2,500,000 Shares
▇▇▇▇▇▇▇▇▇.▇▇▇ INC.
Common Stock
FORM OF
UNDERWRITING AGREEMENT
New York, New York
_____________, 1999
Cruttenden ▇▇▇▇ Incorporated
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ISG Solid Capital Markets, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇.▇▇▇ inc., a Delaware corporation (the "Company"), hereby confirms
its agreement with you. The Company proposes to issue and sell to you (referred
to together as the "Underwriter") pursuant to this Underwriting Agreement (the
"Agreement") an aggregate of 2,500,000 shares (the "Firm Shares") of the
Company's common stock, par value $.001 per share (the "Common Stock"). The
Company has also agreed to grant you an option to purchase up to an additional
375,000 shares of Common Stock (the "Option Shares"). The Firm Shares and the
Option Shares are referred to together as the "Shares."
You have advised the Company that you desire to purchase the Shares. The
Company confirms the agreement made by it with respect to the purchase of the
Shares by the Underwriter, as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, the Underwriter that:
(a) A registration statement on Form S-1 (File No. 333-______) with
respect to the Shares, including a prospectus subject to completion, has been
filed by the Company with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), and in
conformity with the requirements of the Act and the rules and regulations of the
Commission thereunder (the "Rules and Regulations"), and one or more amendments
to such registration statement may have been so filed and such registration
statement has been delivered to you. After the execution of this Agreement, the
Company will file with the Commission either (i) if such registration statement,
as it may have been amended, has been declared by the Commission to be effective
under the Act, either (A) if the Company relies on Rule 434 under the Act, a
Term Sheet (as hereinafter defined) relating to
the Shares, that shall identify the Preliminary Prospectus (as hereinafter
defined) that it supplements containing such information as is required or
permitted by Rules 434, 430A and 424(b) under the Act or (B) if the Company does
not rely on Rule 434 under the Act, a prospectus in the form most recently
included in an amendment to such registration statement (or, if no such
amendment shall have been filed, in such registration statement), with such
changes or insertions as are required by Rule 430A under the Act or permitted by
Rule 424(b) under the Act, and in the case of either clause (i)(A) or (i)(B) of
this sentence as have been provided to and approved by you prior to the
execution of this Agreement, or (ii) if such registration statement, as it may
have been amended, has not been declared by the Commission to be effective under
the Act, an amendment to such registration statement, including a form of
prospectus, a copy of which amendment has been furnished to and approved by you
prior to the execution of this Agreement. The Company may also file a related
registration statement with the Commission pursuant to Rule 462(b) under the Act
for the purpose of registering certain additional Shares, which registration
shall be effective upon filing with the Commission. As used in this Agreement,
the term "Registration Statement" means the registration statement initially
filed relating to the Shares, as amended at the time when it was or is declared
effective under the Act, including all financial schedules and exhibits thereto
and including any information omitted therefrom pursuant to Rule 430A under the
Act and included in the Prospectus (as hereinafter defined), and including any
registration statement filed with the Commission pursuant to Rule 462(b); the
term "Preliminary Prospectus" means each prospectus subject to completion filed
with such registration statement or any amendment thereto (including the
prospectus subject to completion, if any, included in the Registration Statement
or any amendment thereto at the time it was or is declared effective under the
Act); the term "Prospectus" means:
(i) If the Company relies on Rule 434 under the Act, the Term Sheet
relating to the Shares that is first filed pursuant to Rule 424(b)(7) under
the Act, together with the Preliminary Prospectus identified therein that
such Term Sheet supplements;
(ii) if the Company does not rely on Rule 434 under the Act, the
prospectus first filed with the Commission pursuant to Rule 424(b) under
the Act; or
(iii) if the Company does not rely on Rule 434 under the Act and if no
prospectus is required to be filed pursuant to Rule 424(b) under the Act,
the prospectus included in the Registration Statement;
and the term "Term Sheet" means any term sheet that satisfies the requirements
of Rule 434 under the Act. Any reference herein to the "date" of a Prospectus
that includes a Term Sheet shall mean the date of such Term Sheet.
(b) The Commission has not issued any order preventing or suspending
use of the Registration Statement or any Preliminary Prospectus. When any
Preliminary Prospectus was filed with the Commission it (i) contained all
statements required to
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be stated therein in accordance with, and complied in all material respects with
the requirements of, the Act and the Rules and Regulations and (ii) did not
include any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. When the Registration Statement or any amendment thereto was or is
declared effective under the Act, it (i) contained or will contain all
statements required to be stated therein in accordance with, and complied or
will comply in all material respects with the requirements or, the Act and the
Rules and Regulations and (ii) did not or will not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading. When the
Prospectus or any Term Sheet that is a part thereof or any amendment or
supplement to the Prospectus is filed with the Commission pursuant to Rule
424(b) (or, if the Prospectus or part thereof or such amendment or supplement is
not required to be so filed, when the Registration Statement or the amendment
thereto Containing such amendment or supplement to the Prospectus was or is
declared effective under the Act) and on the Closing Date, the Prospectus, as
amended or supplemented at any such time, (i) contained or will contain all
statements required to be stated therein in accordance with, and complied or
will comply in all material respects with the requirements of, the Act and the
Rules and Regulations and (ii) did not or will not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The foregoing
provisions of this paragraph (b) do not apply to statements or omissions made in
any Preliminary Prospectus, the Registration Statement or any amendment thereto
or the Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by you specifically
for use therein. It is understood that the statements set forth in the
Prospectus on the cover page with respect to fees and discounts, paragraph one
(1) and three (3) under the heading "Underwriting" and the identity of counsel
to the Underwriter under the heading "Legal Matters" constitute the only
information furnished in writing by or on behalf of the Underwriter for
inclusion in the Registration Statement, the Preliminary Prospectus and
Prospectus, as the case may be.
(c) If the Company has elected to rely on Rule 462(b) and the
Registration Statement has not been declared effective under the Act (i) the
Company has filed a Registration Statement in compliance with, and that is
effective upon filing pursuant, to Rule 462(b) and has received confirmation of
its receipt and (ii) the Company has given irrevocable instructions for
transmission of the applicable filing fee in connection with the filing of the
Rule 462(b) Registration Statement, in compliance with Rule 111 promulgated
under the Act or the Commission has received payment of such filing fee.
(d) Each of the Company and its subsidiary has been duly organized 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 its properties and conduct its baseness as described in the
Registration Statement and Prospectus and is duly qualified or licensed to do
business as a foreign corporation and is in good standing in each other
jurisdiction in which the nature of its business or the character or location of
its properties requires such qualification, except where the failure to so
qualify will not materially affect the
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condition (financial or otherwise), business, properties, prospects, net worth
or results of operations of the Company and its subsidiary, taken as a whole.
The Company owns all of the outstanding shares of capital stock of its
subsidiary, ANC Holdings, Inc., and the Company has, no other subsidiaries.
Except for the stock of its subsidiary, the Company does not control, directly
or indirectly, any corporation, partnership, joint venture, association or other
business organization.
(e) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under "Capitalization;" the shares of
issued and outstanding capital stock of the Company set forth thereunder have
been duly authorized, validly issued, fully paid and nonassessable; except as
set forth in the Prospectus, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or agreements or other rights to
convert any obligation into, any shares of capital stock of the Company or the
subsidiary have been granted or entered into by the Company; and the Common
Stock conforms in all material respects to all statements relating thereto
contained in the Registration Statement and Prospectus.
(f) The Shares and the shares of Common Stock to be issued upon
exercise of the Underwriter's Warrants (as hereinafter defined) when issued and
delivered pursuant to this Agreement (and the Underwriter's Warrants with
respect to the shares of Common Stock to be issued upon the exercise thereof),
will be duly authorized, validly issued, fully paid and nonassessable and free
of preemptive rights of any security holder of the Company. The Underwriter's
Warrants when issued, paid for and delivered in accordance with the terms of the
Warrant Agreement (as hereinafter defined), will be duly authorized, validly
issued, fully paid and nonassessable and free of preemptive rights of any
security holder of the Company. Neither the filing of the Registration Statement
nor the offering or sale of the Shares as contemplated in this Agreement gives
rise to any rights, other than those which have been waived or satisfied the
existence of which have been disclosed to the Underwriters, for or relating to
the registration of any shares of Common Stock, except as described in the
Registration Statement.
