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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
INFOCURE CORP.
(Name of Issuer)
COMMON STOCK
(Title of Class of Securities)
45665A105
(Cusip Number)
MELVYN CRAW
CRESCENT INTERNATIONAL LIMITED
C/O GREENLIGHT (SWITZERLAND) SA
84, AV LOUIS-CASAI, P.O. BOX 42
1216 GENEVA, COINTRIN
SWITZERLAND
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
COPY TO:
SARA P. HANKS, ESQ.
ROGERS & WELLS
200 PARK AVENUE
NEW YORK, NY 10166
(212) 878-8000
DECEMBER 11, 1998
(Date of event which requires filing of this statement)
/ / Check box if the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of this Schedule
13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4).
/ / Check box if a fee is being paid with the statement.
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CUSIP No. 45665A108 13D Page 2
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
CRESCENT INTERNATIONAL LIMITED
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)/ /
(b)/x/
3. SEC USE ONLY
4. SOURCES OF FUNDS
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) OR 2(e)
/ /
6. CITIZENSHIP OR PLACE OF ORGANIZATION
BERMUDA
7. SOLE VOTING POWER
NUMBER OF
469,983
UNITS
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
8. SHARED VOTING POWER
469,983
9. SOLE DISPOSITIVE POWER
469,983
10. SHARED DISPOSITIVE POWER
469,983
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
469,983
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.03%
14. TYPE OF REPORTING PERSON
OO
2
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CUSIP No. 45665A108 13D Page 3
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON
DMI TRUST
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)/ /
(b)/x/
3. SEC USE ONLY
4. SOURCES OF FUNDS
NOT APPLICABLE
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM
2(d) OR 2(e)
/ /
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Bahamas
7. SOLE VOTING POWER
NUMBER OF
None
UNITS
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON WITH
8. SHARED VOTING POWER
469,983
9. SOLE DISPOSITIVE POWER
None
10. SHARED DISPOSITIVE POWER
469,983
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
469,983
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
/ /
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.03%
14. TYPE OF REPORTING PERSON
OO
3
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SCHEDULE 13D
FILED PURSUANT TO RULE 13d-1
OF THE GENERAL RULES AND REGULATIONS UNDER
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
ITEM 1. SECURITY AND ISSUER.
This Statement on Schedule 13D (this "Statement") relates to shares of
the common stock, par value $0.01 per share (the "Common Stock"), of InfoCure
Corp., a Delaware corporation (the "Issuer"). The Issuer's principal executive
offices are located at 1765 The Exchange, Suite 450, Atlanta, Georgia 30339.
ITEM 2. IDENTITY AND BACKGROUND.
The names and business addresses of the persons filing this Statement
are: (i) Crescent International Limited, an entity organized and existing under
the laws under Bermuda ("Crescent"), which has offices at Clarendon House, 2
Church Street, Hamilton H 11, Bermuda and (ii) DMI Trust, a Bahamian Trust
("DMI") which has offices at 84, av Louis Casai, P.O. Box 42, 1216 Geneva,
Cointrin, Switzerland.(1) (Crescent and DMI are herein sometimes collectively
referred to as the "Reporting Persons.") The name, business address, present
principal occupation or employment and citizenship of each director and
executive officer of Crescent and DMI are set forth on Schedules I and II
hereto. During the past five years no Reporting Person nor, to the best
knowledge of the Reporting Persons, any of the persons listed on Schedules I
and II has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction which resulted in him
or it being subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The aggregate amount of funds used by Crescent to purchase the 469,983
shares of Common Stock and the Warrant (as defined in Item 5) was approximately
$5,000,000. The aggregate amount of funds to be used by Crescent to purchase the
100,000 shares of Common Stock through exercise of the Warrant is currently
anticipated to be approximately $2,300,000. Crescent has used and will use its
working capital to make such purchases.
ITEM 4. PURPOSE OF THE TRANSACTION.
