As filed with the Securities and Exchange Commission on November 1, 1996
Registration No. 333 - 14755
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 1
to
FORM SB-2
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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LIFE CRITICAL CARE CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C>
Delaware 7352 52-0980785
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
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3333 W. Commercial Blvd., Suite 203
Fort Lauderdale, Florida 33309
(954) 486-0424
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
Thomas H. White
Chief Executive Officer
3333 W. Commercial Blvd., Suite 203
Fort Lauderdale, Florida 33309
(954) 486-0424
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
George S. Lawler, Esquire David S. Rosenthal, Esquire
Whiteford, Taylor & Preston L.L.P. Shereff, Friedman, Hoffman & Goodman, LLP
210 West Pennsylvania Avenue 919 Third Avenue
Towson, Maryland 21204-4515 New York, New York 10022
(410) 832-2000 (212) 758-9500
Approximate date of commencement of proposed sale to public: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended, check the following box.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 24. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware
(the "Delaware GCL") provides that the Registrant may indemnify any person,
including any officer or director, who was or is a party or who is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the Registrant), by reason of the fact that he
is or was a director, officer, employee or agent of the Registrant or is or was
serving at the request of the Registrant as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise (collectively, "such Person"), against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement, actually and reasonably
incurred by such Person in connection with such action, suit or proceeding if
such Person acted in good faith and in a manner such Person reasonably believed
to be in or not opposed to the best interests of the Registrant and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. In any threatened, pending or completed action or suit
by or in the right of the Registrant, the Registrant also may indemnify any such
Person against expenses (including attorneys' fees) actually and reasonably
incurred by such Person in connection with that action's or suit's defense or
settlement, if such Person acted in good faith and in a manner such Person
reasonably believed to be in or not opposed to the best interests of the
Registrant, except that no indemnification shall be made with respect to any
claim, issue or matter as to which such Person shall have been adjudged to be
liable to the Registrant, unless and only to the extent that a court shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such Person is fairly and reasonably
entitled to indemnity. Where such Person is successful on the merits or
otherwise in defense of any action or suit referred to above or in defense of
any claim, issue or matter therein, the Registrant shall indemnify such Person
against the expenses (including attorneys' fees) that such Person actually and
reasonably incurred.
The Registrant's Certificate of Incorporation provides that, to the
fullest extent permitted by the laws of the State of Delaware, no director or
officer of the Registrant shall be personally liable to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as a director or
officer. The Registrant's Certificate of Incorporation also provides that to the
fullest extent permitted by the Delaware GCL, as amended or interpreted, the
Registrant shall indemnify all persons whom it may indemnify pursuant thereto.
These provisions in the Certificate of Incorporation do not eliminate the duty
of care. In appropriate circumstances, equitable remedies such as injunctive or
other forms of non-monetary relief remain available under Delaware law. In
addition, each director will continue to be subject to liability for breach of
the director's duty of loyalty to the Registrant or its stockholders, for acts
or omissions not in good faith or involving intentional misconduct or knowing
violations of law, for actions leading to improper personal benefit to the
director and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under the Delaware GCL. These provisions also do
not affect a director's or officer's responsibilities
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under any other law, such as the federal or state securities laws or state or
federal environmental laws.
The Underwriting Agreement (a form of which is filed as Exhibit 1.1
hereto) will provide that the Underwriters will indemnify and hold harmless the
Registrant and each director, officer or controlling person of the Registrant
from and against any liability caused by any statement or omission in the
Registration Statement or Prospectus based upon certain information furnished to
the Registrant by the Underwriters for use in the preparation thereof.
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Item 25. Other Expenses of Issuance and Distribution.*
The following table sets forth a statement of all expenses payable by
the Registrant in connection with the registration, issuance and distribution of
the Common Stock offered hereby, other than the underwriting discount.
SEC Registration Fee............................... $ 4,234
Accounting Fees and Expenses....................... **
Legal Fees and Expenses............................ **
Underwriters Expense Allowance..................... 300,000
Printing and Engraving Expenses.................... **
Blue Sky Fees and Expenses......................... **
NASD Filing Fee.................................... 1,897
Nasdaq Quotation Fee............................... 25,000
Registrar and Transfer Agent Fees.................. **
Miscellaneous Fees and Expenses.................... **
---------
Total..................................... $ **
=========
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* Except for the SEC registration fee, the NASD filing fee and the Nasdaq
quotation fee, all expenses are estimated.
** To be supplied by amendment.
Item 26. Recent Sales of Unregistered Securities.
The following share amounts and sales prices have been adjusted for a
1,110-for-one stock split of the Company's Common Stock, par value $0.01 per
share, effective on August 29, 1996.
On August 10, 1995, Registrant sold 743,700 shares of Common Stock, par
value $0.01 per share, for $0.01 per share to the four founders of the
Registrant in connection with the formation of the Registrant.
On August 12, 1995, the Registrant sold a $750,000 18%
Subordinated Note due December 31, 1997 for $750,000 to Morgenthau Bridge
Investment Limited Partnership.
On August 12, 1995, the Registrant sold a $750,000 18%
Subordinated Note due December 31, 1997 for $750,000 to Morgenthau Bridge
Loan LLC.
On April 8, 1996, the Registrant authorized the sale of and, on
September 30, 1996, the Registrant sold 248,640 shares of Common Stock, par
value $0.01 per share, for $0.01 per share to IRA accounts for the benefit of
the four founding stockholders of the Registrant.
During September and October 1996, the Registrant sold an aggregate
principal amount of $500,000 of 12% Subordinated Notes due December 31, 1997 and
50,000 shares of Common Stock, par value $0.01 per share, for $0.10 per share to
14 investors.
The foregoing sales were exempt from registration under Section 4(2) of
the Securities Act as they did not involve a public offering. In issuing
securities under the exemption provided by Section 4(2) of the Securities Act,
the Registrant relied upon certain purchasers'
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status as an officer or director of the Registrant and that each purchaser had
such knowledge and experience in financial and business matters that such
person was capable of evaluating the merits and risks of the investment.
Item 27. Exhibits.
Exhibit
Number Description
1.1 Form of Underwriting Agreement
3.1 Restated Certificate of Incorporation*
3.2 Amended and Restated By-Laws*
4.1 Specimen form of Common Stock certificate of the
Company*
5.1 Opinion of Whiteford, Taylor & Preston L.L.P.**
10.1 Loan and Securities Purchase Agreement, Stock
Warrant and Subordinated Note each dated August 12,
1995 between Life Critical Care and Morgenthau Bridge
Investment Limited Partnership*
10.2 Loan and Securities Purchase Agreement, Stock
Warrant and Subordinated Note each dated August 12,
1995 between Life Critical Care Corporation and
Morgenthau Bridge Loan LLC*
10.3 Asset Purchase Agreement dated January 22, 1996
between Life Critical Care and Blue Water Medical
Supply, Inc. and Blue Water Industrial Products, Inc.,
as amended*
10.4 Asset Purchase Agreement dated March 1, 1996
among ABC Medical Supply, Inc., Timothy Dillon,
Dennis Phillips and Life Critical Care, as amended*
10.5 Asset Purchase Agreement dated March 1, 1996 among
Great Lakes Home Medical, Inc., Michael E. Belleau,
James Bickel, Thomas Mainhardt and Life Critical
Care, as amended*
10.6 Form of Lease Agreement between Life Critical Care
and Blue Water Land Development for 37885 Green
Street, New Baltimore, Michigan*
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<PAGE>
48047
10.7 Form of Lease Agreement between Life Critical Care
and Blue Water Land Development for 37280 Green
Street, New Baltimore, Michigan 48047*
10.8 Form of Loan and Security Agreement between Life
Critical Care and certain investors*
10.9 Employment Agreement dated as of July 25, 1996
between Life Critical Care and its Chief Executive
Officer*
10.10 Employment Agreement between Life Critical Care and
its Chief Financial Officer**
10.11 1996 Non-Employee Directors Stock Option Plan*
10.12 1996 Stock and Incentive Plan*
10.13 Form of 401(k) Plan**
10.14 Agreement between Life Critical Care and The
Morgenthau Group Financial Corporation**
10.15 Credit facility agreement between Life Critical Care
and Manufactures and Traders Trust Co.**
10.16 Form of Underwriter's Warrant
10.17 Form of Financial Consulting Agreement
10.18 Form of Merger and Acquisition Agreement
10.19 Form of Lock-Up Agreement
10.20 Form of Agreement of Management and Principal
Stockholders
10.21 Form of Stock Escrow Agreement
11.1 Statement Re: Computation of Per Share Earnings*
23.1 Consent of Ernst & Young LLP*
23.2 Consent of Whiteford, Taylor & Preston L.L.P.
(included in Exhibit 5.1)**
24.1 Power of Attorney (included as part of the
signature page of this Registration Statement)
27.1 Financial Data Schedule*
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* Previously filed.
** To be filed by amendment.
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Item 28. Undertakings.
The undersigned Registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement certificates
in such denominations and registered in such names as required by the
Underwriter to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
1. For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
2. For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Fort
Lauderdale, State of Florida, on October 30, 1996.
LIFE CRITICAL CARE CORPORATION
By: /s/ Thomas H. White
--------------------------
Thomas H. White,
Chief Executive Officer
Signature Title Date
/s/ THOMAS H. WHITE Principal Executive Officer, October 30, 1996
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THOMAS H. WHITE Principal Financial Officer,
Principal Accounting Officer
and Director
/s/ RICHARD M. ANDZEL Director October 30, 1996
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RICHARD M. ANDZEL
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EXHIBIT INDEX
Exhibit
Number Description
1.1 Form of Underwriting Agreement
3.1 Restated Certificate of Incorporation*
3.2 Amended and Restated By-Laws*
4.1 Specimen form of Common Stock certificate of the Company*
5.1 Opinion of Whiteford, Taylor & Preston L.L.P.**
10.1 Loan and Securities Purchase Agreement, Stock Warrant and
Subordinated Note each dated August 12, 1995 between Life
Critical Care and Morgenthau Bridge Investment Limited
Partnership*
10.2 Loan and Securities Purchase Agreement, Stock Warrant and
Subordinated Note each dated August 12, 1995 between Life
Critical Care Corporation and Morgenthau Bridge Loan LLC*
10.3 Asset Purchase Agreement dated January 22, 1996 between
Life Critical Care and Blue Water Medical Supply, Inc. and Blue
Water Industrial Products, Inc., as amended*
10.4 Asset Purchase Agreement dated March 1, 1996 among ABC
Medical Supply, Inc., Timothy Dillon, Dennis Phillips and
Life Critical Care, as amended*
10.5 Asset Purchase Agreement dated March 1, 1996 among Great
Lakes Home Medical, Inc., Michael E. Belleau, James Bickel,
Thomas Mainhardt and Life Critical Care, as amended*
10.6 Form of Lease Agreement between Life Critical Care and Blue
Water Land Development for 37885 Green Street, New Baltimore,
Michigan 48047*
10.7 Form of Lease Agreement between Life Critical Care and Blue
Water Land Development for 37280 Green Street, New Baltimore,
Michigan 48047*
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<PAGE>
10.8 Form of Loan and Security Agreement between Life Critical Care
and certain investors*
10.9 Employment Agreement dated as of July 25, 1996 between Life
Critical Care and its Chief Executive Officer*
10.10 Employment Agreement between Life Critical Care and its Chief
Financial Officer**
10.11 1996 Non-Employee Directors Stock Option Plan*
10.12 1996 Stock and Incentive Plan*
10.13 Form of 401(k) Plan**
10.14 Agreement between Life Critical Care and The Morgenthau Group
Financial Corporation**
10.15 Credit facility agreement between Life Critical Care and
Manufactures and Traders Trust Co.**
10.16 Form of Underwriter's Warrant
10.17 Form of Financial Consulting Agreement
10.18 Form of Merger and Acquisition Agreement
10.19 Form of Lock-Up Agreement
10.20 Form of Agreement of Management and Principal Stockholders
10.21 Form of Stock Escrow Agreement
11.1 Statement Re: Computation of Per Share Earnings*
23.1 Consent of Ernst & Young LLP*
23.2 Consent of Whiteford, Taylor & Preston L.L.P. (included in
Exhibit 5.1)**
24.1 Power of Attorney (included as part of the signature page of
this Registration Statement)
27.1 Financial Data Schedule*
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* Previously filed.
** To be filed by amendment.
Exhibit 1.1
2,000,000 Shares
LIFE CRITICAL CARE CORPORATION
UNDERWRITING AGREEMENT
_______________ ___, 1996
H.J. Meyers & Co., Inc.
(as Representative of the Several
Underwriters named in Schedule I hereto)
1895 Mt. Hope Avenue
Rochester, New York 14620
Ladies and Gentlemen:
LIFE CRITICAL CARE CORPORATION, a Delaware corporation (the
"Company"), proposes to issue and sell to the Underwriters named in Schedule I
hereto (the "Underwriters") pursuant to this Underwriting Agreement (the
"Agreement"), an aggregate of 2,000,000 shares (the "Shares") of Common Stock of
the Company, $.01 par value per share (the "Common Stock").
In addition, the Company and certain stockholders of the Company
(the "Selling Stockholders") propose to grant to the Underwriters the option
referred to in Section 2(c) to purchase all or any part of an aggregate of
300,000 additional Shares to cover over-allotments. Unless the context otherwise
indicates, the term "Shares" shall include the additional Shares referred to
above and the Shares issuable upon exercise of the Representative's Warrant
described below.
Simultaneously with the closing on the Firm Shares (as hereinafter
defined) by the Underwriters, (i) each of the Acquired Companies (as hereinafter
defined) will be acquired (collectively, the "Acquisitions"), the consideration
for which will be a combination of cash and shares of the Company's Common Stock
as described in the Registration Statement (as hereinafter defined) and (ii)
there will be a closing of a credit facility obtained by the Company (the
"Credit Facility"), a portion of the proceeds of which will be used for the
Acquisitions.
You have advised the Company that the Underwriters desire to
purchase the Shares, and that you have been authorized to execute this Agreement
as the Representative of the Underwriters (the "Representative"). The Company
confirms the agreements made by it with respect to the purchase of the Shares by
the Underwriters, as follows:
1A. Representations and Warranties of the Company. The
Company represents and warrants to, and agrees with, each Underwriter that:
(a) Registration Statement and Prospectus. A
registration statement (File No. 333-14755) on Form SB-2 relating to the
public offering of the Shares (the "Offering"), including a preliminary form of
prospectus, copies of which have heretofore been delivered to you, has been
prepared by the Company in conformity with the requirements of the Securities
Act of 1933, as amended (the "Act"), and the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, and has been filed with the Commission under the Act.
As used herein, the term "Preliminary Prospectus" shall mean each prospectus
filed pursuant to Rule 430 or Rule 424(a) of the Rules and
Regulations. The registration statement (including all financial statements,
schedules and exhibits) as amended at the time it becomes effective and the
final prospectus included therein are respectively referred to herein as the
"Registration Statement" and the "Prospectus," except that (i) if the prospectus
first filed by the Company pursuant to Rule 424(b) or Rule 430A of the Rules and
Regulations or otherwise utilized and required to be so filed shall differ from
said prospectus as then amended, the term "Prospectus" shall mean the prospectus
first filed pursuant to said Rule 424(b) or Rule 430A or so utilized from and
after the date on which it shall have been filed or utilized, and (ii) if such
registration statement or prospectus is amended or such prospectus is
supplemented after the effective date of such registration statement and prior
to the Option Closing Date (as defined in Section 2(c)), the term "Registration
Statement" shall include such registration statement as so amended, and the term
"Prospectus" shall include the prospectus as so amended or supplemented, or
both, as the case may be.
(b) Contents of Registration Statement. At the
time the Registration Statement becomes effective (the "Effective Date") and
at all times subsequent thereto for so long as the delivery of a
prospectus is required in connection with the offering or sale of any of the
Shares, (i) the Registration Statement and Prospectus will in all respects
conform to the requirements of the Act and the Rules and Regulations; and (ii)
neither the Registration Statement nor the Prospectus shall 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;
provided, however, that the Company makes no representations, warranties or
agreements as to the information contained in or omitted from the Registration
Statement or Prospectus in reliance upon, and in conformity with, written
information furnished to the Company by or on behalf of any Underwriter
specifically for use in the preparation thereof. It is understood that the
statements set forth in the Prospectus with respect to stabilization, the
material set forth under the heading "UNDERWRITING", and the identity of
Underwriters' counsel under the heading "LEGAL MATTERS" constitute the only
information furnished in writing by or on behalf of any Underwriter for
inclusion in the Registration Statement and Prospectus, as the case may be.
(c) Organization and Good Standing. The Company
and each of Blue Water Medical Supply, Inc., Blue Water Industrial Products,
Inc., Great Lakes Home Medical, Inc. and ABC Medical Supply, Inc. (each,
an "Acquired Company" and collectively, the "Acquired Companies") have been
duly incorporated and are validly existing as corporations in good standing
under the laws of the jurisdiction of their incorporation, with full power and
authority (corporate and other) to own their properties and conduct their
business as described in the Prospectus, and are duly qualified or licensed to
do business as foreign corporations and are in good standing in all other
jurisdictions in which the nature of their business or the character or
location of their properties requires such qualification, except where failure
to so qualify will not materially affect the Company's or any of the Acquired
Companies' business, properties or financial condition.
(d) Capitalization. The authorized capital
stock of the Company as of the Effective Date will be, as set forth under the
heading "DESCRIPTION OF CAPITAL STOCK" in the Prospectus, (i) 10,000,000
shares of Common Stock, par value $.01 per share, of which not more than
2,000,000 shares will be issued and outstanding as of the Effective Date, and
(ii) 500,000 shares of Preferred Stock, par value $.01 per share, of which no
shares will be issued and outstanding on the Effective Date. The shares of
issued and outstanding capital stock of the Company set forth thereunder have
been duly authorized, validly issued and are fully paid and non-assessable; 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 have been granted or entered into by the
Company, except for up to 350,000 shares of Common Stock reserved for issuance
to the President and the Chief Financial Officer of the Company pursuant to
options which are subject to a performance earn-out and an additional 250,000
shares of Common Stock reserved for issuance (but not yet granted) under the
Company's 1996 Stock and Incentive Plan and the Non-Employee Directors Stock
Option Plan. The shares conform to all statements relating thereto contained in
the Registration Statement and Prospectus.
(e) Securities Authorized. The Shares and the
Representative's Warrant (as defined in Section 12) are duly authorized and,
when issued, delivered and paid for pursuant to this Agreement, will be
duly authorized, validly issued, fully paid and non-assessable and
free of pre-emptive rights of any security holder of the Company. Neither
the filing of the Registration Statement nor the offering or sale of the
Shares or the Representative's Warrant as contemplated in this Agreement
gives rise to any rights, other than those which have been waived in writing or
satisfied, for or relating to the registration of any shares of capital
stock, except as described in the Registration Statement.
(f) Authority and Enforceability of Agreements.