(g) Each of this Agreement and the Warrant Agreement have been duly
and validly authorized. This Agreement has been, and on the Closing Date the
Warrant will be, executed and delivered by the Company and, assuming due
execution by the other party hereto and thereto, each constitutes the valid and
binding obligation of the Company enforceable against the Company in accordance
with their terms, except as enforceability may be limited by applicable
bankruptcy, insolvency or other laws affecting the rights of creditors generally
and the discretion of the courts in granting equitable remedies. The Company has
full power and lawful authority to authorize, issue and sell the Shares to be
sold by it hereunder on the terms and conditions set forth herein. No consent,
approval, authorization or order of, or any filing or declaration with, any
governmental authority is required for the consummation of the transactions
contemplated by this Agreement or in connection with the issuance and sale of
the Shares or the Underwriter's Warrants by the Company, except such as have
been obtained under the Act or the Rules and Regulations and such as may be
required under state securities or Blue Sky laws or the bylaws and rules of the
National Association of Securities Dealers, Inc. (the
4
"NASD") in connection with the purchase and distribution by the Underwriter of
the Shares and the Underwriter's Warrants to be sold by the Company.
(h) Except as described in the Prospectus, neither the Company
nor its subsidiary is in violation, breach or default (which includes any event
that has occurred which, with notice or lapse of time or both, would constitute
a default) of or under, and consummation of the transactions herein contemplated
and the fulfillment of the terms of this Agreement or the terms of any agreement
contemplated hereby will not conflict with, or result in a breach of, any of the
terms or provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any of the property or
assets of the Company or its subsidiary pursuant to the terms of any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or the subsidiary is a party or by which the Company or the
subsidiary may be bound or to which any of the property or assets of the Company
or the subsidiary is subject, nor will such action result in any violation of
the provisions of the articles of incorporation or any order, rule or regulation
applicable to the Company or the subsidiary of any court or any regulatory
authority or other governmental body having jurisdiction over the Company or the
subsidiary.
(i) Subject to the qualifications stated in the Prospectus, each of
the Company and the subsidiary has good and marketable title to all properties
and assets described in the Prospectus as owned by them, free and clear of all
liens, charges, encumbrances or restrictions, except such as are not materially
significant or important in relation to its business; all of the material leases
and subleases under which the Company or the subsidiary is the lessor or
sublessor of properties or assets or under which the Company or the subsidiary
holds properties or assets as lessee or sublessee as described in the Prospectus
are in full force and effect, and, except as described in the Prospectus,
neither the Company nor the subsidiary is in default in any material respect
with respect to any of the terms or provisions of any of such leases or
subleases, and no claim has been asserted by anyone adverse to rights of the
Company or the subsidiary as lessor, sublessor, lessee or sublessee under any of
the leases or subleases mentioned above, or affecting or questioning the right
of the Company or the subsidiary to continued possession of the leased or
subleased premises or assets under any such lease or sublease, except as
described or referred to in the Prospectus; and each of the Company and the
subsidiary owns or leases all such properties described in the Prospectus as are
necessary to its operations as now conducted and, except as otherwise stated in
the Prospectus, as proposed to be conducted as set forth in the Prospectus.
(j) King ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ P.C. who has given its report on certain
financial statements filed and to be filed with the Commission as a part of the
Registration Statement, which are incorporated in the Prospectus, are, with
respect to the Company, independent public accountants as required by the Act
and the Rules and Regulations.
(k) The consolidated financial statements and the related notes of the
Company, any supplementary financial information, any related schedules and the
pro forma financial statements of the Company set forth in the Registration
Statement and the Prospectus present fairly the consolidated financial position
and results of operations and changes in
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stockholder's equity and cash flows of the Company on the basis stated in the
Registration Statement, at the respective dates and for the respective periods
to which they apply. The consolidated financial statements and the related notes
of Medica Systems, Inc., any supplementary financial information and any related
schedules set forth in the Registration Statement and the Prospectus, present
fairly the consolidated financial position and results of operations and changes
in stockholders' equity and cashflows of Medica Systems, Inc. on the basis
stated in the Registration Statement, at the respective dates and for the
respective periods to which they apply. Said financial statements and notes,
supplementary financial information, related schedules and pro forma financial
statements have been prepared in accordance with generally accepted accounting
principles ("GAAP") applied on a basis which is consistent during the periods
involved. The financial data with respect to the Company set forth in the
Prospectus under the captions "Summary of Consolidated Financial Information,"
"Capitalization," "Selected Financial Data" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" fairly present, on
the basis stated in the Prospectus, the information set forth therein and have
been compiled on a basis consistent with that of the audited financial
statements included in the Prospectus. No other financial statements are
required by Form S-1 or otherwise to be included in the Registration Statement
or the Prospectus. The pro forma financial information included in the
Registration Statement has been prepared in accordance with the applicable
requirements of Regulation S-X and the assumptions used in the preparation of
such pro forma information are, in the opinion of the Company, reasonable. There
has been no material adverse change in the condition (financial or otherwise),
business, properties, prospects, net worth or results of operations of the
Company and its subsidiary, taken as a whole, from the latest information set
forth in the Registration Statement or the Prospectus, except as properly
described in the Prospectus; and there is no fact known to the Company or its
subsidiary which could reasonably be expected to have a material and adverse
effect on the future prospects of the Company and its subsidiary (other than
political or economic matter of general applicability or as properly described
in the Prospectus).
(l) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus and except as described in
the Registration Statement, the Company has not paid or declared any dividends
or other distributions of any kind on any class of its capital stock nor has it
incurred any liabilities or obligations, direct or contingent, not in the
ordinary course of business, or entered into any transaction not in the ordinary
course of business, which is material to the business of the Company, and there
has not been any change in the capital stock of, or any material incurrence of
long-term debt by the Company or its subsidiary or any material issuance of
options, warrants or other rights to purchase the capital stock of the Company
or its subsidiary or any material adverse change or any material development
involving, so far as the Company or its subsidiary can now reasonably foresee, a
prospective adverse change in the condition (financial or otherwise), net worth,
results of operations, business, key personnel or properties of the Company or
its subsidiary which would be material to the business or condition (financial
or otherwise) of the Company and its subsidiary, taken as a whole, and neither
the Company nor its subsidiary has become a party to, and neither the business
nor the property of the Company or its subsidiary has become the subject of, any
material litigation whether or not in the ordinary course of business.
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(m) Except as set forth in the Prospectus, there is not now pending or
threatened, any action, suit or proceeding to which the Company or its
subsidiary is a party before or by any court or governmental agency or body,
which might result in any material adverse change in the condition (financial or
otherwise), business, properties, prospects, net worth, or results of operations
of the Company and its subsidiary, taken as a whole, nor are there any actions,
suits or proceedings related to environmental matters or related to
discrimination on the basis of age, sex, religion or race; and no labor disputes
involving the employees of the Company or its subsidiary exist or are threatened
which might be expected to materially adversely affect the condition (financial
or otherwise), business, properties, prospects, net worth or results of
operations of the Company and its subsidiary, taken as a whole.
(n) Except as disclosed in the Prospectus, each of the Company and its
subsidiary has sufficient licenses, permits, certificates and other governmental
authorizations as are required for the conduct of its business or the ownership
of its property as described in the Prospectus and are in all material respects
complying therewith. Neither the Company nor its subsidiary has received any
notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit nor, to the knowledge of the Company or its
subsidiary, do any of the activities or business of the Company or its
subsidiary cause the Company or its subsidiary to be in violation of, or cause
the Company or its subsidiary to violate, any law, rule, regulation or order of
the United States, any state, county or locality, or of any agency or body of
the United States or of any state, county or locality, the violation of which
would have a material adverse impact upon the condition (financial or
otherwise), business, properties, prospects, net worth or results of operations
of the Company and its subsidiary, taken as a whole.
(o) Neither the Company nor its subsidiary has directly or indirectly,
at any time (i) made any contributions to any candidate for political office, or
failed to disclose fully any such contribution in violation of law or (ii) made
any payment to any state, federal or foreign governmental officer or official,
or other person charged with similar public or quasi-public duties, other than
payments or contributions required or allowed by applicable law. 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.
(p) On the Closing Date (as hereinafter defined) all transfer or other
taxes (including franchise, capital stock or other tax, other than income taxes,
imposed by any jurisdiction), if any, which are required to be paid in
connection with the sale and transfer of the Shares to the Underwriter hereunder
will have been fully paid or provided for by the Company and all laws imposing
such taxes will have been fully complied with in all material respects.
(q) There is no document or contract of a character required to be
described in the Registration Statement or Prospectus (or, if the Prospectus is
not in existence, the most recent Preliminary Prospectus) or to be filed as an
exhibit to the Registration Statement which is not described or filed as
required.
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(r) The Company has not taken nor will take, directly or indirectly,
any action designed to cause or result in, or which has constituted or which
might reasonably be expected to constitute the stabilization or manipulation of
the price of the Shares. The Company has not distributed and will not distribute
any offering material in connection with the offering and sale of the Shares
other than the Preliminary Prospectus and the Registration Statement, the
Prospectus or other materials permitted or required by the Act.
(s) The Company has not entered into any agreement pursuant to which
any person is entitled, either directly or indirectly, to compensation from the
Company for services as a finder in connection with the public offering referred
to herein.
(t) There are no holders of shares of Common Stock or other securities
of the Company having rights to register such Common Stock or other securities
by means of the Registration Statement.
