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EXHIBIT 1.1
3,500,000 SHARES(1)
AREMISSOFT CORPORATION
COMMON STOCK
UNDERWRITING AGREEMENT
__________, 1999
CRUTTENDEN XXXX INCORPORATED
FIRST ALBANY CORPORATION
c/o CRUTTENDEN XXXX INCORPORATED
As Representatives of the several Underwriters
00000 Xxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
AremisSoft Corporation, a Delaware corporation (the "Company"),
addresses you as the Representatives of each of the persons, firms and
corporations listed in Schedule A hereto (herein collectively called the
"Underwriters") and hereby confirms its agreement with the several Underwriters
as follows:
1. Description of Shares. The Company proposes to issue and sell
3,500,000 shares of its authorized and unissued Common Stock, $.001 par value
per share (the "Firm Shares"), to the several Underwriters. In addition, the
Company proposes to grant to the Underwriters an option to purchase up to
525,000 additional shares of the Company's Common Stock (the "Option Shares"),
as provided in Section 5 hereof. The Company also proposes to sell to the
Representatives, warrants (the "Representatives' Warrants") to purchase up to
[175,000/201,250] shares of Common Stock of the Company (the "Representatives'
Warrant Stock"), which sale will be consummated in accordance with the terms and
conditions of the Representatives' Warrant Agreement (the "Representatives'
Warrant Agreement"), the form of which is filed as an exhibit to the
Registration Statement described below. As used in this Agreement, the term
"Shares" shall include the Firm Shares and the Option Shares. All shares of
Common Stock of the Company to be outstanding after giving effect to the sales
contemplated hereby, including the sale of the Shares, are hereinafter referred
to as "Common Stock." Unless the context otherwise requires, references herein
to the "Company" include AremisSoft Corporation together with its predecessors
and subsidiaries described in the Prospectus (hereinafter defined).
(1) Plus an option to purchase up to an additional 525,000 shares from the
Company to cover over-allotments, if any.
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2. Representations, Warranties and Agreements of the Company.
The Company represents and warrants to and agrees with each
Underwriter that, as of the date hereof and as of the Closing Date:
(a) A registration statement on Form S-1 (File No.
333-58351) with respect to the Shares, including a prospectus subject to
completion, has been prepared by the Company in conformity with the requirements
of the Securities Act of 1933, as amended (the "Act"), and the applicable rules
and regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") under the Act and has been filed with the
Commission; such amendments to such registration statement and such amended
prospectuses subject to completion as may have been required prior to the date
hereof have been similarly prepared and filed with the Commission; and the
Company will file such additional amendments to such registration statement and
such amended prospectuses as may hereafter be required. Copies of such
registration statement and amendments and of each related prospectus subject to
completion (the "Preliminary Prospectuses") have been delivered to you.
If the registration statement relating to the Shares has been
declared effective under the Act by the Commission, the Company will prepare and
promptly file with the Commission the information previously omitted from the
registration statement pursuant to Rule 430A(a) of the Rules and Regulations
pursuant to subparagraph (1) or (4) of Rule 424(b) of the Rules and Regulations
or as part of a post-effective amendment to the registration statement
(including a final form of prospectus). If the registration statement relating
to the Shares has not been declared effective under the Act by the Commission,
the Company will prepare and promptly file an amendment to the registration
statement, including a final form of prospectus. The term "Registration
Statement" as used in this Agreement shall mean such registration statement,
including financial statements, schedules and exhibits, in the form in which it
became or becomes, as the case may be, effective (including, if the Company
omitted information from the registration statement pursuant to Rule 430A(a) of
the Rules and Regulations, the information deemed to be a part of the
registration statement at the time it became effective pursuant to Rule 430A(b)
of the Rules and Regulations) and, in the event of any amendment thereto after
the effective date of such registration statement, shall also mean (from and
after the effectiveness of such amendment) such registration statement as so
amended. The term "Prospectus" as used in this Agreement shall mean the
prospectus relating to the Shares as included in such Registration Statement at
the time it becomes effective (including, if the Company omitted information
from the Registration Statement pursuant to Rule 430A(a) of the Rules and
Regulations, the information deemed to be a part of the Registration Statement
at the time it became effective pursuant to Rule 430A(b) of the Rules and
Regulations), except that if any revised prospectus shall be provided to the
Underwriters by the Company for use in connection with the offering of the
Shares that differs from the prospectus on file with the Commission at the time
the Registration Statement became or becomes, as the case may be, effective
(whether or not such revised prospectus is required to be filed with the
Commission pursuant to Rule 424(b)(3) of the Rules and Regulations), the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first provided to the Underwriters for such use.
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(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus or instituted proceedings for
that purpose, and each such Preliminary Prospectus, at the time of filing
thereof, has conformed in all material respects to the requirements of the Act
and the Rules and Regulations and, as of its date, has not included any untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; and at the time the Registration Statement became or
becomes, as the case may be, effective and at all times subsequent thereto up to
and on the Closing Date (hereinafter defined) and on any later date on which
Option Shares are to be purchased, (i) the Registration Statement and the
Prospectus, and any amendments or supplements thereto, contained and will
contain all material information required to be included therein by the Act and
the Rules and Regulations and will in all material respects conform to the
requirements of the Act and the Rules and Regulations, (ii) the Registration
Statement, and any amendments or supplements thereto, did not and will not
include any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and (iii) the Prospectus, and any amendments or supplements thereto,
did not and will not include any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that none of the representations and warranties contained in this subparagraph
(b) shall apply to information contained in or omitted from the Registration
Statement or Prospectus, or any amendment or supplement thereto, in reliance
upon, and in conformity with, written information relating to any Underwriter
furnished to the Company by such Underwriter specifically for use in the
preparation thereof.
(c) The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
subsidiaries listed in Exhibit 21 of the Registration Statement or other than
subsidiaries which may be omitted from Exhibit 21 pursuant to subparagraph
(b)(21)(ii) of Item 601 of Regulation S-K of the Rules and Regulations. All of
the issued and outstanding shares of capital stock of the Company's subsidiaries
have been duly and validly authorized and issued, are fully paid and
nonassessable, and except as set forth in Schedule 2(c), are owned by the
Company, free and clear of any security interest, claim, lien, encumbrance or
adverse interest of any nature. There are no outstanding subscriptions, rights,
warrants or options to acquire, or instruments convertible into or exchangeable
for, any shares of capital stock of any of the Company's subsidiaries. The
Company and each of its subsidiaries has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation with full power and authority (corporate and other) to own,
lease and operate its properties and conduct its business as described in the
Prospectus; the Company and each of its subsidiaries is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the ownership or leasing of its properties or the conduct of its
business requires such qualification, except where the failure to be so
qualified or be in good standing would not have a material adverse effect on the
financial condition results of operations or business of the Company taken as a
whole; no proceeding has been instituted in any such jurisdiction, revoking,
limiting or curtailing, or seeking to revoke, limit or curtail, such power and
authority or qualification; the Company and each of its subsidiaries is in
possession of and operating in compliance in all material respects with all
authorizations, licenses, certificates, consents, orders and permits from state,
federal, foreign and other regulatory authorities that are material to the
conduct of its business, all of which are valid and in full force and effect;
neither
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the Company nor any of its subsidiaries is in violation of its charter or bylaws
or other organizational document or except as disclosed in the Registration
Statement or Prospectus, is in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any bond, debenture,
note or other evidence of indebtedness, or in any lease, contract, indenture,
mortgage, deed of trust, loan agreement, joint venture or other agreement or
instrument to which it is a party or by which it or its properties or assets may
be bound except for any such defaults which, individually or in the aggregate,
would not have a material adverse effect on its business, and neither the
Company nor any of its subsidiaries is in violation of any law, order, rule,
regulation, writ, injunction, judgment or decree of any court, government or
governmental agency or body, domestic or foreign, having jurisdiction over it or
its properties or assets except for any such violations which, individually or
in the aggregate, would not have a material adverse effect on its business; each
of the Company's predecessors possessed and operated in compliance in all
material respects with all authorizations, licenses, certificates, consents,
orders and permits from state, federal, foreign and other regulatory authorities
that were material to the conduct of its business.
(d) The Company has full legal right, power and authority
to enter into this Agreement and the Representatives' Warrant Agreement and to
perform the transactions contemplated hereby and thereby. Each of this Agreement
and the Representatives' Warrant Agreement has been duly authorized, executed
and delivered by the Company and is a valid and binding agreement on the part of
the Company, enforceable in accordance with its terms, except as rights to
indemnification under this Agreement or the Representatives' Warrant Agreement
may be limited by applicable law and except as the enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles; the performance of this Agreement and the Representatives'
Warrant Agreement and the consummation of the transactions herein or therein
contemplated will not violate any provisions of the charter, bylaws or other
organizational document of the Company and will not result in a breach or
violation of any of the terms and provisions of, or constitute, either by itself
or upon notice or the passage of time or both, a default under any bond,
debenture, note or other evidence of indebtedness, or under any lease, contract,
indenture, mortgage, deed of trust, loan agreement, joint venture or other
agreement or instrument to which the Company is a party or by which its
properties or assets may be bound, or any law, order, rule, regulation, writ,
injunction, judgment or decree of any court, government or governmental agency
or body, domestic or foreign, having jurisdiction over the Company or over its
properties or assets. No consent, approval, authorization or order of or
qualification with any court, government or governmental agency or body,
domestic or foreign, having jurisdiction over the Company or over its properties
or assets is required for the execution and delivery of this Agreement or the
Representatives' Warrant Agreement and the consummation by the Company of the
transactions herein and therein contemplated, except such as may be required
under the Act or under state or other securities or Blue Sky laws, all of which
requirements have been satisfied.
(e) There is not pending or, to the knowledge of the
Company's senior management, threatened any action, suit, claim or proceeding
against the Company, or any of its officers or any of its properties, assets or
rights before any court, government or governmental agency or body, domestic or
foreign, having jurisdiction over the Company or over its officers or properties
or otherwise that (i) individually, or together with any other action, claim or
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proceeding, could result in any material adverse change in the financial
condition, results of operations, or business of the Company or might materially
and adversely affect its properties, assets or rights, (ii) might prevent
consummation of the transactions contemplated hereby or (iii) is required to be
disclosed in the Registration Statement or Prospectus and is not so disclosed;
and there are no agreements, contracts, leases or documents of the Company of a
character required to be described or referred to in the Registration Statement
or Prospectus or to be filed as an exhibit to the Registration Statement by the
Act or the Rules and Regulations or by the Securities Exchange Act of 1934 (the
"Exchange Act") or the rules and regulations of the Commission thereunder that
have not been accurately described in all material respects in the Registration
Statement or Prospectus or filed as exhibits to the Registration Statement.