Crescent acquired shares of the Common Stock of the Issuer for
investment purposes. None of the Reporting Persons has any current plans or
proposals which relate to or would result in (a) the acquisition by any person
of additional securities of the Issuer or the disposition of any such
securities, (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries,
(c) a sale or transfer of a material amount of assets of the Issuer or any of
its subsidiaries, (d) any material change in the present capitalization or
dividend policy of the Issuer, (e) any other material change in the Issuer's
business or corporate structure, (f) any other material change in the Issuer's
charter, bylaws or instruments corresponding thereto or other actions which may
impede the acquisition of control of the Issuer by any person, (g) a class of
securities of the Issuer being delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association, (h) a class of equity securities of
the Issuer becoming eligible for termination of registration pursuant to Section
12(g)(4) of the Securities Exchange Act of 1934, or (i) any action similar to
any of the enumerated actions in (a) through (h) above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a)-(b)
Footnote (1): DMI is administered by DMI SA which is 100% indirectly owned by
DMI.
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Crescent owns 369,983 shares of the Common Stock of the Issuer
(the "Common Stock") representing 5.54% of the 6,681,576 shares of Common Stock
outstanding as of the date hereof.
Crescent also owns a warrant (the "Warrant") to purchase
100,000 shares of the Common Stock of the Issuer. The warrant is exercisable by
Crescent at any time before September 28, 2003. Accordingly, pursuant to the
Warrant, Crescent owns beneficially 100,000 shares of the Common Stock of the
Issuer, and owns beneficially in total 469,983 shares of Common Stock,
representing approximately 7.03% of the as adjusted shares of the Common Stock
outstanding.
DMI may be deemed to be a beneficial owner of the shares of
Common Stock of the Issuer beneficially owned by Crescent by reason of the
ownership by DMI of 100 percent of the capital stock of Crescent. Accordingly,
for purposes of this Statement: (i) Crescent is reporting that it shares the
power to vote or direct the vote and the power to dispose or direct the
disposition of the total of 469,983 shares of Common Stock beneficially owned by
it and (ii) DMI is reporting that it shares the power to vote or direct the vote
and the power to dispose or direct the disposition of the 469,983 shares of
Common Stock beneficially owned by Crescent, such number of shares representing
approximately 7.03% of the as adjusted shares of Common Stock outstanding.
(c) On December 11, 1998, Crescent, pursuant to the terms of the Stock
Purchase Agreement (as defined in Item 6), acquired 147,984 shares of Common
Stock of the Issuer for a purchase price of approximately $2,500,000. Such
147,984 shares are included with the 469,983 shares described above.
Other than as described above, Crescent has the sole power to
vote or direct the vote and to dispose or direct the disposition of all the
shares of Common Stock stated to be beneficially owned by Crescent in Item 5(a)
hereof.
(d)-(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
The description that follows of certain provisions of the Stock
Purchase Agreement included as Exhibit 7.1 hereto and of the Registration Rights
Agreement included as Exhibit 7.2 hereto is not, and does purport to be,
complete, and is qualified in its entirety by reference to such Exhibits.
Crescent and the Issuer entered into a Stock Purchase Agreement, dated
September 28, 1998 (the "Stock Purchase Agreement"), pursuant to which the
Issuer may issue and sell to Crescent, from time to time shares of Common Stock.
Crescent and the Issuer entered into a Registration Rights Agreement,
dated September 28, 1998 (the "Registration Rights Agreement"), pursuant to
which the Issuer granted Crescent certain piggyback registration rights with
respect to the shares of Common Stock to be issued to pursuant to the Stock
Purchase Agreement upon exercise of the Warrant; provided, however, that in an
underwritten public offering, the managing underwriter may choose to exclude the
shares of other selling stockholders on a pro rata basis based on market
factors.
Except as set forth herein or in the Exhibits filed or to be filed
herewith, no contracts, arrangements, understandings or relationships (legal or
otherwise) between the Reporting Persons and any other person exists with
respect to any securities of the Issuer, including but not limited to transfer
or voting of any such securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 7.1 Stock Purchase Agreement, by and between InfoCure Corp.
and Crescent International Limited, dated as of
September 28, 1998.
Exhibit 7.2 Registration Rights Agreement, by and between InfoCure
Corp. and Crescent International Limited, dated as of
September 28, 1998.
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Exhibit 7.3 Agreement pursuant to Rule 13d-1(f)(1)(iii), filed
herewith.