(u) The Company has entered into employment contracts with its
principal executive officers, including ▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇ and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, and the description of such employment agreements in the Prospectus is
true, correct and complete in all material respects.
(v) No labor dispute with the employees of the Company exists or is
threatened or imminent that could result in a material adverse change in the
condition (financial or otherwise), business, properties, prospects, net worth
or results of operations of the Company, except as described in or contemplated
by the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(w) The Company owns or possesses, or can acquire on reasonable terms,
all material patents, patent applications, trademarks, service marks, trade
names, licenses, copyrights and proprietary or other confidential information
currently employed by them in connection with their respective businesses, and
the Company has not received any notice of infringement of or conflict with
asserted rights of any third party with respect to any of the foregoing, which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
funding, would result in a material adverse change in the condition (financial
or otherwise), business, properties, prospects, net worth or results of
operations of the Company and its subsidiary, taken as a whole, except as
described in or contemplated by the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus).
(x) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amount as the Company
believes are prudent and customary in the businesses in which it is engaged; the
Company has not been refused any insurance coverage sought or applied for; and
the Company has no 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), business, properties, prospects, net worth or results
of operations of the Company and
8
its subsidiary, taken as a whole, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(y) The Company will conduct its operations in a manner that will not
subject it to registration as an investment company under the Investment Company
Act of 1940, as amended, and this transaction will not cause the Company to
become an investment company subject to registration under such Act.
(z) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a material
adverse effect on the Company and its subsidiary, taken as a whole) and has paid
all taxes required to be paid and any other assessment, fine or penalty levied,
to the extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith or
as described in or contemplated by the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).
(aa) Any certificate signed by any officer of the Company and
delivered to the Underwriter or to counsel for the Underwriter shall be deemed a
representation and warranty made by the Company to the Underwriter as to the
matters covered thereby and shall be deemed incorporated herein in its entirety
and shall be effective as if such representation and warranty were made herein.
(bb) The Company owns no shares of stock or any other equity
securities of any corporation or has any equity interest in any firm,
partnership, association or other entity, except as described in or contemplated
by the Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus).
(cc) The books, records and accounts and systems of internal
accounting controls of the Company currently comply in all material respects
with the requirements of Section 13(b)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (3) access to assets is
permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(dd) No statement, representation, warranty or covenant made by the
Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Underwriter is or will be, when made,
inaccurate, untrue or incorrect in any material respect, unless such statement,
representation, warranty or covenant is qualified as to materiality, in which
case it is not or will not be, when made, inaccurate, untrue or incorrect.
9
(ee) The Shares have been approved for listing on the Nasdaq SmallCap
Market under the symbol "CLAI," and the Boston Stock Exchange under the symbol
"CLA" subject only to notice of issuance.
(ff) The business, operations and facilities of each of the Company
and its subsidiary have been and are being conducted in compliance in all
material respects with all applicable laws, ordinances, rules, regulations,
licenses, permits, approvals, plans, authorizations or requirements relating to
occupational safety and health, or pollution, or protection of health or the
environment (including, without limitation, those relating to emissions,
discharges, releases or threatened releases of pollutants, contaminants or
hazardous or toxic substances, materials or wastes into ambient air, surface
water, groundwater or land, or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
chemical substances, pollutants, contaminants or hazardous or toxic substances,
materials or wastes, whether solid, gaseous or liquid in nature) of any
governmental department, commission, board, bureau, agency or instrumentality of
the United States or any state or political subdivision thereof, and all
applicable judicial or administrative agency or regulatory decrees, awards,
judgments and orders relating thereto; and neither the Company nor its
subsidiary has received any notice from any governmental instrumentality or any
third party alleging any violation thereof or liability thereunder (including,
without limitation, liability for costs of investigating or remediating sites
containing hazardous substances and/or damages to natural resources), which
violation would have, or could reasonably be expected to have, a material
adverse effect on the condition (financial or otherwise), business, properties,
prospects, net worth or results of operations of the Company and its subsidiary,
taken as a whole. The intended use and occupancy of each of the facilities owned
or operated by the Company or its subsidiary complies in all material respects
with all applicable codes and zoning laws and regulations and there is no
pending or, to the knowledge of the Company or its subsidiary, threatened
condemnation, zoning change, environmental or other proceeding or action that
will in any material respect adversely affect the size of, use of, improvements
on, construction on, or access to such facilities.
(gg) Each executive officer, director and certain stockholders of the
Company, as listed on SCHEDULE A attached hereto, has delivered to the
Underwriter an agreement (the "Lock-up Agreement"), in substantially the form of
ANNEX A, to the effect that he, she or it will not, for a period of two years
after the date hereof, without the prior written consent of the Underwriter,
offer to sell, sell, contract to sell, grant any option to purchase or otherwise
dispose (or announce any offer, sale, grant of any option to purchase or other
disposition) of any shares of Common Stock or securities convertible into, or
exchangeable or exercisable for, shares of Common Stock, except for bona fide
private sales or transfers of Common Stock to purchasers or transferees provided
that such person agrees in writing to be bound by the terms of the Lock-up
Agreement.
(hh) No transaction has occurred between or among the Company or any
of its affiliates, officers or directors or any affiliate or affiliates of any
such officer or director that is required to be described in and is not
described in the registration Statement and the Prospectus.
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(ii) The merger of American Net Claims, Inc. with and into the Company
(the "Merger") was duly authorized under all applicable laws by each of the
parties thereto; the merger agreement was duly authorized, executed and
delivered by all corporate action of the Company and American Net Claims, Inc.
and such agreement constitutes the legal, valid and binding obligation of each
of the parties thereto. No registration or filing with, or approval, consent or
action by, any governmental authority is required, other than those which have
heretofore been made or obtained in connection with the Merger. As a result of
the consummation of the Merger, the Company is, by operation of law and without
further action, the legal successor to American Net Claims, Inc.
(jj) Neither the Company nor any of its affiliates nor any person
acting on the Company's behalf has, directly or indirectly, at any time within
the past six (6) months made, nor will any such party make within six (6) months
of the Closing Date, any offer or sale of any security or solicitation of any
offer to buy any security under circumstances that would eliminate the
availability of the exemption from registration under Regulation D under the Act
in connection with the 1998 Private Placements nor which would violate the Act.
2. Purchase, Delivery and Sale of the Shares.
(a) Subject to the terms and conditions of this Agreement, and upon
the basis of the representations, warranties and agreements herein contained,
the Company agrees to issue and sell to the Underwriter, and the Underwriter
agrees to buy from the Company, at $_____ per share, at the place and time
hereinafter specified, 2,500,000 shares of Common Stock (the "Firm Shares").
(b) In addition, subject to the terms and conditions of this
Agreement, and upon the basis of the representations, warranties and agreements
herein contained, the Company hereby grants an option (the "Option") to the
Underwriter to purchase up to an additional 375,000 shares of Common Stock (the
"Option Shares"), at $_____ per share, at the place and time hereinafter
specified. The Option hereby granted will expire 45 days after the date of the
Prospectus, and may be exercised in whole or in part only for the purpose of
covering over-allotments which may be made in connection with the offerings and
distribution of the Firm Shares upon written notice from the Underwriter to the
Company setting forth the amount of Option Shares as to which the Underwriter is
exercising the Option and the time and date of payment for such Option Shares.
Such time and date of delivery for the Option Shares (the "Option Closing Date")
shall be determined by the Underwriter, but shall not be, unless otherwise
agreed upon by the Underwriter and the Company, later than seven full business
days after the exercise of the Option, and in no event prior to the Closing Date
(as hereinafter defined). If the Option is exercised as to all or any portion of
the Option Shares, the Company shall sell all or such portion of the Option
Shares to the Underwriter and the Underwriter shall purchase all or such portion
of the Option Shares from the Company.
(c) Delivery of the Firm Shares against payment therefor shall take
place at the offices of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, MetLife Building, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (or at such other place as may be
designated by agreement between you
11
and the Company) at 10:00 a.m., New York time, on _______________, 1999, or at
such later time and date as you may designate but not later than ten (10) days
from the effective date of the Registration Statement under the Act (the
"Effective Date"), such time and date of payment and delivery for the Firm
Shares being herein called the "Closing Date." In addition, in the event that
any or all of the Option Shares are purchased by the Underwriter, delivery of
the Option Shares against payment therefor shall take place at the
above-mentioned offices of ▇▇▇▇▇▇▇▇▇ Traurig (or at such other place as may be
designated by agreement between you and the Company), at 10:00 a.m., New York
time, on the Option Closing Date as specified in the notice from the Underwriter
to the Company.
(d) The Company will make the certificates for the Firm Shares or the
Option Shares, as the case may be, to be purchased by the Underwriter hereunder
available to you for inspection at least one (1) full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
shall be in such names and denominations as you may request at least two (2)
full business days prior to the Closing Date or the Option Closing Date, as the
case may be. Time shall be of the essence, and delivery of the certificates
representing the Firm Shares or the Option Shares, as the case may be, at the
time and place specified in this Agreement is a further condition to the
obligations of the Underwriter.