(f) All outstanding shares of capital stock of the Company
(i) have been duly authorized and validly issued and are fully paid and
nonassessable, assuming the accuracy of the representations and warranties made
to the Company by purchasers of the Company's securities (which representations
and warranties the Company has no reason to believe are not accurate), (ii) have
been issued in compliance with all federal and state securities laws, and (iii)
were not issued in violation of or subject to any preemptive rights or other
rights to subscribe for or purchase securities. The authorized and outstanding
capital stock of the Company is as set forth in the Prospectus under the caption
"Capitalization" and conforms to the statements relating thereto contained in
the Registration Statement and the Prospectus under the caption "Description of
Capital Stock" and elsewhere therein (and such statements correctly state the
substance of the instruments defining the capitalization of the Company); the
Firm Shares and the Option Shares have been duly authorized for issuance and
sale to the Underwriters pursuant to this Agreement and, when issued and
delivered by the Company against payment therefor in accordance with the terms
of this Agreement, will be duly and validly issued and fully paid and
nonassessable, and will be sold free and clear of any pledge, lien, security
interest, encumbrance, claim or equitable interest; and no preemptive right,
co-sale right, registration right except as set forth in the Prospectus, right
of first refusal or other similar right of shareholders exists with respect to
any of the Firm Shares or Option Shares or the issuance and sale thereof. No
further approval or authorization of any shareholder or the Board of Directors
of the Company or others is required for the issuance and sale or transfer of
the Shares except as may be required under the Act, the Rules and Regulations or
under state or other securities or Blue Sky laws. Except as disclosed in or
contemplated by the Prospectus and the financial statements of the Company, and
the related notes thereto, included in the Prospectus, the Company has no
outstanding options to purchase, or any preemptive rights or other rights to
subscribe for or to purchase, any securities or obligations convertible into, or
any contracts or commitments to issue or sell, shares of its capital stock or
any such options, rights, convertible securities or obligations. The description
of the Company's 1998 Stock Option Plan and the options or other rights granted
or exercisable thereunder, set forth in the Prospectus under the caption
"Management - 1998 Stock Option Plan" accurately and fairly presents the
information required to be shown with respect to such plan, options and rights
under the Act and the Rules and Regulations and the Company does not have, and
has not had, any other stock option, stock bonus or other stock plan or
arrangement.
(g) Xxxxxxx Xxxx Xxxxxxx, which has expressed its opinion
with respect to the financial statements of the Company as of and for the three
years ended December 31, 1998 filed with the Commission as a part of the
Registration Statement, which are included in
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the Prospectus, are independent accountants within the meaning of the Act and
the Rules and Regulations. The audited financial statements of the Company,
together with the related schedules and notes, and the unaudited financial
information, included in the Registration Statement and Prospectus, fairly
present the financial position and the results of operations of the Company at
the respective dates and for the respective periods to which they apply. Such
financial statements of the Company, together with the related schedules and
notes, filed with the Commission as part of the Registration Statement, have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods as certified by Xxxxxxx Xxxx
Xxxxxxx. The selected and summary financial and statistical data included in the
Registration Statement present fairly the information shown therein and have
been compiled on a basis consistent with the audited financial statements
presented therein. No other financial statements or schedules are required to be
included in the Registration Statement.
(h) Subsequent to the respective dates as of which
information is given in the Registration Statement and Prospectus, except as
specifically disclosed or contemplated therein, there has not been (i) any
material adverse change in the financial condition, results of operations or
business of the Company, (ii) any transaction that is material to the Company
and not in the ordinary course of business, (iii) any obligation, direct or
contingent, incurred by the Company that is material and adverse to the Company,
(iv) any material change in the capital stock or material and adverse change in
the outstanding indebtedness of the Company, (v) any dividend or distribution of
any kind declared, paid or made on the capital stock of the Company, or (vi) any
loss or damage (whether or not insured) to the property of the Company which has
a material adverse effect on the financial condition, results of operations or
business of the Company.
(i) Except as set forth in the Registration Statement and
Prospectus, (i) the Company has good and marketable title to all properties and
assets described in the Registration Statement and Prospectus as owned by it,
free and clear of any pledge, lien, security interest, encumbrance, claim or
equitable interest, (ii) the agreements to which the Company or any of its
subsidiaries is a party described in the Registration Statement are valid
agreements, enforceable by the Company or its subsidiary, as the case may be,
except as the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles and, to
the best of the Company's knowledge, the other contracting party or parties
thereto are not in breach or default under any of such agreements, and (iii) the
Company and each of its subsidiaries has valid and enforceable leases for all
properties described in the Registration Statement and Prospectus as leased by
it, except as the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting creditors' rights generally or by general equitable principles. Except
as set forth in the Registration Statement and Prospectus, the Company owns or
leases all such properties as are necessary to its operations as now conducted
and as described in the Registration Statement and the Prospectus.
(j) The Company has timely filed all federal, state, local
and foreign tax returns required to be filed by it and has paid all taxes shown
thereon as due, and there is no tax deficiency that has been or is reasonably
likely to be asserted against the Company, or all tax
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liabilities are adequately provided for on the books of the Company and
reflected in the Company's financial statements.
(k) The Company maintains insurance with insurers of
recognized financial responsibility of the types and in the amounts generally
deemed adequate for its business including, but not limited to, insurance
covering real and personal property owned or leased by the Company against
theft, damage, destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and effect; the Company
has not been refused any insurance coverage sought or applied for; and the
Company does not have any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition
(financial or otherwise), earnings, operations or business of the Company.
(l) No labor disturbance by the employees of the Company
exists or is imminent. No collective bargaining agreement exists with any of the
Company's employees and no such agreement is imminent.
(m) Except as disclosed in or specifically contemplated by
the Prospectus, the Company owns or possesses, in each applicable jurisdiction,
adequate licenses or other rights to use all patents, patent rights, trade
secrets (including any unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), mask works, know-how,
inventions, trademarks, copyrights, licenses, service marks and trade names that
are necessary to conduct its businesses as described in the Registration
Statement and Prospectus; the Company has not received any notice of, and has no
knowledge of, any infringement of or conflict with asserted rights of the
Company by others with respect to any patents, patent rights, trade secrets,
mask works, know-how, inventions, trademarks, copyrights, licenses, service
marks or trade names; and the Company has not received any notice of, and has no
knowledge of, any infringement of or conflict with asserted rights of others
with respect to any patents, patent rights, trade secrets, mask works, know-how,
inventions, trademarks, copyrights, licenses, service marks or trade names.
(n) On the effective date of the Registration Statement,
the Common Stock will be registered pursuant to Section 12(g) of the Exchange
Act and will be approved for quotation on the Nasdaq National Market, and the
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from the Nasdaq National Market, nor has the Company
received any notification that the Commission or the National Association of
Securities Dealers, Inc. ("NASD") is contemplating terminating such registration
or listing.
(o) The Company has been advised concerning the Investment
Company Act of 1940, as amended (the "1940 Act"), and the rules and regulations
thereunder, and has in the past conducted, and intends in the future to conduct,
its affairs in such a manner as to ensure that it will not become an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the 1940 Act and such rules and regulations.
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(p) The Company has not distributed and will not
distribute prior to the later of (i) the Closing Date, or the date on which
Option Shares are to be purchased, as the case may be, and (ii) completion of
the distribution of the Shares, any offering material in connection with the
offering and sale of the Shares other than any Preliminary Prospectuses, the
Prospectus and the Registration Statement.
(q) The Company has not at any time during the last five
(5) years (i) made any unlawful contribution to any candidate for foreign office
or failed to disclose fully any contribution in violation of law which is
required to be disclosed in the Registration Statement or the Prospectus, or
(ii) made any payment to any foreign, federal or state governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required or permitted by the laws of the United States or
any jurisdiction thereof. The Company's internal accounting controls and
procedures are sufficient to cause the Company to comply in all material
respects with the Foreign Corrupt Practices Act of 1977, as amended.
(r) The Company has not taken and will not take, directly
or indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization in violation of law or manipulation of the
price of the Common Stock to facilitate the sale or resale of the Shares.
(s) Each officer, director and director-nominee of the
Company and each beneficial owner of 5% or greater of the Company's Common Stock
has agreed in writing that such person will not, without the prior written
consent of Cruttenden Xxxx Incorporated (which consent may be withheld in its
sole discretion), for a period of 180 days from the date that the Registration
Statement is declared effective by the Commission (the "Lock-up Period"),
directly or indirectly, sell, offer, contract or grant any option to sell
(including without limitation, any short sale), pledge, transfer, establish an
open "put equivalent position" within the meaning of Rule 16a-1(h) under the
Exchange Act, or otherwise dispose of any shares of Common Stock, options or
warrants to acquire shares of Common Stock, or securities exchangeable or
exercisable for or convertible into shares of Common Stock currently or
hereafter owned either of record or beneficially (as defined in Rule 13d-3 under
the Exchange Act) by such person (collectively, "Securities") or publicly
announce the undersigned's intention to do any of the foregoing. Furthermore,
such person has also agreed and consented to the entry of stop transfer
instructions with the Company's transfer agent against the transfer of the
Securities held by such person except in compliance with this restriction. The
Company has provided to counsel for the Underwriters a complete and accurate
list of all shareholders of the Company and the number and type of securities
held by each shareholder. The Company has provided to counsel for the
Underwriters true, accurate and complete copies of all of the agreements
pursuant to which its officers, directors, director-nominees and shareholders
have agreed to such restrictions (the "Lock-up Agreements"). The Company hereby
represents and warrants that it will not release any of its officers, directors
or director-nominees or other shareholders from any Lock-up Agreements currently
existing or hereafter effected without the prior written consent of Cruttenden
Xxxx Incorporated, except for pledges and gifts where the donee agrees in
writing to be bound by the terms hereof.
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(t) Except as set forth in the Registration Statement and
Prospectus, (i) the Company is in compliance in all material respects with all
rules, laws and regulations relating to the use, treatment, storage and disposal
of toxic substances and protection of health or the environment ("Environmental
Laws") that are applicable to its business, (ii) the Company has received no
notice from any governmental authority or third party of an asserted claim under
Environmental Laws and (iii) the Company has no reason to believe that it will
be required to make future capital expenditures to comply with Environmental
Laws.
(u) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets, including without limitation cash receipts,
(iii) access to assets is permitted only in accordance with management's general
or specific authorization, and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(v) There are no outstanding loans, advances (except
normal advances for business expenses in the ordinary course of business) or
guarantees of indebtedness by the Company to or for the benefit of any of the
officers, directors or director-nominees of the Company or any of the members of
the families of any of them of a character and amount required to be disclosed
in the Registration Statement which are not disclosed in the Registration
Statement and Prospectus, nor has any other material transaction occurred
between or among the Company or any of such persons of a character and amount
required to be disclosed in the Registration Statement which are not disclosed
in the Registration Statement and Prospectus.
(w) The Representatives' Warrants have been duly and
validly authorized by the Company and upon delivery to you in accordance with
the Representatives' Warrant Agreement will be duly issued and legal, valid and
binding obligations of the Company.
(x) The Representatives' Warrant Stock has been duly
authorized and reserved for issuance upon the exercise of the Representatives'
Warrants and when issued upon payment of the exercise price therefor will be
validly issued, fully paid and nonassessable shares of Common Stock of the
Company.