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SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: December 21, 1998
CRESCENT INTERNATIONAL LIMITED
By: /s/ Omar Ali
----------------------------------------
Omar Ali
Director
DMI TRUST
By: /s/ Mohamed Al-Faisal
----------------------------------------
Mohamed Al-Faisal
Director of Dar Al Mal Al Islami
(DMI) SA
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SCHEDULE I
INFORMATION REGARDING THE DIRECTORS AND EXECUTIVE OFFICERS OF
CRESCENT INTERNATIONAL LIMITED
Set forth in the table below is the name and the present principal
occupation or employment of each of the directors and executive officers of
Crescent International Limited. Each person listed below has a principal
business address of Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.
<TABLE>
<CAPTION>
Name Present Principal Occupation or Employment Citizenship
- ---- ------------------------------------------ -----------
<S> <C>
Omar Ali Director of Crescent International Limited Somalian
Donald Malcolm Director of Crescent International Limited British
David Astwood Director of Crescent International Limited British
Osama Mohamed Secretary of Crescent International Limited Swiss
Ali
John Thompson Assistant Secretary of Crescent International British
</TABLE> Limited
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SCHEDULE II
INFORMATION REGARDING THE TRUST ADMINISTRATOR OF
DMI TRUST
DMI Trust has no directors or executive officers, but has a trust
administrator, DMI SA. Set forth in the table below is the name and the present
principal occupation or employment of each of the directors of the trust
administrator of DMI Trust. Each person listed below has a principal
business address of 84, av Louis Casai, P.O. Box 42, 1216 Geneva, Cointrin,
Switzerland.
<TABLE>
<CAPTION>
Name Present Principal Occupation or Employment Citizenship
- ---- ------------------------------------------ -----------
<S> <C>
</TABLE>
Mohamed
Al-Faisal Director of Dar Al Maal Al-Islami (DMI) SA Saudi Arabian
Omar Ali Director of Dar Al-Maal Al-Islami (DMI) SA Somalian
Piere Besuchet Director of Dar Al-Maal Al-Islami (DMI) SA Swiss
Lucien
Rouillier Director of Dar Al-Maal Al-Islami (DMI) SA Swiss
Moustapha
Hosny Director of Dar Al-Maal Al-Islami (DMI) Sa Swiss
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EXHIBIT INDEX
-------------
Exhibit No. Description
----------- -----------
Exhibit 7.1 Stock Purchase Agreement, by and between InfoCure Corp.
and Crescent International Limited, dated as of
September 28, 1998.
Exhibit 7.2 Registration Rights Agreement, by and between InfoCure
Corp. and Crescent International Limited, dated as of
September 28, 1998.
Exhibit 7.3 Agreement pursuant to Rule 13d-1(f)(1)(iii), filed
herewith.
<PAGE> 1
EXHIBIT 7.1
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
CRESCENT INTERNATIONAL LIMITED
AND
INFOCURE CORPORATION
DATED AS OF SEPTEMBER 28, 1998
This STOCK PURCHASE AGREEMENT is entered into as of the 28th day of
September 1998 (this "Agreement"), by and between CRESCENT INTERNATIONAL LIMITED
(the "Investor"), an entity organized and existing under the laws of Bermuda,
and INFOCURE CORPORATION, a corporation organized and existing under the laws of
the State of Delaware (the "Company").
WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the Investor,
from time to time as provided herein, and the Investor shall purchase, up to
$10,000,000 of the Common Stock (as defined below); and
WHEREAS, such investments will be made in reliance upon the provisions
of Section 4(2) ("Section 4(2)") and Regulation D ("Regulation D") of the United
States Securities Act of 1933, as amended and the rules and regulations
promulgated thereunder (the "Securities Act"), and/or upon such other exemption
from the registration requirements of the Securities Act as may be available
with respect to any or all of the investments in Common Stock to be made
hereunder.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 "Additional Warrant" shall mean the Additional Warrant in
the form of Exhibit D hereto issued pursuant to Section 2.1(d) of this
Agreement.
Section 1.2 "Additional Warrant Shares" shall mean all shares of Common
Stock issued or issuable pursuant to exercise of the Additional Warrants.
Section 1.3 "Average Daily Trading Volume" shall mean, with respect to
any Closing Date, the average of the daily trading volumes for the Common Stock
on the Principal Market during the applicable Valuation Period, and with respect
to any other date, such average during the portion of the applicable Valuation
Period that has expired as of such date.
Section 1.4 "Capital Shares" shall mean the Common Stock and any shares
of any other class of common stock whether now or hereafter authorized, having
the right to participate in the distribution of dividends (as and when declared)
and assets (upon liquidation of the Company).