If so requested by you, definitive certificates in negotiable
form for the Firm Shares or the Option Shares, as the case may be, to be
purchased by the Underwriter hereunder will be delivered by the Company to you
on the Closing Date or the Option Closing Date, as the case may be, against
payment of the purchase price therefor, by certified or bank cashier's checks in
New York Clearing House funds, payable to the order of the Company or by wire
transfer. However, if eligible, the Shares may be delivered in book entry form
using the Full FAST facilities of The Depository Trust Company.
It is understood that the Underwriter proposes to offer the
Shares to be purchased hereunder to the public, upon the terms and conditions
set forth in the Registration Statement, after the Registration Statement
becomes effective under the Act.
(e) On the Closing Date, the Company will further issue and sell to
you or, at your direction, to your respective bona fide officers, for a total
purchase price of $25.00, warrants entitling the holders thereof to purchase an
aggregate of 250,000 shares of Common Stock, at an initial exercise price of
$______ per share (the "Underwriter's Warrants") for a period of four (4) years,
such period to commence twelve (12) months after the Effective Date. Such
Underwriter's Warrants shall contain such other terms and provisions as may be
set forth in an agreement with respect thereto (the "Warrant Agreement")
executed and delivered by the Company and you simultaneously with the execution
and delivery of this Agreement. As provided in the Warrant Agreement, you may
designate that the Underwriter's Warrants be issued in varying amounts directly
to your respective bona fide officers and not to you. Such designation will be
made by you only if you determine that such issuances would not violate the
Rules of Conduct of the National Association of Securities Dealers, Inc.
relating to the review of corporate financing arrangements. The holders of the
Underwriter's Warrants will be entitled to the registration rights set forth in
Section 10 of the Warrant Agreement.
12
3. Covenants of the Company. The Company covenants and agrees with the
Underwriter as to the matters set forth in subparagraphs (a) through (r) below:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective under the Act at the time of execution of this
Agreement, and any amendments thereto to become effective under the Act as
promptly as possible. If required, the Company will file the Prospectus or any
Term Sheet that constitutes a part thereof and any amendment or supplement
thereto with the Commission in the manner and within the time period required by
Rules 434 and 424(b) under the Act. During any time when a prospectus relating
to the Shares is required to be delivered under the Act, the Company (i) will
comply in all material respects with all requirements imposed upon it by the Act
and the Rules and Regulations to the extent necessary to permit the continuance
of sales of or dealings in the Shares in accordance with the provisions hereof
and of the Prospectus, as then amended or supplemented, and (ii) except as
required by law, will not file with the Commission the Prospectus, Term Sheet or
the amendment referred to in the second sentence of Section 1(a) hereof, any
amendment or supplement to such Prospectus, Term Sheet or any amendment to the
Registration Statement of which the Underwriter previously have been advised and
furnished with a copy for a reasonable period of time prior to the proposed
filing and as to which filing the Underwriter shall not have given their
consent. The Company will prepare and file with the Commission, in accordance
with the Rules and Regulations, promptly upon request by the Underwriter or
counsel for the Underwriter, any amendments to the Registration Statement or
amendments or supplements to the Prospectus that may be necessary or advisable
in connection with the distribution of the Shares by the Underwriter, and will
use its best efforts to cause any such amendment to the Registration Statement
to be declared effective under the Act by the Commission as promptly as
possible. The Company will advise the Underwriter, promptly after receiving
notice thereof, of the time when the Registration Statement or any amendment
thereto has been filed or declared effective under the Act or the Prospectus or
any amendment or supplement thereto has been filed and will furnish the
Underwriter with copies of such documents and provide evidence satisfactory to
the Underwriter of each such filing or effectiveness.
The Company will advise the Underwriter, promptly after receiving
notice or obtaining knowledge thereof, of (i) the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement or any
amendment thereto or any stop order or any order preventing or suspending the
use of any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, (ii) the suspension of the qualification of any
jurisdiction, (iii) the institution, threatening or contemplation of any
proceeding for any such purpose or (iv) any request made by the Commission for
amending the Registration Statement, for amending or supplementing the
Prospectus or for additional information. The Company will use its reasonable
best efforts to prevent the issuance of any such stop order and, if any such
order or stop order is issued, to obtain the withdrawal thereof as promptly as
possible.
The Company has caused to be delivered to you copies of each
Preliminary Prospectus, and the Company has consented and hereby consents to the
use of such copies for the purposes permitted by the Act. The Company authorizes
the Underwriter and dealers to use the Prospectus in connection with the sale of
the Shares for such period as, in the
13
opinion of counsel to the Underwriter, the use thereof is required to comply
with the applicable provisions of the Act and the Rules and Regulations. In case
of the happening, at any time within such period as a Prospectus is required
under the Act to be delivered in connection with sales by an underwriter, of any
event of which the Company has knowledge and which materially affects the
Company or the securities of the Company or which, in the opinion of counsel for
the Company or counsel for the Underwriter, should be set forth in an amendment
of the Registration Statement or a supplement to the Prospectus in order to make
the statements therein not then misleading, in light of the circumstances
existing at the time the Prospectus is required to be delivered to a purchaser
of the Shares, or in case it shall be necessary to amend or supplement the
Prospectus to comply with law or with the Rules and Regulations, the Company
will notify you promptly and forthwith prepare and furnish to you copies of such
amended Prospectus or of such supplement to be attached to the Prospectus, in
such quantities as you may reasonably request, in order that the Prospectus, as
so amended or supplemented, will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements in the Prospectus, in light of the circumstances under which they
were made, not misleading. The preparation and furnishing of any such amendment
or supplement to the Registration Statement or amended Prospectus or supplement
to be attached to the Prospectus shall be without expense to the Underwriter,
except that in case the Underwriter is required, in connection with the sale of
the stock, to deliver a Prospectus ninety (90) days or more after the effective
date of the Registration Statement, the Company will upon request of and at the
expense of the Underwriter, amend or supplement the Registration Statement and
Prospectus and furnish the Underwriter with reasonable quantities of
prospectuses complying with Section 10(a)(3) of the Act.
The Company will comply in all material respects with the Act, the
Rules and Regulations and the Exchange Act and the rules and regulations
thereunder in connection with the offering and issuance of the Shares.
(b) The Company will use its reasonable best efforts to qualify to
register the Shares for sale under the securities or "blue sky" laws of such
jurisdictions as the Underwriter may reasonably designate and will make such
application and furnish such information as may be required for that purpose and
to comply with such laws, provided the Company shall not be required to qualify
as a foreign corporation or a dealer in securities or to execute a general
consent to service of process in any jurisdiction in any action other than one
arising out of the offering or sale of the Shares. The Company will, from time
to time, prepare and file such statements and reports as are or may be required
to continue such qualification in effect for so long a period as the Underwriter
may reasonably request.
(c) If the sale of the Shares provided for herein is not consummated
for any reason caused by the Company, the Company shall pay all costs and
expenses incident to the performance of the Company's obligations hereunder
including, but not limited to, all of the expenses itemized in Section 8,
including the accountable expenses of the Underwriter, including legal fees.
14
(d) For so long as the Company is a reporting company under either
Section 12(b) or (g) or 15(d) of the Exchange Act, the Company, at its expense,
will furnish to its stockholders an annual report (including financial
statements audited by independent public accountants) in reasonable detail and,
at its own expense, will furnish such report to you during the period ending
five (5) years from the date hereof; (i) as soon as practicable after the end of
each fiscal year, a balance sheet of the Company as at the end of such fiscal
year, together with statements of income, changes in stockholder's equity and
cash flows of the Company for such fiscal year, all in reasonable detail and
accompanied by a copy of the certificate or report thereon of independent
accountants; (ii) as soon as they are available, a copy of all reports
(financial or other) mailed to security holders; (iii) as soon as they are
available, a copy of all nonconfidential reports and financial statements
furnished to or filed with the Commission; and (iv) such other information as
you may from time to time reasonably request.
(e) In the event the Company has an active subsidiary or subsidiaries,
such financial statements referred to in subsection (d) above will be furnished
on a consolidated basis to the extent the accounts of the Company and its
subsidiary or subsidiaries are consolidated in reports finished to its
stockholders generally.
(f) The Company will deliver to you at or before the Closing Date two
(2) signed copies of the Registration Statement, including all financial
statements and exhibits filed therewith, and of all amendments thereto, and will
deliver to the Underwriter such number of copies of the Registration Statement,
including financial statements but without exhibits, as the Underwriter may
reasonably request. The Company will deliver to or upon the order of the
Underwriter, from time to time until the effective date of the Registration
Statement, as many copies of any Preliminary Prospectus as the Underwriter may
reasonably request. The Company will deliver to the Underwriter on the effective
date of the Registration Statement and thereafter for so long as a Prospectus is
required to be delivered under the Act, from time to time, as many copies of the
Prospectus, in final form, or as thereafter amended or supplemented, as the
Underwriter may from time to time reasonably request.
