxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxxxxxxxxx Xxxxxxxx, telecopy: (000) 000-0000; (b) if to the Company,
to the Company's agent for service as such agent's address appears on
the cover page of the Registration Statement; and (c) if to any Selling
Stockholder, to such Selling Stockholder's address and telecopy number
as set forth on Schedule II hereto.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to
principles of conflict of laws.
This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
All pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine, or neuter, singular or plural, as the
identity of the person or persons or entity or entities require.
All section headings herein are for convenience of reference
only and are not part of this Agreement, and no construction or
inference shall be derived therefrom.
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Please confirm that the foregoing correctly sets forth the
agreement among us.
Very truly yours,
INFOCURE CORPORATION
By:
------------------------------
Name:
Title:
----------------------------------
XXXXXX X. FINE
----------------------------------
W.K. PRICE
NORSON'S INTERNATIONAL, LLC
By:
------------------------------
Name:
Title:
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Confirmed on behalf of itself
and as the Representatives of the several Underwriters
named in Schedule I annexed hereto:
Xxxxxxxxxx Xxxx & Xxxx Incorporated
By:
------------------------------
Name:
Title:
CRUTTENDEN XXXX INCORPORATED
By:
------------------------------
Name:
Title:
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SCHEDULE I
NUMBER OF FIRM
SHARES TO BE
NAME OF UNDERWRITER PURCHASED
------------------- --------------
Xxxxxxxxxx Xxxx & Xxxx Incorporated....................
Cruttenden Xxxx Incorporated...........................
Total 2,000,000
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SCHEDULE II
NAME, ADDRESS AND TELECOPY NUMBER OF NUMBER OF SHARES TO BE SOLD
SELLING STOCKHOLDER
Xxxxxx X. Fine 136,615
0000 Xxx Xxxxx
Xxxxxx, XX 00000
W. K. Price 88,390
0000 Xxxx X'Xxxxx Xxxxx
Xxxxxxx, XX 00000
Norson's International, LLC 74,995
0000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
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SCHEDULE III
SUBSIDIARY JURISDICTION OF INCORPORATION
DR Software, Inc. Georgia
Xxxxxxx-Xxxxx, Inc. Florida
KComp Management Systems, Inc. California
International Computer Solutions, Inc. Xxxxxxx
Xxxxx, Inc. Minnesota
Health Care Division, Inc. Georgia
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SCHEDULE IV
ACQUISITION AGREEMENTS
[TO FOLLOW]
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INFOCURE CORPORATION
AND
XXXXXXXXXX XXXX & XXXX INCORPORATED
REPRESENTATIVE'S
WARRANT AGREEMENT
Dated as of _________, 1997
51
REPRESENTATIVE'S WARRANT AGREEMENT dated as of ________, 1997 by and
between INFOCURE CORPORATION, a Delaware corporation (the "Company"), and
XXXXXXXXXX XXXX & XXXX INCORPORATED, (hereinafter referred to variously as the
"Holder" or the "Representative").
WITNESSETH
WHEREAS, the Company proposes to issue to the Representative warrants
("Warrants") to purchase up to an aggregate of 200,000 shares of common stock,
$.001 par value, of the Company (the "Common Stock"); and
WHEREAS, the Representative has agreed pursuant to the underwriting
agreement (the "Underwriting Agreement") dated as of the date hereof by and
[among] [between] the Representative, the Company [and the selling stockholders
of the Company who are listed therein,] to act as the Representative in
connection with the Company's proposed public offering of up to 2,000,000 shares
of Common Stock at a public offering price of $_________ per share of Common
Stock (the "Public Offering"); and
WHEREAS, the Warrants to be issued pursuant to this Agreement will be
issued on the Closing Date (as such term is defined in the Underwriting
Agreement) by the Company to the Representative in consideration for, and as
part of the Representative's compensation in connection with, the Representative
acting as the Representative pursuant to the Underwriting Agreement;
NOW, THEREFORE, in consideration of the premises, the payment by the
Representative to the Company of an aggregate of ______________ dollars
($________ ), the agreements herein set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Grant. The Holder is hereby granted the right to purchase, at any
time from _________, 199_ [one year from the effective date of the registration
statement] until 5:30 P.M., New York time, on ________, 200_ [five years from
the effective date of the registration statement], up to an aggregate of 200,000
shares of Common Stock at an initial exercise price (subject to adjustment as
provided in Section 8 hereof) of $______ [120% of the public offering price per
share] per share of Common Stock subject to the terms and conditions of this
Agreement. Except as expressly set forth herein, the shares issuable upon
exercise of the Warrants are in all respects identical to the shares of Common
Stock being purchased by the Representative for resale to the public pursuant to
the terms and provisions of the Underwriting Agreement.