(y) The Agreement of Merger dated June __, 1998 (the
"Agreement of Merger") between AremisSoft Corporation, a Nevada corporation
("AremisSoft") and the Company (AremisSoft and the Company are collectively
referred to as the "Constituent Corporations"), has been duly authorized by all
necessary board of director and stockholder action on the part of the
Constituent Corporations and has been duly executed and delivered by each of the
parties thereto. The execution and delivery of the Agreement of Merger and the
consummation of the merger contemplated thereby does not contravene any
provision of applicable federal law, Nevada or Delaware corporate law or the
certificate of incorporation or bylaws of either of the Constituent Corporations
or any agreement or other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its subsidiaries, taken as a
whole, or any judgement or decree of any governmental body, agency or court
having jurisdiction over either of the Constituent Corporations, except for any
such contravention that
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would not have a material adverse effect on the Company and its subsidiaries,
taken as a whole. No consent, approval, authorization or order of or
qualification with any governmental body or agency is required for the
performance by the Constituent Corporations of their obligations under the
Agreement of Merger except such as have been obtained and except such consent,
approval, authorization, order or qualification that, if not obtained, would not
have a material adverse effect on the Company and its subsidiaries, taken as a
whole. The merger contemplated by the Agreement of Merger is effective under the
laws of the State of Nevada and the State of Delaware.
(z) The Company has not incurred any liability for a fee,
commission, or other compensation on (A) account of the employment of a broker
or finder in connection with the transactions contemplated by this Agreement or
(B) except as set forth in a letter from the Company to be delivered to you
concurrently herewith, to any underwriter on account of any offering or
agreement to offer any securities of the Company, whether or not such offering
was consummated, other than as contemplated hereby.
(aa) The Company does not currently sponsor or participate
in, and has never sponsored or participated in, any employee benefit plan,
including but not limited to a pension or welfare plan, which plan is or was
ever subject to the Employee Retirement Income Security Act of 1974, as amended,
including the regulations and published interpretations thereunder ("ERISA").
3. [Intentionally Deleted]
4. Representation, Warranties and Agreements of the Underwriters.
The information set forth in the last paragraph on the outside front cover page
(insofar as such information relates to the Underwriters), in the second
paragraph on the inside front cover page, concerning stabilization and
over-allotment by the Underwriters, under the caption "Underwriting" in any
Preliminary Prospectus and in the final form of Prospectus filed pursuant to
Rule 424(b) constitutes the only information furnished by the Underwriters to
the Company for inclusion in any Preliminary Prospectus, the Prospectus or the
Registration Statement, and you, on behalf of the respective Underwriters,
represent and warrant to the Company that the statements made therein do not
include any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
5. Purchase, Sale and Delivery of Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and each Underwriter agrees, severally and not jointly, to
purchase from the Company, at a purchase price of $_____ per share, the
respective number of Firm Shares as hereinafter set forth. The obligation of
each Underwriter to the Company shall be to purchase from the Company that
number of Firm Shares which is set forth opposite the name of such Underwriter
in Schedule A hereto (subject to adjustment as provided in Section 11).
Delivery of definitive certificates for the Firm Shares to be
purchased by the Underwriters pursuant to this Section 5 shall be made against
payment of the purchase price
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therefor by the several Underwriters by wire transfer of immediately available
funds to an account designated by the Company, at the offices of Cruttenden Xxxx
Incorporated or such other place as may be agreed upon among the Representatives
and the Company, at 7:00 A.M., California time, on the third (3rd) full business
day following the first day that Shares are traded (or at such time and date to
which payment and delivery shall have been postponed pursuant to Section 11
hereof), such time and date of payment and delivery being herein called the
"Closing Date." The certificates for the Firm Shares to be so delivered will be
made available to you at such office or such other location as you may
reasonably request for checking at least one (1) full business day prior to the
Closing Date and will be in such names and denominations as you may request,
such request to be made at least two (2) full business days prior to the Closing
Date. If the Representatives so elect, delivery of the Firm Shares may be made
by credit through full fast transfer to the accounts at The Depository Trust
Company designated by the Representatives.
It is understood that you, individually, and not as the
Representatives of the several Underwriters, may (but shall not be obligated
unless required under Section 11 to) make payment of the purchase price on
behalf of any Underwriter or Underwriters whose wire transfer of funds shall not
have been received by you prior to the Closing Date for the Firm Shares to be
purchased by such Underwriter or Underwriters. Any such payment by you shall not
relieve any such Underwriter or Underwriters of any of its or their obligations
hereunder.
On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company hereby grants to the several Underwriters, for the purpose of covering
over-allotments in connection with the distribution and sale of the Firm Shares
only, a nontransferable option to purchase up to an aggregate of 525,000 Option
Shares at the purchase price per share for the Firm Shares set forth in this
Section 5. Such option may be exercised by the Representatives on behalf of the
several Underwriters on one occasion in whole or in part during the forty-five
(45) day period after the date on which the Firm Shares are initially offered to
the public, by giving written notice to the Company. The number of Option Shares
to be purchased by each Underwriter upon the exercise of such option shall be
the same proportion of the total number of Option Shares to be purchased as the
number of Firm Shares purchased by such Underwriter (set forth in Schedule A
hereto) bears to the total number of Firm Shares purchased by the several
Underwriters (set forth in Schedule A hereto), adjusted by the Representatives
in such manner selected by them as to avoid fractional shares.
Delivery of definitive certificates for the Option Shares to be
purchased by the several Underwriters pursuant to the exercise of the option
granted by this Section 5 shall be made against payment of the purchase price
therefor by the several Underwriters by wire transfer of immediately available
funds to an account designated by the Company. Such delivery and payment shall
take place at the offices of Cruttenden Xxxx Incorporated, or at such other
place as may be agreed upon by the Representatives, the Company and the Agent
(i) on the Closing Date, if written notice of the exercise of such option is
received by the Agent at least three (3) full business days prior to the Closing
Date, or (ii) on a date which shall be during the 45 day period after the date
on which the Firm Shares are initially offered to the public and which shall not
be later than the fifth (5th) full business day following the date the Agent
receives written notice of the exercise of such option, if such notice is
received by the Agent less than three (3) full business days prior to the
Closing Date.
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The certificates for the Option Shares to be so delivered will be
made available to you at such office or such other location as you may
reasonably request for inspection at least two (2) full business days prior to
the date of payment and delivery and will be in such names and denominations as
you may request, such request to be made at least three (3) full business days
prior to such date of payment and delivery. If the Representatives so elect,
delivery of the Option Shares may be made by credit through full fast transfer
to the accounts at The Depository Trust Company designated by the
Representatives.
It is understood that you, individually, and not as the
Representatives of the several Underwriters, may (but shall not be obligated
unless required under Section 11 to) make payment of the purchase price on
behalf of any Underwriter or Underwriters whose wire transfer of immediately
available funds shall not have been received by you prior to the date of payment
and delivery for the Option Shares to be purchased by such Underwriter or
Underwriters. Any such payment by you shall not relieve any such Underwriter or
Underwriters of any of its or their obligations hereunder.
Upon exercise of any option provided for in this Section 5, the
obligations of the several Underwriters to purchase such Option Shares will be
subject (as of the date hereof and as of the date of payment and delivery for
such Option Shares) to the accuracy of and compliance with the representations,
warranties and agreements of the Company herein, to the accuracy of the
statements of the Company and officers of the Company made pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder, and to the condition that all proceedings taken at or prior to the
payment date in connection with the sale and transfer of such Option Shares
shall be reasonably satisfactory in form and substance to you and to
Underwriters' Counsel, and you shall have been furnished with all such
documents, certificates and opinions as you may reasonably request in order to
evidence the accuracy and completeness of any of the representations, warranties
or statements, the performance of any of the covenants or agreements of the
Company or the compliance with any of the conditions herein contained in each
case in all material respects.
After the Registration Statement becomes effective, the several
Underwriters intend to make an initial public offering (as such term is
described in Section 13 hereof) of the Firm Shares at an initial public offering
price of $_____ per share. After the initial public offering, the several
Underwriters may, in their discretion, vary the public offering price.
6. Further Agreements of the Company. The Company agrees with the
several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at the time
and date that this Agreement is executed and delivered by the parties hereto, to
become effective as promptly as possible; it will notify you, promptly after it
shall receive notice thereof, of the time when the Registration Statement or any
subsequent amendment to the Registration Statement has become effective or any
supplement to the Prospectus has been filed; if the Company omitted information
from the Registration Statement at the time it was originally declared effective
in reliance upon Rule 430A(a) of the Rules and Regulations, the Company will
provide evidence satisfactory to you that the Prospectus contains such
information and has been filed, within the time period
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prescribed, with the Commission pursuant to subparagraph (1) or (4) of Rule
424(b) of the Rules and Regulations or as part of a post-effective amendment to
such Registration Statement as originally declared effective which is declared
effective by the Commission; if for any reason the filing of the final form of
Prospectus is required under Rule 424(b)(3) of the Rules and Regulations, the
Company will provide evidence satisfactory to you that the Prospectus contains
such information and has been filed with the Commission within the time period
prescribed; it will notify you promptly of any request by the Commission for the
amending or supplementing of the Registration Statement or the Prospectus or for
additional information; promptly upon your request, the Company will prepare and
file with the Commission any amendments or supplements to the Registration
Statement or Prospectus which, in the opinion of counsel for the several
Underwriters ("Underwriters' Counsel"), may be necessary or advisable in
connection with the distribution of the Shares by the Underwriters; it will
promptly prepare and file with the Commission, and promptly notify you of the
filing of, any amendments or supplements to the Registration Statement or
Prospectus which may be necessary to correct any statements or omissions, if, at
any time when a prospectus relating to the Shares is required to be delivered
under the Act, any event shall have occurred as a result of which the Prospectus
or any other prospectus relating to the Shares as then in effect would include
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; in case any Underwriter is required
to deliver a prospectus nine (9) months or more after the effective date of the
Registration Statement in connection with the sale of the Shares, the Company
will prepare promptly upon request, such amendment or amendments to the
Registration Statement and such prospectus or prospectuses as may be necessary
to permit compliance with the requirements of Section 10(a)(3) of the Act; and
it will file no amendment or supplement to the Registration Statement or
Prospectus which shall not previously have been submitted to you a reasonable
time prior to the proposed filing thereof or to which you shall reasonably
object in writing, subject, however, to compliance with the Act and the Rules
and Regulations and the rules and regulations of the Commission thereunder and
the provisions of this Agreement.
(b) The Company will advise you promptly after it shall
have received notice or obtained knowledge of the issuance of any stop order by
the Commission suspending the effectiveness of the Registration Statement or of
the initiation or threat of any proceeding for that purpose; and it will
promptly use its best efforts to prevent the issuance of any stop order or to
obtain its withdrawal at the earliest possible moment if such stop order should
be issued.