(g) The Company will make generally available to its security holders
and deliver to you as soon as it is practicable to do so, but in no event later
than ninety (90) days after the and of twelve (12) months after its current
fiscal quarter, an earnings statement (which need not be audited) covering a
period of at least twelve (12) consecutive months beginning after the effective
date of the Registration Statement, which shall satisfy the requirements of
Section 11(a) of the Act.
(h) The Company will apply the net proceeds from the sale of the
Shares for the purposes set forth under "Use of Proceeds" in the Prospectus, and
will file such reports with the Commission with respect to the sale of the
Shares and the application of the proceeds therefrom as may be required pursuant
to Rule 463 under the Act.
(i) The Company will promptly, upon your written request, prepare and
file with the Commission any amendments or supplements to the Registration
Statement, Preliminary Prospectus or Prospectus and take any other action which,
in the reasonable opinion
15
of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, counsel to the Underwriter, may be reasonably necessary or
advisable in connection with the distribution of the Shares, and will use its
best efforts to cause the same to become effective as promptly as possible.
(j) The Company will reserve and keep available that maximum number of
its authorized but unissued shares of Common Stock which are issuable upon
exercise of the Underwriter's Warrants outstanding from time to time.
(k) Upon completion of this offering, the Company will make all
filings required, including registration under the Exchange Act, to obtain the
listing of its Common Stock on the Nasdaq SmallCap Market and the Boston Stock
Exchange, and will effect and will use its best efforts to maintain such
listings for at least five (5) years from the date of this Agreement.
(l) The Company represents that it has not taken and agrees that it
will not take, directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in the stabilization or manipulation
of the price of the Shares or to facilitate the sale or resale of the Shares.
The Company has not distributed and will not distribute any offering material in
connection with the offering and sale of the Shares other than the Preliminary
Prospectus and the Registration Statement, the Prospectus or other materially
permitted or required by the Act.
(m) On the Closing Date and simultaneously with the delivery of the
Firm Shares, the Company shall execute and deliver to Cruttenden ▇▇▇▇
Incorporated and its designees the Underwriter's Warrants for an initial
exercise price of $______ per share. The Underwriter's Warrants will be
substantially in the form as filed as an exhibit to the Registration Statement.
(n) During the one hundred eighty (180) day period commencing on the
Closing Date, the Company will not, without the prior written consent of the
Underwriter, grant options to purchase shares of Common Stock at a price less
than the initial public offering price except as may be provided by the
Company's currently existing stock option plan as described in the Prospectus.
To the extent that such stock option plan allows, the Company may issue shares
upon exercise of the options.
(o) For a period of two (2) years from the Effective Date, when deemed
necessary by the Chief Financial Officer of the Company, the Company, at its
expense, shall cause its regularly engaged independent certified public
accountants to review (but not audit) the Company's financial statements for
each of the first three (3) fiscal quarters prior to the announcement of
quarterly financial information, the filing of the Company's quarterly report on
Form 10-Q and the mailing of quarterly financial information to stockholders.
(p) Pending completion of the offering and for a period of ninety (90)
days thereafter, the Company will not issue press releases or engage in other
publicity without the Underwriters prior consent.
16
(q) For a period of two years from the Closing Date, the Company will
not, nor will it allow, without the prior written consent of the Underwriter,
the executive officers, directors or certain holders of any class of equity
securities of the Company to, sell, grant any option or warrant for the sale, or
otherwise dispose of, directly or indirectly, any shares of Common Stock or
other equity securities of the Company (including any shares obtained through
the exercise of options granted under the Company's Stock Option Plan (as such
term is defined in the Prospectus) or any securities convertible into,
exercisable for or exchangeable for shares of Common Stock or other equity
securities of the Company, provided, however, that with respect to any issuances
of securities by the Company such consent may not be unreasonably withheld, and
the Company may issue options for up to 500,000 shares of Common Stock under its
Stock Option Plan and 100,000 under its Non-Employee Director's Plan without
such consent.
(r) On the Closing Date, the Company will furnish you with a Lock-up
Agreement, substantially in the form of Annex A hereto, from each of the
executive officers, directors and certain holders of any class of equity
securities of the Company, as listed on Schedule A attached hereto, not to sell
any shares of Common Stock or other equity securities of the Company, held by
each prior to the Effective Date or obtained through exercise of options granted
under the Stock Option Plan, for a period of twenty-four (24) months from the
Closing Date, without your prior written consent, which consent may not be
unreasonably withheld; provided, however, the aforementioned restrictions do not
apply to private sales or transfers of Common Stock to purchasers or transferees
who agree in writing to be bound by the terms of such Lock-up Agreement.
4. Conditions of Underwriter's Obligations. The obligations of the
Underwriter to purchase and pay for the Firm Shares, and the Option Shares if
the Option is exercised, which it has agreed to purchase hereunder, are subject
to the accuracy (as of the date hereof and as of the Closing Date, or with
respect to the Option Shares, the Option Closing Date) of and compliance with
the representations and warranties of the Company herein, to the performance by
the Company of its obligations hereunder, and to the following conditions:
(a) The Registration Statement shall have become effective, and you
shall have received notice thereof not later than 10:00 a.m., New York time, on
the day following the date of this Agreement, or at such later time or on such
later date as to which you may agree; on or prior to the Closing Date, and on
the Option Closing Date if the Option is exercised, no stop order suspending the
effectiveness of the Registration Statement shall have been issued, and no
proceedings for that or any similar purpose shall have been instituted or shall
be pending or, to your knowledge or to the knowledge of the Company, shall be
contemplated by the Commission; any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, counsel to the Underwriter; and no stop order
shall be in effect denying or suspending the effectiveness of such
qualification, nor shall any stop order proceedings with respect thereto be
instituted or pending or threatened under such law.
(b) On the Closing Date, and again on the Option Closing Date if the
Option is exercised, you shall have received the opinion, dated as of the
Closing Date, of ▇▇▇▇▇
17
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLC, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriter, to the effect that:
(i) The Company owns all of the outstanding capital stock of ANC
Holdings, Inc. (the "Subsidiary") and has no other subsidiaries. Each of
the Company and the Subsidiary has been duly organized 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 its properties and conduct its business as described in
the Registration Statement and Prospectus, and is duly qualified or
licensed to do business as a foreign corporation and is in good standing in
each other jurisdiction in which the nature of its business or the
character or location of its properties requires such qualification, except
where the failure to so qualify would not have a material adverse effect on
the condition (financial or otherwise), business, properties, prospects,
net worth or results of operations of the Company and its subsidiary, taken
as a whole.
(ii) To our knowledge, each of the Company and the Subsidiary has not
been required to obtain any authorization, approval, order, license or
permit of or from any governmental or regulatory official or body
(collectively "Permits") to own or lease its material properties and
conduct the material aspects of its business within the United States as
described in the Prospectus. To our knowledge, neither the Company nor the
Subsidiary has received any notice of a proceeding relating to the
revocation or modification of any Permit which singly or in aggregate, if
the subject of an unfavorable decision, ruling or finding would materially
and adversely affect the condition, financial or otherwise, of the Company
and the Subsidiary or their operations taken as a whole.
(iii) The authorized equity capitalization of the Company is as set
forth under "Capitalization" in the Prospectus; all shares of the Company's
outstanding Common Stock requiring authorization for issuance by the
Company's Board of Directors have been duly authorized, validly issued, are
fully paid and nonassessable and conform to the description thereof
contained in the Prospectus; to our knowledge, the outstanding shares of
Common Stock of the Company have not been issued in violation of the
preemptive rights of any stockholder, and the stockholders of the Company
do not have any preemptive rights or other rights to subscribe for or to
purchase, nor are there any restrictions upon the voting or transfer of any
of the Shares; the Shares conform to the description thereof contained in
the Prospectus; the Shares have been duly authorized and, when issued and
delivered pursuant to this Agreement, will be duly and validly issued,
fully paid, nonassessable, free of preemptive rights and no personal
liability will attach to the ownership thereof; and to our knowledge,
neither the filing of the Registration Statement nor the offering or sale
of the Shares as contemplated by the Agreement gives rise to any
registration rights or other rights, other than those
18
which have been waived or satisfied, relating to the registration of any
shares of Common Stock.
(iv) The Agreement and the Warrant Agreement have been duly and
validly authorized, executed and delivered by the Company and, assuming due
execution and delivery of the Agreement and the Warrant Agreement by the
other parties thereto, payment by the Underwriter for the Shares offered
pursuant to the Agreement and payment by the Underwriter for the
Underwriter's Warrants, are the valid and legally binding obligations of
the Company, except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
in general and subject, as to enforceability to general principles of
equity (regardless of whether enforcement is sought in a proceeding, in
equity or law); and except that no opinion is expressed as to the
enforceability of the indemnity provisions contained in Section 6 or the
contribution provisions contained in Section 7 of the Agreement.