2. Warrant Certificates. The warrant certificates (the "Warrant
Certificates") delivered and to be delivered pursuant to this Agreement shall be
in the form set forth in Exhibit A attached hereto and made a part hereof, with
such appropriate insertions, omissions, substitutions, and other variations as
required or permitted by this Agreement.
52
3. Exercise of Warrant.
3.1 Method of Exercise. The Warrants initially are exercisable at
an exercise price (subject to adjustment as provided in Section 8 hereof) per
share of Common Stock set forth in Section 6 hereof payable by certified or
official bank check in New York Clearing House funds. Upon surrender of a
Warrant Certificate with the annexed Form of Election to Purchase duly executed,
together with payment of the Exercise Price (as hereinafter defined) for the
shares of Common Stock purchased at the Company's principal offices in Atlanta,
Georgia (presently located at 0000 Xxxxxxxxx Xxxx, Xxxxx 000), the registered
holder of a Warrant Certificate ("Holder" or "Holders") shall be entitled to
receive a certificate or certificates for the shares of Common Stock so
purchased. The purchase rights represented by each Warrant Certificate are
exercisable at the option of the Holder thereof, in whole or in part (but not as
to fractional shares of the Common Stock underlying the Warrants). In the case
of the purchase of less than all the shares of Common Stock purchasable under
any Warrant Certificate, the Company shall cancel said Warrant Certificate upon
the surrender thereof and shall execute and deliver a new Warrant Certificate of
like tenor for the balance of the shares of Common Stock purchasable thereunder.
3.2 Exercise by Surrender of Warrant. In addition to the method
of payment set forth in Section 3.1 hereof and in lieu of any cash payment
required thereunder, the Holder(s) of the Warrants shall have the right at any
time and from time to time to exercise the Warrants in full or in part by
surrendering the Warrant Certificate in the manner specified in Section 3.1 in
exchange for the number of shares of Common Stock equal to the product of (x)
the number of shares as to which the Warrants are being exercised multiplied by
(y) a fraction, the numerator of which is the Market Price (as defined below) of
the Common Stock less the Exercise Price, and the denominator of which is such
Market Price. Solely for the purposes of this paragraph, Market Price shall be
calculated either (i) on the date which the form of election attached hereto is
deemed to have been sent to the Company pursuant to Section 13 hereof (the
"Notice Date"), or (ii) as the average of the Market Prices for each of the five
trading days immediately preceding the Notice Date, whichever of (i) or (ii) is
greater.
3.3 Definition of Market Price. As used herein, the phrase
"Market Price" at any date shall be deemed to be the last reported sale price,
or, in case no such reported sale takes place on such day, the average of the
last reported sale prices for the last three (3) trading days, in either case as
officially reported by the principal securities exchange on which the Common
Stock is listed or admitted to trading or by NASDAQ, or, if the Common Stock is
not listed or admitted to trading on any national securities exchange or quoted
by NASDAQ, the average closing bid price as furnished by the NASD through NASDAQ
or similar organization if NASDAQ is no longer reporting such information, or if
the Common Stock is not quoted on NASDAQ, as determined in good faith by
resolution of the Board of Directors of the Company, based on the best
information available to it.
4. Issuance of Certificates. Upon the exercise of the Warrants, the
issuance of certificates for shares of Common Stock or other securities,
properties or rights underlying such Warrants, shall be made forthwith (and in
any event within five (5) business days thereafter) without charge to the Holder
thereof including, without limitation, any tax which may be payable in respect
of the issuance thereof, and such certificates shall (subject to the provisions
of Sections 5 and 7 hereof) be issued in the name of,
53
or in such names as may be directed by, the Holder thereof; provided, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any such
certificates in a name other than that of the Holder and the Company shall not
be required to issue or deliver such certificates unless or until the person or
persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid.