(c) The Company will use its best efforts to qualify the
Shares for offering and sale under the securities laws of such jurisdictions,
domestic or foreign, as you may designate and to continue such qualifications in
effect for so long as may be required for purposes of the distribution of the
Shares, except that the Company shall not be required in connection therewith or
as a condition thereof to qualify as a foreign corporation or to execute a
general consent to service of process in any jurisdiction in which it is not
otherwise required to be so qualified or to so execute a general consent to
service of process. In each jurisdiction in which the Shares shall have been
qualified as above provided, the Company will make and file such statements and
reports in each year as are or may be reasonably required by the laws of such
jurisdiction.
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(d) The Company will furnish to you, as soon as available,
copies of the Registration Statement (three of which will be signed and which
will include all exhibits), each Preliminary Prospectus, the Prospectus and any
amendments or supplements to such documents, including any prospectus prepared
to permit compliance with Section 10(a)(3) of the Act (three of which will
include all exhibits) all in such quantities as you may from time to time
reasonably request.
(e) The Company will make generally available to its
shareholders as soon as practicable, but in any event not later than the
forty-fifth (45th) day following the end of the fiscal quarter first occurring
after the first anniversary of the effective date of the Registration Statement,
an earnings statement (which will be in reasonable detail but need not be
audited) complying with the provisions of Section 11(a) of the Act and covering
a twelve (12) month period beginning after the effective date of the
Registration Statement.
(f) During a period of five (5) years after the date
hereof and for so long as the Company is subject to Section 13 or 15 of the
Exchange Act, the Company will furnish to its shareholders as soon as
practicable after the end of each respective period, annual reports (including
financial statements audited by independent certified public accountants) and
unaudited quarterly reports of operations for each of the first three quarters
of the fiscal year, and will furnish to you and the other several Underwriters
hereunder, (i) concurrently with furnishing such reports to its shareholders,
statements of operations of the Company for each of the first three (3) quarters
in the form furnished to the Company's shareholders, (ii) concurrently with
furnishing to its shareholders, a balance sheet of the Company as of the end of
such fiscal year, together with statements of operations, of shareholders'
equity, and of cash flows of the Company for such fiscal year, accompanied by a
copy of the certificate or report thereon of independent certified public
accountants, (iii) as soon as they are available, copies of all reports
(financial or other) mailed to shareholders, (iv) as soon as they are available,
copies of all reports and financial statements furnished to or filed with the
Commission, any securities exchange or the NASD, (v) every material press
release and every material news item or article in respect of the Company or its
affairs which was generally released to shareholders or prepared by the Company,
and (vi) any additional information of a public nature concerning the Company or
its business which you may reasonably request. During such five (5) year period,
if the Company shall have active subsidiaries, the foregoing financial
statements shall be on a consolidated basis to the extent that the accounts of
the Company and its subsidiaries are consolidated, and shall be accompanied by
similar financial statements for any significant subsidiary that is not so
consolidated.
(g) The Company will apply the net proceeds from the sale
of the Shares being sold by it in the manner set forth under the caption "Use of
Proceeds" in the Prospectus.
(h) The Company will maintain a transfer agent and a
registrar (which may be the same entity) for its Common Stock.
(i) If at any time during the ninety (90) day period after
the Registration Statement becomes effective, any rumor, publication or event
relating to or affecting the Company shall occur as a result of which in your
opinion the market price of the Common
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Stock has been or is likely to be materially affected (regardless of whether
such rumor, publication or event necessitates a supplement to or amendment of
the Prospectus), the Company will, if reasonably requested by you, forthwith
prepare, and, if permitted by law, disseminate a press release or other public
statement, reasonably satisfactory to you, responding to or commenting on such
rumor, publication or event.
(j) During the Lock-up Period, the Company will not,
without the prior written consent of the Representatives, effect the Disposition
of, directly or indirectly, any Securities other than (i) the sale of the Firm
Shares and the Option Shares hereunder, (ii) the Company's issuance of options
or Common Stock under the Company's presently authorized stock option plans or
restricted stock plans (collectively, the "Option Plans") and (iii) the
Company's issuance of Common Stock pursuant to the exercise or conversion of any
warrant, debenture or other security described in the Registration Statement and
Prospectus which is exercisable or convertible into share of Common Stock.
7. Expenses.
(a) The Company agrees with each Underwriter that:
(i) The Company will pay and bear all costs and
expenses in connection with the preparation, printing and filing of the
Registration Statement (including financial statements, schedules and exhibits),
Preliminary Prospectuses and the Prospectus, and any amendments or supplements
thereto during the nine month period after the effective date of the
Registration Statement; the printing of this Agreement, the Agreement Among
Underwriters, the Selected Dealer Agreement, the Preliminary Blue Sky Survey and
any supplemental Blue Sky Survey, the Underwriters' Questionnaire and Power of
Attorney, and any instruments related to any of the foregoing; the issuance and
delivery of the Shares hereunder to the several Underwriters, including transfer
taxes, if any, the cost of all certificates representing the Shares and transfer
agents' and registrars' fees; the fees and disbursements of counsel and
accountants for the Company; all fees and other charges of the Company's
independent certified public accountants; the cost of delivery to, or pursuant
to the instructions of, the several Underwriters copies of the Registration
Statement (including appropriate exhibits), Preliminary Prospectus and the
Prospectus, and any amendments or supplements to any of the foregoing during the
nine month period after the effective date of the Registration Statement; NASD
filing fees; the cost of qualifying the Shares under the laws of such
jurisdictions as you may designate (including filing fees and fees and
disbursements of counsel for the Underwriters related to such qualification);
the cost of listing the Shares on the Nasdaq National Market; the Company's road
show costs and expenses; the cost of any tombstone advertisement or press
release; the cost of preparing bound volumes of the documents relating to the
public offering of Common Stock contemplated hereby; all costs and expenses
associated with retaining a qualified independent underwriter if required by
NASD rules; and all other expenses directly incurred by the Company in
connection with the performance of its obligations hereunder.
(ii) In addition to its other obligations under
Section 7(a)(i) hereof, if the Shares are sold pursuant to this Agreement, the
Company will pay to the Representatives a nonaccountable expense allowance equal
to 1.0% of the aggregate sales price of the Shares to the public. This
nonaccountable expense allowance with respect to the Firm
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Shares shall be paid to you on the Closing Date and the nonaccountable expense
allowance with respect to the Option Shares shall be paid to you on the closing
of the sale to you of such Option Shares.
(iii) In addition to its other obligations under
Section 9 hereof, the Company agrees that, during the pendency of any claim,
action, investigation, inquiry or other proceeding described in Section 9(a)
hereof, it will reimburse the Underwriters for all reasonable legal or other
expenses incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding . To the extent that any such
reimbursement payment is held by a court of competent jurisdiction to have been
improper, the Underwriters shall promptly return such payment to the Company
together with interest, compounded daily, determined on the basis of the prime
rate (or other commercial lending rate for borrowers of the highest credit
standing) listed from time to time in The Wall Street Journal which represents
the base rate on corporate loans posted by a substantial majority of the
nation's five (5) largest banks (the "Prime Rate"). Any such reimbursement
payments which are not made to the Underwriters within thirty (30) days of a
request for reimbursement shall bear interest at the Prime Rate from the date of
such request.
(b) In addition to their other obligations under Section
9(b) hereof, the Underwriters severally, and not jointly, agree that, during the
pendency of any claim, action, investigation, inquiry or other proceeding
described in Section 9(b) hereof, they will reimburse the Company for all
reasonable legal or other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other proceeding. To
the extent that any such reimbursement payment is held by a court of competent
jurisdiction to have been improper, the Company shall promptly return such
payment to the Underwriters together with interest, compounded daily, determined
on the basis of the Prime Rate. Any such reimbursement payments which are not
made to the Company within thirty (30) days of a request for reimbursement shall
bear interest at the Prime Rate from the date of such request
(c) It is agreed that any controversy arising out of the
operation of the reimbursement arrangements set forth in Sections 7(a)(iii) and
7(b) hereof, including the amounts of any requested reimbursement payments, the
method of determining such amounts and the basis on which such amounts shall be
apportioned among the reimbursing parties, shall be settled by arbitration
conducted pursuant to the Code of Arbitration Procedure of the NASD in Orange
County, California (or as close geographically to Orange County, California as
is reasonably practical). Any such arbitration must be commenced by service of a
written demand for arbitration or a written notice of intention to arbitrate,
therein electing the arbitration tribunal. In the event the party demanding
arbitration does not make such designation of an arbitration tribunal in such
demand or notice, then the party responding to said demand or notice is
authorized to do so. Any such arbitration will be limited to the operation of
the reimbursement provisions contained in Sections 7(a)(iii) and 7(b) hereof and
will not resolve the ultimate propriety or enforceability of the obligation to
indemnify for expenses which is created by the provisions of Sections 9(a) and
9(b) hereof or the obligation to contribute to expenses which is created by the
provisions of Section 9(d) hereof.
8. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters to purchase and pay for the Shares as provided herein
shall be subject to the
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accuracy, as of the date hereof and the Closing Date and any later date on which
Option Shares are to be purchased, as the case may be, of the representations
and warranties of the Company and the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) The Registration Statement shall have become effective
not later than 2:00 P.M., California time, on the date of this Agreement, or
such later date as shall be consented to in writing by you; and no stop order
suspending the effectiveness thereof shall have been issued and no proceedings
for that purpose shall have been initiated or threatened by the Commission, and
any request of the Commission for additional information (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been complied
with to the satisfaction of Underwriters' Counsel.
(b) All corporate proceedings and other legal matters in
connection with this Agreement, the form of Registration Statement and the
Prospectus, and the registration, authorization, issuance, sale and delivery of
the Shares, shall have been reasonably satisfactory to Underwriters' Counsel,
and such counsel shall have been furnished with such documents and information
as they may reasonably have requested to enable them to pass upon the matters
referred to in this Section.
(c) You shall be satisfied that since the respective dates
as of which information is given in the Registration Statement and Prospectus,
(i) there shall not have been any change in the capital stock of the Company
other than pursuant to the exercise of outstanding options, warrants or other
convertible securities disclosed in the Registration Statement and Prospectus or
any material adverse change in the indebtedness of the Company, (ii) except as
set forth or contemplated by the Registration Statement or the Prospectus, no
material verbal or written agreement or other transaction shall have been
entered into by the Company, which is not in the ordinary course of business and
which would have a material adverse effect on the Company's business, financial
condition and operating results, (iii) no loss or damage (whether or not
insured) to the property of the Company shall have been sustained which
materially and adversely affects the financial condition, business or results of
operations of the Company, (iv) no legal or governmental action, suit or
proceeding affecting the Company which is material to the Company or which
affects or may affect the transactions contemplated by this Agreement shall have
been instituted or threatened and (v) there shall not have been any material
change in the financial condition, business, or results of operations of the
Company which makes it impractical or inadvisable in the judgment of the
Representatives to proceed with public offering or purchase the Shares as
contemplated hereby.