(v) The certificates evidencing the Shares are in due and proper form;
the additional shares issuable upon exercise of the over-allotment option
and the shares of Common Stock of the Company issuable upon exercise of the
Underwriter's Warrants in accordance with the terms of, respectively, the
Agreement and the Warrant Agreement and at the prices therein provided for,
have been duly authorized and reserved for issuance upon such exercise, and
such shares, when issued upon exercise in accordance with the terms of the
Agreement and such warrants and at the price provided for, will be duly and
validly issued, fully paid and nonassessable.
(vi) We do not know of any pending or threatened legal or governmental
proceedings to which the Company or a subsidiary is a party which, if an
unfavorable decision were rendered, could materially adversely affect the
condition (financial or otherwise), business, properties, net worth or
results of operations of the Company and the Subsidiary, taken as a whole,
or which question the validity of the Common Stock of the Company, the
Shares, the Agreement, the Warrant Agreement, the Underwriter's Warrants or
of any action taken or to be taken by the Company pursuant to the
Agreement, the Warrant Agreement, or the Underwriter's Warrants; and to our
knowledge there are no governmental proceedings or regulations required to
be described or referred to in the Registration Statement which are not so
described or referred to.
(vii) Neither the Company nor the Subsidiary is in violation of or
default under, nor will the execution, delivery or performance by the
Company of its obligations under the Agreement, the Warrant Agreement or
the Underwriter's Warrants, result in a violation of, or constitute a
default under articles or certificate of incorporation or by-laws of the
Company's or of the Subsidiary.
19
(viii) The Registration Statement has become effective under the Act,
and no stop order suspending the effectiveness of the Registration
Statement is in effect, and no proceedings for that purpose have been
instituted or are pending before, or to our knowledge threatened by, the
Commission; the Registration Statement and the Prospectus (except for the
financial statements and other financial data contained therein, or omitted
therefrom, as to which such counsel need express no opinion) comply as to
form in all material respects with the applicable requirements of the Act
and the Rules and Regulations.
(ix) The descriptions in the Registration Statement and the
Prospectus, and any amendment or supplement thereto, of contracts and other
documents are accurate in all material respects and fairly present the
information required to be shown; and we do not know of any contract or
document to be summarized or described therein or to be filed as exhibits
thereto which are not so summarized, described or filed.
(x) No authorization, approval, consent, or license of any
governmental or regulatory authority or agency is necessary in connection
with the authorization, issuance, transfer, sale or delivery of the Shares
by the Company, in connection with the execution, delivery and performance
of this Agreement or the Warrant Agreement by the Company, or the issuance
of the Underwriter's Warrants or the Common Stock underlying the
Underwriter's Warrants, other than registrations or qualifications of such
stock under applicable state or foreign securities or "Blue Sky" laws and
registration under the Act.
(xi) We have reviewed the statements in the Registration Statement
under the captions "Business," "Management," "Principal Stockholders,"
"Certain Transactions," "Description of Securities" and "Shares Eligible
for Future Sale" and, insofar as they refer to descriptions of agreements,
statements of law, descriptions of statutes, licenses, rules or regulations
or legal conclusions, such statements are correct in all material respects.
(xii) The merger prior to the sale of the Shares between the Company
and its American Net Claims, Inc. ("ANC"), its former parent, in which the
Company was the surviving corporation and succeeds to the rights,
limitations, obligation and liabilities of ANC (the "Merger") was duly
authorized by each of the parties thereto; the merger agreement was duly
executed and delivered by the parties thereto and is the legal, valid and
binding obligation of each of the parties thereto. Except as enforceability
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights in general and subject as to
enforceability to general principles of equity (regardless of whether
enforcement is sought in a proceeding, in equity or law). No registration
or filing with, or approval, consent or action by, any Governmental
authority is required, other than those which have heretofore been made or
obtained in connection with the Merger.
20
Such counsel shall also state that such counsel has participated
in the preparation of the Registration Statement and the Prospectus, and nothing
has come to the attention of such counsel to cause such Counsel to have reason
to believe that the Registration Statement or any amendment thereto at the time
it became effective under the Act contained any untrue statement of a material
fact required to be stated therein or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus or any supplement thereto contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading (except, in the case of both the Registration
Statement and any amendment thereto and the Prospectus and any supplement
thereto, for the financial statements, notes thereto and other financial
information and statistical data contained therein, as to which such counsel
need express no opinion).
Such opinion shall also cover such matters incident to the
transactions contemplated hereby as the Underwriter or counsel for the
Underwriter shall reasonably request. In rendering such opinion, such counsel
may rely upon certificates of any officer of the Company or public officials as
to matters of fact; and may rely as to all matters of law other than the law of
the United States or of the State of Delaware upon opinions of counsel
satisfactory to you (e.g., local counsel shall provide a satisfactory opinion
for matters of Texas law), in which case the opinion shall state that they have
no reason to believe that you and they are not entitled to so rely.
(c) On the Closing Date, and again on the Option Closing Date if the
Option is exercised, you shall have received the opinion, dated as of the
Closing Date, of __________________, special intellectual property counsel for
the Company, in form and substance satisfactory to counsel for the Underwriter
and in substantially the form of Schedule B attached hereto.
(d) All corporate proceedings and other legal matters relating to this
Agreement, the Registration Statement, the Prospectus and other related matters
shall be satisfactory to or approved by ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, counsel to the
Underwriter, and you shall have received from such counsel a signed opinion,
dated as of the Closing Date (or in the event of the Option Closing, the Option
Closing Date), with respect to the validity of the issuance of the Firm Shares
(or in the event of the Option Closing, the Option Shares), the form of the
Registration Statement and Prospectus (other than the financial statements,
notes thereto and other financial data contained therein), the execution of this
Agreement and other related matters as you may reasonably require. The Company
shall have furnished to counsel for the Underwriter such documents as they may
reasonably request for the purpose of enabling them to render such opinion.
(e) You shall have received a letter on and as of the Effective Date
of the Registration Statement and again on and as of the Closing Date (and again
on and as of the Option Closing Date, if the Option is exercised) from King
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ P.C., independent public accountants for the Company,
substantially in the form approved by you.
21
(f) At the Closing Date or, in the event the Option is exercised, at
the Option Closing Date, (i) the representations and warranties of the Company
contained in this Agreement shall be true and correct with the same effect as if
made on and as of the Closing Date or the Option Closing Date, as the case may
be, and the Company shall have performed all of its obligations hereunder and
satisfied all the conditions on its part to be satisfied at or prior to such
Closing Date or such Option Closing Date, as the case may be; (ii) the
Registration Statement and the Prospectus and any amendments or supplements
thereto shall contain all statements which are required to be stated therein in
accordance with the Act and the Rules and Regulations and in all material
respects conform to the requirements thereof, and neither the Registration
Statement nor the Prospectus nor any amendment or supplement thereto shall
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading; (iii) there shall have been, since the respective dates as of
which information is given, no material adverse change in the condition
(financial or otherwise), business, properties, prospects, net worth, results of
operations, capital stock, long-term or short-term debt or general affairs of
the Company and its subsidiary, taken as a whole, from that set forth in the
Registration Statement and the Prospectus, except changes which the Registration
Statement and Prospectus indicate might occur after the effective date of the
Registration Statement, and neither the Company nor its subsidiary shall have
incurred any material liabilities or agreement not in the ordinary course of
business other than as referred to in the Registration Statement and Prospectus;
(iv) except as set forth in the Prospectus, no action, suit or proceeding at law
or in equity shall be pending or threatened against the Company or its
subsidiary which would be required to be set forth in the Registration
Statement, and no proceedings shall be pending or threatened against the Company
or its subsidiary before or by any commission, board or administrative agency in
the United States or elsewhere, wherein an unfavorable decision, ruling or
finding would materially adversely affect the condition (financial or
otherwise), business, properties, prospects, net worth or results of operations
of the Company and its subsidiary, taken as a whole; and (v) you shall receive
at the Closing Date or the Option Closing Date, as the case may be, a
certificate signed by each of the Chairman of the Board or the President and the
principal financial or accounting officer of the Company, dated as of the
Closing Date or the Option Closing Date, as the case may be, evidencing
compliance with the provisions of this subsection (e).
(g) If any of the conditions herein provided for in this Section shall
not have been fulfilled as of the date indicated, this Agreement and all
obligations of the Underwriter under this Agreement may be canceled at, or at
any time prior to, the Closing Date by the Underwriter by notifying the Company
of such cancellation in writing or by telegram at or prior to the Closing Date.
Any such cancellation shall be without liability of the Underwriter to the
Company.