Section 1.5 "Closing" shall mean one of the closings of a purchase and
sale of the Common Stock pursuant to Section 2.1.
Section 1.6 "Closing Date" shall mean, with respect to a Closing, the
first Trading Day following the Put Notice Period related to such Closing,
provided all conditions to such Closing have been satisfied on or before such
Trading Day.
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Section 1.7 "Commitment Period" shall mean the period commencing on the
Subscription Date and expiring on the earlier to occur of (i) the date on which
the Investor shall have purchased Put Shares pursuant to this Agreement for an
aggregate Purchase Price of the Maximum Commitment Amount, (ii) the date this
Agreement is terminated pursuant to Section 2.4, or (iii) the date occurring
eighteen (18) months from the Subscription Date.
Section 1.8 "Common Stock" shall mean the Company's common stock,
$0.001 par value per share.
Section 1.9 "Common Stock Equivalents" shall mean any securities that
are convertible into or exchangeable for Common Stock or any warrants, options
or other rights to subscribe for or purchase Common Stock or any such
convertible or exchangeable securities.
Section 1.10 "Condition Satisfaction Date" shall have the meaning set
forth in Section 7.2 of this Agreement.
Section 1.11 "Damages" shall mean any loss, claim, damage, liability,
costs and expenses (including, without limitation, any and all investigative,
legal and other expenses reasonably incurred in connection with, and any and all
amounts paid in defense or settlement of, any action, suit or proceeding between
any indemnified party and any indemnifying party or between any indemnified
party and any third party, or otherwise, or any claim asserted).
Section 1.12 "Discounted Market Price" shall mean ninety two and a half
percent (92.5%) of the Lowest Average Price.
Section 1.13 "Effective Date" shall mean the earlier to occur of: (i)
the date on which the Company first notifies the Investor that the SEC has
declared effective a Registration Statement registering resale of Registrable
Securities as set forth in Section 7.2(a) and (ii) the date on which such
Registrable Securities first become eligible for resale pursuant to Rule 144 of
the Securities Act.
Section 1.14 "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended and the rules and regulations promulgated thereunder.
Section 1.15 "Floor Price" shall mean ten dollars ($10.00) per share.
Section 1.16 "Incentive Warrant Shares" shall mean all shares of Common
Stock issued or issuable pursuant to exercise of the Incentive Warrant.
Section 1.17 "Incentive Warrant" shall mean the Incentive Warrant in
the form of Exhibit C hereto issued pursuant to Section 2.5 of this Agreement.
Section 1.18 "Investment Amount" shall mean the dollar amount (within
the range specified in Annex A hereto) to be invested by the Investor to
purchase Put Shares with respect to any Put Date as notified by the Company to
the Investor in accordance with Section 2.2 hereof.
Section 1.19 "Legend" shall have the meaning specified in Section 8.1.
Section 1.20 "Letter Agreement" shall mean the letter agreement in the
form of Exhibit H hereto.
Section 1.21 "Lowest Average Price" shall mean the lowest average Sale
Price for any period of three consecutive Trading Days during the applicable
Valuation Period.
Section 1.22 "Material Adverse Effect" shall mean any effect on the
business, operations, properties, prospects, or financial condition of the
Company that is material and adverse to the Company and such other entities
controlling or controlled by the Company, taken
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as a whole, and/or any condition, circumstance, or situation that would prohibit
or otherwise interfere with the ability of the Company to enter into and perform
its obligations under any of (i) this Agreement, (ii) the Registration Rights
Agreement and (iii) the Warrants.
Section 1.23 "Maximum Commitment Amount" shall mean $10,000,000.
Section 1.24 "Maximum Put Amount" shall mean with respect to any Put
the amount determined in accordance with the table set forth on Annex A hereto.
Section 1.25 "Minimum Put Amount" shall mean $500,000.
Section 1.26 "Minimum Time Interval" shall mean the mandatory thirty
(30) days between any two Put Dates.
Section 1.27 "NASD" shall mean the National Association of Securities
Dealers, Inc.