(d) You shall have received on the Closing Date and on any
later date on which Option Shares are purchased, as the case may be, an opinion
from each of Xxxxxx Eng Linn & Xxxxxxxx, general counsel to the Company, and
Pillsbury Madison & Sutro LLP, special counsel for the Company, (which opinion
of special counsel need not include subparagraphs (ii), (iii) or (iv) below or
subparagraph (xx) below with respect to more than the last fiscal year) dated
the Closing Date or such later date on which Option Shares are purchased,
addressed to the Underwriters (and stating that it may be relied upon by
Underwriters' Counsel in rendering its opinion pursuant to Section 8(j) of this
Agreement) and with reproduced copies or signed counterparts thereof for each of
the Underwriters, to the effect that:
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(i) The Company has been duly incorporated and is
validly existing and in good standing under the laws of the
jurisdiction of its incorporation;
(ii) The Company has full corporate power and
authority to own, lease and operate its properties and to conduct
its business as described in the Registration Statement;
(iii) The Company is duly qualified to do business
as a foreign corporation and is in good standing in each United
States jurisdiction, if any, in which the ownership or leasing of
its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified or be
in good standing would not have a material adverse effect on the
financial condition results of operations or business of the
Company taken as a whole. To such counsel's knowledge, Company
has no subsidiaries or other than as listed in Exhibit 21 to the
Registration Statement;
(iv) The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus
under the caption "Capitalization"; all outstanding shares of
capital stock of the Company have been duly and validly issued
and are fully paid and nonassessable, and, to such counsel's
knowledge, have not been issued in violation of or subject to any
preemptive right, co-sale right, registration right, right of
first refusal or other similar right; without limiting the
foregoing, to such counsel's knowledge, there are no preemptive
or other rights to subscribe for or purchase any of the Shares;
(v) The certificates evidencing the Shares to be
delivered hereunder are in due and proper form under Delaware law
and when duly countersigned by the Company's transfer agent and
registrar and delivered to the Underwriters against payment of
the agreed compensation in accordance with this Agreement, the
Firm Shares and the Option Shares, represented thereby will be
duly and validly issued and fully paid and nonassessable, and
will not have been issued in violation of or subject to any
preemptive right, co-sale right, registration right, right of
first refusal or other similar right of shareholders and will
conform in all respects to the description thereof in the
Registration Statement;
(vi) The Company has the corporate power and
authority to enter into this Agreement and to issue, sell and
deliver to the Underwriters the Shares to be issued and sold by
it hereunder;
(vii) The Company has the corporate power and
authority to enter into the Representatives' Warrant Agreement
and to issue, sell and deliver to the Representatives the
Representatives' Warrants to be issued and sold by it thereunder;
(viii) Each of this Agreement, the
Representatives' Warrant Agreement and the Representatives'
Warrants has been duly authorized by all
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necessary corporate action on the part of the Company and has
been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery by you, is a valid and
binding agreement of the Company, enforceable in accordance with
its terms, except insofar as indemnification and contribution
provisions may be limited by applicable law and except as
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally or by general equitable
principles;
(ix) The Registration Statement has become
effective under the Act and, to such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been
instituted or are pending or threatened under the Act;
(x) The Registration Statement and the Prospectus,
and each amendment or supplement thereto (other than the
financial statements and notes thereto, the financial statement
schedules and other financial or statistical data included
therein as to which such counsel need express no opinion), as of
the effective date of the Registration Statement, complied as to
form in all material respects with the requirements of the Act
and the applicable Rules and Regulations;
(xi) The statements in the Registration Statement
and Prospectus under the captions "Management--1998 Stock Option
Plan," "Management--Employment Agreements,"
"Management--Compensation Committee Interlocks and Insider
Participation" and "Management--Limitation of Liability and
Indemnification Matters" including but not limited to the
statements with respect to employment agreements of management,
"Certain Transactions," "Description of Capital Stock" and
"Shares Eligible For Future Sale," and in the Registration
Statement in Items 14 and 15 are accurate and complete in all
material respects and fairly present the information contained
herein;
(xii) The description in the Registration
Statement and the Prospectus of the charter and bylaws of the
Company and of statutes are accurate and fairly present the
information required to be presented by the Act and the
applicable Rules and Regulations and the Company is not in
violation of its charter or bylaws, or other organizational
documents;
(xiii) To such counsel's knowledge, there are no
agreements, contracts, leases or documents to which the Company
is a party of a character required to be described or referred to
in the Registration Statement or Prospectus or to be filed as an
exhibit to the Registration Statement that are not described or
referred to therein or filed as required;
(xiv) The execution and delivery of this Agreement
and the Representatives' Warrant Agreement and the performance by
the Company of its obligations hereunder and thereunder will not
(a) result in any violation of the
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Company's charter, bylaws or other organizational documents, or
(b) result in a material breach or violation of any of the terms
and provisions of, or constitute a default under, any bond,
debenture, note or other evidence of indebtedness, or under any
lease, contract, indenture, mortgage, deed of trust, loan
agreement, joint venture or other agreement or instrument to
which the Company is a party or by which its properties are
bound, of which such counsel has knowledge except for any breach,
violation or default which would not, singly or in the aggregate,
have a material adverse effect on the business of the Company and
its subsidiaries taken as a whole or any applicable United States
federal, state or local statute, rule or regulation or, to such
counsel's knowledge, any order, writ or decree of any United
States federal, state or local court, government or governmental
agency or body having jurisdiction over the Company or over any
of its properties or operations;
(xv) No consent, approval, authorization or order
of or qualification with any United States federal, state or
local court, government or governmental agency or body having
jurisdiction over the Company or over any of its properties or
operations is necessary in connection with the consummation by
the Company of the transactions contemplated in this Agreement
and the Representatives' Warrant Agreement, except such as have
been obtained under the Act or such as may be required under
state or other securities or Blue Sky laws in connection with the
purchase and the distribution of the Shares by the Underwriters;
(xvi) To such counsel's knowledge, there are no
legal or governmental proceedings pending or threatened against
the Company of a character required to be disclosed in the
Registration Statement or the Prospectus by the Act or the Rules
and Regulations or by the Exchange Act or the applicable rules
and regulations of the Commission thereunder, other than those
described therein;
(xvii) The Representatives' Warrants have been
duly and validly authorized by the Company and upon delivery to
the Representatives in accordance with the Representatives'
Warrant Agreement will be duly issued and legal, valid and
binding obligations of the Company;
(xviii) The Representatives' Warrant Stock to be
issued by the Company pursuant to the terms of the
Representatives' Warrant has been duly authorized and reserved,
and, upon issuance and delivery against payment therefor in
accordance with the terms of the Representatives' Warrant
Agreement, will be duly and validly issued and fully paid and
nonassessable, and to such counsel's knowledge, will not have
been issued in violation of or subject to any preemptive right,
co-sale right, registration right, right of first refusal or
other similar right of shareholders;
(xix) To such counsel's knowledge, except as set
forth in the Registration Statement and Prospectus, no holders of
Common Stock or other
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securities of the Company have registration rights with respect
to securities of the Company that have not been waived;
(xx) The offer and sale of all securities of the
Company made within the last three years as set forth in Item 15
of the Registration Statement were exempt from the registration
requirements of the Securities Act, pursuant to the provisions
set forth in such Item, and from the registration or
qualification requirements of all relevant state securities laws;
(xxi) The Company has satisfied the conditions for
use of Form S-1 as set forth in the General Instructions thereto;
(xxii) No transfer taxes are required to be paid
in connection with the sale and delivery of the Shares to the
Underwriters;
(xxiii) The Agreement of Merger between AremisSoft
and the Company has been duly authorized by all necessary board
of director and stockholder action on the part of the Constituent
Corporations and has been duly executed and delivered by each of
the parties thereto. The execution and delivery of the Agreement
of Merger and the consummation of the merger contemplated thereby
does not contravene any provision of applicable federal law,
Nevada or Delaware corporate law or the certificate of
incorporation or bylaws of either of the Constituent Corporations
or, to such counsel's knowledge, any agreement or other
instrument binding upon the Company or any of its subsidiaries
that is material to the Company and its subsidiaries, taken as a
whole, or to such counsel's knowledge, any judgement or decree of
any governmental body, agency or court having jurisdiction over
either of the Constituent Corporations, except for any such
contravention that would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole. No consent,
approval, authorization or order of or qualification with any
governmental body or agency is required for the performance by
the Constituent Corporations of their obligations under the
Agreement of Merger except such as have been obtained and except
such consent, approval, authorization, order or qualification
that, if not obtained, would not have a material adverse effect
on the Company and its subsidiaries, taken as a whole. The merger
contemplated by the Agreement of Merger is effective under the
laws of the State of Nevada and the State of Delaware; and
(xxiv) Neither the Company nor any of its
subsidiaries is an "investment company" or a person "controlled
by" an "investment company" within the meaning of the 1940 Act.
In addition, such counsel shall state that such counsel has
participated in conferences with officials and other representatives of the
Company, the Representatives, Underwriters' Counsel and the independent
certified public accountants of the Company, at which the contents of the
Registration Statement and Prospectus and related matters were discussed, and
although they have not verified the accuracy or completeness of the statements
contained in the Registration Statement or the Prospectus, nothing has come to
the attention of
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such counsel that leads them to believe that, at the time the Registration
Statement became effective and at all times subsequent thereto up to and on the
Closing Date and on any later date on which Option Shares are purchased, the
Registration Statement and any amendment or supplement thereto, when such
documents became effective or were filed with the Commission (other than the
financial statements and notes thereto, the financial statement schedules and
other financial or statistical data and supporting schedules included in the
Registration Statement as to which such counsel need express no comment)
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 at the Closing Date or the date on which the Option
Shares are purchased, as the case may be, the Registration Statement, the
Prospectus and any amendment or supplement thereto (other than the financial
statements and notes thereto, the financial statement schedules or other
financial or statistical data included therein as to which such counsel need
express no comment) contained any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
Each of such co-counsel shall also provide an opinion, addressed
and as of the dates set forth in the first paragraph of this Section 8(d), to
the same general effect as clauses (i), (ii), (iii) and (iv) of this Section
8(d) in respect of each direct and indirect United States subsidiary of the
Company that is a significant subsidiary as defined by the Commission.
Counsel rendering the foregoing opinions may rely as to questions
of law not involving the laws of the United States upon opinions of local
counsel, and as to questions of fact upon representations or certificates of
officers of the Company, and of government officials, in which case its opinion
is to state that they are so relying and that they have no knowledge of any
material misstatement or inaccuracy in any such opinion, representation or
certificate. Copies of any opinion, representation or certificate so relied upon
shall be delivered to you, as Representatives of the Underwriters.