This Agreement, the Representative's Warrant, the Financial Consulting
Agreement (as defined in Section 3A(r)), the Merger and Acquisition Agreement
(as defined in Section 3A(s)) and the Stock Escrow Agreement (as defined
in Section 3A(t)) have been duly and validly authorized, executed and
delivered by the Company, and assuming due execution by the other party or
parties hereto and thereto, constitute valid and binding obligations of the
Company enforceable against the Company in accordance with their respective
terms, except as enforceability may be limited by bankruptcy, insolvency or
other laws affecting the rights of creditors generally. The Company has full
right, power and lawful authority to authorize, issue and sell the Shares and
the Representative's Warrant to be sold by it hereunder on the terms and
conditions set forth herein, and no consent, approval, authorization or other
order of any governmental authority is required in connection with such
authorization, execution and delivery or with the authorization, issue and sale
of the Shares or the Representative's Warrant, except such as may be required
under the Act, state securities laws or the rules of the National Association of
Securities Dealers, Inc. ("NASD").
(g) No Conflicts. Except as described in the
Prospectus, the Company and each of the Acquired Companies are not in
violation, breach or default of or under, and consummation of the
transactions herein contemplated and the fulfillment of the terms of this
Agreement 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 pursuant to the terms of, any
material contract, indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of the Acquired Companies is
a party or by which the Company or any of the Acquired Companies may be bound or
to which any of the property or assets of the Company or any of the Acquired
Companies are subject, nor will such action result in any violation of the
provisions of the certificate of incorporation or the by-laws of the Company, as
amended, or any statute or any order, rule or regulation applicable to the
Company or any of the Acquired Companies of any court or of any regulatory
authority or other governmental body having jurisdiction over the Company or any
of the Acquired Companies.
(h) Title to Assets. Subject to the
qualifications stated in the Prospectus, the Company has good and marketable
title to all properties and assets described in the Prospectus as owned by
it, including without limitation intellectual property, free and clear of all
liens, charges, encumbrances, equities, claims 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 is the lessor or
sublessor of properties or assets or under which the Company 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, the Company is not
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 as lessor, sublessor, lessee or
sublessee under any of the leases or subleases mentioned above, or affecting or
questioning the right of the Company to continued possession of the leased or
subleased premises or assets under any such leases or sublease except as
described or referred to in the Prospectus; and the Company 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. As of the First Closing Date (as
defined in Section 2(b) hereof), after giving effect to the Acquisitions, all of
the assets of each of the Acquired Companies will be owned by the Company free
and clear of all liens, charges, encumbrances, equities, claims and
restrictions.
(i) Independent Accountants. Ernst & Young LLP
("E&Y"), who have examined and certified and given their report on certain
financial statements filed and to be filed with the Commission as a part of the
Registration Statement, which are included in the Prospectus, are independent
public accountants within the meaning of the Act and the Rules and Regulations.
(j) Financial Statements. The financial
statements, together with the related notes set forth in the Registration
Statement and the Prospectus, present fairly the financial position,
results of operations, changes in stockholders' equity and cash flows of the
Company and each Acquired Company on the basis stated in the Registration
Statement, at the respective dates and for the respective periods to which they
apply. Such financial statements and related notes have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the entire period involved, except to the extent disclosed
therein. The financial information for each of the periods presented in the
Registration Statement and the Prospectus present a true and complete statement
of the financial position of the Company and each Acquired Company at the dates
indicated and the results of their operations for the periods then ended. The
selected historical financial information set forth under the headings "SUMMARY
FINANCIAL INFORMATION" and "SELECTED FINANCIAL DATA" included in the
Registration Statement and the Prospectus present fairly the information shown
therein and have been prepared on a basis consistent with that of the audited
financial statements included in the Registration Statement and the Prospectus.
The pro forma condensed consolidated financial statements of the Company, and
the related notes thereto, set forth in the Registration Statement and the
Prospectus, have been prepared in conformity with the requirements of the Act
and the Rules and Regulations and present fairly the pro forma information shown
therein; and the pro forma adjustments on such pro forma financial statements
have been properly applied on the basis described in the related notes thereto
and the assumptions used in preparing such adjustments are reasonable. The pro
forma financial data set forth in the Prospectus under the headings "SUMMARY
FINANCIAL DATA" and "SELECTED FINANCIAL DATA" have been prepared on a basis
consistent with the pro forma consolidated financial statements of the Company.
(k) No Material Change. Except as described in
the Prospectus, subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, neither the Company nor any
of the Acquired Companies has 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 or any such Acquired Company; and there has not
been any change in the capital stock of, or any incurrence of long-term debt
by, the Company or any of the Acquired Companies or any issuance of
options, warrants or other rights to purchase the capital stock of the Company
or any adverse change or any development involving, so far as the Company can
now reasonably foresee, a prospective adverse change in the condition (financial
or other), net worth, results of operations, earnings, business, key personnel
or properties of the Company or any of the Acquired Companies which would be
material to the business or financial condition of the Company or any such
Acquired Company; and neither the Company nor any of the Acquired Companies has
become party to, and neither the business nor the property of the Company or any
of the Acquired Companies has become the subject of, any material litigation,
whether or not in the ordinary course of business.
(l) Environmental Compliance. The property,
assets and operations of the Company and each of the Acquired Companies
comply in all material respects with all applicable federal, state or local
laws, rules, orders, decrees, judgments, injunctions, licenses, permits or
regulations relating to environmental matters (the "Environmental Laws"),
except to the extent that failure to comply with such Environmental Laws would
not result in any material adverse change in the condition (financial or
other), business, prospects, revenues, net worth or properties of the Company or
any of the Acquired Companies. None of the Company's nor any of the Acquired
Companies' property, assets or operations is the subject of any federal, state
or local investigation evaluating whether any remedial action is needed to
respond to a release of any substance regulated by or form the basis of
liability under any Environmental Laws (a "Hazardous Material") into the
environment or is in contravention of any federal, state, local or foreign law,
order or regulation that would result in any material adverse change in the
condition (financial or other), business, prospects, revenues, net worth or
properties of the Company or any of the Acquired Companies. Neither the Company
nor any of the Acquired Companies has received any notice or claim, nor are
there pending threatened or reasonably anticipated lawsuits against it with
respect to violations of an Environmental Law or in connection with the release
of any Hazardous Material into the environment. Neither the Company nor any of
the Acquired Companies has any material contingent liability in connection with
any release of Hazardous Material into the environment.
(m) Internal Controls. The Company maintains a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management's
general or specific authorization; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain
accountability for assets; (ii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(n) Litigation. Except as set forth in the
Prospectus, there is not now pending nor, to the best knowledge of the
Company, threatened, any action, suit or proceeding (including those related to
environmental matters or discrimination on the basis of age, sex, religion
or race), whether or not in the ordinary course of business, to which the
Company, any of the Acquired Companies, the sellers of the Acquired Companies
or their respective property is subject or affected before or by any court or
governmental agency or body, which might result in any material adverse change
in the condition (financial or other), business prospects, revenues, net worth
or properties of the Company or any of the Acquired Companies; and no labor
disputes involving the employees of the Company or any of the Acquired
Companies exist which might be expected to materially adversely affect the
conduct of the business, property, operations or the condition (financial or
otherwise) or earnings of the Company or any such Acquired Company.
(o) Taxes. Except as disclosed in the
Prospectus, the Company and each of the Acquired Companies have filed all
necessary federal, state, local and foreign income and franchise tax returns
and has paid all taxes shown as due thereon; and there is no tax
deficiency which has been asserted against the Company or any of the Acquired
Companies or, to the best knowledge of the Company, any basis for asserting a
tax deficiency against the Company or any of the Acquired Companies.
(p) Licenses and Permits. Each of the Company
and the Acquired Companies has all material licenses (including without
limitation all necessary Medicare and Medicaid licenses), permits and other
governmental authorizations currently required for the conduct of its business
or the ownership of its property as described in the Prospectus, has current
Medicare provider numbers and is in all material respects complying therewith
and owns or possesses adequate rights to use all material patents, patent
applications, trademarks, service-marks, mark registrations, copyrights and
licenses necessary for the conduct of such business and, except as described in
the Prospectus, has not received any notice of conflict with the asserted
rights of others in respect thereof. To the best knowledge of the Company, none
of the activities or business of the Company or of any of the Acquired Companies
is in violation of, or causes the Company or any of the Acquired Companies to
violate, any law, rule, regulation or order of the United States, any state,
county or locality, or of any foreign agency or locality, the violation of which
would have a material adverse impact upon the condition (financial or
otherwise), business, property, prospective results of operations or net worth
of the Company or any such Acquired Company.
(q) Insurance. Each of the Company and the
Acquired Companies maintains insurance of the types and in amounts which it
reasonably believes to be adequate for its business, in such amounts and with
such deductible as is customary for companies in the same or similar
business, all of which insurance is in full force and effect. The Company
has no reason to believe that it will not be able to renew the existing
insurance coverage for the Acquired Companies as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business upon completion of the Acquisitions.
(r) No Prohibited Payments. The Company has
not, directly or indirectly, at any time (i) made any contributions to any
candidate for political office, or if made, failed to disclose fully any
such contribution made 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 1988, as
amended.
(s) Transfer Taxes. On the Closing Dates (as
defined in Section 2(d)), 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 Underwriters hereunder will
have been fully paid or provided for by the Company and all laws imposing such
taxes will have been fully complied with.
(t) Exhibits. All contracts and other
documents of the Company which are, under the Rules and Regulations,
required to be described in, or filed as exhibits to, the Registration
Statement have been so described or filed.
(u) Stabilization Activities. Each of the
Company and its directors and officers has not taken and will not 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 to facilitate the sale
or resale of the Shares hereunder.
(v) No Subsidiaries. The Company has no
subsidiaries.
(w) No Finders. 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 proposed Offering.
(x) No Unlawful Prospectuses. The Company has
not distributed any prospectus or other offering material in connection with the
Offering contemplated herein, other than any Preliminary Prospectus, the
Prospectus or other material permitted by the Act and the Rules and Regulations.
(y) Shareholder Agreements; Registration
Rights. Except as described in the Prospectus, no security holder of the
Company has any rights with respect to the purchase, sale or registration
of any securities of the Company and all registration rights with respect to
the Offering have been waived.
(z) Lock-Up Agreements. The Company has obtained
from all of its directors, officers, shareholders and holders of options or
warrants to purchase Common Stock and from the sellers of the Acquired
Companies, written agreements in favor of the Representative restricting
the sale, pledge or other transfer of shares of Common Stock for a period of
eighteen (18) months from the Effective Date without the prior written consent
of the Representative, which consent shall not be unreasonably withheld.
1B. Representations and Warranties of the Selling
Stockholders. Each Selling Stockholder represents and warrants to each
Underwriter that:
(a) Title to Assets. Such Selling Stockholder
now has, and on any Option Closing Date will have, valid and unencumbered
title to the Shares to be sold by such Selling Stockholder, free and clear of
any lien, claim, security interest or other encumbrance, including,
without limitation, any restriction on transfer or other defect in title
except for any lien, claim, security interest, encumbrance or restriction on
transfer created pursuant hereto.
(b) Right to Assign Shares. Such Selling
Stockholder now has, and on any Option Closing Date will have, full legal right,
power and authorization to sell, assign, transfer and deliver such Shares in
the manner provided in this Agreement, and upon delivery of and payment for
such Shares hereunder, the several Underwriters will acquire valid and
marketable title to such Shares hereunder, the several Underwriters will
acquire valid and marketable title to such Shares, free and clear of any lien,
claim, security interest, or other encumbrance, restriction on transfer or other
defect in title.
(c) Authority and Enforceability of Agreements.
This Agreement and the Custody Agreement (as defined below) have been duly
authorized, and in the case of this Agreement, when executed and delivered on
behalf of such Selling Stockholder in accordance with the Custody Agreement,
have been duly executed and delivered by or on behalf of such Selling
Stockholder and are the valid and binding agreements of such Selling
Stockholder enforceable against such Selling Stockholder in accordance with
their respective terms, except as rights to indemnity and contribution
hereunder may be limited by federal or state securities laws or principles of
public policy and except as enforcement hereof and thereof may be limited by
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally and by general
equitable principles.
(d) No Governmental Approval; No Conflicts.
Neither the execution and delivery of this Agreement or the Custody Agreement
by or on behalf of such Selling Stockholder nor the consummation of the
transactions herein or therein contemplated by or on behalf of such Selling
Stockholder requires any consent, approval, authorization or order of, or
filing or registration with, any court, regulatory body, administrative
agency or other governmental body, agency or official (except such as may be
required under the Act, state securities laws governing the purchase and
distribution of the Shares or by the rules of the NASD) or any other
approval or conflicts or will conflict with or constitutes or will
constitute a breach of, or default under, or violates or will violate, any
agreement, indenture or other instrument to which such Selling Stockholder is a
party or by which such Selling Stockholder is or may be bound or to which any of
such Selling Stockholder's property or assets is subject, or any statute, law,
rule, regulation, ruling, judgment, injunction, order or decree applicable to
such Selling Stockholder or to any property or assets of such Selling
Stockholder.
(e) Contents of Registration Statement. Such
Selling Stockholder has reviewed the Registration Statement and the
Prospectus. The Registration Statement does not contain an untrue statement
of a material fact with respect to such Selling Stockholder or omit to state a
material fact with respect to such Selling Stockholder required to be stated
therein or necessary to make the statements therein with respect to such Selling
Stockholder not misleading and the Prospectus does not contain an untrue
statement of a material fact with respect to such Selling Stockholder or omit
to state a material fact with respect to such Selling Stockholder necessary to
make the statements therein with respect to such Selling Stockholder, in
light of the circumstances under which they were made, not misleading and,
except as disclosed in the Registration Statement and the Prospectus, such
Selling Stockholder knows of no material adverse information concerning the
current or prospective operations of the Company.
(f) Representations and Warranties. The
representations and warranties of such Selling Stockholder in the Custody
Agreement are, and on any Option Closing Date will be, true and correct.
(g) Stabilization Activities. Such Selling
Stockholder has not taken, directly or indirectly, any action designed to
or that might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or resale
of the Shares, except for the lock-up arrangements described in the
Prospectus.
2. Purchase, Delivery and Sale of the Shares.
(a) Purchase Price for Shares. The Shares shall
be sold to and purchased by the Underwriters hereunder at the purchase price
of $_____ per Share [the initial public offering price of the Shares of $_____
less an underwriting discount of nine percent (9%)] (the "Purchase Price").
(b) Firm Shares. 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 Underwriters, and the Underwriters agree to buy from the Company at
the Purchase Price at the place and time hereinafter specified, the number of
Shares set forth opposite each Underwriter's name in Schedule I hereto (the
"Firm Shares").
Delivery of the Firm Shares against payment therefor shall take
place at the offices of H.J. Meyers & Co., Inc., 1895 Mt. Hope Avenue,
Rochester, New York 14620 (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
____________ ___, 1996, or at such later time and date, not later than ten (10)
banking days after the Effective Date, as you may designate, such time and date
of payment and delivery for the Firm Shares being herein called the "First
Closing Date." Time shall be of the essence and delivery at the time and place
specified in this subsection (a) is a further condition to the obligations of
the Underwriters hereunder.
(c) Over-Allotment Option. The Company and the
Selling Stockholders also agree, subject to all the terms and conditions
of this Agreement and to such adjustments as you may determine in order to
avoid fractional shares, to issue (in the case of the Company) and sell
to the Underwriters, and, upon the basis of the representations,
warranties and agreements of the Company and the Selling Stockholders
herein contained and subject to all the terms and conditions set forth herein,
the Underwriters shall have the right to purchase from the Company and the
Selling Stockholders, at the same price per Share as the Underwriters shall
pay for the Firm Shares being sold pursuant to this Agreement (such
additional Shares being referred to herein as the "Option Shares"), pursuant to
an option (the "Over-Allotment Option") which may be exercised, in whole or in
part, within thirty (30) calendar days after the Effective Date (or, if such
30th day shall be a Saturday or Sunday or a holiday, on the next business day
thereafter when the New York Stock Exchange is open for trading), up to an
aggregate of 300,000 Option Shares, of which up to an aggregate of [50,000]
Option Shares may be purchased from the Selling Stockholders and of which up to
an aggregate of [240,000] Option Shares may be purchased from the Company. The
maximum number of Option Shares subject to sale by each Selling Stockholder
shall be as set forth opposite the name of such Selling Shareholder on Schedule
II hereto. If the Underwriters exercise all or part of the Over-Allotment
Option, Option Shares will be purchased by the Underwriters pro rata from the
Selling Stockholders and the Company in proportion to the maximum number of
Option Shares which each of them has agreed to sell. Upon any exercise of the
Over-Allotment Option, each Underwriter, severally and not jointly, agrees to
purchase from the Company and each Selling Stockholder the number of Option
Shares (subject to such adjustments as you may determine in order to avoid
fractional shares) which bears the same proportion to the number of Option
Shares to be sold by the Company or such Selling Stockholder as the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule I hereto
(or such number of Firm Shares increased as set forth in Section 9 hereof) bears
to the aggregate number of Firm Shares to be sold by the Company.
This Over-Allotment Option may be exercised by the Underwriters upon
notice by you to the Company and the Attorneys-in-Fact (as defined below)
advising it as to the amount of Option Shares as to which the Over-Allotment
Option is being exercised, the names and denominations in which the certificates
for such Option Shares are to be registered and the time and date when such
certificates are to be delivered. Such time and date shall be determined by you
but shall not be earlier than four (4) and not later than ten (10) full business
days after the exercise of said option, nor in any event prior to the First
Closing Date, and such time and date is referred to herein as the "Option
Closing Date." Delivery of the Option Shares against payment therefor shall take
place at the offices of H.J. Meyers & Co., Inc., 1895 Mt. Hope Avenue,
Rochester, New York 14620. Time shall be of the essence, and delivery at the
time and place specified in this subsection (c) is a further condition to the
obligations of the Underwriters hereunder.
Certificates in transferable form for the Option Shares that each of
the Selling Stockholders agrees to sell pursuant to this Agreement have been
placed in custody with ___________________ (the "Custodian") for delivery under
this Agreement pursuant to a Custody Agreement and Power of Attorney (the
"Custody Agreement") executed by each of the Selling Stockholders appointing
__________________________ as agents and attorneys-in-fact (the
"Attorneys-in-Fact"). Each Selling Stockholder agrees that (i) the Shares
represented by the certificates held in custody pursuant to the Custody
Agreement are subject to the interests of the Underwriters, the Company and each
other Selling Stockholder, (ii) the arrangements made by the Selling
Stockholders for such custody are, except as specifically provided in the
Custody Agreement, irrevocable and (iii) the obligations of the Selling
Stockholders hereunder and under the Custody Agreement shall not be terminated
by any act of such Selling Stockholder or by operation of law, whether by the
death or incapacity of any Selling Stockholder or the occurrence of any other
event. If any Selling Stockholder shall die or be incapacitated or if any other
event shall occur before the delivery of the Shares hereunder, certificates for
the Shares to be sold by such Selling Stockholder shall be delivered to the
Underwriters by the Attorneys-in-Fact in accordance with the terms and
conditions of this Agreement and the Custody Agreement as if such death or
incapacity or other event had not occurred, regardless of whether or not the
Attorneys-in-Fact of any Underwriter shall have received notice of such death,
incapacity or other event. Each Attorney-in-Fact represents that he is
authorized, on behalf of each of the Selling Stockholders, to execute this
Agreement and any other documents necessary or desirable in connection with the
sale of the Shares to be sold hereunder by such Selling Stockholder, to make
delivery of the certificates for such Shares, to receive the proceeds of the
sale of such Shares, to give receipts for such proceeds, to pay therefrom any
expenses to be borne by such Selling Stockholder in connection with the sale and
public offering of such Shares, to distribute the balance thereof to such
Selling Stockholder and to take such other actions as may be necessary or
desirable in connection with the transactions contemplated by this Agreement.