(h) In the event the Option is exercised, if any of the conditions
herein provided for in this Section, with respect to the Option Closing, shall
not have been fulfilled as of the date indicated, all obligations of the
Underwriter under this Agreement with respect to such Option Closing may be
canceled at, or at any time prior to, the Option Closing Date by the Underwriter
by notifying the Company of such cancellation in writing or by telegram at or
prior
22
to the Option Closing Date. Any such cancellation shall be without liability of
the Underwriter to the Company.
5. Conditions of the Company's Obligations. The obligation of the Company
to sell and deliver the Firm Shares, and the Option Shares if the Option is
exercised, is subject to the following conditions:
(a) The Registration Statement shall have become effective under the
Act not later than 10:00 a.m., New York time, on the day following the date of
this Agreement, or on such later date as the Company and the Underwriter may
agree to in writing.
(b) At the Closing Date, and on the Option Closing Date if the Option
is exercised, no stop orders suspending the effectiveness under the Act of the
Registration Statement shall have been issued under the Act or any proceedings
therefor initiated or threatened by the Commission.
(c) The Company shall have received payment for the Shares from the
Underwriter.
6. Indemnification.
(a) The Company agrees to indemnify and hold harmless the Underwriter
and each person, if any, who controls the Underwriter within the meaning of the
Act, the Underwriter's counsel and the Company's counsel against any losses,
claims, damages or liabilities, joint or several (which shall, for all purposes
of this Agreement, include, but not be limited to, all reasonable costs of
defense and investigation and all attorneys' fees), to which the Underwriter,
any controlling person, the Underwriter's counsel or the Company's counsel may
become subject, under the Act or otherwise, insofar, as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in (i) the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto; (ii) any "Blue Sky"
application or other document executed by the Company specifically for the
purpose or based upon written information furnished by the Company filed in any
state or other jurisdiction in order to qualify any or all of the Shares, under
the securities laws thereof (any such application, document or information being
hereinafter called a "Blue Sky Application"), or arise out of or are based upon
the omission or alleged omission to state in the Registration Statement, any
Preliminary Prospectus, Prospectus, or any amendment or supplement thereto, or
in any Blue Sky Application, a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
the Company will not be liable in any such case to the extent, but only to the
extent, that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with written or oral
information furnished to the Company by or on behalf of the Underwriter or oral
misrepresentations or omissions in connection therewith specifically for use in
the preparation of the Registration Statement or any such amendment or
supplement thereof or any such Blue Sky Application or any such Preliminary
Prospectus or the Prospectus of any such amendment or supplement thereto. The
23
Company shall not be obligated to indemnify the Underwriter for a violation of
state securities or "Blue Sky" laws for liability occasioned by reason of such
Underwriter's (or its agent's) failure to have been registered as a
broker-dealer (or agent) or the failure of the securities to have been
registered or qualified in a jurisdiction where such Underwriter (or its agent)
is determined to have sold such security. This indemnity will be in addition to
any liability which the Company may otherwise have.
(b) The Underwriter will indemnify and hold hardness the Company, each
of the Company's directors, each nominee (if any) for director named in the
Prospectus, each of its officers who have signed the Registration Statement,
each person, if any, who controls the Company within the meaning of the Act, the
Underwriter's counsel and the Company's counsel against any losses, claims,
damages or liabilities (which shall, for all purposes of this Agreement,
include, but not be limited to, all costs of defense and investigation and all
attorneys' fees) to which the Company, any such director, nominee, officer or
controlling person, the Underwriter's counsel or the Company's counsel may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto, in reliance upon and in conformity with written information
furnished to the Company by you specifically for use in the preparation thereof.
The Underwriter shall indemnify the Company for any violation of state
securities or "Blue Sky" laws for liability occasioned by reason of such
Underwriter's (or its agent's) failure to have been registered as a
broker-dealer (or agent) or the failure of the securities to have been
registered or qualified in a jurisdiction which such Underwriter (or agent) is
determined to have sold such security. This indemnity will be in addition to any
liability which the Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section, notify in writing the indemnifying party 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. In case any such action is brought against any indemnified party,
and it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate in, and, to the extent that
it may wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, subject to the provisions herein stated, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than the reasonable costs of investigation. The
24
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses of
such counsel shall not be at the expense of the indemnifying party if the
indemnifying party has assumed the defense of the action with counsel reasonably
satisfactory to the indemnified party; provided that if the indemnified party is
the Underwriter or a person who controls the Underwriter within the meaning of
the Act, the fees and expenses of such counsel shall be at the expense of the
indemnifying party if (i) the employment of such counsel has been specifically
authorized in writing by the indemnifying party or (ii) the named parties to any
such action (including any impleaded parties) include both the Underwriter or
such controlling person and the indemnifying party and, the Underwriter
reasonably determines that it is advisable for the Underwriter or controlling
persons to be represented by separate counsel (in which case the indemnifying
party shall not have the right to assume the defense of such action on behalf of
the Underwriter or such controlling person, it being understood, however, that
the indemnifying party shall not, in connection with any one such action or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys for the
Underwriter and controlling persons, which firm shall be designated in writing
by you). No settlement of any action against an indemnified party shall be made
without the consent of the indemnifying party, which shall not be unreasonably
withheld in light of all factors of importance to such indemnified party.
(d) If the Closing occurs, the Company will not have liability to the
Underwriter (for indemnification or otherwise) with respect to any
representation or warranty unless on or before the third anniversary of the date
hereof the Underwriter notifies the Company of a claim of breach of a
representation or warranty.
7. Contribution. In order to provide for just and equitable contribution
under the Act in any case in which (i) the Underwriter makes claim for
indemnification pursuant to Section 6 hereof but it is judicially determined (by
the entry of a final judgment or decree by a court of competent jurisdiction and
the expiration of time to appeal or the denial of the last right of appeal) that
such indemnification may not be enforced in such case, notwithstanding the fact
that the express provisions of Section 6 provide for indemnification in such
case or (ii) contribution under the Act may be required on the part of the
Underwriter or the Company in circumstances for which indemnification is
provided for pursuant to Section 6, then the Company, in the aggregate, and the
Underwriter shall contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (which shall for all purposes of this
Agreement include, but not be limited to, all reasonable costs of defense and
investigation and all reasonable attorneys' fees) in either such case (after
contribution from others) in such proportions that the Underwriter is
responsible in the aggregate for that portion of such losses, claims, damages or
liabilities represented by the percentage that the underwriting discount per
share appearing on the cover page of the Prospectus bears to the public offering
price appearing thereon, and the Company shall be responsible for the remaining
portion; provided, however, that, if such allocation is not permitted by
applicable law, then the relative fault of the Company and the Underwriter, in
the aggregate, in connection with the statements or omissions which resulted in
such damages and other relevant equitable considerations shall also be
considered.
25
The relative fault shall be determined by reference to, among other things,
whether in the case of an untrue statement or a material fact or the omission to
state a material fact, such statement or omission relates to information
supplied by the Company or the Underwriter, and the parties' relevant intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Underwriter agree that it
would not be just and equitable if the respective obligations of the Company and
the Underwriter to contribute pursuant to this Section 7 were to be determined
by pro rata or per capital allocation of the aggregate damages (even if the
Underwriter and its controlling persons in the aggregate were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in the first sentence of
this Section 7. 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. For the purposes
of this paragraph, each officer, director, or other person who controls the
Underwriter within the meaning of Section 15 of the Act shall have the same
rights to contribution as such Underwriter, and each officer, director, or other
person. If the full amount of the contribution specified in this paragraph is
not permitted by law, then the Underwriter and each person who controls the
Underwriter shall be entitled to contribution from the Company to the full
extent permitted by law. The foregoing contribution agreement shall in no way
affect the contribution liabilities of any persons having liability under
Section 11 of the Act other than the Company and the Underwriter. No
contribution shall be requested with regard to the settlement of any matter from
any party who did not consent to the settlement; provided, however, that such
consent shall not be unreasonably withheld in light of all factors of importance
to such party.
8. Costs and Expenses.
(a) Whether or not this Agreement becomes effective or the sale of the
Shares to the Underwriter is consummated, the Company will pay all costs and
expenses incident to the performance of this Agreement including, but not
limited to, the fees and expenses of counsel to the Company and of the Company's
accountants; the costs and expenses incident to the preparation, printing,
filing and distribution under the Act of the Registration Statement (including
the financial statements therein and all amendments and exhibits thereto),
Preliminary Prospectus and Prospectus, as amended or supplemented; all expenses,
including fees, disbursements and other charges of counsel to the Underwriter,
in connection with any filing required by the NASD relating to the offering of
the Shares contemplated hereby; all expenses, including fees, disbursements and
other charges of counsel to the Underwriter, in connection with the
qualification of the Shares under the state securities or blue sky laws which
the Underwriter shall designate; the cost of printing and furnishing to the
Underwriter copies of the Registration Statement, each Preliminary Prospectus
and the Prospectus and the cost of printing the certificates representing the
Shares. The Company shall pay any and all taxes (including any transfer,
franchise, capital stock or other tax imposed by any jurisdiction) on sales by
the Company to the Underwriter hereunder. The Company will also pay all costs
and expenses incident to the furnishing of any amended Prospectus or of any
supplement to be attached to the Prospectus as called for in Section 3(a) of
this Agreement except as otherwise set forth in said Section.