Section 1.28 "Outstanding" when used with reference to Common Shares or
Capital Shares (collectively the "Shares"), shall mean, at any date as of which
the number of such Shares is to be determined, all issued and outstanding
Shares, and shall include all such Shares issuable in respect of outstanding
scrip or any certificates representing fractional interests in such Shares;
provided, however, that "Outstanding" shall not refer to any such Shares then
directly or indirectly owned or held by or for the account of the Company.
Section 1.29 "Parent Company" shall mean Dar Al-Maal Al-Islami Trust.
Section 1.30 "Person" shall mean an individual, a corporation, a
partnership, an association, a trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
Section 1.31 "Principal Market" shall mean the Nasdaq National Market,
the Nasdaq SmallCap Market, the American Stock Exchange, the Bulletin Board or
the New York Stock Exchange, whichever is at the time the principal trading
exchange or market for the Common Stock.
Section 1.32 "Purchase Price" shall mean, with respect to a Put, the
Discounted Market Price for the applicable Closing Date (or such other date on
which the Purchase Price is calculated in accordance with the terms and
conditions of this Agreement); provided, however, that in no event shall the
Purchase Price be less than ninety-two and a half percent (92.5%) of the Floor
Price.
Section 1.33 "Put" shall mean each occasion the Company elects to
exercise its right to tender a Put Notice requiring the Investor to purchase a
discretionary amount of the Company's Common Stock, subject to the terms and
conditions of this Agreement.
Section 1.34 "Put Date" shall mean the Trading Day during the
Commitment Period that a Put Notice to sell Common Stock to the Investor is
deemed delivered pursuant to Section 2.2(b) hereof.
Section 1.35 "Put Fees" shall have the meaning specified in Section 2.6
hereof.
Section 1.36 "Put Notice" shall mean a written notice to the Investor
setting forth the intended Closing Date and the Investment Amount that the
Company intends to require the Investor to purchase pursuant to the terms of
this Agreement.
Section 1.37 "Put Notice Period" shall mean a period of five (5)
Trading Days immediately following the Put Date with respect to a Closing.
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Section 1.38 "Put Shares" shall mean all shares of Common Stock issued
or issuable pursuant to a Put that has been exercised or may be exercised in
accordance with the terms and conditions of this Agreement.
Section 1.39 "Registerable Securities" shall mean (i) the Put Shares,
(ii) the Warrant Shares and (iii) any securities issued or issuable with respect
to any of the foregoing by way of exchange, stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise. As to any particular Registrable
Securities, once issued such securities shall cease to be Registrable Securities
when (w) the applicable Registration Statement has been declared effective by
the SEC and all such Registrable Securities have been disposed of pursuant to
the applicable Registration Statement, (x) all such Registrable Securities have
been sold under circumstances under which all of the applicable conditions of
Rule 144 (or any similar provision then in force) under the Securities Act
("Rule 144") are met, (y) such time as all such Registrable Securities have been
otherwise transferred to holders who may trade such shares without restriction
under the Securities Act, and the Company has delivered a new certificate or
other evidence of ownership for such securities not bearing a restrictive legend
or (z) in the opinion of counsel to the Company, which counsel shall be
reasonably acceptable to the Investor, all such Registrable Securities may be
sold without registration or the need for an exemption from any registration
requirements and without any time, volume or manner limitations pursuant to Rule
144(k) (or any similar provision then in effect) under the Securities Act.
Section 1.40 "Registration Rights Agreement" shall mean the
registration rights agreement in the form of Exhibit B hereto.
Section 1.41 "Registration Statement" shall mean a registration
statement on Form S-3 (if use of such form is then available to the Company
pursuant to the rules of the SEC and, if not, on such other form promulgated by
the SEC for which the Company then qualifies and which counsel for the Company
shall deem appropriate and which form shall be available for the resale of the
Registrable Securities to be registered thereunder in accordance with the
provisions of this Agreement, the Registration Rights Agreement, and the
Warrants and in accordance with the intended method of distribution of such
securities), for the registration of the resale by the Investor of the
Registrable Securities under the Securities Act.
Section 1.42 "Regulation D" shall have the meaning set forth in the
recitals of this Agreement.
Section 1.43 "Sale Price" shall mean the closing sale price (as
reported by the Principal Market.
Section 1.44 "SEC" shall mean the Securities and Exchange Commission.
