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[CRUTTENDEN XXXX LETTERHEAD] Exhibit 3.2
Via Facsimile and Mail
April 30, 1996
Xxxx Xxxxx
President
Medical Asset Management, Inc.
0000 X. Xxxxxxxx, Xxxxx 000
Xxxx, XX 00000
Dear Xx. Xxxxx:
As a follow-up to our discussions, this letter (the "Placement Agreement")
constitutes an agreement whereby Cruttenden Xxxx Incorporated ("CRI" or the
"Placement Agent") will assist Medical Asset Management, Inc. (the "Company")
in obtaining equity financing and will provide such other services as may be
within the scope of CRI's activities. Accordingly, we mutually agree as
follows:
1. The Company agrees to sell approximately 1,000,000 to 1,200,000 shares
of its common stock (the "Shares"), at a price range of $3.50 to $4.00
per share, with the final price to be determined on or before Friday,
May 3, 1996, through a private placement under Regulation D of the
Securities Act of 1933, as amended; such placement shall be managed by
CRI. This Placement Agreement will terminate not later than August 15,
1996 (such period between the date of this letter and August 15, 1996
shall be "Term") unless extended by the Company. CRI will act on a best
efforts basis to close this placement the week of May 20, 1996. It is
anticipated that the Placement Agreement relating to the Shares will
contain the following additional terms:
The Shares will carry registration rights such that they will be
included in any registration filed to effect a public offering of the
Company's common stock within six (6) months of the closing of this
offering and will be subject to the Underwriter's lock-up or holdback
restrictions. If such an offering is not consummated within the six
month period, the Company agrees to register the Shares on a Form S-3,
SB-2 or other equivalent form. This registration statement, the Company
hereby warrants, will be filed within two (2) months from the close of
this offering and the Company will use its best efforts to cause such
registration statement to be declared effective as soon as possible,
thereafter. Further, the Company agrees to use reasonable efforts to
effect blue sky clearance in the states pertaining to the investors'
residences.
Upon signing this Agreement, the Company will pay to CRI a one-time
retainer of $15,000, such retainer will apply to expenses and be
accounted for in the closing and will be non-refundable should a closing
not occur. Upon closing, there shall become due and payable to CRI from
the proceeds of the transaction, a cash fee equal to seven percent (7%)
of the gross value of the transaction. As additional consideration, the
Company shall grant to CRI a five-year warrant to purchase shares equal
to ten percent (10%) of the total number of shares being offered hereby
at an exercise price equal to 120% of the Bid price of fully registered
and publicly traded common shares of the Company on the date the price
or the offering is determined. Such warrant shall contain standard net
issuance provisions, and the shares underlying such warrant shall be
registered in all appropriate jurisdiction concurrently with the Shares
offered herein.
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[CRUTTENDEN XXXX LETTERHEAD]
Medical Asset Management, Inc.
April 30, 1996
Page 2
The Company acknowledges that CRI shall be exclusive agent during the
term of this Agreement, and that CRI shall act on a "best efforts"
basis. The Company shall have the right to refuse any proposal
presented to it for acceptance by CRI that significantly deviates from
the transaction outlined herein without incurring any obligations to
CRI.
2. The Company and CRI each agree to comply with all applicable securities
laws, and the Company will be responsible for obtaining any required
permits. The Company agrees to notify CRI promptly of any adverse
changes to its business. Breaking of escrow will be subject to
completion of satisfactory due diligence and agreement on all relevant
terms and conditions.
3. The Company agrees to hold harmless and indemnify CRI in any action
arising out of this transaction in which CRI is named, present or
future, between the Company and any third party not a party to this
Agreement, provided however that CRI is not guilty or gross negligence
or willful misconduct.
4. Upon closing of the offering contemplated hereby, the Company will pay
CRI an advisory fee equal to three percent (3.0%) of the aggregate
offering price of the Shares sold in the private placement with due
credit given to the $15,000 retainer. In addition to the compensation
to be paid to CRI as provided above, the Company shall pay to, or on
behalf of CRI, promptly as billed, all reasonable out-of-pocket expenses
(including all reasonable fees and expenses of CRI's counsel, if any,
and messenger, overnight courier, fax, telephone, copying, printing,
database and travel related expenses) incurred by CRI in connection with
the Private Placement. CRI will not incur such expenses in excess of
$35,000.00 without the Company's prior approval.
5. XXX agrees that certain information furnished by the Company is
confidential and no portion of it shall be disclosed to others, except
to those employees and agents of CRI whose knowledge of the information
is required to consummate the transactions contemplated herein and who
shall assume the same obligations as CRI with respect to this Section 6.
6. For a period of two years after the closing of this offering or until an
offering occurs which the Placement Agent declined, the Company shall
notify the Placement Agent in writing at least ten (10) days before the
proposed private or public offering of any debt or equity securities
(other than bank debt or seller financing related to an acquisition that
the Company may undertake) by the Company or by any of its majority
owned or controlled subsidiaries (collectively referred to herein as the
Company) or any of its stockholders owning at least five percent of the
Company's Common Stock ("Principal Shareholders") so that the Placement
Agent, shall have the right of first refusal to effect the offering as
agent, co-agent, manager or co-manager such that the Placement Agent
participates in at least 50% of the fees associated therewith. We agree
to notify the Company if we intend to exercise the right of first
refusal within ten (10) days of receipt by us of such notice from the
Company. If the Placement Agent fails to exercise the right of first
refusal within the ten day period and the terms of the proposed
subsequent financings thereafter are altered in any material respect,
the Company shall again offer to the Placement Agent the right of first
refusal to effect subsequent financings upon such altered terms and the
Representative shall have ten (10) days from the date of receipt to
notify the Company of its acceptance. This right of first refusal shall
not extend to private offerings of the Company's
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[CRUTTENDEN XXXX LETTERHEAD]
Medical Asset Management, Inc.
April 30, 1996
Page 3
common stock of less than $2,000,000 to "friends" and current
shareholders of the Company.
7. The Company agrees that it will engage its legal counsel to assist in
the preparation of any private placement memorandum, subscription
agreement, or other legal documents that CRI deems necessary to
facilitate the transaction contemplated herein; and that, subsequent to
the successful closing of this transaction, the Company and its legal
counsel will work diligently and expeditiously to register (including
its obligations under Section 1), any shares issued as a result of the
private offering contemplated herein, including shares underlying the
warrants due to CRI.
8. Any controversy arising out of or relating to this Agreement in
connection with transactions between CRI and the Company or pursuant to
this Agreement or the breach thereof shall be settled by arbitration in
accordance with the rules, then in effect, of the National Association
of Securities Dealers, Inc.
9. This Agreement supersedes any and all other agreements, either oral or
written, between the parties hereto with respect to this Agreement.
Each party to this Agreement acknowledges that no representation,
inducements, promises or agreement, orally or otherwise, have been made
by any party, or anyone acting on behalf of any party, which are not
embodied herein, and that no other agreement, statement, or promise not
contained in this Agreement shall be valid or binding. Any modification
of this Agreement will be effective only if it is in writing and signed
by all parties.
If the above meets with your agreement, please execute two copies of this
letter agreement, retaining one original for your files and returning one
original to us. We look forward to a successful engagement and a cooperative
working relationship with you and your staff.
Sincerely, Accepted:
CRUTTENDEN XXXX INCORPORATED MEDICAL ASSET
MANAGEMENT, INC.
/s/ XXXXXXXXXXX X. XXXXXXXX /s/ XXXX XXXXX
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Xxxxxxxxxxx X. Xxxxxxxx Xxxx Xxxxx
Managing Director President
Date: 4/30/96
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