Each Attorney-in-Fact agrees to perform his duties under the Custody Agreement.
The Over-Allotment Option granted hereunder may be exercised only to
cover over-allotments in the sale by the Underwriters of Firm Shares referred to
in subsection (a) above. No Option Shares shall be sold or delivered unless all
of the Firm Shares previously have been, or simultaneously are, sold and
delivered.
(d) Inspection of Certificates. The Company (and
the Selling Stockholders, if the Over-Allotment Option is exercised) will make
the certificates for the Shares to be purchased by the Underwriters hereunder
available to you for checking at least two (2) full business days prior to
the First Closing Date or the Option Closing Date (which are collectively
referred to herein as the "Closing Dates" and individually as a "Closing Date"),
as the case may be. The certificates shall be in such names and denominations as
you may request, at least three (3) full business days prior to the relevant
Closing Dates. Time shall be of the essence, and the availability of the
certificates at the time and place specified in this Agreement is a further
condition to the obligations of the Underwriters.
Definitive engraved certificates in negotiable form for the Shares
to be purchased by the Underwriters hereunder will be delivered by the Company
(and the Selling Stockholders, if the Over-Allotment Option is exercised) to you
for the several accounts of the Underwriters against payment of the purchase
price by you, for the several accounts of the Underwriters, at your option, by
certified or bank cashier's checks in New York Clearing House funds or by wire
transfer, payable to the order of the Company and the Selling Stockholders.
In addition, in the event the Underwriters exercise the option to
purchase from the Company and the Selling Stockholders all or any portion of the
Option Shares pursuant to the provisions of subsection (c) above, payment for
such Option Shares shall be made, at your option, to or upon the order of the
Company and the Selling Stockholders by certified or bank cashier's checks
payable in New York Clearing House funds or by wire transfer, at the offices of
H.J. Meyers & Co., Inc. at the time and date of delivery of such Option Shares
as required by the provisions of subsection (c) above, against receipt of the
certificates for such Option Shares by you for the several accounts of the
Underwriters, registered in such names and in such denominations as you may
request.
It is understood that the Underwriters propose 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.
3A. Covenants of the Company. The Company covenants and
agrees with the Underwriters that:
(a) Effectiveness of Registration Statement.
(i) The Company will use its best efforts to cause the Registration Statement
to become effective and, upon notification from the Commission that the
Registration Statement has become effective, will so advise you and will not at
any time, whether before or after the Effective Date, file any amendment to
the Registration Statement or supplement to the Prospectus of which you shall
not previously have been advised and furnished with a copy or to which you or
your counsel shall have objected in writing or which is not in compliance
with the Act and the Rules and Regulations. At any time prior to the later of
(A) the completion by the Underwriters of the distribution of the Shares
contemplated hereby (but in no event more than nine (9) months after the
Effective Date), and (B) twenty-five (25) days after the Effective Date, the
Company will prepare and file with the Commission, promptly upon your request,
any amendments or supplements to the Registration Statement or Prospectus which,
in your reasonable opinion, may be necessary or advisable in connection with the
distribution of the Shares.
(ii) Promptly after you or the Company is advised
thereof, you will advise the Company or the Company will advise you, as the
case may be, and confirm the advice in writing, of the receipt of any
comments of the Commission, of the effectiveness of any post-effective
amendment to the Registration Statement, of the filing of any supplement to
the Prospectus or any amended Prospectus, of any request made by the
Commission for amendment of the Registration Statement or for amending or
supplementing the Prospectus or for additional information with respect thereto,
or of the issuance by the Commission or any state or regulatory body of any stop
orders or other order suspending the effectiveness of the Registration Statement
or any order preventing or suspending the use of any Preliminary Prospectus, or
of the suspension of the qualification of the Shares for offering in any
jurisdiction, or the institution of any proceedings for any of such purposes, or
otherwise preventing or impairing the offering of Shares, and will use its best
efforts to prevent the issuance of any such order and, if issued, to obtain as
soon as possible the lifting thereof. The Company and you shall not acquiesce in
such order or proceeding, and shall instead use its best efforts to defend such
order or proceeding, unless the Company and you agree in writing to such
acquiescence.
(iii) 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 Underwriters and selected dealers to
use the Prospectus in connection with the sale of the Shares for such period as
in the opinion of counsel for the Underwriters 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 or dealer, of any event of which the Company has knowledge and
which materially affects the Company or the Shares, or which in the opinion of
counsel for the Company or counsel for the Underwriters should be set forth in
an amendment to 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 the Act 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 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, shall not contain any
untrue statement of a material fact or omit to state any material facts
necessary in order to make the statements in the Prospectus, in the light of the
circumstances under which they are 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 Underwriters, except that in case the Underwriters are
required, in connection with the sale of the Shares, to deliver a Prospectus
nine (9) months or more after the Effective Date, the Company will, upon request
of and at the expense of the Underwriters, amend or supplement the Registration
Statement and Prospectus and furnish the Underwriters with reasonable quantities
of prospectuses complying with Section 10(a)(3) of the Act.
(iv) The Company will comply with the Act, the Rules and
Regulations and the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations thereunder in connection with the
Offering.
(b) Blue Sky. The Company will use its best
efforts to qualify the Shares for sale under the securities or "blue sky" laws
of such jurisdictions as you may designate and furnish such information to
Underwriters' counsel as may be required for registration and to comply with
such laws; provided, however, that 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 shall, 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 you
may reasonably request. Legal fees of Underwriter's counsel for such
qualifications shall not exceed $35,000.00, exclusive of filing fees. The
Company shall promptly pay all filing fees in connection with the registration
or qualification of the Shares. After each Closing Date, the Company shall, at
its own expense, from time to time prepare and file such statements and reports
as may be required to continue each such qualification in effect for so long a
period as the Underwriters may reasonably request.
(c) Exchange Act Registration. The Company
shall, at its own expense, prepare and file with the Commission a
registration statement (on Form 8-A or Form 10) under Section 12(b) of the
Exchange Act, and shall use its best efforts to cause such registration
statement to be declared effective concurrently with the Registration Statement
being declared effective and maintained in effect for at least five (5) years
from the Effective Date (unless otherwise agreed in writing by the
Underwriters).
(d) Prospectus Copies. The Company shall
deliver to you at or before the First Closing Date two (2) signed copies of
the Registration Statement including all financial statements and exhibits
filed therewith, and of all amendments thereto. The Company shall deliver to
or upon your order, from time to time until the Effective Date, as many
copies of any Preliminary Prospectus filed with the Commission prior to the
Effective Date as you may reasonably request. The Company shall deliver to you
on the Effective Date and thereafter for as 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 you may from time to
time reasonably request.
(e) Amendments and Supplements. The Company
shall, promptly upon your request, prepare and file with the Commission any
amendments to the Registration Statement, and any amendments or supplements to
the Preliminary Prospectus or the Prospectus, and take any other action
which in the reasonable opinions of the Company's counsel and the
Underwriters' counsel may be reasonably necessary or advisable in connection
with the distribution of the Shares, and shall use its best efforts to cause the
same to become effective as promptly as possible.
(f) [NASDAQ National Market Listing, etc.
The Company shall, upon the initial filing of the Registration
Statement, make all filings required to obtain approval for the quotation of
the Shares on the NASDAQ National Market of The Nasdaq Stock Market and shall,
unless otherwise agreed to in writing by the Underwriters, use its best
efforts to effect and maintain the aforesaid approval for at least five (5)
years from the date of this Agreement. In addition, the Company shall use its
best efforts to cause the Common Stock to be accepted for listing on the Pacific
Stock Exchange or other exchange acceptable to the Representative, if such
listing has not occurred prior to the Effective Date. Within ten (10) days after
the Effective Date, the Company shall cause the Company to be listed in Moody's
OTC Industrial Manual, Standard & Poor's or other recognized securities manual
acceptable to the Representative and cause such listing to be maintained for
five (5) years from the date of this Agreement.]
(g) Certain Market Practices. The Company
represents that it has not taken, and agrees that it will not take, directly or
indirectly, any action designed to or which has constituted 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.
(h) Certain Representations. Neither the Company
nor any representative of the Company shall make any written or oral
representation in connection with the offering and sale of the Shares or the
Representative's Warrant which is not contained in the Prospectus or which
shall constitute a violation of the Act, the Rules and Regulations, the Exchange
Act or the rules and regulations promulgated under the Exchange Act.
(i) Use of Proceeds. The Company will apply the
net proceeds from the sale of the Shares substantially for the purposes set
forth under the heading "USE OF PROCEEDS" in the Prospectus and shall 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 of
the Rules and Regulations.
(j) Twelve Months' Earnings Statement. 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 end 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 which shall satisfy the requirements of Section 11(a) of the Act.
(k) Lock-Up. Prior to the Effective Date, the
Company shall use its best efforts to cause all members of management, all
officers and directors of the Company, and all holders of the outstanding
securities of the Company (including the Sellers of the Acquired Companies),
to execute agreements in the form previously delivered, to the effect that
for a period of eighteen (18) months from the First Closing Date, such
persons shall not sell, assign, hypothecate or pledge or otherwise dispose of,
directly or indirectly, any shares of Common Stock of the Company, whether
currently owned or subsequently acquired through the exercise of any option,
warrant or right or through the conversion of any convertible security without
your prior written consent, which consent shall not be unreasonably withheld,
and agreeing to permit all certificates evidencing such shares to be endorsed
with the appropriate restrictive legends, and consent to the placement of
appropriate stop transfer orders with the transfer agent for the Company, and to
note such restrictions on the transfer books and records of the Company.
(l) Periodic Reports. For so long as the Company
is a reporting company under Section 12(b), 12(g) or Section 15(d) of the
Exchange Act, the Company shall, at its own expense, furnish to its
shareholders an annual report (including financial statements audited by
certified public accountants) in reasonable detail. In addition, during the
period ending five (5) years from the date hereof, the Company shall, at its own
expense, furnish to you: (i) within ninety (90) days of the end of each
fiscal year, a balance sheet of the Company and its Subsidiaries as at the end
of such fiscal year, together with statements of income, stockholders'
equity and cash flows of the Company and its Subsidiaries as at the end of such
fiscal year, all in reasonable detail and accompanied by a copy of the
certificate or report thereon of certified public accountants; (ii) as soon as
they are available, a copy of all reports (financial or otherwise) distributed
to security holders; (iii) as soon as they are available, a copy of all
non-confidential 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. The financial statements referred to herein shall be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its shareholders
generally.
(m) Option Grants Below Offering Price. During
the 90-day period commencing as of the First Closing Date, the Company will
not, without your prior written consent, grant options to purchase shares of
Common Stock at a price less than the initial public offering price of the
Shares.
(n) Form S-8 Registrations. For a period of one
year following the First Closing Date, the Company shall not register or
otherwise facilitate the registration of any of its securities issuable
upon the exercise of options, warrants (other than the Representative's
Warrant) or other rights, whether by means of a Registration Statement on Form
S-8 or otherwise, without your prior written consent.
(o) Future Sales. During the period of the
Offering and for a period of twelve (12) months from the Effective Date, the
Company will not sell or otherwise dispose of any securities of the Company
(except for shares of Common Stock issued pursuant to the exercise of
options, warrants or other convertible securities outstanding prior to the
Effective Date), without the prior written consent of the Underwriters, which
consent shall not be unreasonably withheld. For a period of twenty-four (24)
months from the Effective Date, the Company will not sell or otherwise
issue any securities pursuant to Regulation S under the Act, without the
Underwriters' prior written consent, which consent shall not be unreasonably
withheld.
(p) Available Shares. The Company shall reserve
and at all times keep available that maximum number of its authorized but
unexercised issued shares which are issuable upon exercise of the
Representative's Warrant, taking into account the anti-dilution provisions
thereof.
(q) Management. Prior to the Effective Date,
the Company will have in place key person life insurance on the life of Thomas
H. White, the President of the Company, for so long as such individual
remains an officer of the Company, in the amount of $1,000,000, on terms, and
with an insurance company, mutually agreed upon by the Company and you.
(r) Financial Consulting Agreement. On the
First Closing Date and simultaneously with the delivery of the Firm Shares,
the Company shall execute and deliver to you an agreement with you, in the form
previously delivered to the Company by you, regarding your services as a
financial consultant to the Company (the "Financial Consulting Agreement").
(s) Merger and Acquisition Agreement. On the
First Closing Date and simultaneously with the delivery of the Firm Shares, the
Company will execute and deliver to you an agreement with you regarding
mergers, acquisitions and certain other forms of transactions in the form
previously delivered to the Company by you (the "Merger and Acquisition
Agreement").
(t) Stock Escrow Agreement. On or before
the Effective Date, the Company shall, and shall cause certain of its
current stockholders to, execute and deliver to you an agreement with
________________ (or other escrow agent mutually acceptable to the Company and
you), in the form previously delivered to the Company by you, regarding the
escrow of an aggregate of 600,000 shares of Common Stock owned by such
stockholders (the "Stock Escrow Agreement"); in addition, the Company shall
deliver to you copies of the option agreements between the Company and all
optionees, which contain provisions conditioning accelerated vesting on
achieving certain performance earn-out criteria.
(u) Agreement of Management and Principal
Stockholders. On or before the Effective Date, the Company shall cause the
parties named therein to execute and deliver to you an agreement, in the
form previously delivered to the Company by you, regarding certain
undertakings by such parties in connection with the Offering (the
"Agreement of Management and Principal Stockholders").
(v) Board of Directors Observer. For a period of
thirty-six (36) months from the First Closing Date, the Company shall allow
an observer designated by the Representative and acceptable to the Company
to receive notice of and to attend all meetings of the Board of Directors of the
Company. Such observer shall have no voting rights, and shall be reimbursed
for all out-of-pocket expenses incurred in attending such meetings. The
Company shall hold at least four (4) meetings per year, and the observer will be
indemnified by the Company against any claims arising out of his participation
at Board meetings.
(w) Consent to Future Issuances of Preferred
Stock. The Company agrees to obtain the Representative's written consent
prior to the issuance of any shares of preferred stock of any class or series
of the Company during the period of thirty-six (36) months from the First
Closing Date.
(x) DTC Transfer Sheets. The Company will supply
the Representative with DTC Stock Transfer sheets on a weekly basis for the
first six (6) weeks after the Effective Date and a monthly basis for one (1)
year thereafter.
(y) Bound Volumes. Within ninety (90) days from
the First Closing Date, the Company shall deliver to you, at the Company's
expense, three bound volumes in form and content acceptable to you,
containing the Registration Statement and all exhibits filed therewith, and
all amendments thereto, and all other correspondence, filings, certificates
and other documents filed and/or delivered in connection with the Offering.
(z) Public Relations. At least five (5) days
prior to the Effective Date, the Company shall retain a public relations
firm acceptable to you and on such terms as are acceptable to you, and shall
continue to retain such firm, or any alternate firm acceptable to you, for a
period of twenty-four (24) months following the Effective Date.
(aa) Right of First Refusal. During the
three (3) year period from the Effective Date, the Representative
shall have the right of first refusal to act as underwriter or agent for any
public or private offering or sale of the securities of the Company or any
successor to the Company or any of the officers or directors of the Company. In
addition, the Company shall use its best efforts to assure that for a period of
three (3) years following the Effective Date, the Representative shall have the
right of first refusal to act as underwriter or agent for any public or
private offering or sale of the securities of the Company or any successor
to the Company made by any other stockholder owning beneficially at least
five percent (5%) of the Company's Common Stock, not including the sellers of
the Acquired Companies.
(bb) Rule 144 Sales. The Representative shall
have the right for a three-year period after the First Closing Date, to
purchase as principal or sell as agent any of the Company's securities sold
pursuant to Rule 144 of the Rules and Regulations by any officer or director.
The Company shall use its best efforts to cause each of the other stockholders
owning beneficially at least five percent (5%) of the Company's Common Stock,
not including the sellers of the Acquired Companies, to provide you the right,
for a three-year period following the First Closing Date, to purchase as
principal or sell as agent any of the Company's securities sold pursuant to
Rule 144 of the Rules and Regulations.
(cc) Acquisitions. The Company will (i) use
its best efforts to satisfy all conditions to the consummation of the
Acquisitions as set forth in the agreements with respect thereto, (ii) use
its best efforts to cause each other party to such agreements to satisfy all
conditions to the consummation of the Acquisitions, and (iii) promptly
notify the Underwriters of the occurrence of any event which may result in the
non-consummation of any of the Acquisitions on the Closing Date.
3B. Covenants of the Selling Stockholders. Each of the
Selling Stockholders agrees with the several Underwriters as follows:
(a) Effectiveness of Registration Statement.
Such Selling Stockholder will cooperate to the extent reasonably necessary to
cause the Registration Statement and any post-effective amendment thereto to
become effective at the earliest possible time.
(b) Transfer Taxes. Such Selling Stockholder
will pay all federal and other taxes, if any, on the transfer or sale of any
Option Shares that are sold by such Selling Stockholder to the Underwriters.
(c) Performance of Conditions Precedent. Such
Selling Stockholder will do or perform all things required to be done or
performed by such Selling Stockholder prior to the Option Closing Date to
satisfy all conditions precedent to the deliver of the Option Shares by such
Selling Stockholder pursuant to this Agreement.
(d) Sale of Common Stock. Such Selling
Stockholder shall not sell, assign, hypothecate or pledge or otherwise
dispose of, directly or indirectly, any shares of Common Stock of the Company
beneficially owned by such Selling Stockholder for a period of eighteen (18)
months from the First Closing Date without the prior written consent of the
Representative, except for shares of Common Stock to be sold by such Selling
Stockholder to the Underwriters upon exercise of the Over-Allotment Option.
(e) Stabilization Activities. Except as stated
in this Agreement and in the Preliminary Prospectus and the Prospectus, such
Selling Stockholder will not take, directly or indirectly, any action designed
to or that might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or resale
of the Option Shares.
(f) Change in Information. Such Selling
Stockholder will advise you promptly, and if requested by you, will confirm
such advice in writing, within the period of time referred to in Section
3A(a)(iii) hereof, of any change in information relating to such Selling
Stockholder and of any change in the Company's condition (financial or other),
business, prospects, properties, net worth or results of operations or any other
information relating to the Company or relating to any matter stated in the
Prospectus or any amendment or supplement thereto that comes to the attention of
such Selling Stockholder that suggests that any statement made in the
Registration Statement or the Prospectus (as then amended or supplemented, if
amended or supplemented) is or may be untrue in any material respect or that the
Registration Statement or Prospectus (as then amended or supplemented, if
amended or supplemented) omits or may omit to state a material fact necessary to
be stated therein in order to make the statements therein not misleading in any
material respect.
(g) Agreement of Management and Principal
Stockholders. On or before the Effective Date, the Selling Stockholders
shall execute and deliver to you the Agreement of Management and Principal
Stockholders.