The Warrant Certificates and the certificates representing the Common
Stock (and/or other securities, property or rights issuable upon the exercise of
the Warrants) shall be executed on behalf of the Company by the manual or
facsimile signature of the then present Chairman or Vice Chairman of the Board
of Directors or President or Vice President of the Company under its corporate
seal reproduced thereon, attested to by the manual or facsimile signature of the
then present Secretary or Assistant Secretary of the Company. Warrant
Certificates shall be dated the date of execution by the Company upon initial
issuance, division, exchange, substitution or transfer.
5. Restriction On Transfer of Warrants. The Holder of a Warrant
Certificate, by its acceptance thereof, covenants and agrees that the Warrants
are being acquired as an investment and not with a view to the distribution
thereof; and that the Warrants may not be sold, transferred, assigned,
hypothecated or otherwise disposed of, in whole or in part, for a period of one
(1) year from the date hereof, except to officers of the Representative.
6. Exercise Price.
6.1 Initial and Adjusted Exercise Price. Except as otherwise provided
in Section 8 hereof, the initial exercise price of each Warrant shall be
[$_____] [120% of the initial public offering price] per share of Common Stock.
The adjusted exercise price shall be the price which shall result from time to
time from any and all adjustments of the initial exercise price in accordance
with the provisions of Section 8 hereof.
6.2 Exercise Price. The term "Exercise Price" herein shall mean the
initial exercise price or the adjusted exercise price, depending upon the
context.
7. Registration Rights.
7.1 Registration Under the Securities Act of 1933. The Warrants, the
Shares and any of the other securities issuable upon exercise of the Warrants
have not been registered under the Securities Act of 1933, as amended (the
"Act"). Upon exercise, in part or in whole, of the Warrants, certificates
representing the Common Stock underlying the Warrants and any of the other
securities issuable upon exercise of the Warrants (collectively, the "Warrant
Shares") shall bear the following legend:
The securities represented by this certificate have not
been registered under the Securities Act of 1933, as amended
("Act"), and may not be offered or sold except pursuant to (i)
an effective registration statement under the Act, (ii) to the
extent
54
applicable, Rule 144 under the Act (or any similar rule under
such Act relating to the disposition of securities), or (iii)
an opinion of counsel, if such opinion shall be reasonably
satisfactory to counsel to the issuer, that an exemption from
registration under such Act is available.
7.2 Piggyback Registration. For a period of seven (7) years from the
effective date (the "Effective Date") of the Company's registration statement on
Form S--, if the Company proposes to register any of its securities under the
Act (other than in connection with a merger or pursuant to Form S-8) it will
give written notice by registered mail, at least thirty (30) days prior to the
filing of each such registration statement, to the Representative and to all
other Holders of the Warrants and/or the Warrant Shares of its intention to do
so. If the Representative or other Holders of the Warrants and/or Warrant Shares
notify the Company within twenty (20) days after receipt of any such notice of
its or their desire to include any such securities in such proposed registration
statement, the Company shall afford each of the Representative and such Holders
of the Warrants and/or Warrant Shares the opportunity to have any such Warrant
Shares registered under such registration statement.
Notwithstanding the provisions of this Section 7.2, the Company shall
have the right at any time after it shall have given written notice pursuant to
this Section 7.2 (irrespective of whether a written request for inclusion of any
such securities shall have been made) to elect not to file any such proposed
registration statement, or to withdraw the same after the filing but prior to
the effective date thereof.
7.3 Demand Registration.
(a) For a period of five (5) years from the Effective Date, the
Holders of the Warrants and/or Warrant Shares representing a "Majority" (as
hereinafter defined) of such securities (assuming the exercise of all of the
Warrants) shall have the right (which right is in addition to the registration
rights under Section 7.2 hereof), exercisable by written notice to the Company,
to have the Company prepare and file with the Commission, on one occasion, a
registration statement and such other documents, including a prospectus, as may
be necessary in the opinion of both counsel for the Company and counsel for the
Representative and Holders, in order to comply with the provisions of the Act,
so as to permit a public offering and sale of their respective Warrant Shares
for nine (9) consecutive months by such Holders and any other Holders of the
Warrants and/or Warrant Shares who notify the Company within ten (10) days after
receiving notice from the Company of such request.