(e) You shall have received from Xxxxxx & Co., counsel for
LK Global Software Engineering (India) Private Limited ("LK Global (India)"), a
favorable opinion dated the Closing Date and such later date on which Option
Shares are purchased, addressed to the Underwriters (and stating that it may be
relied upon by Underwriters' Counsel in rendering its opinion pursuant to
Section 8(j) of this Agreement) and with reproduced copies or signed
counterparts thereof for each of the Underwriters, and satisfactory to the
Representatives and the Underwriters' Counsel substantially to the effect that:
(i) LK Global (India) has been duly organized and is (A)
validly existing as a private company limited by shares in good
standing under the laws of India and (B) able to transact
business as described in the Prospectus in India;
(ii) LK Global (India) has __________ shares of capital
stock authorized, __________ of which are issued and outstanding;
all necessary and proper corporate proceedings have been taken in
order to authorize validly such authorized capital stock; all
outstanding shares of such capital stock have been duly and
validly issued, are fully paid and nonassessable, have been
issued in
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compliance with Indian law and were not issued in violation of or
subject to any preemptive rights or other rights to subscribe for
or purchase any securities;
(iii) All of the outstanding shares of capital stock of,
or other ownership interests in, LK Global (India) are owned by
LK Global Information Systems BV ("LK Global BV")[, except one
share held by __________, one of the directors of LK Global
(India), as nominee shareholder of LK Global BV], free and clear
of any security interest, claim, lien, encumbrance or adverse
interest of any nature, except for the security interest existing
in favor of Barclays Bank plc and Barclays De Zoete Wedd Limited;
(iv) There are no outstanding options for the purchase
of, or any agreements providing for the issuance (contingent or
otherwise) of, or any commitments or claims of any character
relating to, any of LK Global (India)'s capital stock or any
shares of stock or securities that are convertible or
exchangeable or exercisable for such capital stock; and
(v) The execution and delivery of this Agreement by the
Company and the consummation of the transactions contemplated
hereby will not result in a breach of, or constitute a default
under, any material indenture, mortgage, deed of trust, trust
(constructive or other), loan agreement, lease, franchise,
license or other material agreement or instrument to which LK
Global (India) is a party or by which any of its properties may
be bound, or violate any statute, judgment, decree, order, rule
or regulation known to such counsel of any court or governmental
body having jurisdiction over LK Global (India) or any of its
properties and to such counsel's knowledge, no approval,
authorization, order or consent of any court, regulatory body,
administrative agency or other governmental body is required for
the execution and delivery of this Agreement or the consummation
by the Company of the transactions contemplated herein, except as
have been made or obtained.
In rendering such opinion, such counsel may rely as to matters of
fact, on certificates of the officers of LK Global (India) and of governmental
officials, in which case their opinion shall state that they are so doing and
that the Underwriters are justified in relying on such opinions or certificates
and copies of said opinions or certificates shall be attached to the opinion.
(f) You shall have received from Xxxxxxx & Co, counsel for
LK Global Information Systems (UK) Plc, LK Global Healthcare Systems (UK) Ltd,
LK Global Hospitality Systems (UK) Ltd, LK Global Field Engineering Systems (UK)
Ltd, LK Global Manufacturing Systems (UK) Ltd, LK Global Construction Systems
(UK) Ltd, Briter Computer Systems Limited, LK Global Financial Systems (UK)
Limited, LK Global Software Engineering (UK) Limited and LK Global Human
Resources (UK) Limited (collectively, the "UK Subsidiaries"), a favorable
opinion dated the Closing Date and such later date on which Option Shares are
purchased, addressed to the Underwriters (and stating that it may be relied upon
by Underwriters' Counsel in rendering its opinion pursuant to Section 8(j) of
this Agreement) and
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with reproduced copies or signed counterparts thereof for each of the
Underwriters, and satisfactory to the Representatives and the Underwriters'
Counsel substantially to the effect that:
(i) Each of the UK Subsidiaries is a company (A) duly
incorporated and registered under the laws of England and (B)
able to transact business as described in the Prospectus in
England and Wales;
(ii) Each of the UK Subsidiaries has the corporate power
and authority necessary to own freehold and leasehold properties
and to conduct the businesses described in the Registration
Statement and the Prospectus;
(iii) Based on an examination of the Register of Members
of each of the UK Subsidiaries all of the issued shares of the UK
Subsidiaries are legally owned by the companies and persons
listed in the Schedule to such opinion and such shares are not
subject to any third party adverse claims or rights, except for
the security interest existing in favor of Barclays Bank plc and
Barclays De Zoete Wedd Limited;
(iv) There are no outstanding options for the purchase
of, or any agreements providing for the issuance (contingent or
otherwise) of, or any commitments or claims of any character
relating to, any of the issued or authorized share capital of
each of the UK Subsidiaries or any shares, stock or securities
that are convertible into or exchangeable for such share capital;
and
(v) The execution and delivery of this Agreement by the
Company and the consummation of the transactions contemplated
hereby, the offering for sale, sale and issuance by the Company
of the Shares to be sold by the Company pursuant to this
Agreement do not require any authorization, consent, approval or
notice by any of the UK Subsidiaries or the Company to any court
or administrative or governmental body administering the laws of
England applicable therein and do not (A) conflict with or result
in a breach of the terms of, (B) constitute a default under or
(C) result in a violation of, the Memorandum and Articles of
Association of any of the UK Subsidiaries, any material
indenture, mortgage, loan agreement, lease or other material
agreement or instrument by which any of the UK Subsidiaries is
bound or the laws of England, any regulations enacted thereunder
and any policies of any administrative or governmental body
administering same in each case binding on the UK Subsidiaries.
In rendering such opinion, such counsel may rely as to matters of
fact, on certificates of the officers of the UK Subsidiaries and of governmental
officials, in which case their opinion shall state that they are so doing and
that the Underwriters are justified in relying on such opinions or certificates
and copies of said opinions or certificates shall be attached to the opinion.
(g) You shall have received from __________, counsel for
LK Global BV, a favorable opinion dated the Closing Date and such later date on
which Option Shares are
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purchased, addressed to the Underwriters (and stating that it may be relied upon
by Underwriters' Counsel in rendering its opinion pursuant to Section 8(j) of
this Agreement) and with reproduced copies or signed counterparts thereof for
each of the Underwriters, and satisfactory to the Representatives and the
Underwriters' Counsel substantially to the effect that:
(i) LK Global BV is (A) duly incorporated, validly
existing and in good standing under the laws of The Netherlands
and (B) able to transact business as described in the Prospectus
in The Netherlands;
(ii) LK Global BV has a share capital of __________; all
necessary and proper corporate proceedings have been taken in
order to validly authorize such capital stock; all outstanding
shares of such capital stock have been duly and validly issued,
are fully paid and nonassessable, have been issued in compliance
with Dutch law, and were not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or
purchase any securities;
(iii) All of the outstanding shares of capital stock of,
or other ownership interests in, LK Global BV are owned by [the
Company] free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature, except for the
security interest existing in favor of Barclays Bank plc and
Barclays De Zoete Wedd Limited;
(iv) There are no outstanding options for the purchase
of, or any agreements providing for the issuance (contingent or
otherwise) of, or any commitments or claims of any character
relating to, any of LK Global BV's capital stock or any shares of
stock or securities that are convertible or exchangeable or
exercisable for such capital stock, except for that certain
Warrant Agreement between LK Global BV and Barclays De Zoete Wedd
Limited; and
(v) The execution and delivery of this Agreement by the
Company and the consummation of the transactions contemplated
hereby will not (A) conflict with or result in breach of terms
of, (B) constitute a default under, (C) result in the creation of
any lien, mortgage or security interest upon LK Global BV's
capital stock or assets pursuant to, (D) result in a violation
of, or (E) require any authorization, consent, approval or
exemption by or notice to any court or administrative or
governmental body pursuant to, the charter, by-laws or other
organizational document of LK Global BV, any applicable law,
statute, rule or regulation to which LK Global BV is subject, or
any agreement, indenture, instrument, order, judgment or decree
by which LK Global BV is bound.
In rendering such opinion, such counsel may rely as to matters of
fact, on certificates of the officers of LK Global BV and of governmental
officials, in which case their opinion shall state that they are so doing and
that the Underwriters are justified in relying on such opinions or certificates
and copies of said opinions or certificates shall be attached to the opinion.
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(h) You shall have received from __________, counsel for
AremisSoft (Cyprus) Limited, a favorable opinion dated the Closing Date and such
later date on which Option Shares are purchased, addressed to the Underwriters
(and stating that it may be relied upon by Underwriters' Counsel in rendering
its opinion pursuant to Section 8(j) of this Agreement) and with reproduced
copies or signed counterparts thereof for each of the Underwriters and
satisfactory to the Representatives and the Underwriters' Counsel substantially
to the effect that:
(i) AremisSoft (Cyprus) Limited is (A) a corporation
duly incorporated, validly existing and in good standing under
the laws of Cyprus and (B) able to transact business as described
in the Prospectus in Cyprus;
(ii) AremisSoft (Cyprus) Limited has __________ shares
of capital stock authorized, __________ of which are issued and
outstanding; all necessary and proper corporate proceedings have
been taken in order to authorize validly such authorized capital
stock; all outstanding shares of such capital stock have been
duly and validly issued, are fully paid and nonassessable, have
been issued in compliance with Cyprus law, were not issued in
violation of or subject to any preemptive rights or other rights
to subscribe for or purchase any securities;
(iii) All of the outstanding shares of capital stock of,
or other ownership interests in, AremisSoft (Cyprus) Limited are
owned by LK Global BV, free and clear of any security interest,
claim, lien, encumbrance or adverse interest of any nature,
except for the security interest existing in favor of Barclays
Bank plc and Barclays De Zoete Wedd Limited; and
(iv) There are no outstanding options for the purchase
of, or any agreements providing for the issuance (contingent or
otherwise) of, or any commitments or claims of any character
relating to, any of AremisSoft (Cyprus) Limited capital stock or
any shares of stock or securities that are convertible or
exchangeable or exercisable for such capital stock; and
(v) The execution and delivery of this Agreement by the
Company and the consummation of the transactions contemplated
hereby will not (A) conflict with or result in a breach of terms
of, (B) constitute a default under, (C) result in the creation of
any lien, mortgage or security interest upon AremisSoft (Cyprus)
Limited's capital stock or assets pursuant to, (D) result in a
violation of, or (E) require any authorization, consent, approval
or exemption by or notice to any court or administrative or
governmental body pursuant to, the charter, by-laws or other
organizational document of AremisSoft (Cyprus) Limited, any
applicable law, statute, rule or regulation to which AremisSoft
(Cyprus) Limited is subject, or any agreement, indenture,
instrument, order, judgment or decree by which AremisSoft
(Cyprus) Limited is bound.
In rendering such opinion, such counsel may rely as to matters of
fact, on certificates of the officers of AremisSoft (Cyprus) Limited and of
governmental officials, in which case their opinion shall state that they are so
doing and that the Underwriters are justified
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in relying on such opinions or certificates and copies of said opinions or
certificates shall be attached to the opinion.
(i) [intentionally deleted]
(j) You shall have received on the Closing Date and on any
later date on which Option Shares are purchased, as the case may be, an opinion
of Loeb & Loeb LLP in form and substance satisfactory to you, with respect to
the sufficiency of all such corporate proceedings and other legal matters
relating to this Agreement and the transactions contemplated hereby as you may
reasonably require, and the Company shall have furnished to such counsel such
documents as they may have requested for the purpose of enabling them to pass
upon such matters.