26
(b) In addition to the foregoing expenses the Company shall at the
Closing Date pay to Cruttenden ▇▇▇▇ Incorporated a non-accountable expense
allowance equal to 2.5% of the gross proceeds of the sale of the Shares. In the
event the transactions contemplated hereby are not consummated by reason of any
action by the Underwriter (except if such prevention is based upon a breach by
the Company of any covenant, representation or warranty contained herein or
because any other condition to the Underwriter's obligations hereunder required
to be fulfilled by the Company is not fulfilled), the Company shall not be
liable to the Underwriter for any out-of-pocket accountable expenses except that
the Underwriter may retain all monies paid to it prior to the termination of the
underwriting, but only to the extent of out-of-pocket accountable expenses
incurred by the Underwriter, and the Underwriter shall return to the Company all
monies received in excess of its out-of-pocket accountable expenses. In the
event the transactions contemplated hereby are not consummated by reason of any
action of the Company or because of a breach by the Company of any covenant,
representation or warranty contained herein, the Company shall be liable for the
out-of-pocket accountable expenses incurred by the Underwriter, including
attorneys' fees, less a credit of any amounts previously paid by the Company to
the Underwriter, and the Underwriter shall return to the Company all monies
received in excess of its out-of-pocket accountable expenses.
(c) No person is entitled either directly or indirectly to
compensation from the Company, from the Underwriter or from any other person for
services as a finder in connection with the proposed offering, and the Company
agrees to indemnify and hold harmless the Underwriter against any losses,
claims, damages or liabilities, joint or several, which shall, for all purposes
of this Agreement, include, but not be limited to, all costs of defense and
investigation and all attorneys' fees, to which the Company, the Underwriter or
person may become subject insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon the claim of any
person (other than an employee of the party claiming indemnity) or entity that
he or it is entitled to a finder's fee in connection with the proposed offering
by reason of such person's or entity's influence or prior contact with the
indemnifying party.
9. Effective Date. This Agreement shall become effective upon its
execution, except that you may, at your option, delay its effectiveness until
11:00 a.m., New York time, on the first full business day following the
Effective Date of the Registration Statement, or at such earlier time after the
Effective Date of the Registration Statement as you in your discretion shall
first commence the initial public offering by the Underwriter of any of the
Shares. The time of the initial public offering shall mean the time of release
by you of the first newspaper advertisement with respect to the Shares, or the
time when the Shares are first generally offered by you to dealers by letter or
telegram, whichever shall first occur. This Agreement may be terminated by you
at any time before it becomes effective as provided above, except that Sections
3(c), 6, 7, 8, 12, 13, 14 and 15 hereof shall remain in effect notwithstanding
such termination.
27
10. Termination.
(a) This Agreement, except for Sections 3(c), 6, 7, 8, 12, 13, 14 and
15 hereof, may be terminated by you at any time prior to the Closing Date if in
your judgment it is impracticable to offer for sale or to enforce contracts made
by the Underwriter for the resale of the Shares agreed to be purchased hereunder
by reason of (i) the Company having sustained a material loss, whether or not
insured, by reason of fire, earthquake, flood, accident or other calamity, or
from any labor dispute or court or government action, order or decree; (ii)
trading in securities on the New York Stock Exchange, the American Stock
Exchange, and/or the Nasdaq Small Cap Market having been generally suspended or
limited; (iii) material governmental restrictions having been imposed on trading
in securities generally (not in force and effect on the date hereof); (iv) a
banking moratorium having been declared by federal or New York State
authorities; (v) an outbreak of major international hostilities or other
national or international calamity having occurred; (vi) the passage by the
Congress of the United States, or by any state legislative body of similar
impact, of any act or measure, or the adoption of any orders, rules or
regulations by any governmental body or any authoritative accounting institute
or board, or any governmental executive, which is reasonably believed likely by
the Underwriter to have a material impact on the condition (financial or
otherwise), business, properties, prospects or financial statements of the
Company or on the market for the securities offered hereby; (vii) any material
adverse change in the financial or securities markets in the United States,
particularly in the over-the-counter market, having occurred since the date of
this Agreement, or (viii) any material adverse change having occurred, since the
respective dates of which information is given in the Registration Statement and
Prospectus, in the condition (financial or otherwise), business, properties,
prospects, net worth or results of operations of the Company, not arising in the
ordinary course of business.
(b) If you elect to prevent this Agreement from becoming effective or
to terminate this Agreement as provided in this Section 10 or in Section 9, the
Company shall be promptly notified by you, by telephone or telegram, confirmed
by letter.
11. Warrants. At or before the Closing Date, the Company will sell to
Cruttenden ▇▇▇▇ Incorporated the Underwriters' Warrants to purchase an aggregate
of 250,000 shares of the Common Stock of the Company for a consideration of
$25.00 upon the terms and conditions set forth in the Warrant Agreement. In the
event of conflict in the terms of this Agreement and the Underwriter's Warrants,
the language of the Underwriter's Warrants shall control.
12. Representations, Warranties and Agreements to Survive Delivery. Except
as may be limited by Section 6(d), the respective indemnities, agreements,
representations, warranties and other statements of the Company and the
Underwriter set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of the
Underwriter, the Company or any of its officers or directors or any controlling
person and will survive delivery of and payment for the Shares and the
termination of this Agreement.
28
13. Notices. Any communications specifically required hereunder to be in
writing, if sent to the Underwriter, will be mailed, delivered or telegraphed
and confirmed to them at Cruttenden ▇▇▇▇ Incorporated, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, with a copy sent
to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, MetLife Building, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., or if sent to the Company,
will be mailed, delivered or telegraphed and confirmed to it at ▇▇▇▇▇▇▇▇▇.▇▇▇
inc., ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇ ▇.
▇▇▇▇▇, President, with a copy to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLC, One Citicorp
Center, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇▇, Esq.
14. Parties in Interest. The Agreement herein set forth is made solely for
the benefit of the Underwriter, the Company and any person controlling the
Company or the Underwriter, and the directors of the Company, nominees for
directors (if any) named in the Prospectus, its officers who have signed the
Registration Statement, and their respective executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" shall
not include any purchaser, as such purchaser, from the Underwriter of the
Shares.
15. Applicable Law. THIS AGREEMENT WILL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMIENTS
MADE AND TO BE ENTIRELY PERFORMED WITHIN NEW YORK.
29
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return this agreement, whereupon it will become a
binding agreement among the Company and the Underwriter in accordance with its
terms.
Very truly yours,
▇▇▇▇▇▇▇▇▇.▇▇▇ INC.
By:
----------------------------------------
▇▇ ▇. ▇▇▇▇▇
President
The foregoing Underwriting Agreement is hereby confirmed and accepted
as of the date first above written.
CRUTTENDEN ▇▇▇▇ INCORPORATED
By:
-----------------------------------------
Name:
Title:
ISG SOLID CAPITAL MARKETS, LLC
By:
-----------------------------------------
Name:
Title:
ANNEX A
FORM OF LOCK-UP
Cruttenden ▇▇▇▇ Incorporated
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ISG Solid Capital Markets, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated ____________,
1999 (the "Underwriting Agreement"), between ▇▇▇▇▇▇▇▇▇.▇▇▇ inc., a Delaware
corporation (the "Company"), and Cruttenden ▇▇▇▇ Incorporated and ISG Solid
Capital Markets, LLC (together, the "Underwriter"). Capitalized terms used
herein and not defined herein shall have the same meanings ascribed to them in
the Underwriting Agreement.
1. In consideration of the Underwriting Agreement, the undersigned
hereby agrees not to, without the prior written consent of the Underwriter and
except as set forth in Section 2, offer, sell or otherwise dispose of any shares
of the Company's common stock, par value $.001 per share (the "Common Stock"),
or any securities convertible into or exercisable or exchangeable for, or any
rights to purchase or acquires Common Stock owned by the Undersigned for a
period of twenty-four (24) months after the date of the Underwriting Agreement.
2. The restrictions set forth in Section 1 shall not apply to private
sales or transfers of Common Stock to purchasers or transferees who agree in
writing to be bound by the terms set forth herein.
3. The undersigned hereby waives all registration rights to which the
undersigned may be entitled prior to the expiration of such twenty-four (24)
month period.
Dated: ___________, 1999
Very truly yours,
--------------------------------
Name:
SCHEDULE A
▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, III
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ LLC
American Medical Finance, Inc.