Section 1.45 "SEC Documents" shall mean the Company's latest Form 10-K
as of the time in question, all Forms 10-Q and 8-K filed thereafter, and the
Proxy Statement for its latest fiscal year as of the time in question until such
time the Company no longer has an obligation to maintain the effectiveness of a
Registration Statement as set forth in the Registration Rights Agreement.
Section 1.46 "Section 4(2)" shall have the meaning set forth in the
recitals of this Agreement.
Section 1.47 "Securities Act" shall have the meaning set forth in the
recitals of this Agreement.
Section 1.48 "Securities Exchange Act" shall mean the United States
Securities Exchange Act of 1934, as amended and the rules and regulations
promulgated thereunder.
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Section 1.49 "Short Sale" shall have the meaning specified in the Rule
3b-3 of the Securities Exchange Act; provided that this Agreement shall not
represent an unconditional contract (within the meaning of Rule 3b-3(2) of the
Securities Exchange Act) with respect to any shares of Common Stock until (a) a
Put Notice shall have been given with respect to such shares, and (b) a Closing
shall have occurred with respect to such shares.
Section 1.50 "Subscription Date" shall mean the date on which this
Agreement is executed and delivered by the parties hereto.
Section 1.51 "Trading Day" shall mean any day during which the
Principal Market shall be open for business.
Section 1.52 "Underwriter" shall mean any underwriter participating in
any disposition of the Registrable Securities on behalf of the Investor pursuant
to a Registration Statement.
Section 1.53 "Valuation Period" shall mean (i) with respect to the
Subscription Date, the twenty-two (22) Trading Day period immediately before the
Subscription Date, (ii) with respect to an Effective Date, the twenty-two (22)
Trading Day Period immediately before such Effective Date, (iii) with respect to
a Closing Date, the twenty-two (22) Trading Day period immediately before the
applicable Put Date, during which the Discounted Market Price of the Common
Stock is determined.
Section 1.54 "Warrants" shall mean the Additional Warrants and
Incentive Warrant.
Section 1.55 "Warrant Shares" shall mean the Additional Warrant Shares
and the Incentive Warrant Shares.
ARTICLE II
PURCHASE AND SALE OF COMMON STOCK;
TERMINATION OF OBLIGATIONS; INCENTIVE WARRANT
Section 2.1 Investments.
(a) Puts. Upon the terms and conditions set forth herein
(including, without limitation, the provisions of Article VII
hereof), on any Put Date the Company may exercise a Put by the
delivery of a Put Notice. The number of Put Shares that the
Investor shall receive pursuant to such Put shall be
determined by dividing the Investment Amount specified in the
Put Notice by the Purchase Price with respect to such Put
Date.
(b) Maximum Amount of Puts. Unless the Company obtains the
requisite approval of its shareholders in accordance with the
corporate laws of Delaware and the applicable rules of the
Principal Market, no more than 19.9% of the Outstanding shares
of Common Stock may be issued and sold pursuant to Puts.
(c) First Put. The Company shall issue and sell and the
Investor shall purchase, on the Subscription Date, shares of
the Common Stock for an Investment Amount of $2,500,000 at the
Discounted Market Price for the Subscription Date (the
"Subscription Date Price"). For the purpose only of such first
Put, the Investor waives the requirements of Section 2.2, and
the conditions set forth in paragraphs (a), (b), and (g) of
Section 7.2, hereof.
(d) Additional Warrants. In addition to the Incentive Warrant
(as defined hereinafter), on the Subscription Date and on each
Closing Date, the Company shall issue to the Investor an
additional warrant (each an "Additional Warrant") with an
exercise price of $0.001 for each share of Common Stock.
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(e) Parent Letter of Comfort. Simultaneous with the execution
of this Agreement, the Parent Company has executed and
delivered to the Company a letter of comfort in the form
attached hereto as Exhibit A.
Section 2.2 Mechanics.
(a) Put Notice. At any time during the Commitment Period, the
Company may deliver a Put Notice to the Investor, subject to
the conditions set forth in Section 7.2; provided, however,
the Investment Amount for each Put as designated by the
Company in the applicable Put Notice shall be neither less
than the Minimum Put Amount nor more than the Maximum Put
Amount.
(b) Date of Delivery of Put Notice. A Put Notice shall be
deemed delivered on (i) the Trading Day it is received by
facsimile or otherwise by the Investor if such notice is
received prior to 12:00 noon New York time, or (ii) the
immediately succeeding Trading Day if it is received by
facsimile or otherwise after 12:00 noon New York time on a
Trading Day or at any time on a day which is not a Trading
Day. No Put Notice may be deemed delivered, on a day that is
not a Trading Day.