(b) The Company covenants and agrees to give written notice of any
registration request under this Section 7.3 by any Holder or Holders to all
other registered Holders of the Warrants and the Warrant Shares within ten (10)
days from the date of the receipt of any such registration request.
(c) In addition to the registration rights under Section 7.2 and
subsection (a) of this Section 7.3, for a period of five (5) years from the
Effective Date, any Holder of Warrants and/or Warrant Shares shall have the
right, exercisable by written request to the Company, to have the Company
prepare and file, on one occasion, with the Commission a registration statement
so as to permit a public offering and sale for nine (9) consecutive months by
any such Holder of its Warrant
55
Shares provided, however, that the provisions of Section 7.4(b) hereof shall not
apply to any such registration request and registration and all costs incident
thereto shall be at the expense of the Holder or Holders making such request.
(d) Notwithstanding anything to the contrary contained herein, if
the Company shall not have filed a registration statement for the Warrant Shares
within the time period specified in Section 7.4(a) hereof pursuant to the
written notice specified in Section 7.3(a) of a Majority of the Holders of the
Warrants and/or Warrant Shares, upon the written notice of election of a
Majority of the Holders of the Warrants and/or Warrant Shares it shall have the
option to repurchase (i) any and all Warrant Shares at the higher of the Market
Price per share of Common Stock on (x) the date of the notice sent pursuant to
Section 7.3(a) or (y) the expiration of the period specified in Section 7.4(a),
and (ii) any and all Warrants at such Market Price less the Exercise Price of
such Warrant. Such repurchase shall be in immediately available funds and shall
close within two (2) days after the later of (i) the expiration of the period
specified in Section 7.4(a) or (ii) the delivery of the written notice of
election specified in this Section 7.3(d).
7.4 Covenants of the Company With Respect to Registration. In
connection with any registration under Section 7.2 or 7.3 hereof, the Company
covenants and agrees as follows:
(a) The Company shall use its best efforts to file a registration
statement within thirty (30) days of receipt of any demand therefor, shall use
its best efforts to have any registration statements declared effective at the
earliest possible time, and shall furnish each Holder desiring to sell Warrant
Shares such number of prospectuses as shall reasonably be requested.
(b) The Company shall pay all costs (excluding fees and expenses of
Holder(s)' counsel and any underwriting or selling commissions), fees and
expenses in connection with all registration statements filed pursuant to
Sections 7.2 and 7.3(a) hereof including, without limitation, the Company's
legal and accounting fees, printing expenses, blue sky fees and expenses. The
Holder(s) will pay all costs, fees and expenses in connection with any
registration statement filed pursuant to Section 7.3(c).
(c) The Company will take all necessary action which may be required
in qualifying or registering the Warrant Shares included in a registration
statement for offering and sale under the securities or blue sky laws of such
states as reasonably are requested by the Holder(s), provided that the Company
shall not be obligated to execute or file any general consent to service of
process or to qualify as a foreign corporation to do business under the laws of
any such jurisdiction.
(d) The Company shall indemnify and hold harmless the Holder(s) of
the Warrant Shares to be sold pursuant to any registration statement and each
person, if any, who controls such Holders within the meaning of Section 15 of
the Act or Section 20(a) of the Securities Exchange Act of 1934, as amended
("Exchange Act"), from and against any and all loss, claim, damage, expense or
liability (including all expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever including, without
limitation, the fees and expenses of legal counsel) to which any of them
56
may become subject under the Act, the Exchange Act or otherwise, arising from
such registration statement but only to the same extent and with the same effect
as the provisions pursuant to which the Company has agreed to indemnify the
Representative contained in Section 8 of the Underwriting Agreement.
(e) The Holder(s) of the Warrant Shares to be sold pursuant to a
registration statement, and their successors and assigns, shall severally, and
not jointly, indemnify the Company, its officers and directors and each person,
if any, who controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, from and against any and all loss, claim,
damage or expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Act, the Exchange Act or otherwise, arising
from information furnished in writing by or on behalf of such Holders, or their
successors or assigns, for specific inclusion in such registration statement to
the same extent and with the same effect as the provisions contained in Section
8 of the Underwriting Agreement pursuant to which the Representative has agreed
to indemnify the Company.