(h) Delivery of Form W-9. In order to document
the Underwriters' compliance with the reporting and withholding provisions
of the Tax Equity and Fiscal Responsibility Act of 1982, as amended, with
respect to the transactions herein contemplated, such Selling Stockholder
agrees to deliver to you prior to or on the Option Closing Date a properly
completed and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations in
lieu thereof).
4. Conditions of Underwriters' Obligations.
The obligations of the several Underwriters to purchase and pay for
the Shares which they have agreed to purchase hereunder are subject to the
accuracy (as of the date hereof, and as of each Closing Date) of and compliance
with the representations and warranties of the Company contained herein, the
performance by the Company of its obligations hereunder, and to the following
conditions:
(a) Effective Registration Statement; No Stop
Order. The Registration Statement shall have become effective and you shall
have received notice thereof not later than 6:00 p.m., New York time, on the
date of this Agreement, or at such later time or on such later date as to
which you may agree in writing. In addition, on each Closing Date, (i) no
stop order denying or suspending the effectiveness of the Registration
Statement shall be in effect 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, and (ii) all requests on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction of
Shereff, Friedman, Hoffman & Goodman, LLP, counsel for the Underwriters
("SFH&G").
(b) Opinion of Company Counsel. On the First
Closing Date, you shall have received the opinion, dated as of the First
Closing Date, of Whiteford, Taylor & Preston L.L.P., counsel for the Company
("WT&P"), in form and substance satisfactory to Underwriters' counsel, to
the effect that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation with full corporate power and
authority to own its properties and conduct its business as described
in the Prospectus, and, after giving effect to the Acquisitions, is
duly qualified or licensed to do business as a foreign corporation and
is in good standing in each jurisdiction in which the business requires
such qualification and in which it owns or leases property;
(ii) to the best knowledge of such counsel: (A) the
Company and each of the Acquired Companies has obtained, or is in the
process of obtaining, all necessary licenses, permits and other
governmental authorizations currently required for the conduct of its
business or the ownership of its property, as described in the
Prospectus; (B) such obtained licenses, permits and other governmental
authorizations are in full force and effect; and (C) the Company and
each of the Acquired Companies is in all material respects complying
therewith;
(iii) (A) the authorized capitalization of the
Company as of the date of the Prospectus was as set forth under the
heading "CAPITALIZATION" in the Prospectus; (B) all of the shares of
the Company's Common Stock now outstanding have been duly authorized
and validly issued, are fully paid and non-assessable and conform to
the description thereof contained in the Prospectus, have not been
issued in violation of the pre-emptive rights of any stockholder and,
except as described in the Prospectus, to the best knowledge of such
counsel, are not subject to any restrictions upon the voting or
transfer thereof; the Shares and the Representative's Warrant conform
to the respective descriptions thereof contained in the Prospectus; (C)
the Shares and the Representative's Warrant to be issued as
contemplated in the Registration Statement have been duly authorized
and, when issued and delivered against payment therefor as provided
herein, will be validly issued, fully paid and nonassessable, will not
have been issued in violation of the pre-emptive rights of any
stockholder, and no personal liability will attach to the ownership
thereof; (D) except as described in the Prospectus, the security
holders of the Company do not have any pre-emptive rights or other
rights to subscribe for or purchase, and there are no restrictions upon
the voting or transfer of, any shares of Common Stock owned by them,
except for transfer restrictions imposed by federal or state securities
laws or contained in lock-up agreements; (E) the Shares and the
Representative's Warrant conform in all material respects to the
respective descriptions thereof contained in the Prospectus; (F) all
prior sales of the Company's securities have been made in compliance
with, or under an exemption from, the Act and applicable state
securities laws; (G) a sufficient number of shares of Common Stock has
been reserved for issuance upon exercise of the Representative's
Warrant; and (H) to the best of such counsel's knowledge, except as
described in the Prospectus, neither the filing of the Registration
Statement nor the offering or sale of the Shares as contemplated by
this Agreement gives rise to any registration rights or other rights,
other than those which have been waived or satisfied or described in
the Prospectus, for or relating to the registration of any securities
of the Company;
(iv) this Agreement, the Representative's Warrant,
the Financial Consulting Agreement, the Stock Escrow Agreement and the
Merger and Acquisition Agreement have been duly and validly authorized,
executed and delivered by the Company, and assuming due execution and
delivery by you, all of such agreements are, or when duly executed will
be, the valid and legally binding obligations of the Company; provided,
however, that no opinion need be expressed as to the enforceability of
the indemnity provisions contained in Section 6 or the contribution
provisions contained in Section 7 of this Agreement;
(v) the certificates or instruments evidencing the
Shares and the Representative's Warrant are in valid and proper legal
form; and the Representative's Warrant will be exercisable for shares
of Common Stock of the Company in accordance with the terms of the
Representative's Warrant and at the prices therein provided for;
(vi) to the best knowledge of such counsel, except as
required to be described in the Prospectus: (A) there is no pending or
threatened legal or governmental proceeding affecting the Company or
any Acquired Company or any seller of an Acquired Company which could
materially and adversely affect the business, property, operations,
condition (financial or otherwise) or results of operations of the
Company or such Acquired Company, or which questions the validity of
the Shares, this Agreement, the Representative's Warrant, the Financial
Consulting Agreement, the Stock Escrow Agreement, the Agreement of
Management and Principal Stockholders or the Merger and Acquisition
Agreement, or any action taken or to be taken by the Company pursuant
thereto; and (B) there is no legal or governmental proceeding or
regulation required to be described or referred to in the Registration
Statement which is not so described or referred to;
(vii) to the best knowledge of such counsel: (A) the
Company is not in violation of or default under this Agreement, the
Representative's Warrant, the Financial Consulting Agreement, the Stock
Escrow Agreement or the Merger and Acquisition Agreement; and (B) and
the execution and delivery hereof and thereof and the incurrence of the
obligations herein and therein set forth and the consummation of the
transactions herein or therein contemplated will not result in a
violation of, or constitute a default under, the Certificate of
Incorporation or By-laws of the Company, or any material obligation,
agreement, covenant or condition contained in any bond, debenture, note
or other evidence of indebtedness or in any material contract,
indenture, mortgage, loan agreement, lease, joint venture, other
agreement or instrument filed as an exhibit to the Registration
Statement and to which the Company is a party or by which its assets
are bound or any material order, rule, regulation, writ, injunction or
decree of any government, governmental instrumentality or court,
domestic or foreign;
(viii) the Registration Statement has become
effective under the Act, and to the best of such counsel's knowledge,
no stop order suspending the effectiveness of the Registration
Statement is in effect, and no proceedings for that or any similar
purpose have been instituted or are pending before, or threatened by,
the Commission;
(ix) 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;
(x) all descriptions contained in the Registration
Statement and the Prospectus, and any amendment or supplement thereto,
of contracts and other documents are accurate and fairly present the
information required to be described, and such counsel is familiar with
all contracts and other documents referred to in the Registration
Statement and the Prospectus and any such amendment or supplement, or
filed as exhibits to the Registration Statement, and such counsel does
not know of any contracts, documents, licenses or permits of a
character required to be summarized or described therein or to be filed
as exhibits thereto which are not so summarized, described or filed;
(xi) 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 by the Company or in
connection with the taking of any action contemplated herein, or the
issuance of the Representative's Warrant or the Shares underlying the
Representative's Warrant, other than registration or qualification of
the Shares under applicable state or foreign securities or blue sky
laws and registration under the Act; and
(xii) the statements in the Prospectus under the
headings "RISK FACTORS," "BUSINESS," "USE OF PROCEEDS," "MANAGEMENT,"
"DESCRIPTION OF CAPITAL STOCK" and "SHARES ELIGIBLE FOR FUTURE SALE"
have been reviewed by such counsel and insofar as they refer to
descriptions of agreements, statements of laws, descriptions of
statutes, licenses, rules or regulations or legal conclusions, are
correct in all material respects.
(xiii) Each of the agreements with respect to the
Acquisitions (which have been filed with the Commission as exhibits to
the Registration Statement) has been duly authorized, executed and
delivered by the Company and constitutes the valid and binding
obligation of the Company.
Such opinion shall also state that the examination by Company's
counsel of the Registration Statement and its discussions with the Company and
its independent auditors did not disclose any information which gives Company's
counsel reason to believe that the Registration Statement (other than the
financial statements and other financial and statistical information as to which
counsel need not express an opinion) at the time it became effective contained
any untrue statement of a material fact 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 (other than the schedules, financial
statements and other financial and statistical information as to which no view
is expressed) at the time it became effective and as of each Closing Date
contained or contains any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus (other than
the financial statements and other financial and statistical information as to
which counsel need not express an opinion) 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.
In addition, such opinion shall also cover such matters incident to
the transactions contemplated hereby as you or your counsel 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 the
State of Delaware upon opinions of counsel satisfactory to you, 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) Corporate Proceedings. 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 SFH&G, and you shall have received from such
counsel a signed opinion, dated as of the First Closing Date, with respect to
the validity of the issuance of the Shares, the form of the Registration
Statement and Prospectus (other than the financial statements and other
financial data contained therein), the execution of this Agreement and other
related matters. The Company shall have furnished to Underwriters' counsel such
documents as they may reasonably request for the purpose of enabling them to
render such opinion.
(d) Comfort Letter. You shall have received a
letter on and as of the Effective Date and again on and as of the First
Closing Date, from E&Y, certified public accountants for the Company, in
each instance describing the procedures carried out to a date within five (5)
days of the date of the letter and substantially in the form approved by you.
(e) Bring Down. At each of the Closing Dates,
(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
such Closing Date, 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; (ii) the Registration Statement and the Prospectus
shall contain all statements which are required to be stated therein in
accordance with the Act and the Rules and Regulations, and shall in all
material respects conform to the requirements thereof, and neither the
Registration Statement nor the Prospectus 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 of which information is given, no material
adverse change in the business, properties, condition (financial or otherwise),
results of operations, capital stock, long-term or short-term debt or general
affairs or operations of the Company 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, and the Company
shall not have incurred any material liabilities nor entered into any agreement
not in the ordinary course of business other than as referred to in the
Registration Statement and Prospectus; and (iv) except as set forth in the
Prospectus, no action, suit or proceeding at law or at equity shall be pending
or threatened against the Company which would be required to be disclosed in the
Registration Statement, and no proceedings shall be pending or threatened
against the Company before or by any commission, board or administrative agency
in the United States or elsewhere, wherein an unfavorable decision, ruling or
finding would materially and adversely affect the business, property, condition
(financial or otherwise), results of operations or general affairs of the
Company. In addition, you shall have received at the First Closing Date, a
certificate signed by the principal executive officer and the principal
financial or accounting officer of the Company, dated as of the First Closing
Date, evidencing compliance with the provisions of this Section 4(e).
(f) Transfer Agent. The Company shall have
appointed Continental Stock Transfer and Trust Company (or other agent
mutually acceptable to the Company and you), as its transfer agent and warrant
agent to transfer all of the Shares issued in the Offering, as well as to
transfer other shares of the Common Stock outstanding from time to time.
(g) Certain Further Matters. On each Closing Date,
Underwriters' counsel shall have been furnished with all such other documents
and certificates as they may reasonably request for the purpose of enabling them
to render their legal opinion to the Underwriters and in order to evidence
the accuracy and completeness of any of the representations,
warranties or statements, the performance of any of the covenants, or
the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company on or prior to each of the Closing Dates in
connection with the authorization, issuance and sale of the Shares as herein
contemplated shall be reasonably satisfactory in form and substance to you and
to Underwriters' counsel.
(h) Over-Allotment Option. Upon exercise of
the option provided for in Section 2(c) hereof, the obligations of the
several Underwriters to purchase and pay for the Option Shares referred to
therein will be subject (as of the date hereof and as of the Option Closing
Date) to the following additional conditions:
(i) The Registration Statement shall remain effective
at the Option Closing Date, no stop order suspending the effectiveness
thereof 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 the knowledge of the Company, shall be contemplated
by the Commission, and any reasonable request on the part of the
Commission for additional information shall have been complied with to
the satisfaction of SFH&G.
(ii) On the Option Closing Date, there shall have
been delivered to you the signed opinion of WT&P, dated as of the
Option Closing Date, in form and substance satisfactory to SFH&G, which
opinion shall be substantially the same in scope and substance as the
opinion furnished to you at the First Closing Date pursuant to Section
4(b) hereof, except that such opinion, where appropriate, shall cover
the Option Shares rather than the Firm Shares and include the opinions
as set forth below. If the First Closing Date is the same as the Option
Closing Date, such opinions may be combined.
(A) This Agreement and the Custody Agreement
have each been duly executed and delivered by or on behalf of
each of the Selling Stockholders and are valid and binding
agreements of each Selling Stockholder enforceable against
each Selling Stockholder in accordance with their respective
terms, except (A) as enforcement of rights to indemnity and
contribution hereunder and thereunder may be limited by
federal or state securities laws or principles of public
policy and (B) subject to the qualification that the
enforceability of each of their obligations hereunder and
thereunder may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and
by general equitable principles;
(B) To the knowledge of such counsel, each
Selling Stockholder has full legal right, power and
authorization to sell, assign, transfer and deliver valid and
unencumbered title to the Option Shares such Selling
Stockholder has agreed to sell pursuant to this Agreement; and
upon delivery of such Option Shares pursuant this Agreement
and payment therefor as contemplated herein and assuming that
the several Underwriters are bona fide purchasers within the
meaning of the Uniform Commercial Code as in effect in the
State of New York (the "UCC"), the Underwriters will acquire
valid and unencumbered title to such Shares free and clear of
any adverse claim (within the meaning of Section 8-302 of the
U.C.C.); and
(C) To the knowledge of such counsel, the
execution and delivery of this Agreement and the Custody
Agreement by the Selling Stockholders and the consummation of
the transactions contemplated hereby and thereby will not
conflict with, violate, result in a breach of or constitute a
default under the terms or provisions of any material
agreement, indenture, mortgage or other instrument to which
any Selling Stockholder is a party or by which any of them or
any of their respective assets or property is bound, or any
court order or decree or any law, rule, or regulation known to
such counsel applicable to any Selling Stockholder or to any
of the respective material property or assets of any Selling
Stockholder.
(iii) On the Option Closing Date, there shall have
been delivered to you a certificate of the principal executive officer
and the principal financial or accounting officer of the Company dated
the Option Closing Date, in form and substance satisfactory to SFH&G,
substantially the same in scope and substance as the certificate
furnished to you at the First Closing Date pursuant to Section 4(e)
hereof.
(iv) On the Option Closing Date, there shall have
been delivered to you a letter in form and substance satisfactory to
you from E&Y dated the Option Closing Date and addressed to you,
confirming the information in their letter referred to in Section 4(d)
hereof as of the date thereof and stating that, without any additional
investigation required, nothing has come to their attention during the
period from the ending date of their review referred to in said letter
to a date not more than five (5) days prior to the Option Closing Date
which would require any change in said letter if it were required to be
dated the Option Closing Date.
(v) All proceedings taken at or prior to the Option
Closing Date in connection with the sale and issuance of the Option
Shares shall be satisfactory in form and substance to you, and you and
SFH&G, shall have been furnished with all such documents, certificates
and opinions as you may request in connection with this transaction in
order to evidence the accuracy and completeness of any of the
representations, warranties or statements of the Company or its
compliance with any of the covenants or conditions contained therein.
(i) Closing of the Acquisitions. Each of the
Acquisitions shall have been completed upon the terms set forth in the
Prospectus simultaneously with the closing of the purchase of the Firm Shares by
the Underwriters.
(j) Closing of the Credit Facility. The Credit
Facility shall have been completed simultaneously with the closing of the
purchase of the Firm Shares by the Underwriters.
If any of the conditions provided for in this Section shall not have
been completely fulfilled as of the date indicated, this Agreement and all
obligations of the several Underwriters under this Agreement may be canceled at,
or at any time prior to, each Closing Date by your notifying the Company of such
cancellation in writing or by telegram at or prior to the applicable Closing
Date. Any such cancellation shall be without liability of any Underwriter to the
Company, except as otherwise provided herein.
5. Conditions of the Obligations of the Company.
The obligation of the Company to sell and deliver the Shares is
subject to the following conditions:
(a) Registration Statement Effective. The
Registration Statement shall have become effective not later than 6:00 p.m. New
York time, on the date of this Agreement, or at such later time on such later
date as the Company and you may agree in writing.
(b) No Stop Order. On each applicable
Closing Date, no stop order denying or suspending the effectiveness of
the Registration Statement shall have been issued under the Act or any
proceedings therefor initiated or threatened by the Commission.
(c) Payment for Shares. On each applicable
Closing Date, you shall have made payment, for the several accounts of the
Underwriters, of the aggregate Purchase Price for the Shares then being
purchased, by certified or bank cashier's checks payable in next-day funds to
the order of the Company or the Selling Stockholders, as the case may be.
If the conditions to the obligations of the Company provided for in
this Section have been fulfilled on the First Closing Date but are not fulfilled
after the First Closing Date and prior to the Option Closing Date, then only the
obligation of the Company and the Selling Stockholders to sell and deliver the
Option Shares upon exercise of the Over-Allotment Option shall be affected.
6. Indemnification.
(a) Indemnification by Company. As used in this
Agreement, the term "Liabilities" shall mean any and all losses, claims,
damages and liabilities, and actions and proceedings in respect thereof
(including without limitation all reasonable costs of defense and
investigation and all attorneys' fees) including without limitation those
asserted by any party to this Agreement against any other party to this
Agreement. The Company hereby indemnifies and holds harmless each Underwriter
and each person, if any, who controls such Underwriter, within the meaning of
the Act, from and against any Liabilities, joint and several, to which such
Underwriter or such controlling person 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:
(i) any untrue statement or alleged untrue statement
of any material fact contained in (A) the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment thereof or
supplement thereto, or (B) any "blue sky" application or other document
executed by the Company specifically for that 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 and the
Representative's Warrant under the securities laws thereof (any such
application, document or information being hereinafter called a "Blue
Sky Application"); or
(ii) the omission or alleged omission to state in the
Registration Statement, or any amendment thereto, or the Prospectus or
any Preliminary 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 shall not be liable in any such case to the
extent, but only to the extent, that any such Liabilities arise out of or are
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with written
information furnished to the Company through you by or on behalf of any
Underwriter specifically for use in the preparation of the Registration
Statement, or any amendment thereto, or the Prospectus or any Preliminary
Prospectus, or any amendment or supplement thereto, or any such Blue Sky
Application; and provided, further, that the Company shall not be liable in any
such case with respect to any Preliminary Prospectus to the extent that any such
loss, claim, damage or liability of each Underwriter results from the fact that
such Underwriter sold shares of Common Stock to a person to whom there was not
sent or given, at or prior to the time that such person was sent or given a
written confirmation of such sale, a copy of the Prospectus if the Company had
previously furnished copies thereof to such Underwriter and the untrue statement
or omission of a material fact contained in such Preliminary Prospectus was
corrected in the Prospectus. The foregoing indemnity will be in addition to any
liability which the Company may otherwise have.
(b) Indemnification by Selling Stockholders.