Section 2.3 Closings. On each Closing Date for a Put, (i) the Company
shall deliver irrevocable instructions to the Transfer Agent to prepare and
notify the Investor that a share certificate in the name of the Investor and in
the amount of the applicable Put Shares has been prepared and is then held by
the Transfer Agent and (ii) the Investor shall deliver to the company the
Investment Amount specified in the Put Notice by wire transfer of immediately
available funds to the account designated in the Put Notice. In addition, on or
prior to such Closing Date, each of the Company and the Investor shall deliver
to the other all documents, instruments and writings required to be delivered or
reasonably requested by either of them pursuant to this Agreement in order to
implement and effect the transactions contemplated herein.
Section 2.4 Termination of Agreement and Investment Obligation. The
Investor shall have the right to terminate this Agreement (including with
respect to any Put, notice of which has been given but the applicable Closing
Date has not yet occurred) in the event that: (i) the Registration Statement
with respect to shares of Common Stock purchased through the first Put is not
effective within one hundred and fifty (150) days following the Subscription
Date, (ii) a Registration Statement with respect to shares of Common Stock
purchased through any subsequent Put is not effective within ninety (90) days
following the applicable Closing Date, (iii) there shall occur any stop order or
suspension of the effectiveness of the Registration Statement for an aggregate
of thirty (30) Trading Days during the Commitment Period, (iv) the Company shall
at any time fail to comply with the requirements of Section 6.3, 6.4, 6.5 or
6.6, or (v) the Company has given to the Investor thirty (30) days' written
notice of termination of this Agreement and such obligations.
Section 2.5 The Incentive Warrant. On the Subscription Date, the
Company shall issue the Incentive Warrant to the Investor. The Incentive Warrant
shall be delivered by the Company to the Investor upon execution of this
Agreement by the parties hereto. The Incentive Warrant Shares shall be
registered for resale pursuant to the Registration Rights Agreement.
Section 2.6 Put Fees. The Company shall pay the Investor's advisor,
Greenlight (Switzerland) SA, the following fees (the "Put Fees"): (i) the sum of
$150,000 and an amount equivalent to one and a quarter percent (1.25%) of the
Investment Amount for the First Put on the Subscription Date and (ii) an amount
equivalent to one and a quarter percent (1.25%) percent of the Investment Amount
for any subsequent Put on the applicable Closing Date.
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Section 2.7 Right of First Refusal. If the Company, for the purpose of
obtaining any additional financing in connection with an acquisition of 50% or
more of the outstanding common stock of a corporation, a partnership, an
association, a trust or other entity or organization (the "Acquisition"), wishes
to sell its Common Stock for cash (the "Sale"), in a transaction exempt from
registration under the Securities Act, to a party (the "Third Party") other than
the Investor, the Company shall first offer (the "Offer") to the Investor, in
writing, the right to purchase such Common Stock (the "Offered Shares") at (a)
the bona fide price offered by the Third Party (the "Third Party Offer Price"),
within a five (5) business day period (the "Offer Period"). The Offer shall
grant the Investor the right during the five (5) business days next following
the date of the Offer to elect to purchase all of the Offered Shares. The
Company, in connection with such an Acquisition, shall refrain from
circumventing or attempting to circumvent the Investor's right of first refusal
by way of making such a Sale to any of its affiliates without first making an
Offer to the Investor. If, however, the Company, prior to such a Sale to an
affiliate, makes an Offer to the Investor, and the Investor declines such Offer,
the Company shall have a right to make such a Sale pursuant to the terms and
conditions of this Section 2.7. If the Investor so exercises it right to
purchase all of the Offered Shares, (i) the purchase price for the Offered
Shares shall be the Investor Offer Price, and the closing and method of payment
shall be as provided for in Section 2.3 hereof and the Closing Date shall be
five (5) Trading Days after the Investor exercises such right and (ii) the
Maximum Commitment Amount shall be increased by the purchase price for the
Offered Shares and such Offered Shares shall be deemed Put Shares. If the
Investor fails to exercise its right to purchase all of the Offered Shares, then
during the sixty (60) calendar days next following the expiration of such right,
the Company shall be free to sell any or all of the Offered Shares to a
purchaser for a purchase price not lower than the Third Party Offer Price
payable on terms and conditions that are not more favorable to such purchaser
than those contained in the Offer.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF INVESTOR
The Investor represents and warrants to the Company that:
Section 3.1 Intent. The Investor is entering into this Agreement for
its own account and the Investor has no view to the distribution of the
Registrable Securities or Warrants and has no present arrangement (whether or
not legally binding) at any time to sell the Registrable Securities or Warrants
to or through any person or entity; provided, however, that by making the
representations herein, the Investor does not agree to hold the Registrable
Securities or Warrants for any minimum or other specific term and reserves the
right to dispose of the Registrable Securities or Warrants at any time pursuant
to the Registration Statement and in accordance with federal and state
securities laws applicable to such disposition.