(f) Nothing contained in this Agreement shall be construed as
requiring the Holder(s) to exercise their Warrants prior to the initial filing
of any registration statement or the effectiveness thereof.
(g) The Company shall not permit the inclusion of any securities
other than the Warrant Shares to be included in any registration statement filed
pursuant to Section 7.3 hereof, or permit any other registration statement to be
or remain effective during the effectiveness of a registration statement filed
pursuant to Section 7.3 hereof, without the prior written consent of the Holders
of the Warrants and Warrant Shares representing a Majority of such securities.
(h) The Company shall furnish to each Holder participating in the
offering and to each underwriter, if any, a signed counterpart, addressed to
such Holder or underwriter, of (i) an opinion of counsel to the Company, dated
the Effective Date (and, if such registration includes an underwritten public
offering, an opinion dated the date of the closing under the underwriting
agreement), and (ii) a "cold comfort" letter dated the Effective Date (and, if
such registration includes an underwritten public offering, a letter dated the
date of the closing under the underwriting agreement) signed by the independent
public accountants who have issued a report on the Company's financial
statements included in such registration statement, in each case covering
substantially the same matters with respect to such registration statement (and
the prospectus included therein) and, in the case of such accountants' letter,
with respect to events subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to underwriters in underwritten public offerings of
securities.
(i) The Company shall as soon as practicable after the Effective
Date of the registration statement, and in any event within 15 months
thereafter, make "generally available to its security holders" (within the
meaning of Rule 158 under the Act) an earnings statement (which need not be
audited) complying with Section 11 (a) of the Act and covering a period of at
least 12 consecutive months beginning after the Effective Date.
57
(j) The Company shall deliver promptly to each Holder participating
in the offering requesting the correspondence and memoranda described below and
to the managing underwriters, copies of all correspondence between the
Commission and the Company, its counsel or auditors and all memoranda relating
to discussions with the Commission or its staff with respect to the registration
statement and permit each Holder and underwriters to do such investigation, upon
reasonable advance notice, with respect to information contained in or omitted
from the registration statement as it deems reasonably necessary to comply with
applicable securities laws or the rules and regulations of the National
Association of Securities Dealers, Inc. ("NASD"). Such investigation shall
include access to books, records and properties and opportunities to discuss the
business of the Company with its officers and independent auditors, all to such
reasonable extent and at such reasonable times and as often as any such Holder
or underwriter shall reasonably request.
(k) The Company shall enter into an underwriting agreement with the
underwriters selected for such underwriting by the Holders of a Majority of the
Warrant Shares requested to be included in such underwriting, which may be the
Representative. Such agreement shall be satisfactory in form and substance to
the Company, each Holder and such managing underwriters, and shall contain such
representations, warranties and covenants by the Company and such other terms as
are customarily contained in agreements of that type used by the managing
underwriter. The Holders shall be parties to any underwriting agreement relating
to an underwritten sale of their Warrant Shares and may, at their option,
require that any or all the representations, warranties and covenants of the
Company to or for the benefit of such underwriters shall also be made to and for
the benefit of such Holders. Such Holders shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters except as they may relate to such Holders and their intended
methods of distribution.
(l) In addition to the Warrant Shares, upon the written request
therefor by any Holder(s), the Company shall include in the registration
statement any other securities of the Company held by such Holder(s) as of the
date of filing of such registration statement, including without limitation
restricted shares of Common Stock, options, warrants or any other securities
convertible into shares of Common Stock.
(m) For purposes of this Agreement, the term "Majority" in reference
to the Holders of Warrants or Warrant Shares, shall mean in excess of fifty
percent (50%) of the then outstanding Warrants or Warrant Shares that (i) are
not held by the Company, an affiliate, officer, creditor, employee or agent
thereof or any of their respective affiliates, members of their family, persons
acting as nominees or in conjunction therewith and (ii) have not been resold to
the public.
8. Adjustments to Exercise Price and Number of Securities.
8.1 Subdivision and Combination. In case the Company shall at any time
subdivide or combine the outstanding shares of Common Stock, the Exercise Price
shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.
58
8.2 Stock Dividends and Distributions. In case the Company shall pay a
dividend in, or make a distribution of, shares of Common Stock or of the
Company's capital stock convertible into Common Stock, the Exercise Price shall
forthwith be proportionately decreased. An adjustment made pursuant to this
Section 8.2 shall be made as of the record date for the subject stock dividend
or distribution.