Each of the Selling Stockholders agrees, severally and not jointly, to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act to the same extent as the indemnity from the Company
to each Underwriter set forth in Section 6(a) hereof (but only with respect
to information relating to such Selling Stockholder contained in any
Preliminary Prospectus or in the Registration Statement or the Prospectus or any
amendment or supplement thereto); provided, however, that the indemnification
contained in this paragraph (b) with respect to any Preliminary Prospectus shall
not inure to the benefit of any Underwriter (or to the benefit of any person
controlling such Underwriter) on account of any such loss, claim, damage,
liability or expense arising from the sale of the Option Shares by such
Underwriter to any person if a copy of the Prospectus shall not have been
delivered or sent to such person within the time required by the Act and the
regulations thereunder, and the untrue statement or alleged untrue statement or
omission or alleged omission of a material fact contained in such Preliminary
Prospectus was corrected in the Prospectus, provided that the Company has
delivered the Prospectus to the several Underwriters in requisite quantity on a
timely basis to permit such delivery or sending. The foregoing indemnity
agreement shall be in addition to any liability which each of the Selling
Stockholders may otherwise have.
(c) Indemnification by Underwriters. Each
Underwriter, severally but not jointly, hereby indemnifies and holds harmless
the Company, each of its directors, each nominee (if any) for director named in
the Prospectus, each of the officers who have signed the Registration
Statement, each person, if any, who signed the Registration Statement,
the Selling Stockholders and each person, if any, who controls the Company,
within the meaning of the Act, from and against any Liabilities to which the
Company or any such director, nominee, officer or controlling person or
Selling Stockholder may become subject under the Act or otherwise, insofar as
such Liabilities arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement or any amendment thereto, or the Prospectus or Preliminary Prospectus,
or any amendment or supplement thereto, or (ii) the omission or the alleged
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 Liabilities arise out of or are based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement or any amendment thereto, the
Prospectus or Preliminary Prospectus, or any amendment or supplement thereto, or
any Blue Sky Application, or any amendment or supplement thereto, in reliance
upon and in conformity with written information furnished to the Company through
you by or on behalf of any Underwriter specifically for use in preparation
thereof. In no event shall any Underwriter be liable under this Section 6(c) for
any amount in excess of the compensation received by such Underwriter in the
form of underwriting discounts or otherwise, pursuant to this Agreement or any
other agreement contemplated hereby. The foregoing indemnity will be in addition
to any liability which any Underwriter may otherwise have.
(d) Procedures for Claims. 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
6, 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
reasonable costs of investigation. The 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, however, that if the indemnified party is any Underwriter or a person
who controls any 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 such Underwriter or such
controlling person and the indemnifying party, and in the judgment of such
Underwriter, it is advisable for such Underwriter or such 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 such
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). No
settlement of any action against an indemnified party shall be made without the
consent of the indemnified party, which shall not be unreasonably withheld in
light of all factors of importance to such indemnified party.
7. Contribution.
In order to provide for just and equitable contribution under the
Act in any case in which (a) any indemnified party makes claims 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 (b) contribution under the Act may be required on the part of any
indemnified party, then such indemnified party and each indemnifying party (if
more than one) shall contribute to the aggregate Liabilities to which they may
be subject, in either such case (after contribution from others) in such
proportions that such Underwriter is responsible in the aggregate for that
portion of such 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 per Share appearing thereon, and the Company shall be
responsible for the remaining portion provided that in the event that the
Underwriters shall have purchased any Option Shares hereunder, any determination
of the Liabilities of the Company, the Selling Stockholders and the Underwriters
to which they may be subject shall include the proceeds (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
and each of the Selling Stockholders and the underwriting discounts and
commissions attributable to the sale of the shares of Common Stock by the
Company or such Seller Stockholders from the sale of such Option Shares, in each
case computed on the basis of the respective amounts set forth on the cover page
of this Prospectus. If such allocation is not permitted by applicable law, then
the relative fault of the Company and such Underwriter and controlling persons,
in the aggregate, in connection with the statements or omissions which resulted
in such damages and other relevant equitable considerations shall also be
considered. Notwithstanding the foregoing, there shall be subtracted from such
aggregate Liabilities suffered by the Company and any Selling Stockholder, as
the case may be, any contribution received by the Company or any such Selling
Stockholder from persons, other than the Underwriters, who may also be liable
for contribution, including persons who control the Company, within the meaning
of Section 15 of the Act, officers of the Company who signed the Registration
Statement and directors of the Company, and there shall be subtracted from such
aggregate Liabilities suffered by the Underwriters any contribution received by
the Underwriter from persons, other than the Company (including persons who
control the Company within the meaning of Section 15 of the Act, officers of the
Company who signed the Registration Statement and directors of the Company), who
may also be liable for contribution, including persons who control the
Underwriter within the meaning of Section 15 of the Act.
The relative fault shall be determined by reference to, among other
things, whether in the case of an untrue statement of a material fact or the
omission to state a material fact, such statement or omission relates to
information supplied by the Company, its officers or directors, the Selling
Stockholders or the Underwriter and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if the respective
obligations of the Company, the Selling Stockholders and the Underwriters to
contribute pursuant to this Section 7 were to be determined by pro rata or per
capita allocation of the aggregate Liabilities (even if the Underwriters have to
be 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 this
Section 7. In addition, the contribution of any Underwriter shall not be in
excess of its proportionate share of the portion of such Liabilities for which
such Underwriter is responsible. 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. As used in this Section 7, the word "Company" includes any
officer, director or person who controls the Company within the meaning of
Section 15 of the Act. Each Underwriter's obligations under this Section 7 to
contribute are several in proportion to their respective underwriting
obligations and not joint. If the full amount of the contribution specified in
this paragraph is not permitted by law, then each Underwriter and each person
who controls such Underwriter shall be entitled to contribution from the Company
and the Selling Stockholders to the full extent permitted by law.
Notwithstanding any other provision of this Section 7, the liability of any
Selling Stockholder for contribution under this Section 7 shall not exceed an
amount equal to the number of Option Shares sold by such Selling Stockholder
hereunder multiplied by the Price to Public per share set forth on the cover
page of the Prospectus. 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, the Selling Stockholders and the
Underwriters. 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) Payment of Expenses. Whether or not this
Agreement becomes effective or the sale of the Shares to the Underwriters is
consummated, the Company shall pay all costs and expenses incident to the
issuance, offering, sale and delivery of the Shares and the Representative's
Warrant and the performance of this Agreement, including without
limitation: (i) all fees and expenses of the Company's counsel and
accountants; (ii) $46,315.79 payable to the Representative's counsel as
reimbursement for its fees in connection with the representation of an
underwriter in a proposed offering that was not completed; (iii) all costs and
expenses incident to the preparation, printing, filing and distribution of the
Registration Statement (including the financial statements therein and all
exhibits and amendments thereto), each Preliminary Prospectus and the
Prospectus, each as amended or supplemented, this Agreement and the other
agreements and documents referred to herein, each in such quantities as you
shall deem necessary; (iv) all fees required by the NASD to be paid in
connection with the filing to be made with the NASD by the Representative with
respect to the Offering; (v) all expenses, including fees (but not in excess of
$35,000) and disbursements of counsel to the Underwriters, in connection with
the qualifications of the Shares under the state securities or "Blue Sky" laws
which you shall designate; (vi) all costs and expenses of printing the
certificates representing the Shares; (vii) the expense (which shall not exceed
$10,000) of placing one or more "tombstone" advertisements as directed by you;
(viii) all costs and expenses of the Company and its employees (but not of the
Representative or its employees) associated with due diligence meetings and
presentations; (ix) any and all taxes (including without limitation any
transfer, franchise, capital stock or other tax imposed by any jurisdiction) on
sales of the Shares to the Underwriters hereunder; and (x) 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 3A(a) of
this Agreement except as otherwise set forth in said Section.
(b) Expense Allowance. In addition to the
foregoing expenses, the Company shall on the First Closing Date pay to you the
balance of a non-accountable expense allowance (which shall include fees of
Underwriter's counsel, exclusive of the fees referred to in Section 3(b))
of $330,000 (that being an amount equal to three percent (3%) of the gross
proceeds received upon sale of the Firm Shares) of which $30,000 has been paid
to you prior to the date hereof. In the event the Over-Allotment Option is
exercised, the Company and the Selling Stockholders shall pay to you at the
Option Closing Date an additional amount equal to three percent (3%) of the
gross proceeds received by the Company and the Selling Stockholders upon
exercise of the Over-Allotment Option. In the event that the transactions
contemplated hereby fail to be consummated for any reason, then you shall return
to the Company that portion of the $30,000 heretofore paid by the Company to the
extent that it has not been utilized by you in connection with the proposed
offering for accountable out-of-pocket expenses; provided, however, that if such
failure is due to a breach by the Company of any covenant, representation or
warranty contained herein or because any other condition to the Underwriters'
obligations hereunder required to be fulfilled by the Company or any is not
fulfilled, then the Company shall be liable for your accountable out-of-pocket
expenses to the full extent thereof (with credit given to the $30,000 paid).
(c) No Finders. No person is entitled either
directly or indirectly to compensation from the Company, from any Underwriter
or from any other person for services as a finder in connection with the
proposed offering, and the Company hereby agrees to indemnify and hold
harmless each Underwriter, and each Underwriter hereby agrees to indemnify and
hold harmless the Company from and 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 indemnified party 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. Substitution of Underwriters.
If any Underwriter defaults in its obligation to purchase the number
of Shares which it has agreed to purchase under this Agreement, you shall be
obligated to purchase all of the Shares not purchased by the defaulting
Underwriter unless such purchase shall cause you to be in violation of the net
capital requirements of Rule 15c3-1 of the Exchange Act, in which case you, and
any other underwriters satisfactory to you who so agree, shall have the right,
but shall not be obligated, to purchase (in such proportions as may be agreed
upon among them) all of the Shares. If any Underwriter or Underwriters default
in their obligations to purchase Shares hereunder and the aggregate number of
Shares that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed ten percent (10%) of the total number of Shares, you
may make arrangements satisfactory to the Company for the purchase of such
Shares by other persons, including any of the Underwriters, but if no such
arrangements are made by the Closing Date, the non-defaulting Underwriters shall
be obligated severally, in proportion to their respective commitments hereunder,
to purchase the Shares that such defaulting Underwriters agreed but failed to
purchase. If you or the other Underwriters satisfactory to you do not elect to
purchase the Shares which the defaulting Underwriter or Underwriters agreed but
failed to purchase, then this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter or the Company except for the payment of
expenses to be borne by the Company and the Underwriters as provided in Section
8(a), the payment by the Company of accountable expenses as provided by Section
8(b), and the indemnity and contribution agreements of the Company and the
Underwriters contained in Sections 6 and 7 hereof.
Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have for damages caused by its default. If the other
Underwriters satisfactory to you are obligated or agree to purchase the Shares
of a defaulting Underwriter, either you or the Company may postpone the First
Closing Date for up to seven (7) banking days in order to affect any changes
that may be necessary in the Registration Statement, the Prospectus or in any
other document or agreement, and to file promptly any amendments or any
supplements to the Registration Statement and the Prospectus which in your
opinion may thereby be made necessary.
10. Effective Date.
This Agreement shall become effective upon its execution, except
that you may, at your option, delay its effectiveness until 10:00 a.m., New York
time, on the first full business day following the Effective Date, or at such
earlier time after the Effective Date 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 3A(a),
3B(a), 6, 7, 8, 13, 14, 15 and 16 shall remain in effect notwithstanding such
termination.
11. Termination.
(a) Grounds for Termination. This Agreement,
except for Sections 3A(a)(iii), 6, 7, 8, 13, 14, 15 and 16, may be terminated
at any time prior to the First Closing Date, and the option referred to in
Section 2(c), if exercised, may be canceled at any time prior to the Option
Closing Date, by you if in your sole judgment it is impracticable to offer
for sale or to enforce contracts made by the Underwriters for the resale of the
Shares agreed to be purchased hereunder, by reason of: (i) the Company,
including assuming the closing of the Acquisitions, 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
governmental action, order or decree; (ii) trading in securities on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National Market
having been suspended or limited; (iii) material governmental
restrictions having been imposed on trading in securities generally which are
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 or
significant escalation 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 order, rule or regulation by any governmental
body or any authoritative accounting institute or board, or any governmental
executive, which is reasonably believed likely by you to have material adverse
effect on the business, property, operations, condition (financial or otherwise)
or earnings of the Company; (vii) any material adverse change in the financial
or securities markets beyond normal fluctuations in the United States having
occurred since the date of this Agreement; or (viii) any material adverse change
having occurred, since the respective dates for which information is given in
the Registration Statement and Prospectus, in the business, property,
operations, condition (financial or otherwise), earnings or business prospects
of the Company, whether or not arising in the ordinary course of business.
(b) Notification. If you elect to prevent this
Agreement from becoming effective or to terminate this Agreement as provided
in this Section 11 or in Section 10, the Company shall be promptly notified by
you, by telephone, facsimile or telegram, confirmed by letter.
12. Representative's Warrant.
On the First Closing Date, the Company will issue and sell to you,
for a total purchase price of $5.00, and upon the terms and conditions set forth
in the form of Representative's Warrant filed as an exhibit to the Registration
Statement, a warrant entitling you to purchase 200,000 Shares (the
"Representative's Warrant"). In the event of conflict in the terms of this
Agreement and the Representative's Warrant, the language of the Representative's
Warrant shall control.
13. Representations, Warranties and Agreements to Survive
Delivery.
The respective indemnities, agreements, representations, warranties,
covenants and other statements of the Company and the Underwriters 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 Underwriters, the
Company, or any of its officers or directors or any controlling persons, and
will survive delivery of and payment for the Shares and the termination of this
Agreement.
14. Notice.
All communications hereunder will be in writing and, except as
otherwise expressly provided herein, if sent to any Underwriter, will be mailed,
sent by facsimile transmission or overnight courier service, delivered or
telegraphed and confirmed to it at H.J. Meyers & Co., Inc., 1895 Mt. Hope
Avenue, Rochester, New York 14620, with a copy sent to David S. Rosenthal, Esq.,
Shereff, Friedman, Hoffman & Goodman, LLP, 919 Third Avenue, New York, New York
10022, or if sent to the Company, will be mailed, sent by facsimile transmission
or overnight courier service, delivered or telegraphed and confirmed to it at
37885 Green Street, New Baltimore, Michigan 48047, with a copy sent to George
Lawler, Esq., Whiteford, Taylor & Preston L.L.P., 210 West Pennsylvania Avenue,
Towson, Maryland 21204.
15. Parties In Interest.
This Agreement herein set forth is made solely for the benefit of
the Underwriters, the Company and, to the extent expressed, any person
controlling the Company, or any Underwriter, as the case may be, and directors
of the Company, nominees for directors of the Company (if any) named in the
Prospectus, the officers of the Company 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, from any Underwriter of the Shares.
16. Applicable Law.
This Agreement will be governed by, and construed in accordance
with, the laws of the State of New York applicable to agreements made and to be
entirely performed within such state.
17. Counterparts.
This Agreement may be executed in two or more counterpart copies,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return this Underwriting Agreement, whereupon it will
become a binding agreement between the Company and you in accordance with its
terms.
Yours very truly,
LIFE CRITICAL CARE CORPORATION
By:________________________________
Name:
Title:
Dated:_______________, 1996
EACH OF THE SELLING STOCKHOLDERS
NAMED IN SCHEDULE II HERETO
By:________________________________
On his own behalf and as
Attorney-in-Fact
Dated:_______________, 1996
The foregoing Underwriting Agreement is hereby confirmed and
accepted as of the date first above written.
H.J. MEYERS & CO., INC.
By:_______________________________
Title:____________________________
Dated:_______________, 1996
<PAGE>
SCHEDULE I
SCHEDULE OF UNDERWRITERS
Number of Firm Shares
Underwriter to be Purchased
----------- ---------------------
H.J. Meyers & Co., Inc.
Total 2,000,000
<PAGE>
SCHEDULE II
Selling Stockholders Number of Option Shares
-------------------- -----------------------
Total 50,000
Exhibit 10.16
RW-_________
Warrant to Purchase
200,000 shares of Common Stock
REPRESENTATIVE'S WARRANT
Dated: ____________ __, 1996
THIS CERTIFIES THAT H.J. Meyers & Co., Inc. (herein sometimes called
the "Holder" and the "Representative") is entitled to purchase from LIFE
CRITICAL CARE CORPORATION, a Delaware corporation (the "Company"), at the price
and during the period as hereinafter specified, up to 200,000 shares of the
Company's Common Stock, par value $0.01 per share (the "Common Stock"), at any
time during the period from the first anniversary that the Registration
Statement (as defined below) became effective (the "Effective Date") through
________ __, 2001 (60 months after the Effective Date) at $_____ per share.
This Representative's Warrant (the "Representative's Warrant") is
issued pursuant to an Underwriting Agreement dated the date hereof between the
Company and H.J. Meyers & Co., Inc., as Representative of the several
Underwriters named in Schedule I thereto in connection with a public offering,
through the Underwriters, of 2,000,000 shares of Common Stock, (and up to
300,000 additional shares of Common Stock covered by an over-allotment option
granted by the Company to the Underwriters) and for the aggregate consideration
of $5.00 received by the Company for this Representative's Warrant. Except as
specifically otherwise provided herein, the Common Stock
<PAGE>
issued pursuant to the Representative's Warrant shall bear the same terms and
conditions as described under the heading "Description of Capital Stock" in the
Registration Statement on Form SB-2, File No. 33-___________ (the
"Registration Statement"), except that the Holder shall have registration
rights under the Securities Act of 1933, as amended (the "Act"), for this
Representative's Warrant and the Common Stock issuable upon exercise of this
Representative's Warrant as more fully described in paragraph 6 herein.
Each certificate evidencing the Common Stock issuable upon exercise
of this Representative's Warrant (the "Registrable Securities") shall bear the
appropriate restrictive legend set forth below, except that any such
certificate shall not bear such restrictive legend if (a) it is transferred
pursuant to an effective registration statement under the Act or in compliance
with Rule 144 or Rule 144A promulgated under the Act, or (b) the Company is
provided with an opinion of counsel to the effect that such legend is not
required in order to establish compliance with the provisions of the Act:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE
REPRESENTATIVE'S WARRANT COVERING REGISTRATION RIGHTS
PERTAINING TO THESE SECURITIES AND RESTRICTING THEIR TRANSFER
MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE
HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE
COMPANY AT THE OFFICE OF THE COMPANY AT NEW BALTIMORE,
MICHIGAN."
1. Exercise Rights. The rights represented by this
Representative's Warrant shall be exercised at the price, subject to
adjustment in accordance with Section 8 hereof (the "Exercise Price"), and
during the periods as follows:
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<PAGE>
(a) Parity for Mergers or Consolidations. During the period
from the Effective Date to ____________ __, 1997 (the "First
Anniversary Date"), inclusive, the Holder shall have no right to
purchase any Common Stock hereunder, except that in the event of any
merger, consolidation or sale of substantially all the capital stock or
assets of the Company prior to the First Anniversary Date, the Holder
shall have the right to exercise this Representative's Warrant at such
time and into the kind and amount of shares of stock and other
securities and property (including cash) receivable by a holder of the
number of shares of Common Stock into which this Representative's
Warrant might have been exercisable for immediately prior thereto.
(b) Between _________, __ 1997 and ________ __, 2001, five
years from the Effective Date (the "Expiration Date"), inclusive, the
Holder shall have the option to purchase Common Stock hereunder at a
price of $____ per share [120% of the initial pubic offering price of
the Common Stock].