(k) You shall have received on the Closing Date and on any
later date on which Option Shares are to be purchased, as the case may be, a
letter from Xxxxxxx Xxxx Xxxxxxx, addressed to the Company and the Underwriters,
dated the Closing Date or such later date on which Option Shares are purchased,
as the case may be, confirming that they are independent certified public
accountants with respect to the Company within the meaning of the Act and the
applicable published Rules and Regulations and based upon the procedures
described in such letter delivered to you concurrently with the execution of
this Agreement (herein called the "Original Letter"), but carried out to a date
not more than three (3) business days prior to the Closing Date or such later
date on which Option Shares are to be purchased, as the case may be, (i)
confirming, to the extent true, that the statements and conclusions set forth in
the Original Letter are accurate as of the Closing Date or such later date on
which Option Shares are to be purchased, as the case may be, and (ii) setting
forth any revisions and additions to the statements and conclusions set forth in
the Original Letter which are necessary to reflect any changes in the facts
described in the Original Letter since the date of such letter, or to reflect
the availability of more recent financial statements, data or information. The
letter shall not disclose any change in the condition (financial or otherwise),
earnings, operations or business of the Company from that set forth in the
Registration Statement or Prospectus, which, in your sole judgment, is material
and adverse and that makes it, in your sole judgment, impracticable or
inadvisable to proceed with the public offering of the Shares as contemplated by
the Prospectus. The Original Letter shall be addressed to or for the use of the
Underwriters in form and substance satisfactory to the Underwriters and shall
(i) represent, to the extent true, that they are independent certified public
accountants with respect to the Company within the meaning of the Act and the
applicable published Rules and Regulations, (ii) set forth its opinion respect
to its examination of the balance sheets of the Company as of December 31, 1998
and 1997 and related statements of operations, shareholders' equity, and cash
flows for the years ended December 31, 1998, 1997 and 1996 and (iii) address
other matters agreed upon by Xxxxxxx Xxxx Xxxxxxx and you. In addition, you
shall have received from Xxxxxxx Xxxx Xxxxxxx (i) a letter addressed to the
Company and made available to you for the use of the Underwriters stating that
its review of the Company's system of internal accounting controls, to the
extent they deemed necessary in establishing the scope of its examination of the
Company's financial statements as of December 31, 1998, did not disclose any
weaknesses in internal controls that they considered to be material weaknesses
and (ii) a letter addressed to you addressing other matters agreed upon by
Xxxxxxx Xxxx Xxxxxxx and you which letter shall be satisfactory to you in form
and substance.
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(l) You shall have received on the Closing Date and on the
date on which Option Shares are purchased, as the case may be, a certificate of
the Company, dated the Closing Date or such later date on which Option Shares
are to be purchased, as the case may be, signed by the Chief Executive Officer
and Chief Financial Officer of the Company, to the effect that, and you shall be
satisfied that:
(i) The representations and warranties of the
Company in this Agreement are true and correct in all
material respects, as if made on and as of the Closing
Date or the date on which Option Shares are to be
purchased, as the case may be, and the Company has
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied, at or
prior to the Closing Date or the date on which Option
Shares are to be purchased, as the case may be;
(ii) No stop order suspending the effectiveness
of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or, to
their knowledge, are pending or threatened under the Act;
(iii) When the Registration Statement became
effective and at all times subsequent thereto up to the
delivery of such certificate, the Registration Statement
and the Prospectus, and any amendments or supplements
thereto, contained all material information required to be
included therein by the Act and the Rules and Regulations
or the Exchange Act and the applicable rules and
regulations of the Commission thereunder, as the case may
be, and in all material respects conformed to the
requirements of the Act and the Rules and Regulations or
the Exchange Act and the applicable rules and regulations
of the Commission thereunder, as the case may be, the
Registration Statement, and any amendment or supplement
thereto, did not and does not include any untrue statement
of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading, the Prospectus, and any
amendment or supplement thereto, did not and does not
include any untrue statement of a material fact or omit to
state a material fact necessary to make the statements
therein, in the light of the circumstances under which
they were made, not misleading, and, since the effective
date of the Registration Statement, there has occurred no
event required to be set forth in an amended or
supplemented Prospectus that has not been so set forth;
and
(iv) Subsequent to the respective dates as of
which information is given in the Registration Statement
and Prospectus, there has not been (a) any material
adverse change in the financial condition results of
operations or business of the Company, (b) any transaction
that is material to the Company, (c) any obligation,
direct or contingent incurred by the Company, that is
material to the Company, (d) any material change in the
capital stock or material and adverse change in the
outstanding
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indebtedness of the Company, (e) any dividend or
distribution of any kind declared, paid or made on the
capital stock of the Company, or (f) any loss or damage
(whether or not insured) to the property of the Company
which has a material adverse effect on the financial
condition results of operations or business of the
Company.
(m) The Company shall have obtained and delivered to you
an agreement from each officer, director and director-nominee of the Company,
and each beneficial or record owner of Common Stock 5% or greater of the
Company's issued and outstanding shares, in writing prior to the date hereof
that such person will not, during the Lock-up Period, effect the Disposition of
any Securities now owned or hereafter acquired directly by such person or with
respect to which such person has or hereafter acquires the power of disposition,
otherwise than (i) as a bona fide gift or gifts, provided the donee or donees
thereof agree in writing to be bound by this restriction, (ii) as a distribution
to limited partners or shareholders of such person, provided that the
distributees thereof agree in writing to be bound by the terms of this
restriction, or (iii) with the prior written consent of Cruttenden Xxxx
Incorporated. The foregoing restriction is expressly agreed to preclude the
holder of the Securities from engaging in any hedging or other transaction which
is designed to or reasonably expected to lead to or result in a Disposition of
Securities during the Lock-up Period, even if such Securities would be disposed
of by someone other than the such holder. Such prohibited hedging or other
transactions would include, without limitation, any short sale (whether or not
against the box) or any purchase, sale or grant of any right (including, without
limitation, any put or call option) with respect to any Securities or with
respect to any security (other than a broad-based market basket or index) that
includes, relates to or derives any significant part of its value from
Securities. Furthermore, such person shall have also agreed and consented to the
entry of stop transfer instructions with the Company's transfer agent against
the transfer of the Securities held by such person except in compliance with
this restriction.
(n) The Company shall have furnished to you such further
certificates and documents as you shall reasonably request, including
certificates of officers of the Company as to the accuracy of the
representations and warranties of the Company, as to the performance by the
Company of its obligations hereunder and as to the other conditions concurrent
and precedent to the obligations of the Underwriters hereunder.
(o) The Representatives' Warrant Agreement shall have been
entered into by the Company and you, and the Representatives' Warrants shall
have been issued and sold to you pursuant thereto.
(p) The Company shall have repaid all indebtedness
outstanding, including principal, interest and any related premiums, fees or
charges, under the Company's bank credit facilities, which may be repaid using
the net proceeds received from the sale of the Shares. The Underwriters shall
have received an acknowledgment from each of Barclays Bank plc and Barclays De
Zoete Wedd Limited to the effect that all outstanding indebtedness of the
Company to them, including principal, interest and any related premiums, fees or
charges, has been repaid in full and all security interests of the Company or
its subsidiaries in favor of such banks have been released.
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All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to Underwriters' Counsel. The Company will furnish you with such number of
conformed copies of such opinions, certificates, letters and documents as you
shall reasonably request.
9. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject (including, without
limitation, in its capacity as an Underwriter or as a "qualified independent
underwriter" within the meaning of Schedule E of the Bylaws of the NASD), under
the Act, the Exchange Act or otherwise, specifically including, but not limited
to, losses, claims, damages or liabilities, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any breach of any representation, warranty, agreement or covenant of
the Company herein contained, or any failure of the Company to perform its
obligations hereunder, or (ii) any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and agrees to reimburse
each Underwriter for any legal or other expenses reasonably incurred by it in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or
action arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement,
any Preliminary Prospectus or the Prospectus, or any such amendment or
supplement thereto, in reliance upon, and in conformity with, written
information relating to any Underwriter furnished to the Company as described in
Section 4 hereof, and, provided further, that the indemnity agreement provided
in this Section 9(a) with respect to any Preliminary Prospectus shall not inure
to the benefit of any Underwriter from whom the person asserting any losses,
claims, damages, liabilities or actions based upon any untrue statement or
alleged untrue statement of material fact or omission or alleged omission to
state therein a material fact purchased Shares, if a copy of the Prospectus in
which such untrue statement or alleged untrue statement or omission or alleged
omission was corrected had not been sent or given to such person within the time
required by the Act and the Rules and Regulations, unless such failure is the
result of noncompliance by the Company with Section 6(d) hereof.
The indemnity agreement in this Section 9(a) shall extend upon
the same terms and conditions to, and shall inure to the benefit of, each
person, if any, who controls any Underwriter within the meaning of the Act or
the Exchange Act. This indemnity agreement shall be in addition to any
liabilities which the Company may otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company against any losses, claims, damages or
liabilities, joint or several, to which the Company may become subject under the
Act or otherwise, specifically including, but not limited to, losses, claims,
damages or liabilities, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
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31
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company as described in Section 4 hereof, and agrees to reimburse the Company
for any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such loss, claim, damage, liability or
action.
The indemnity agreement in this Section 9(b) shall extend upon
the same terms and conditions to, and shall inure to the benefit of, each
officer of the Company who signed the Registration Statement and each director
of the Company (or nominee for director set forth in the Registration Statement
or Prospectus or any amendment or supplement thereto) and each person, if any,
who controls the Company within the meaning of the Act or the Exchange Act. This
indemnity agreement shall be in addition to any liabilities which each
Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section 9 of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section 9, notify the indemnifying party in
writing of the commencement thereof but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party otherwise than under this Section 9. In case any such
action is brought against any indemnified party, and it notified the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it shall 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; provided,
however, that if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party which pose a conflict of interest for such counsel, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of the indemnifying
party's election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with appropriate local counsel)
approved by the indemnifying party representing all the indemnified parties
under Section 9(a) or 9(b) hereof who are parties to such action), (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the
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action or (iii) the indemnifying party has authorized in writing the employment
of counsel for the indemnified party at the expense of the indemnifying party.
In no event shall any indemnifying party be liable in respect of any amounts
paid in settlement of any action unless the indemnifying party shall have
approved the terms of such settlement; provided that such consent shall not be
unreasonably withheld. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnification could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such indemnification.
(d) In order to provide for just and equitable
contribution in any action in which a claim for indemnification is made pursuant
to this Section 9 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 notwithstanding the fact that
this Section 9 provides for indemnification in such case, all the parties hereto
shall contribute to the aggregate losses, claims, damages or liabilities to
which they may be subject (after contribution from others) in such proportion so
that the Underwriters severally and not jointly are responsible pro rata for the
portion represented by the percentage that the underwriting discount bears to
the initial public offering price, and the Company is responsible for the
remaining portion, provided, however, that (i) no Underwriter shall be required
to contribute any amount in excess of the underwriting discount applicable to
the Shares purchased by such Underwriter, and (ii) no person guilty of a
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation. The contribution agreement in this Section 9(d)
shall extend upon the same terms and conditions to, and shall inure to the
benefit of, each person, if any, who controls the Underwriters or the Company
within the meaning of the Act or the Exchange Act and each officer of the
Company who signed the Registration Statement and each director of the Company
(or nominee for director set forth in the Registration Statement or Prospectus
or any amendment or supplement thereto).