8.3 Adjustment in Number of Securities. Upon each adjustment of the
Exercise Price pursuant to the provisions of this Section 8, the number of
Securities issuable upon the exercise at the adjusted exercise price of each
Warrant shall be adjusted to the nearest full amount by multiplying a number
equal to the Exercise Price in effect immediately prior to such adjustment by
the number of Warrant Shares issuable upon exercise of the Warrants immediately
prior to such adjustment and dividing the product so obtained by the adjusted
Exercise Price.
8.4 Definition of Common Stock. For the purpose of this Agreement, the
term "Common Stock" shall mean (i) the class of stock designated as Common Stock
in the Certificate of Incorporation of the Company as may be amended as of the
date hereof, or (ii) any other class of stock resulting from successive changes
or reclassifications of such Common Stock consisting solely of changes in par
value, or from par value to no par value, or from no par value to par value. In
the event that the Company shall after the date hereof issue securities with
greater or superior voting rights than the shares of Common Stock outstanding as
of the date hereof, the Holder, at its option, may receive upon exercise of any
Warrant either shares of Common Stock or a like number of such securities with
greater or superior voting rights.
8.5 Merger or Consolidation. In case of any consolidation of the
Company with, or merger of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger which does not result
in any reclassification or change of the outstanding Common Stock), the
corporation formed by such consolidation or merger shall execute and deliver to
the Holder a supplemental warrant agreement providing that the holder of each
Warrant then outstanding or to be outstanding shall have the right thereafter
(until the expiration of such Warrant) to receive, upon exercise of such
warrant, the kind and amount of shares of stock and other securities and
property receivable upon such consolidation or merger, by a holder of the number
of shares of Common Stock of the Company for which such warrant might have been
exercised immediately prior to such consolidation, merger, sale or transfer.
Such supplemental warrant agreement shall provide for adjustments which shall be
identical to the adjustments provided in Section 8. The above provision of this
subsection shall similarly apply to successive consolidations or mergers.
8.6 No Adjustment of Exercise Price in Certain Cases. No adjustment of
the Exercise Price shall be made:
(a) Upon the issuance or sale of the Warrants or the shares of
Common Stock issuable upon the exercise of the Warrants; or
(b) If the amount of said adjustment shall be less than two cents
($.2) per Warrant Share, provided, however, that in such case any adjustment
that would otherwise be required then to be made
59
shall be carried forward and shall be made at the time of and together with the
next subsequent adjustment which, together with any adjustment so carried
forward, shall amount to at least two cents (2(cent)) per Warrant Share.
9. Exchange and Replacement of Warrant Certificates. Each Warrant
Certificate is exchangeable without expense, upon the surrender thereof by the
registered Holder at the principal executive office of the Company, for a new
Warrant Certificate of like tenor and date representing in the aggregate the
right to purchase the same number of Warrant Shares in such denominations as
shall be designated by the Holder thereof at the time of such surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant Certificate of like
tenor, in lieu thereof.
10. Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
upon the exercise of the Warrants, nor shall it be required to issue scrip or
pay cash in lieu of fractional interests, it being the intent of the parties
that all fractional interests shall be eliminated by rounding any fraction up to
the nearest whole number of shares of Common Stock or other securities,
properties or rights.
11. Reservation and Listing of Securities. The Company shall at all
times reserve and keep available out of its authorized shares of Common Stock,
solely for the purpose of issuance upon the exercise of the Warrants, such
number of shares of Common Stock or other securities, properties or rights as
shall be issuable upon the exercise thereof. The Company covenants and agrees
that, upon exercise of the Warrants and payment of the Exercise Price therefor,
all shares of Common Stock and other securities issuable upon such exercise
shall be duly and validly issued, fully paid, non-assessable and not subject to
the preemptive rights of any stockholder. As long as the Warrants shall be
outstanding, the Company shall use its best efforts to cause all shares of
Common Stock issuable upon the exercise of the Warrants to be listed (subject to
official notice of issuance) on all securities exchanges on which the Common
Stock issued to the public in connection herewith may then be listed and/or
quoted on NASDAQ/NM.