(c) After the Expiration Date, this Representative's Warrant
shall automatically expire and the Holder shall have no right to
purchase any Common Stock hereunder.
2. Mechanics of Exercise.
(a) Exercise for Cash. The rights represented by this
Representative's Warrant may be exercised at any time within the
periods above specified, in whole or in part, by (i) the surrender of
this Representative's Warrant (with the purchase form at the end hereof
properly executed) at the principal executive office of the Company (or
such other office or agency of the Company as it may designate by
notice in writing to the Holder at the address of the Holder appearing
on the books of the Company); (ii) payment to the Company of the
exercise price then in effect for the number of shares of Common Stock
specified in the above-mentioned purchase form together with applicable
stock transfer taxes, if any; and (iii) delivery to the Company of a
duly executed agreement signed by the person(s) designated in the
purchase form to the effect that such person(s) agree(s) to be bound by
the provisions of paragraph 6 and subparagraphs (b), (c) and (d) of
paragraph 7 hereof. This Representative's Warrant shall be deemed to
have been exercised, in whole or in part to the extent specified,
immediately prior to the close of business on the date this
Representative's Warrant is surrendered and payment is made in
accordance with the foregoing provisions of this paragraph 2, and the
person or persons in whose name or names the certificates for shares of
Common Stock shall be issuable upon such exercise shall become the
holder or holders of record of such Common Stock at that time and date.
The Common Stock and the certificates for the Common Stock so purchased
shall be delivered to the Holder within a reasonable time, not
exceeding ten (10) days after the rights represented by this
Representative's Warrant shall have been so exercised.
(b) Cashless Exercise. Notwithstanding anything to the
contrary contained in subparagraph (a) of paragraph 2, the Holder may
elect to exercise this Representative's
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<PAGE>
Warrant in whole or in part by receiving shares of Common Stock
equal to the value (as determined below) of this Representative's
Warrant at the principal office of the Company together with notice
of such election, in which event the Company shall issue to the
Holder a number of shares of Common Stock computed using the following
formula:
X = Y(A-B)
----------
A
Where: X = the number of shares of Common Stock to be
issued to the Holder;
Y = the number of shares of Common Stock issuable
under this Warrant;
A = the current fair-market value of one share of
Common Stock (calculated as described below);
and
B = the Per Share Exercise Price.
As used herein, the current fair-market value of one
share of Common Stock shall mean the greater of (x) the average of the
closing prices of the Company's Common Stock sold on all securities
exchanges on which the Common Stock may at the time be listed and the
NASDAQ National Market, or, if there have been no sales on any such
exchange or the NASDAQ National Market on such day, the average of the
highest bid and lowest asked price on such day on The NASDAQ Stock
Market or otherwise in the domestic over-the-counter market as reported
by the National Quotation Bureau, Incorporated, or any similar
successor organization (the "Market Price"), on the trading day
immediately preceding the date notice of exercise of this
Representative's Warrant is given or (y) the average of the Market
Price per share of Common Stock for the five trading days immediately
preceding the date notice of exercise of this Representative's Warrant
is given. If on any date for which the Market Price per share of Common
Stock is to be determined, the Common Stock is not listed on any
securities exchange or quoted on the NASDAQ National Market or on The
NASDAQ Stock Market or otherwise in the over-the-counter market, the
Market Price per share of Common Stock shall be the highest price per
share which the Company could then obtain from a willing buyer (not a
current employee or director) for shares of Common Stock sold by the
Company, from authorized but unissued shares, as determined in good
faith by the Board of Directors of the Company, unless prior to such
date the Company has become subject to a merger, acquisition or other
consolidation pursuant to which the Company is not the surviving party,
in which case the Market Price per share of Common Stock shall be
deemed to be the value received by the holders of the Company's Common
Stock for each share thereof pursuant to the Company's acquisition.
4
<PAGE>
3. Transfer of Warrant. This Representative's Warrant shall not be
transferred, sold, assigned, or hypothecated for a period of twelve (12) months
commencing on the Effective Date except that it may be transferred to successors
of the Holder, and may be assigned in whole or in part to any person who is an
officer of the Holder [or to any member of the selling group and/or the officers
or partners thereof during such period]. Any such assignment shall be effected
by the Holder by (i) executing the form of assignment at the end hereof and (ii)
surrendering this Representative's Warrant for cancellation at the office or
agency of the Company referred to in paragraph 2 hereof, accompanied by a
certificate (signed by an officer of the Holder if the Holder is a corporation),
stating that each transferee is a permitted transferee under this paragraph 3;
whereupon the Company shall issue, in the name or names specified by the Holder
(including the Holder) a new Representative's Warrant or Warrants of like tenor
and representing in the aggregate rights to purchase the same number of shares
of Common Stock as are purchasable hereunder. The Representative may designate
that this Representative's Warrant be issued in varying amounts directly to its
officers and other assigns; provided, however, that such designation will only
be made by the Representative if it determines and substantiates to the Company
that such issuance will not violate the interpretation of the Board of Governors
of the National Association of Securities Dealers, Inc. ("NASD") relating to the
review of corporate financing arrangements.
4. Due Authorization of Stock Upon issuance; Reservation of Shares. The
Company covenants and agrees that all shares of Common Stock which may be issued
hereunder will, upon issuance, be duly and validly issued, fully paid and
nonassessable, and no personal liability will attach to the holder thereof. The
Company further covenants and agrees that, during the periods within which this
Representative's Warrant may be exercised, the Company will at all times have
authorized and reserved a sufficient number of shares of its Common Stock to
provide for the exercise of this Representative's Warrant.
5. No Voting Rights. This Representative's Warrant shall not
entitle the Holder to any voting rights or other rights as a shareholder of the
Company until it is actually exercised.
6. Registration Rights.
(a) Notice of Registration. Commencing twelve (12) months from
the Effective Date, the Company shall advise the Holder or its
transferee, whether the Holder holds this Representative's Warrant or
has exercised this Representative's Warrant and holds Common Stock, by
written notice at least four weeks prior to the filing of any
post-effective amendment to the Registration Statement, of any new
registration statement under the Act or of a Notification on Form 1-A
under the Act for a public offering of securities, either for the
account of the Company or for the account of any other person, and
shall, for a period of five (5) years from the Effective Date, upon the
request of the Holder, include in any such post-effective amendment,
new registration statement or Notification on Form 1-A such information
as may be required to permit a public offering of this Representative's
Warrant, and all or any of the Registrable Securities. The Company
shall supply prospectuses and such other documents as the Holder may
reasonably request in order to facilitate the public
5
<PAGE>
sale or other disposition of the Registrable Securities, use its
best efforts to register and qualify any of the Registrable Securities
for sale in such states as such Holder designates and do any and all
other acts and things which may be necessary or desirable to
enable such Holder to consummate the public sale or other
disposition of the Registrable Securities, all at no expense to the
Holder or the Representative, and furnish indemnification in the
manner provided in paragraph 7 hereof. The Holder shall furnish
information and indemnification as set forth in paragraph 7.
(b) Demand Registration Rights. On two (2) separate occasions,
if any 50% Holder (as defined below) shall request in writing from the
Company at any time that the Company register under the Act any or all
of the Registrable Securities under such circumstances that a public
distribution (within the meaning of the Act) of any such securities
will be involved, then the Company shall promptly, but no later than
four weeks after receipt of such request, file a post-effective
amendment to the current Registration Statement or a new registration
statement pursuant to the Act, so that such designated Registrable
Securities may be publicly sold under the Act as promptly as
practicable thereafter and the Company will use its best efforts to
cause such registration to become and remain effective (including the
taking of such steps as are necessary to obtain the removal of any stop
order) within ninety (90) days after the receipt of such request,
provided, that the Company has available current financial statements
and that such Holder shall furnish the Company with appropriate
information in connection therewith as the Company may reasonably
request in writing. The 50% Holder may, at its option, request the
filing of a post-effective amendment to the current Registration
Statement or a new registration statement under the Act on two (2)
occasions during the four-year period beginning one (1) year from the
Effective Date. The 50% Holder may, at its option, request the
registration of this Representative's Warrant and/or any of the Common
Stock underlying this Representative's Warrant in a registration
statement made by the Company as contemplated by Section 6(a) or in
connection with a written request made pursuant to this Section 6(b)
prior to acquisition of the Common Stock issuable upon exercise of this
Representative's Warrant. The 50% Holder may, at its option, request
such post-effective amendment or new registration statement during the
described period with respect to the Representative's Warrant and/or
the Common Stock issuable upon the exercise of the Representative's
Warrant, and such registration rights may be exercised by the 50%
Holder prior to or subsequent to the exercise of this Representative's
Warrant. Within ten (10) days after receiving any such request pursuant
to this subsection (b) of paragraph 6, the Company shall give notice to
any other Holders of this Representative's Warrant, advising that the
Company is proceeding with such post-effective amendment or
registration statement and offering to include therein the Registrable
Securities underlying that part of this Representative's Warrant held
by the other Holders, provided that they shall furnish the Company with
such appropriate information (relating to the intentions of such
Holders) in connection therewith as the Company shall reasonably
request in writing. All costs and expenses of the first post-effective
amendment or new registration statement including, but not limited to,
legal, accounting, printing and mailing fees shall be borne by the
Company. All costs and
6
<PAGE>
expenses of the second such post-effective amendment or new
registration statement shall be borne by the Holder(s). The
Company shall maintain such registration statement or post-effective
amendment current under the Act for a period of at least six months
(and for up to an additional three months if requested by the
Holder(s)) from the effective date thereof. The Company shall
supply prospectuses, and such other documents as the Holder(s) may
request in order to facilitate the public sale or other disposition of
the Registrable Securities, use its best efforts to register and
qualify any of the Registrable Securities for sale in such states as
such Holder(s) designate and furnish indemnification in the manner
provided in paragraph 7 hereof.
(c) Definition of 50% Holder. The term "50% Holder" as used in
this paragraph 6 shall mean the Holder(s) of at least 50% of this
Representative's Warrant and/or the Common Stock underlying this
Representative's Warrant and shall include any owner or combination of
owners of such securities, which ownership shall be calculated by
determining the number of shares of Common Stock held by such owner or
owners as well as the number of shares of Common Stock then issuable
upon exercise of this Representative's Warrant, all calculated on an
"as if exercised" basis.
7. Indemnification.
(a) Indemnification of Distributing Holder by Company.
Whenever pursuant to paragraph 6 a registration statement relating to
this Representative's Warrant or any Common Stock issued or issuable
upon the exercise of any warrant is filed under the Act, amended or
supplemented, the Company will indemnify and hold harmless each Holder
of the securities covered by such registration statement, amendment or
supplement (such Holder being hereinafter called the "Distributing
Holder"), and each person, if any, who controls (within the meaning of
the Act) the Distributing Holder, and each underwriter (within the
meaning of the Act) of such securities and each person, if any, who
controls (within the meaning of the Act) any such underwriter, against
any losses, claims, damages or liabilities, joint or several, to which
the Distributing Holder, any such controlling person or any such
underwriter 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 or any material fact contained in any such
registration statement or any preliminary prospectus or final
prospectus constituting a part thereof or any amendment or supplement
thereto or any "blue sky" application or document (the "Blue Sky
Application") executed by the Company and filed in any state or other
jurisdiction in order to qualify this Representative's Warrant or any
Common Stock issued or issuable upon exercise of this Representative's
Warrant, or arise out of or are based upon the omission or the alleged
omission to the state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Company shall reimburse the Distributing Holder or such controlling
person or underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that
the Company will not be liable in any such case to the extent that any
such
7
<PAGE>
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 said registration statement, said preliminary
prospectus, said financial prospectus, said amendment or supplement or
said Blue Sky Application in reliance upon and in conformity with
written information furnished by such Distributing Holder or any other
Distributing Holder for use in the preparation thereof.
(b) Indemnification of Company by Distributing Holder. The
Distributing Holder will indemnify and hold harmless the Company, each
of its directors, each of its officers who have signed said
registration statement and such amendments and supplements thereto, and
each person, if any, who controls the Company (within the meaning of
the Act) against any losses, claims, damages or liabilities, joint or
several, to which the Company or any such director, officer or
controlling person 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 (i) any untrue
statement of any material fact contained in said registration
statement, said preliminary prospectus, said final prospectus, or said
amendment or supplement, or arise out of or are based upon the omission
or the alleged 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 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 said registration statement, said preliminary
prospectus, said final prospectus or said amendment or supplement in
reliance upon and in conformity with written information furnished by
such Distributing Holder for use in the preparation thereof or (ii) the
Distributing Holder's failure to deliver a prospectus as required under
applicable federal or state securities laws. The Distributing Holders
shall reimburse the Company or any such director, officer or
controlling person for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss,
claim, damage, liability or action.
(c) Notice of Claims. Promptly after receipt by an indemnified
party under this paragraph 7 of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is
to be made against any indemnifying party, give the indemnifying party
notice 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 then under this paragraph 7.
(d) Participation in Defense of Claims. In case any such
action is brought against any indemnified party, and it notifies an
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, 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
8
<PAGE>
paragraph 7 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other
than reasonable costs of investigation.
8. Adjustments to Exercise Price. The Exercise Price in
effect at any time and the number of shares purchasable upon the exercise
of this Representative's Warrant shall be subject to adjustment from time to
time upon the happening of certain events as follows:
(a) Stock Dividends, Combinations or Reclassifications. In
case the Company shall (i) declare a dividend or make a distribution on
its outstanding shares of Common Stock in shares of Common Stock, (ii)
subdivide or reclassify its outstanding shares of Common Stock into a
greater number of shares, or (iii) combine or reclassify its
outstanding shares of Common Stock into a smaller number of shares, the
Exercise Price in effect at the time of the record date for such
dividend or distribution or of the effective date of such subdivision,
combination or reclassification shall be proportionately adjusted so
that the Holder of this Representative's Warrant exercised after such
date shall be entitled to receive the aggregate number and kind of
security which, if this Representative's Warrant had been exercised by
such Holder immediately prior to such date, he would have owned upon
such exercise and been entitled to receive upon such dividend,
distribution, subdivision, combination or reclassification. For
example, if the Company declares a 2-for-1 stock distribution, the
adjusted Exercise Price immediately after such event would be reduced
by 50% per share of Common Stock and the adjusted number of shares of
Common Stock then issuable upon exercise of the Representative's
Warrant purchasable upon exercise of this Representative's Warrant
would be doubled. Such adjustment shall be made successively whenever
any event listed above shall occur.
(b) Issuance of Rights to Purchase Common Stock. In case the
Company shall fix a record date for the issuance of rights or warrants
to all holders of its Common Stock entitling them to subscribe for or
purchase shares of Common Stock (or securities convertible into Common
Stock) at a price (the "Subscription Price") (or having a conversion
price per share) less than the current market price of the Common Stock
(as defined in Subsection (h) below) on the record date mentioned
below, or less than the Exercise Price on a per share basis (the "Per
Share Exercise Price") on such record date, the Exercise Price shall be
adjusted so that the same shall equal the lower of (i) the price
determined by multiplying the number of shares of Common Stock by the
Per Share Exercise Price in effect immediately prior to the date of
such issuance, multiplied by a fraction, the numerator of which shall
be the sum of the number of shares of Common Stock outstanding on the
record date mentioned below and the number of additional shares of
Common Stock which the aggregate offering price of the total number of
shares of Common Stock so offered (or the aggregate conversion price of
the convertible securities so offered) would purchase at such current
market price per share of the Common Stock, and the denominator of
which shall be the sum of the number of shares of Common Stock
outstanding on such record date and the number of additional shares of
Common Stock offered for subscription or purchase (or into which the
convertible securities so offered are convertible) or (ii) in the event
the
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<PAGE>
Subscription Price is equal to or higher than the current market
price but is less than the Per Share Exercise Price, the price
determined by multiplying the number of shares of Common Stock then
issuable upon exercise of this Representative's Warrant by the Per
Share Exercise Price in effect immediately prior to the date of
issuance by a fraction, the numerator of which shall be the sum of the
number of shares outstanding on the record date mentioned below and the
number of additional shares of Common Stock which the aggregate
offering price of the total number of shares of Common Stock so offered
(or the aggregate conversion price of the convertible securities so
offered) would purchase at the Per Share Exercise Price in effect
immediately prior to the date of such issuance, and the denominator of
which shall be the sum of the number of shares of Common Stock
outstanding on the record date mentioned below and the number of
additional shares of Common Stock offered for subscription or purchase
(or into which the convertible securities so offered are convertible).
Such adjustment shall be made successively whenever such rights or
warrants are issued and shall become effective immediately after the
record date for the determination of shareholders entitled to receive
such rights or warrants; and to the extent that shares of Common Stock
are not delivered (or securities convertible into Common Stock are not
delivered) after the expiration of such rights or warrants the Exercise
Price shall be readjusted to the Exercise Price which would then be in
effect had the adjustments made upon the issuance of such rights or
warrants been made upon the basis of delivery of only the number of
shares of Common Stock (or securities convertible into Common Stock)
actually delivered.
(c) Distributions of Other Assets to Holders of Common Stock.
In case the Company shall hereafter distribute to all holders of its
Common Stock evidences of its indebtedness or assets (excluding cash
dividends or distributions and dividends or distributions referred to
in Subsection (a) above) or subscription rights or warrants (excluding
those referred to in Subsection (b) above), then in each such case the
Exercise Price in effect thereafter shall be determined by multiplying
the number of shares of Common Stock then issuable upon exercise of
this Representative's Warrant by the Per Share Exercise Price in effect
immediately prior thereto, multiplied by a fraction, the numerator of
which shall be the total number of shares of Common Stock then
outstanding multiplied by the current market price per share of Common
Stock (as defined in Subsection (h) below), less the fair market value
(as determined by the Company's Board of Directors) of said assets, or
evidences of indebtedness so distributed or of such rights or warrants,
and the denominator of which shall be the total number of shares of
Common Stock outstanding multiplied by such current market price per
share of Common Stock. Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately after the
record date for the determination of shareholders entitled to receive
such distribution.
(d) Issuances of Common Stock Below Market Price. In case the
Company shall issue shares of its Common stock excluding shares issued
(i) in any of the transactions described in Subsection (a), (b), or (c)
above, (ii) upon exercise of options granted to the Company's employees
under a plan or plans adopted by the Company's Board of Directors
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<PAGE>
and approved by its shareholders, if such shares would otherwise
be included in this Subsection (d), (iii) upon exercise of options
and warrants outstanding at ____________, 1996, or of this
Representative's Warrant or (iv) to shareholders of any corporation
which merges into the Company in proportion to their stock holdings of
such corporation immediately prior to such merger, upon such merger,
or in a bona fide public offering pursuant to a firm commitment
underwriting, but only if no adjustment is required pursuant to any
other specific subsection of this Section 8 (without regard to
Subsection (i) below), with respect to the transaction giving rise
to such rights or for a consideration per share (the "Offering Price")
(determined as provided in Subsection (g) below) less than the current
market price per share of Common Stock (as defined in Subsection (h)
below) on the date the Company fixes the offering price of such
additional shares, or the Per Share Exercise Price, the Exercise
Price shall be adjusted immediately thereafter so that it shall
equal the lower of (i) the price determined by multiplying the
number of shares of Common Stock then issuable upon exercise of
this Representative's Warrant by the Per Share Exercise Price in
effect immediately prior thereto, multiplied by a fraction, the
numerator of which shall be the sum of the number of shares of
Common Stock outstanding immediately prior to the issuance of such
additional shares and the number of shares of Common Stock which the
aggregate consideration received (determined as provided in Subsection
(g) below) for the issuance of such additional shares would purchase at
such current market price per share, and the denominator of which shall
be the number of shares of Common Stock outstanding immediately after
the issuance of such additional shares or (ii) in the event that
Offering price is equal to or higher than the current market price per
share but less than the Per Share Exercise Price, the price determined
by multiplying the number of shares of Common Stock then issuable upon
exercise of this Representative's Warrant by the Per Share Exercise
Price in effect immediately prior to the date or issuance multiplied by
a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding immediately prior to the issuance of such
additional shares and the number of shares of Common Stock which the
aggregate consideration received (determined as provided in subsection
(g) below) for the issuance of such additional shares would purchase at
the per Share Exercise Price in effect immediately prior to the date of
such issuance, and the denominator of which shall be the number of
shares of Common Stock outstanding immediately after the issuance of
such additional shares. Such adjustment shall be made successively
whenever such an issuance is made.