(e) The parties to this Agreement hereby acknowledge that
they are sophisticated business persons who were represented by counsel during
the negotiations regarding the provisions hereof including, without limitation,
the provisions of this Section 9, and are fully informed regarding said
provisions. They further acknowledge that the provisions of this Section 9
fairly allocate the risks in light of the ability of the parties to investigate
the Company and its business in order to assure that adequate disclosure is made
in the Registration Statement and Prospectus as required by the Act and the
Exchange Act. The parties are advised that federal or state public policy, as
interpreted by the courts in certain jurisdictions, may be contrary to certain
of the provisions of this Section 9.
10. Representations, Warranties, Covenants and Agreements to
Survive Delivery. All representations, warranties, covenants and agreements of
the Company and the Underwriters herein or in certificates delivered pursuant
hereto, and the indemnity and contribution agreements contained in Sections 7
and 9 and hereof shall remain operative and in full force and effect regardless
of any investigation made by or on behalf of any Underwriter or
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any controlling person within the meaning of the Act or the Exchange Act, or by
or on behalf of the Company or any of its officers, directors or controlling
persons within the meaning of the Act or the Exchange Act, and shall survive the
delivery of the Shares to the several Underwriters hereunder or termination of
this Agreement.
11. Substitution of Underwriters. If any Underwriter or
Underwriters shall fail to take up and pay for the number of Firm Shares agreed
by such Underwriter or Underwriters to be purchased hereunder upon tender of
such Firm Shares in accordance with the terms hereof, and if the aggregate
number of Firm Shares which such defaulting Underwriter or Underwriters so
agreed but failed to purchase does not exceed 10% of the Firm Shares, the
remaining Underwriters shall be obligated, severally in proportion to their
respective commitments hereunder, to take up and pay for the Firm Shares of such
defaulting Underwriter or Underwriters.
If any Underwriter or Underwriters so defaults and the aggregate
number of Firm Shares which such defaulting Underwriter or Underwriters agreed
but failed to take up and pay for exceeds 10% of the Firm Shares, the remaining
Underwriters shall have the right, but shall not be obligated, to take up and
pay for (in such proportions as may be agreed upon among them) the Firm Shares
which the defaulting Underwriter or Underwriters so agreed but failed to
purchase. If such remaining Underwriters do not, at the Closing Date, take up
and pay for the Firm Shares which the defaulting Underwriter or Underwriters so
agreed but failed to purchase, the Closing Date shall be postponed for
twenty-four (24) hours to allow the several Underwriters the privilege of
substituting within twenty-four (24) hours (including non-business hours)
another underwriter or underwriters (which may include any nondefaulting
Underwriter) satisfactory to the Company. If no such underwriter or underwriters
shall have been substituted as aforesaid by such postponed Closing Date, the
Closing Date may, at the option of the Company, be postponed for a further
forty-eight (48) hours, if necessary, to allow the Company the privilege of
finding another underwriter or underwriters, satisfactory to you, to purchase
the Firm Shares which the defaulting Underwriter or Underwriters so agreed but
failed to purchase. If it shall be arranged for the remaining Underwriters or
substituted underwriter or underwriters to take up the Firm Shares of the
defaulting Underwriter or Underwriters as provided in this Section 11, (i) the
Company shall have the right to postpone the time of delivery for a period of
not more than seven (7) full business days, in order to effect whatever changes
may thereby be made necessary in the Registration Statement or the Prospectus,
or in any other documents or arrangements, and the Company agrees promptly to
file any amendments to the Registration Statement or supplements to the
Prospectus which may thereby be made necessary, and (ii) the respective number
of Firm Shares to be purchased by the remaining Underwriters and substituted
underwriter or underwriters shall be taken as the basis of their underwriting
obligation. If the remaining Underwriters shall not take up and pay for all such
Firm Shares so agreed to be purchased by the defaulting Underwriter or
Underwriters or substitute another underwriter or underwriters as aforesaid and
the Company shall not find or shall not elect to seek another underwriter or
underwriters for such Firm Shares as aforesaid, then this Agreement shall
terminate.
In the event of any termination of this Agreement pursuant to the
preceding paragraph of this Section 11, the Company shall not be liable to any
Underwriter (except as provided in Sections 7 and 9 hereof) nor shall any
Underwriter (other than an Underwriter who
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shall have failed, otherwise than for some reason permitted under this
Agreement, to purchase the number of Firm Shares agreed by such Underwriter to
be purchased hereunder, which Underwriter shall remain liable to the Company and
the other Underwriters for damages, if any, resulting from such default) be
liable to the Company (except to the extent provided in Sections 7 and 9
hereof).
The term "Underwriter" in this Agreement shall include any person
substituted for an Underwriter under this Section 11.
12. Effective Date of this Agreement and Termination.
(a) This Agreement shall become effective at the earlier
of (i) 6:30 A.M., California time, on the second full business day following the
effective date of the Registration Statement, or (ii) the time of the initial
public offering of any of the Shares by the Underwriters after the Registration
Statement becomes effective. The time of the initial public offering shall mean
the time of the release by you, for publication, of the first newspaper
advertisement relating to the Shares, or the time at which the Shares are first
generally offered by the Underwriters to the public by letter, telephone,
telegram or telecopy, whichever shall first occur. By giving notice as set forth
in Section 13 before the time this Agreement becomes effective, you, as
Representatives of the several Underwriters, or the Company, may prevent this
Agreement from becoming effective without liability of any party to any other
party, except as provided in Sections 7 and 9 hereof.
(b) You, as Representatives of the several Underwriters,
shall have the right to terminate this Agreement by giving notice as hereinafter
specified at any time at or prior to the Closing Date or on or prior to any
later date on which Option Shares are purchased, as the case may be, (i) if the
Company shall have failed, refused or been unable to perform any agreement on
its part to be performed unless such failure or refusal is on account of the
default or omission of any Underwriter, or (ii) because any other condition to
the Underwriters' obligations hereunder is not satisfied (unless the reason for
failure to satisfy the condition is on account of the default or omission of any
Underwriter, or (iii) if additional material and adverse governmental
restrictions, not in force and effect on the date hereof, shall have been
imposed upon trading in securities generally or minimum or maximum prices shall
have been generally established on the New York Stock Exchange or on the
American Stock Exchange or in the over the counter market by the NASD, or
trading in securities generally shall have been suspended on either such
exchange or in the over the counter market by the NASD, or if a banking
moratorium shall have been declared by federal, New York or California
authorities, or (iv) if the Company shall have sustained a loss by strike, fire,
flood, earthquake, accident or other calamity of such character as to interfere
substantially with the conduct of the business and operations of the Company
regardless of whether or not such loss shall have been insured, or (v) if there
shall have been a material adverse change in the general political or economic
conditions or financial markets as in your reasonable judgment makes it
inadvisable or impracticable to proceed with the offering, sale and delivery of
the Shares, or (vi) if there shall have been an outbreak or escalation of
hostilities or of any other insurrection or armed conflict or the declaration by
the United States of a national emergency which, in the reasonable opinion of
the Representatives, makes it impracticable or inadvisable to proceed with the
public offering of the Shares as contemplated by the Prospectus. Any termination
pursuant to any of subparagraphs (ii) through
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(vi) above shall be without liability of any party to any other party except as
provided in Sections 7 and 9 hereof. In the event of termination pursuant to
subparagraph (i) above, the Company shall also remain obligated to pay costs and
expenses pursuant to Section 7 hereof.
If you elect to prevent this Agreement from becoming effective or
to terminate this Agreement as provided in this Section 12, you shall promptly
notify the Company by telephone or facsimile, in each case confirmed by letter.
If the Company shall elect to prevent this Agreement from becoming effective,
the Company shall promptly notify you by telephone or facsimile, in each case,
confirmed by letter.
13. Notices. All notices or communications hereunder, except as
herein otherwise specifically provided, shall be in writing and if sent to any
of the several Underwriters shall be mailed, delivered or facsimiled (and
confirmed by letter) to you c/o Cruttenden Xxxx Incorporated, 00000 Xxx Xxxxxx,
Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000, facsimile number (000) 000-0000, Attention:
Xxxxxx Xxxxxxx; if sent to the Company, such notice shall be mailed, delivered
or facsimiled (and confirmed by letter) to AremisSoft Corporation, 00
Xxxxxxxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx, facsimile number 011-44-171-309-1501,
Attention: Dr. Lycourgos X. Xxxxxxxxx with a copy to Xxxxx X. Xxxxxx, Esq.,
Xxxxxx Eng Xxxx & Xxxxxxx, 000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, XX 00000,
and Xxxxxxxx Xxxx Xxxxxxxx, Xxxxxxxxx Madison & Sutro LLP, 000 Xxxxxxx Xxxx,
Xxxxx 0000, Xxxxxxxxxx, XX 00000.
14. Parties. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters and the Company and their respective
executors, administrators, successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person
or corporation, other than the parties hereto and their respective executors,
administrators, successors and assigns, and their controlling persons within the
meaning of the Act or the Exchange Act, officers and directors referred to in
Section 9 hereof, any legal or equitable right, remedy or claim in respect of
this Agreement or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of the parties hereto and their respective executors,
administrators, successors and assigns and said controlling persons and said
officers and directors, and for the benefit of no other person or corporation.
No purchaser of any of the Shares from any Underwriter shall be construed a
successor or assign by reason merely of such purchase. The Agreement constitutes
the entire agreement and understanding of the parties with respect to the
subject matter hereof.
In all dealings with the Company under this Agreement, you shall
act on behalf of each of the several Underwriters, and the Company shall be
entitled to act and rely upon any statement, request, notice or agreement made
or given by you on behalf of each of the several Underwriters.
15. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California.
16. Counterparts. This Agreement may be signed in several
counterparts, each of which will constitute an original.
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If the foregoing correctly sets forth the understanding among the
Company and the several Underwriters, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement among the Company and the several Underwriters.
Very truly yours,
AREMISSOFT CORPORATION
By:
----------------------------------------
Name:
Title:
Accepted as of the date first above written:
CRUTTENDEN XXXX INCORPORATED
FIRST ALBANY CORPORATION
On their behalf and on behalf of each of the several Underwriters named in
Schedule A hereto.
By: CRUTTENDEN XXXX INCORPORATED
By:
----------------------------------------
Name:
Title:
By: FIRST ALBANY CORPORATION
By:
----------------------------------------
Name:
Title:
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SCHEDULE A
Underwriters Number of Firm Shares To
Be Purchased
Cruttenden Xxxx Incorporated.........................
First Albany Corporation.............................
Total............................................
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