12. Notices to Warrant Holders. Nothing contained in this Agreement
shall be construed as conferring upon the Holders the right to vote or to
consent or to receive notice as a stockholder in respect of any meetings of
stockholders for the election of directors or any other matter, or as having any
rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Warrants and their exercise, any of the following
events shall occur:
(a) the Company shall take a record of the holders of its shares of
Common Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash
60
dividend or distribution payable otherwise than out of current or retained
earnings, as indicated by the accounting treatment of such dividend or
distribution on the books of the Company; or
(b) the Company shall offer to all the holders of its Common Stock
any additional shares of capital stock of the Company or securities convertible
into or exchangeable for shares of capital stock of the Company, or any option,
right or warrant to subscribe therefor; or
(c) a dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business as an entirety shall be
proposed; then, in any one or more of said events, the Company shall give
written notice of such event at least fifteen (15) days prior to the date fixed
as a record date or the date of closing the transfer books for the determination
of the stockholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such notice shall specify
such record date or the date of closing the transfer books, as the case may be.
Failure to give such notice or any defect therein shall not affect the validity
of any action taken in connection with the declaration or payment of any such
dividend, or the issuance of any convertible or exchangeable securities, or
subscription rights, options or warrants, or any proposed dissolution,
liquidation, winding up or sale.
13. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made and
sent when delivered, or mailed by registered or certified mail, return receipt
requested:
(a) If to the registered Holder of the Warrants, to the address of
such Holder as shown on the books of the Company; or
(b) If to the Company, to the address set forth in Section 3 hereof
or to such other address as the Company may designate by notice to the Holders.
14. Supplements and Amendments. The Company and the Representative may
from time to time supplement or amend this Agreement without the approval of any
Holders of Warrant Certificates (other than the Representative) in order to cure
any ambiguity, to correct or supplement any provision contained herein which may
be defective or inconsistent with any provisions herein, or to make any other
provisions in regard to matters or questions arising hereunder which the Company
and the Representative may deem necessary or desirable and which the Company and
the Representative deem shall not adversely affect the interests of the Holders
of Warrant Certificates.
15. Successors. All the covenants and provisions of this Agreement
shall be binding upon and inure to the benefit of the Company, the Holders and
their respective successors and assigns hereunder.
16. Termination. This Agreement shall terminate at the close of
business on ________, 200_. Notwithstanding the foregoing, the indemnification
provisions of Section 7 shall survive such termination until the close of
business on ________ , 200_.
61
17. Governing Law: Submission to Jurisdiction. This Agreement and each
Warrant Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of New York and for all purposes shall be construed in
accordance with the laws of said State without giving effect to its rules
governing the conflicts of laws.
The Company and the Representative hereby agree that any action,
proceeding or claim against it arising out of or relating in any way to, this
Agreement shall be brought and enforced in the courts of the State of New York
or of the United States of America for the Southern District of New York, and
irrevocably submit to such jurisdiction, which jurisdiction shall be exclusive.
The Company and the Representative hereby irrevocably waive any objection to
such exclusive jurisdiction or inconvenient forum. Any such process or summons
to be served upon the Company or the Representative (at the option of the party
bringing such action, proceeding or claim) may be served by transmitting a copy
thereof, by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 13 hereof. Such
mailing shall be deemed personal service and shall be legal and binding upon the
party so served in any action, proceeding or claim. The Company and the
Representative agree that the prevailing party(ies) in any such action or
proceeding shall be entitled to recover from the other party(ies) all of
its/their reasonable legal costs and expenses relating to such action or
proceeding and/or incurred in connection with the preparation therefor.
18. Entire Agreement: Modification. This Agreement (including the
Underwriting Agreement to the extent portions thereof are referred to herein)
contains the entire understanding between the parties hereto with respect to the
subject matter hereof and may not be modified or amended except by a writing
duly signed by the party against whom enforcement of the modification or
amendment is sought.
19. Severability. If any provision of this Agreement shall be held to
be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision of this Agreement.
20. Captions. The caption headings of the Sections of this Agreement
are for convenience of reference only and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive effect.
21. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Representative and any other registered Holder(s) of the Warrant Certificates or
Warrant Shares any legal or equitable right, remedy or claim under this
Agreement; and this Agreement shall be for the sole and exclusive benefit of the
Company, the Representative and the Holder(s) of the Warrant Certificates or
Warrant Shares.
22. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.
62
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
[SEAL]
INFOCURE CORPORATION
By:
----------------------------------
Name:
Title:
Attest:
-----------------
Secretary
XXXXXXXXXX XXXX & XXXX INCORPORATED
By:
----------------------------------
Name:
Title:
63
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE HEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS
CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT
REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE 5:30 P.M.,
NEW YORK TIME, ___________ , 200_
No. W-_______
WARRANT CERTIFICATE
This Warrant Certificate certifies that ________, or registered assigns, is the
registered holder of _________ Warrants, each Warrant entitling the holder to
purchase initially, at any time from _______ 199_ [one year from the effective
date of the Registration Statement] until 5:30 p.m. New York time on ________,
200__ [five years from the effective date of the Registration Statement]
("Expiration Date"), one fully-paid and non-assessable share of common stock,
$.__ par value ("Common Stock") of ________, a ________ corporation (the
"Company"), at the initial exercise price, subject to adjustment in certain
events (the "Exercise Price"), of $__________ [120% of the public offering
price] per share of Common Stock upon surrender of this Warrant Certificate and
payment of the Exercise Price at an office or agency of the Company, but subject
to the conditions set forth herein and in the warrant agreement dated as
of__________ , 199_ by and between the Company and XXXXXXXXXX XXXX & XXXX
INCORPORATED (the "Warrant Agreement"). Payment of the Exercise Price shall be
made by certified or official bank check in New York Clearing House funds
payable to the order of the Company or by surrender of this Warrant Certificate.
64
No Warrant may be exercised after 5:30 p.m., New York time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, hereby shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price and the type and/or number of the Company's securities
issuable thereupon may, subject to certain conditions, be adjusted. In such
event, the Company will, at the request of the holder, issue a new Warrant
Certificate evidencing the adjustment in the Exercise Price and the number
and/or type of securities issuable upon the exercise of the Warrants; provided,
however, that the failure of the Company to issue such new Warrant Certificates
shall not in any way change, alter, or otherwise impair, the rights of the
holder as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax or other governmental charge
imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
65
IN WITNESS WHEREOF the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
Dated as of , 1997
----------
INFOCURE CORPORATION
[SEAL] By:
-----------------------
Name:
Title:
Attest:
---------------------------
Secretary
66
[FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.1]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase _____________ shares of
Common Stock and herewith tenders in payment for such securities a certified or
official bank check payable in New York Clearing House Funds to the order of
____________ in the amount of $________ , all in accordance with the terms of
Section 3.1 of the Representative's Warrant Agreement dated as of __________,
199_ between __________ , INC. and XXXXXXXXXX XXXX & XXXX INCORPORATED. The
undersigned requests that a certificate for such securities be registered in the
name of ____________ whose address is _____________________ and that such
Certificate be delivered to _________________ whose address is ________________
Dated: ____________________
Signature ____________________________
(Signature must conform
in all respects to name of holder as specified on the
face of the Warrant Certificate.)
(Insert Social Security or Other Identifying Number of Holder)
67
[FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.2]
The undersigned hereby irrevocably elects to exercise the right, represented by
this Warrant Certificate, to purchase _____________ shares of Common Stock all
in accordance with the terms of Section 3.2 of the Representative's Warrant
Agreement dated as of __________ 199_ between_______________, INC. and
XXXXXXXXXX XXXX & XXXX INCORPORATED. The undersigned requests that a certificate
for such securities be registered in the name of ______________ whose address
is_____________ and that such Certificate be delivered to ___________ whose
address is
Dated: __________________________
Signature (Signature must conform in all respects to name of
holder as specified on the face of the Warrant Certificate. )
(Insert Social Security or Other Identifying Number of Holder)
68
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder desires to transfer the
Warrant Certificate.)
FOR VALUE RECEIVED) __________________________ hereby sells, assigns and
transfers unto ___________________________.
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____________ Attorney, to
transfer the within Warrant Certificate on the books of the within-named
Company, with full power of substitution.
Dated: ____________________
Signature:_____________________ (Signature must conform in all
respects to name of holder as specified on the face of the Warrant
Certificate.)
(Insert Social Security or Other Identifying Number of
Assignee)