(e) Issuances of Convertible Securities Below Market Price. In
case the Company shall issue any securities convertible into or
exchangeable for its Common Stock (excluding securities issued in
transactions described in Subsections (b) or (c) above) for an initial
consideration per share of Common Stock (the "Conversion Price")
deliverable upon conversion or exchange of such securities (determined
as provided in Subsection (g) below) less than the current market price
per share of Common Stock (as defined in Subsection (h) below) in
effect immediately prior to the issuance of such securities, or the Per
Share Exercise Price, the Exercise Price shall be adjusted immediately
thereafter so that it shall equal the lower of (i) the price determined
by multiplying the number of shares of Common
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<PAGE>
Stock then issuable upon exercise of this Representative's Warrant
by the Per Share Exercise Price in effect immediately prior thereto
multiplied, by a fraction, the numerator of which shall be the sum
of the number of shares of Common Stock outstanding immediately
prior to the issuance of such securities and the number of shares of
Common Stock which the aggregate consideration received (determined as
provided in Subsection (g) below) for such securities would purchase
at such current market price per share, and the denominator of which
shall be the sum of the number of shares of Common Stock outstanding
immediately prior to such issuance and the maximum number of shares
of Common Stock of the Company deliverable upon conversion of or
in exchange for such securities at the initial conversion or exchange
price or rate or (ii) in the event the Conversion Price is equal to
or higher than the current market price per share but less than the
Per Share Exercise Price in effect immediately prior to the date of
issuance by a fraction, the numerator of which shall be the sum of
the number of shares of Common Stock outstanding prior to the
issuance of such securities and the number of shares of Common Stock
which the aggregate consideration received (determined as provided
in subsection (g) below) for such securities would purchase at the
Per Share Exercise Price in effect immediately prior to the date of
such issuance, the denominator of which shall be the sum of the
number of shares of Common Stock outstanding immediately prior to the
issuance of such securities and the maximum number of shares of
Common Stock of the Company deliverable upon conversion of or in
exchange for such securities at the initial conversion or exchange
price or rate. Such adjustment shall be made successively whenever such
an issuance is made.
(f) Adjustments to Number of Shares Purchasable Upon Exercise.
Whenever the Exercise Price payable upon exercise of this
Representative's Warrant is adjusted pursuant to Subsections (a), (b),
(c), (d) or (e) above, the number of shares of Common Stock purchasable
upon exercise of this Representative's Warrant shall simultaneously be
adjusted by multiplying the number of shares of Common Stock issuable
upon exercise of this Representative's Warrant by the Exercise Price in
effect on the date hereof and dividing the product so obtained by the
Exercise Price, as adjusted.
(g) Determination of Consideration. For purposes of any
computation respecting consideration received pursuant to Subsections
(d) and (e) above, the following shall apply:
(A) in the case of the issuance of shares of Common
Stock for cash, the consideration shall be the amount of such cash,
provided that in no case shall any deduction be made for any
commissions, discounts or other expenses incurred by the Company for
any underwriting of the shares or otherwise in connection therewith;
(B) in the case of the issuance of shares of Common
Stock for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair market
value thereof as determined in good faith by the Board of
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<PAGE>
Directors of the Company (irrespective of the accounting treatment
thereof), whose determination shall be conclusive; and
(C) in the case of the issuance of securities
convertible into or exchangeable for shares of Common Stock the
aggregate consideration received therefor shall be deemed to be the
consideration received by the Company for the issuance of such
securities plus the additional minimum consideration, if any, to be
received by the Company upon the conversion or exchange thereof (the
consideration in each case to be determined in the same manner as
provided in clauses (A) and (B) of this Subsection (g)).
(h) Determination of Market Price. For the purpose of any
computation under Subsections (b), (c), (d) or (e) above, the current
market price per share of Common Stock at any date shall be deemed to
be the average of the daily closing prices of the Common Stock for
thirty (30) consecutive business days before such date. The closing
price for each day shall be the last sale price regular way or, in case
no such reported sale takes place on such day, the average of the last
reported bid and asked prices regular way, in either case on the
principal national securities exchange on which the Common Stock is
admitted to trading or listed, or if not listed or admitted to trading
on such exchange, the average of the highest reported bid and lowest
reported asked prices as reported by NASDAQ, or other similar
organization if NASDAQ is no longer reporting such information, or if
not so available, the fair market price as determined by the Board of
Directors.
(i) Calculations of Adjustments. No adjustment in the Exercise
Price shall be required unless such adjustment would require an
increase or decrease of at least five cents ($0.05) in such price;
provided, however, that any adjustments which by reason of this
Subsection (i) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment required to be made
hereunder. All calculations under this Section 8 shall be made to the
nearest cent or to the nearest one-hundredth of a share, as the case
may be. Anything in this Section 8 to the contrary notwithstanding, the
Company shall be entitled, but shall not be required, to make such
changes in the Exercise Price, in addition to those required by this
Section 8, as it shall determine, in its sole discretion, to be
advisable in order that any dividend or distribution in shares of
Common Stock, or any subdivision, reclassification or combination of
Common Stock, hereafter made by the Company shall not result in any
Federal income tax liability to the holders of Common Stock.
(j) Notice of Adjustments. Whenever the Exercise Price is
adjusted, as herein provided, the Company shall promptly cause a notice
setting forth the adjusted Exercise Price and adjusted number of shares
of Common Stock issuable upon exercise of this Representative's Warrant
to be mailed to the Holder, at its address set forth herein, and shall
cause a certified copy thereof to be mailed to the Company's transfer
agent, if any. The Company may retain a firm of independent certified
public accountants selected by the Board of Directors (who may be the
regular accountants employed by the Company) to make any
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<PAGE>
computation required by this Section 8, and a certificate signed by
such firm shall be conclusive evidence of the correctness of such
adjustment.
(k) Protection Against Dilution. In the event that at any
time, as a result of an adjustment made pursuant to the provisions of
this Section 8, the Holder of this Representative's Warrant thereafter
shall become entitled to receive any shares of the Company, other than
Common Stock, thereafter the number of such other shares so receivable
upon exercise of this Representative's Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Common
Stock contained in Subsections (a) to (i), inclusive, above.
9. Governing Law. This Agreement shall be governed by and in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Representative's
Warrant to be signed by its duly authorized officers under its corporate seal,
and this Representative's Warrant to be dated ___________________, 1996.
LIFE CRITICAL CARE CORPORATION
[CORPORATE SEAL] By: ______________________________
Attest: Title: ___________________________
- -----------------------------
14
<PAGE>
EXERCISE FORM
(To be executed upon exercise of Representative's Warrant)
Life Critical Care Corporation
37885 Green Street
New Baltimore, Michigan 48047
The undersigned hereby irrevocably elects to exercise the
right, represented by this Representative's Warrant, to purchase shares of
Common Stock of Life Critical Care Corporation and (check one):
[ ] herewith tenders payment for ___________ shares of Common
Stock to the order of Life Critical Care Corporation in
the amount of $______ in accordance with the terms of this
Representative's Warrant; or
[ ] herewith tenders this Representative's Warrant for
___________ shares of Common Stock pursuant to the net
issuance exercise provisions of Section 2(b) of this
Representative's Warrant.
Please issue a certificate or certificates for such shares of
Common Stock in the name of, and pay any cash for any fractional share to:
<PAGE>
Name ____________________________
____________________________
____________________________
____________________________
(Please print Name, Address
and Social Security No.)
Signature _______________________
Note: The above signature should
correspond exactly with the
name on the first page of
this Warrant Certificate or
with the name of the
assignee appearing in the
assignment form below.
If said number of shares shall not be all the shares
purchasable under the within Representative's Warrant, a new Representative's
Warrant is to be issued in the name of the said undersigned for the balance
remaining of the shares purchasable thereunder.
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<PAGE>
TRANSFER FORM
(To be signed only upon transfer of Representative's Warrant)
For value received, the undersigned hereby sells, assigns and transfers
unto _______________________________ the right to purchase shares of Common
Stock represented by the foregoing Representative's Warrant to the extent of
______________ shares of Common Stock, and appoints __________________________
attorney to transfer such rights on the books of __________________________,
with full power of substitution.
Dated: ______________________ By:______________________________
______________________________
______________________________
Address
In the presence of:
- --------------------------------
Exhibit 10.17
FINANCIAL CONSULTING AGREEMENT
This Agreement is made on ____________, 1996, by and between LIFE
CRITICAL CARE CORPORATION, a Delaware corporation having its principal office at
37885 Green Street, New Baltimore, Michigan 48047 (the "Company"), and H.J.
MEYERS & CO., INC., a New York corporation having its principal office at 1895
Mt. Hope Avenue, Rochester, New York 14620 ("Consultant").
In consideration of the mutual promises contained herein and on the
terms and conditions hereinafter set forth, the Company and Consultant agree as
follows:
1. Provision of Services.
(a) Consultant shall, to the extent reasonably required in the
conduct of the business of the Company, place at the disposal of the
Company its judgment and experience and, to such extent and at the
prior written request of the President of the Company, provide business
development and corporate finance services to the Company, including
without limitation the following:
(i) evaluation of the Company's managerial and
financial requirements;
(ii) assistance when requested by the Company in
recruiting, screening, evaluating and
recommending key personnel, directors,
accountants, commercial and investment
bankers, underwriters, attorneys and other
professional consultants;
(iii) assistance in the preparation of budgets and
business plans;
(iv) advice with regard to sales planning and
sales activities;
(v) advice with regard to stockholder relations
and public relations matters; and
(vi) assistance in financial arrangements.
All such services shall at all times be at the request of the Company
and shall be on a non-exclusive basis. Notwithstanding the foregoing,
Consultant shall not provide services to the Company hereunder in
connection with mergers, acquisitions, consolidations, joint ventures
and similar corporate finance transactions, which transactions are
instead the subject of a certain letter agreement dated this date
between Consultant and the Company.
<PAGE>
(b) Consultant shall use its best efforts in the furnishing of
advice and recommendations, and for this purpose Consultant shall at
all times maintain or keep and make available qualified personnel or a
network of qualified outside professionals for the performance of its
obligations under this Agreement. To the extent reasonably practicable,
Consultant shall so use its own personnel rather than outside
professionals.
2. Compensation. In consideration of Consultant's services
hereunder, the Company shall pay Consultant a non-refundable consulting
fee of $72,000, payable in advance on the date hereof (that being the
closing date of the sale of the Company's securities pursuant to a
Registration Statement on Form SB-2, No. 33-__________, filed with the
Securities and Exchange Commission). Consultant hereby accepts such
compensation.
[3. Expenses. The Company shall reimburse Consultant for
reasonable expenses incurred by Consultant in connection with its services
rendered hereunder. All expenses in excess of $500.00 shall be approved
in writing by the Company in advance. Consultant shall invoice the Company
for its expenses incurred. Payment of invoices shall be due upon receipt by the
Company.]
4. Liability; Indemnification.
(a) It is expressly understood and agreed that, in furnishing
the Company with management advice and other services as herein
provided, neither Consultant nor any of its officers, directors,
employees or agents shall be liable to the Company, its stockholders or
its creditors for errors of judgment or for any act or omission except
willful malfeasance, bad faith or gross negligence in the performance
of its duties or reckless disregard of its obligations and duties
hereunder. It is further understood and agreed that Consultant may rely
upon information furnished to it and reasonably believed by it to be
accurate and reliable and that, except as herein provided, Consultant
shall not be liable for any loss suffered by the Company, or by any
officer, director, employee, stockholder or creditor of the Company, by
reason of the Company's action or non-action on the basis of any
advice, recommendation or approval of Consultant or any of its
officers, directors, employees or agents.
(b) The Company shall indemnify, save harmless and defend
Consultant and its officers, directors, employees and agents (including
without limitation any observer to the Company's Board of Directors
appointed by the Consultant) from, against, and in respect of, any
loss, damage, liability, judgment, cost or expense whatsoever,
including counsel fees, suffered or incurred by it or him by reason of,
or on account of, its status or activities as a consultant to the
Company hereunder, except for any loss, damage, liability, judgment,
cost or expense resulting from willful malfeasance, bad faith or gross
negligence in the performance of Consultant's duties or reckless
disregard of its obligations and duties hereunder.
(c) Consultant shall indemnify, save harmless and defend the
Company and its officers, directors, employees and agents from,
against, and in respect of, any loss, damage,
2
<PAGE>
liability, judgment, cost or expense whatsoever, including counsel
fees, suffered or incurred by it or him by reason of, or on account
of, willful malfeasance, bad faith or gross negligence in the
performance of Consultant's duties or reckless disregard of its
obligations and duties hereunder.
5. Status of Consultant. Consultant shall at all times be an
independent contractor of the Company and, except as expressly provided or
authorized by this Agreement, shall have no authority to act for or represent
the Company.
6. Other Activities of Consultant. The Company recognizes
that Consultant now renders and may continue to render management and other
services to other companies which may or may not have policies and conduct
activities similar to those of the Company. Consultant shall be free to render
such advice and other services, and the Company hereby consents thereto.
Consultant shall not be required to devote its full time and attention to the
performance of its duties under this Agreement, but shall devote only so
much of its time and attention as it deems reasonable or necessary for such
purposes.
7. Control. Nothing contained herein shall be deemed to
require the Company to take any action contrary to its Certificate of
Incorporation or By-laws, or any applicable statute or regulation, or to
deprive its Board of Directors of its responsibility for and control of the
conduct of the affairs of the Company.
8. Term. Consultant's performance of services hereunder shall be
for a term of one year commencing on the date hereof.
9. In General. This Agreement sets forth the entire agreement
and understanding between the parties with respect to its subject matter
and supersedes all prior discussions, agreements and understandings of every and
any nature between them with respect thereto. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within such State.
3
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their respective offices or representatives duly authorized on the day and
year first above written.
LIFE CRITICAL CARE CORPORATION
By:________________________________
Name:
Title:
H.J. MEYERS & CO., INC.
By:________________________________
Name:
Title:
Exhibit 10.18
H.J. MEYERS & CO., INC.
1895 Mt. Hope Avenue
Rochester, New York 14620
____________, 1996
Life Critical Care Corporation
37885 Green Street
New Baltimore, Michigan 48047
Ladies and Gentlemen:
You have agreed that H.J. Meyers & Co., Inc. ("H.J. Meyers") may act as
a non-exclusive finder or financial consultant for you in various transactions
in which Life Critical Care Corporation (the "Company") may be involved, such as
mergers, acquisitions and consolidations, for a period of twenty-four (24)
months from the date of this Agreement (the "Period").
1. H.J. Meyers' Fee.
(a) If, during the Period, H.J. Meyers brings to the Company
an opportunity for a proposed merger, consolidation or acquisition of
assets involving the Company as one of the parties thereto, or an
acquisition of all or substantially all of the securities of the
Company or of another entity (including an acquisition of assets or
securities that is paid for in part or in full by the issuance of
shares of the Company's Common Stock or other securities), then upon
the consummation of any such transaction (but only if such consummation
occurs within thirty-six (36) months from the date of this Agreement),
the Company will pay to H.J. Meyers as a fee the amount provided for in
Paragraph 1(c) hereof; provided, however, that H.J. Meyers shall be
deemed to have brought an opportunity to the Company for purposes of
this Paragraph 1(a) only if the opportunity is at least briefly
specifically described in a writing (which need not identify the other
parties) signed by H.J. Meyers and received (with receipt acknowledged
in writing by the Company) prior to any negotiations between
representatives of the Company and representatives of the other party
or parties to such transaction, and such writing signed by H.J. Meyers
refers to the Company's obligations under this Paragraph 1(a).
(b) If, during the Period, an opportunity for a proposed
transaction of the type described in Paragraph 1(a) hereof is brought
to the Company by someone other than H.J. Meyers, and if the Company in
writing retains H.J. Meyers for consultation or other services in
connection therewith, then upon the consummation of that transaction,
the Company will pay H.J. Meyers as a fee the amount provided for in
Paragraph 1(c) hereof or such fee as is otherwise agreed to by the
Company and H.J. Meyers.
(c) The amount to be paid by the Company to H.J. Meyers in any
case described in Paragraphs 1(a) or 1(b) hereof shall be calculated
based on the value of the consideration paid to or received by the
Company (or its stockholders), as follows: five percent (5%) of the
first two million dollars and two percent (2.0%) of any consideration
above two million dollars. "Consideration" shall mean the total value
of all cash, securities, other property and any other consideration,
including, without limitation, any contingent, earned or other
consideration paid or payable, directly or indirectly, in connection
with a transaction and consideration shall be determined at the
closing. The value of any such securities (whether debt or equity) or
other property shall be determined as follows: (1) the value of
securities that are freely tradeable in an established public market
shall be the last closing market price of such securities prior to the
public announcement of the transaction; and (2) the value of the
securities which are not freely tradeable or which have no established
public market, or if the consideration consists of property other than
securities, the value of such securities or other property shall be the
fair-market value thereof as mutually agreed by the Company and H.J.
Meyers. Consideration shall also be deemed to include any indebtedness,
including, without limitation, pension liabilities, guarantees and
other obligations assumed, directly or indirectly, in connection with,
or which survives the closing of, a transaction. If the consideration
to be paid is computed or payable in any foreign currency, the value of
such foreign currency shall, for the purposes hereof, be converted into
U.S. Dollars at the prevailing exchange rate on the dates on which such
consideration is payable.
2. Payment. The fee due to H.J. Meyers hereunder shall be paid by the
Company in cash at the closing of the transaction, without regard to whether the
transaction involves payment in cash, stock or a combination of stock and cash,
or is made on an installment sales basis. By way of example, if the transaction
involves securities of the acquiring entity (whether securities of the Company,
if the Company is the acquiring party, or securities of another entity, if the
Company is the selling party) having a value of $5,000,000, the cash
consideration to be paid by the Company to H.J. Meyers at closing shall be
$160,000.
3. Binding Obligation. The Company represents and warrants to
H.J. Meyers that H.J. Meyers' engagement hereunder has been duly authorized and
approved by the Board of Directors of the Company and that this letter agreement
has been duly executed and delivered by the Company and constitutes a legal,
valid and binding obligation of the Company.
4. In General. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely within such State. This Agreement sets forth the
entire agreement and understanding between the undersigned with respect to its
subject matter and supersedes all prior discussions, agreements and
understandings of every kind and nature between them with respect thereto. This
Agreement shall inure to the benefit of, and be enforceable against, each of the
undersigned and their respective successors and assigns.
<PAGE>
Life Critical Care Corporation
___________, 1996
Page 4
Please sign this letter at the place indicated below, whereupon it will
constitute our mutually binding agreement with respect to the matters contained
herein.
Yours very truly,
H.J. MEYERS & CO., INC.
By:__________________________
Name:
Title:
ACCEPTED AND AGREED TO:
LIFE CRITICAL CARE CORPORATION
By:_______________________________________
Name:
Title:
Exhibit 10.19
LIFE CRITICAL CARE CORPORATION
LOCK-UP AGREEMENT
H.J. Meyers & Co., Inc.
as Representative of the Underwriters
1895 Mount Hope Avenue
Rochester, New York 14620
Ladies and Gentlemen:
The undersigned, a beneficial owner of shares of the common stock, par
value $0.01 per share (the "Common Stock"), of Life Critical Care Corporation, a
Delaware corporation (the "Company"), and/or warrants, options or rights to
purchase, or securities or debt convertible into, Common Stock, understands that
the Company has filed with the Securities and Exchange Commission a registration
statement on Form SB-2 (No. 333-14755) for the registration of shares of
Common Stock of the Company (the "Registration Statement") in connection with a
proposed public offering of such securities (the "Offering"). The undersigned
further understands that upon the effectiveness of the Registration Statement,
the Company and H.J. Meyers & Co., Inc., as representative (the
"Representative") for a group of underwriters including H.J. Meyers & Co., Inc.
(the "Underwriters") intends to enter into an underwriting agreement (the
"Underwriting Agreement") relating to the Offering.
In order to induce the Representative to act on behalf of the
Underwriters and to proceed with the Offering, and in consideration thereof, the
undersigned hereby agrees that, for a period of eighteen months following the
closing date of the Offering, the undersigned will not sell, assign,
hypothecate, pledge or otherwise dispose (either pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended, or otherwise) of any
shares of Common Stock of the Company registered in the name of the undersigned
or beneficially owned by the undersigned or subsequently acquired through the
exercise of any options, warrants or any conversion of any convertible
securities of the Company (collectively, the "Securities"), without the prior
written consent of the Representative. In addition, before any transfer of
Securities may occur, the transferee thereof shall agree in writing to the terms
hereof.
In order to enable the Representative to enforce the aforesaid
covenants, the undersigned hereby consents to the placing of restrictive legends
on all certificates evidencing any Securities registered in the name of the
undersigned or beneficially owned by the undersigned, the placement
<PAGE>
of appropriate stop transfer orders with the transfer agent of the Company and
the noting of such restrictions on the transfer books and records of the
Company.
This Agreement shall be binding on the undersigned and his, her or its
respective successors, heirs, personal representatives and assigns.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to conflict of law
principles.
Dated:___________________ Very truly yours,
------------------------
Signature
------------------------
Printed Name
------------------------
Print Address
-------------------------
Print Social Security Number
or Taxpayer I.D. Number
Exhibit 10.20
AGREEMENT OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
[EFFECTIVE DATE]
H.J. Meyers & Co., Inc.
As Representative of the
referenced Underwriters
1895 Mt. Hope Avenue
Rochester, New York 14620
Ladies and Gentlemen:
Pursuant to a certain Underwriting Agreement (the "Underwriting
Agreement") dated this date (the "Effective Date") between Life Critical Care
Corporation, a Delaware corporation (the "Company"), and you, as Representative
of the several Underwriters, including yourself, named therein (the
"Underwriters"), the Company proposes to sell to the Underwriters, pursuant to a
registration statement (File No. 333-14755) on Form SB-2 relating to the
public offering thereof (the "Offering"), shares of the common stock, $.01 par
value, of the Company (the "Shares"). Capitalized terms used in this Agreement
and not otherwise defined herein shall have the respective meanings given them
by the Underwriting Agreement.
To induce you to enter into the Underwriting Agreement, and in
consideration thereof, each of the undersigned, being an officer, director or
principal stockholder of the Company (each, an "Individual") agrees as follows:
1. Covenants. Each Individual, for himself individually and
not jointly, covenants and agrees with each Underwriter and the Company that:
(a) Restriction on Future Sales. For a period of 18 months
following the Effective Date, such Individual shall not, without your prior
written consent, sell, assign, hypothecate, pledge or otherwise dispose of,
directly or indirectly, any Shares now or hereafter owned by him (whether
acquired through option exercise or otherwise), and such Individual hereby
agrees to permit all certificates evidencing such Shares to be endorsed with the
appropriate restrictive legends, and consents to the placement of appropriate
stop transfer orders with the transfer agent for the Company.
(b) Certain Market Practices. Such Individual represents that
he has not taken, and agrees that he shall not take, directly or indirectly, any
action designed, or which might reasonably be expected, to cause or result in,
or which has constituted, the stabilization or manipulation of the price of the
Shares to facilitate the sale or resale thereof.
1
<PAGE>
(c) Certain Representations. Such Individual shall not make
any written or oral representation in connection with the offering and sale of
the Shares or the Representative's Warrant which is not contained in the
Prospectus, which is otherwise inconsistent with or in contravention of anything
contained in the Prospectus, or which shall constitute a violation of the
Securities Act of 1933, as amended (the "Act"), the rules and regulations
promulgated thereunder, the Securities Exchange Act of 1934, as amended, or the
rules and regulations promulgated thereunder.
(d) Rule 144 Sales. For a period of three years following the
First Closing Date, you shall have the right to purchase for your own account,
or to sell for the account of such Individual, all securities of the Company
sold by such Individual pursuant to Rule 144 of the rules and regulations
promulgated under the Act.
2. Representations and Warranties. Each Individual, for himself
individually and not jointly, represents and warrants to, and agrees with, each
Underwriter and the Company (except that Individuals who are not party to the
Stock Escrow Agreement make no representations or warranties whatsoever with
respect to the Stock Escrow Agreement) as follows:
(a) Enforceability. This Agreement and the Stock Escrow
Agreement have been duly and validly executed and delivered by such Individual
and, assuming due execution thereof by you or the Company, as the case may be,
constitutes valid and binding obligations of such Individual, enforceable
against him in accordance with their respective terms.
(b) No Conflict. The compliance by such Individual with all of
the provisions of this Agreement and the Stock Escrow Agreement 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 pursuant to the terms of, any contract, indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which such Individual is a party or by which he may be bound or to
which any of his property or assets are subject, nor will such action result in
any violation of the provisions of any statute, order, rule or regulation
applicable to such Individual of any court or governmental authority having
jurisdiction over him or his property.
(c) Stockholder Agreements; Registration Rights. Such
Individual has no rights with respect to the purchase, sale or registration of
any Shares.
(d) No NASD Affiliation. Such Individual has no direct
or indirect affiliation or association with any member of the National
Association of Securities Dealers, Inc.
3. Effectiveness. This Agreement shall become effective upon
the effectiveness, in accordance with its terms, of the Underwriting
Agreement.
4. Termination. This Agreement shall terminate upon the
termination by you of the Underwriting Agreement in accordance with the terms
of the Underwriting Agreement.
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<PAGE>
5. In General.
(a) Survival. The respective covenants,
representations and warranties of the Individuals set forth in this Agreement
shall survive delivery of and payment for the Shares.
(b) Parties in Interest. This Agreement is made solely for the
benefit of the Underwriters and, to the extent expressed, the Individuals, any
person controlling an Underwriter, 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, of Shares from an
Underwriter.
(c) Gender. Wherever used herein, the masculine
pronoun shall include the feminine and the neuter, as appropriate in the
context.
(d) Applicable Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York
applicable to agreements made and to be performed entirely within such State.
(e) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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 Individuals, the Company and the Underwriters in
accordance with its terms.
Yours very truly,
_______________________________
_______________________________
_______________________________
_______________________________
3
<PAGE>
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
H.J. MEYERS & CO., INC.
As Representative of the
referenced Underwriters
By:________________________
Name:
Title:
LIFE CRITICAL CARE CORPORATION
By:_________________________
Name:
Title:
4
Exhibit 10.21
STOCK ESCROW AGREEMENT
THIS AGREEMENT has been made on [EFFECTIVE DATE], by and among
[CONTINENTAL STOCK TRANSFER AND TRUST COMPANY, a New York limited purpose trust
company] having its principal office at ___________________________, (the
"Escrow Agent") and LIFE CRITICAL CARE CORPORATION, a Delaware corporation,
having its principal office at 37885 Green Street, New Baltimore, Michigan 48047
(the "Company"), and each of the stockholders of the Company listed on Schedule
I annexed hereto (collectively, the "Stockholders").
In consideration of the mutual covenants and promises hereinafter
contained, the parties agree as follows:
1. Escrow Deposit. Concurrently with the execution of this Agreement,
the Stockholders have delivered to the Escrow Agent, in the respective numbers
of shares set forth on Schedule I annexed hereto, certificates representing an
aggregate of 600,000 shares of the Common Stock, $.01 par value, of the Company
(the "Escrow Shares"). The Escrow Agent hereby acknowledges receipt of the
Escrow Shares and accepts its appointment by the Stockholders to hold the Escrow
Shares in escrow, upon the terms and conditions set forth in this Agreement.
2. Term. The term of this Agreement and of the escrow provided
hereby (the "Escrow Period") shall commence on the date hereof and end on
December 31, 2004 (the "Termination Date"), unless sooner terminated as
hereinafter provided.
3. Release from Escrow.
(a) If the Company achieves earnings after taxes of at least
$0.30 per share for its fiscal year ending December 31, 1997, then 300,000 of
the Escrow Shares shall be released from escrow and returned to the
Stockholders.
(b) If the Company achieves earnings after taxes of at least
$0.60 per share for any fiscal year ending on or before December 31, 1998, then
all of the Escrow Shares then remaining shall be released from escrow and
returned to the Stockholders.
(c) If at any time prior to the Termination Date the Company
achieves earnings after taxes of at least $1.25 per share, then all of the
Escrow Shares then remaining shall be released from escrow and returned to the
Stockholders.
(d) Whenever any Escrow Shares are required to be released
from escrow by the terms of this Section 3, the Company shall give written
notice thereof to the Escrow Agent and to H.J. Meyers & Co., Inc. If H.J. Meyers
& Co., Inc. shall not have notified the Escrow Agent, within ten business days
after its actual receipt of such notice, that the requirements of
<PAGE>
this Section 3 for the release of such Escrow Shares have not been satisfied,
then the Escrow Agent shall, as soon as reasonably practicable, deliver such
Escrow Shares to the Stockholders on a pro-rata basis in accordance with
their respective deposits of Escrow Shares set forth on Schedule I annexed
hereto. Upon such delivery of all of the Escrow Shares, this Agreement shall
terminate.
(e) If all of the Escrow Shares have not been required to be
released from escrow by the terms of this Section 3 prior to the Termination
Date, then on the Termination Date the Escrow Agent shall deliver all of the
Escrow Shares remaining to the Stockholders on a pro-rata basis in accordance
with their respective deposits of Escrow Shares set forth on Schedule I annexed
hereto. Upon such delivery of all of the Escrow Shares remaining, this Agreement
shall terminate.
(f) For purposes of this Agreement, the Company's "earnings
after taxes" shall be determined by the independent certified public accountants
then regularly engaged by the Company, in accordance with generally accepted
accounting principles applied on a consistent basis, and when certified by such
accountants, such determination shall be conclusive and binding upon the
parties. The earnings after taxes and stock price levels required by this
Section 3 for release of the Escrow Shares shall be appropriately adjusted in
the event that the Company shall at any time pay a stock dividend on, or split
up, subdivide, combine or recapitalize, the Common Stock.
4. Disputes. In the event of any disagreement between the Stockholders
and the Company resulting in conflicting instructions to, or adverse claims or
demands upon, the Escrow Agent with respect to the release of the Escrow Shares,
the Escrow Agent shall be entitled to refuse to comply with any such
instruction, claim or demand unless instructed to the contrary by the
Stockholders and the Company jointly, and in so refusing the Escrow Agent shall
not be or become liable in any way to the Stockholders or to the Company for its
failure or refusal to comply with any such conflicting instructions or adverse
claims or demands, and it shall be entitled to continue so to refrain from
acting until such conflicting or adverse demands (a) shall have been resolved by
agreement and the Escrow Agent shall have been notified in writing thereof by
the Stockholders and the Company, or (b) shall have been finally determined by a
court of competent jurisdiction.
5. Concerning the Escrow Agent. The parties understand and agree
as follows:
(a) The Escrow Agent is not a trustee for any party for any
purpose, and is merely acting as a depository and in a ministerial capacity
hereunder with the limited duties herein prescribed.
(b) The Escrow Agent has no responsibility in respect of the
Escrow Shares, or any instruction, certificate or notice delivered to it, other
than faithfully to carry out the obligations undertaken by it in this Agreement
and to follow the directions in such instruction or
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<PAGE>
notice provided in accordance with the terms hereof.
(c) The Escrow Agent shall not be liable for any action taken
or omitted by it in good faith and may rely upon and act in accordance with the
advice of its counsel without liability on its part for any action taken or
omitted in accordance with such advice. In any event, its liability hereunder
shall be limited to liability for gross negligence, willful misconduct or bad
faith on its part.
(d) The Escrow Agent may conclusively rely upon and act in
accordance with any certificate, instruction, notice, letter, facsimile
transmission, telegram, cablegram, or other written instrument believed by it to
be genuine and to have been signed by the proper party or parties.
(e) The Company agrees (i) to pay the Escrow Agent's
reasonable fees and to reimburse it for its reasonable expenses, including
attorneys fees, incurred in connection with its duties hereunder, and (ii) to
save harmless, indemnify and defend the Escrow Agent for, from and against any
loss, damage, liability, judgment, cost and expense whatsoever, including
counsel fees suffered or incurred by it, by reason of, or on account of, any
misrepresentation made to it or its status or activities as Escrow Agent under
this Agreement, except for any loss, damage, liability, judgment, cost or
expense resulting from gross negligence, willful misconduct or bad faith on the
part of the Escrow Agent. The obligation of the Escrow Agent to deliver the
Escrow Shares to the Stockholders shall be subject to the prior satisfaction,
upon demand of the Escrow Agent, of the Company's obligations so to save
harmless, indemnify and defend the Escrow Agent, and to reimburse the Escrow
Agent or otherwise pay its fees and expenses hereunder.
(f) The Escrow Agent shall not be required to defend any legal
proceeding which may be instituted against it in respect of the subject matter
of this Agreement unless it is (i) requested so to do by the Stockholders or the
Company and (ii) indemnified, to the Escrow Agent's satisfaction, by the party
requesting such defense against the cost and expense of such defense. If any
such legal proceeding is instituted against it, the Escrow Agent agrees promptly
to give notice of such proceeding to the Stockholders and the Company. The
Escrow Agent shall not be required to institute legal proceedings of any kind.
(g) The Escrow Agent shall not, by act, delay, omission or
otherwise, be deemed to have waived any right or remedy it may have either under
this Agreement or generally unless such waiver is in writing, and no waiver
shall be valid unless it is in writing, signed by the Escrow Agent, and only to
the extent expressly therein set forth. A waiver by the Escrow Agent under the
terms of this Agreement shall not be construed as a bar to, or a waiver of, the
same or any other such right or remedy which it would otherwise have on any
other occasion.
(h) The Escrow Agent may resign as such hereunder by giving 30
days' written notice thereof to the Stockholders and the Company. Within 20 days
after receipt of such
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<PAGE>
notice, the Stockholders and the Company shall furnish to the Escrow Agent
written instructions for the release of the Escrow Shares then remaining to a
substitute Escrow Agent which (whether designated by written instructions
from the Stockholders and the Company jointly, or in the absence thereof by
instructions from a court of competent jurisdiction to the Escrow Agent)
shall be a bank or trust company organized and doing business under the laws
of the United States or of any state thereof with a combined capital and
surplus of at least $5,000,000. Such substitute Escrow Agent shall thereafter
hold the Escrow Shares and otherwise act hereunder as if it were the Escrow
Agent originally named herein. The Escrow Agent's duties and responsibilities
hereunder shall terminate upon the release of all Escrow Shares then held in
escrow according to such written instruction or upon such delivery as herein
provided. This Agreement shall not otherwise be assignable by the Escrow Agent
without the prior written consent of the Stockholders and the Company.
6. Concerning the Escrow Shares. During the Escrow Period and while any
Escrow Shares are being held by the Escrow Agent pursuant to this Agreement: (a)
no Stockholder shall sell, assign, transfer, pledge, hypothecate or otherwise
dispose of any of the Escrow Shares deposited by him; (b) each Stockholder shall
promptly deliver to the Escrow Agent all stock certificates evidencing
additional shares of Common Stock which he may receive as the result of a stock
dividend, split-up or similar transaction in respect of the Escrow Shares; and
(c) each Stockholder shall have the sole power to vote the Escrow Shares
deposited by him.
7. Notices. Each notice, instruction or other certificate required or
permitted by the terms hereof shall be in writing and shall be communicated by
personal delivery, telecopier, telex or registered or certified mail, return
receipt requested, to the parties hereto at the addresses set forth below, or at
such other address as any of them may designate by notice to each of the others:
If to the Company: Life Critical Care Corporation
37885 Green Street
New Baltimore, Michigan 48047
If to the Stockholders: c/o Thomas H. White
Life Critical Care Corporation
37885 Green Street
New Baltimore, Michigan 48047
If to the Escrow Agent: [Continental Stock Transfer and Trust Company]
______________________________________
______________________________________
Attn.: _____________________________
All notices, instructions or certificates given hereunder to the Escrow Agent
shall be effective upon receipt by the Escrow Agent. All notices given hereunder
by the Escrow Agent shall be
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<PAGE>
effective and deemed received upon personal delivery or transmission by
telecommunication or, if mailed, five calendar days after mailing by the Escrow
Agent.
8. Modification. Except as provided by Section 5(h) hereof, this
Agreement may not be modified, altered or amended in any material respect or
canceled or terminated except with the consent of the Company, which consent
shall have been approved by the holders of a majority of the outstanding shares
of the Common Stock (excluding shares held by the Stockholders).
9. In General. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely within such State, and shall be binding upon and
shall inure to the benefit of all parties hereto and their respective successors
in interest and assigns. Wherever used herein, the masculine pronoun shall
include the feminine and the neuter, as appropriate in the context. The
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or
caused it to be executed by their duly authorized officers, on the day and year
first above written.
CONTINENTAL STOCK TRANSFER
AND TRUST COMPANY
By:___________________________
Name:
Title:
LIFE CRITICAL CARE CORPORATION
By:____________________________
Name:
Title:
[SIGNATURE LINES TO BE ADDED WHEN
STOCKHOLDER INFORMATION SUPPLIED]
-------------------------------
[------------------------------]
As Attorney-In-Fact
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<PAGE>
SCHEDULE I
Name and Address of Number of
Stockholder Escrow Shares
------------------- -------------
[TO BE PROVIDED BY COMPANY'S COUNSEL]
----------
Total 600,000
6