Section 3.2 Sophisticated Investor. The Investor is a sophisticated
investor (as described in Rule 506(b)(2)(ii) of Regulation D) and an accredited
investor (as defined in Rule 501 of Regulation D), and Investor has such
experience in business and financial matters that it is capable of evaluating
the merits and risks of an investment in Common Stock. The Investor acknowledges
that an investment in the Common Stock is speculative and involves a high degree
of risk.
Section 3.3 Authority. Each of this Agreement, the Registration Rights
Agreement, and the Escrow Agreement has been duly authorized by all necessary
corporate action and no further consent or authorization of the Investor, or its
Board of Directors or stockholders is required. Each of this Agreement and the
Registration Rights Agreement was validly executed and delivered by the Investor
and each is a valid and binding agreement of the Investor enforceable against it
in accordance with its terms, subject to applicable bankruptcy, insolvency,
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or similar laws relating to, or affecting generally the enforcement of,
creditors' rights and remedies or by other equitable principles of general
application.
Section 3.4 Not an Affiliate. The Investor is not an officer, director
or "affiliate" (as that term is defined in Rule 405 of the Securities Act) of
the Company.
Section 3.5 Organization and Standing. Investor is duly organized,
validly existing, and in good standing under the laws of Bermuda.
Section 3.6 Absence of Conflicts. The execution and delivery of this
Agreement and any other document or instrument contemplated hereby, and the
consummation of the transactions contemplated thereby, and compliance with the
requirements thereof, will not (a) violate any law, rule, regulation, order,
writ, judgment, injunction, decree or award binding on Investor, or, to the
Investor's knowledge, (b) violate any provision of any indenture, instrument or
agreement to which Investor is a party or is subject, or by which Investor or
any of its assets is bound, (c) conflict with or constitute a material default
thereunder, (d) result in the creation or imposition of any lien pursuant to the
terms of any such indenture, instrument or agreement, or constitute a breach of
any fiduciary duty owed by Investor to any third party, or (e) require the
approval of any third-party (that has not been obtained) pursuant to any
material contract to which Investor is subject or to which any of its assets,
operations or management may be subject.
Section 3.7 Disclosure; Access to Information. Investor has received
all documents, records, books and other information pertaining to Investor's
investment in the Company that have been requested by Investor. The Investor has
received and reviewed copies of the SEC Documents.
Section 3.8 Manner of Sale. At no time was Investor presented with or
solicited by or through any leaflet, public promotional meeting, television
advertisement or any other form of general solicitation or advertising.
Section 3.9 Resale Restrictions. It is acknowledged by Investor that
any Registrable Securities and Warrants to be acquired by Investor have not been
registered under the federal securities laws or any applicable state securities
laws in reliance upon exemptions available for non-public or limited offerings.
Investor understands that Investor must bear the economic risk of the investment
in the Registrable Securities and Warrants because the Registrable Securities
and Warrants have not been so registered and therefore are subject to
restrictions upon transfer such that they may not be sold or otherwise
transferred unless registered under the applicable securities laws or an
exemption from such registration is available. Investor will not reoffer, sell,
assign, transfer, pledge, encumber, hypothecate or otherwise dispose of any
Registrable Securities or the Warrants in the absence of an effective
registration statement, qualification or authorization relating thereto under
federal and applicable state securities laws or an opinion of qualified counsel
satisfactory to the Company to the effect that the proposed transaction in the
Registrable Securities or the Warrants will neither constitute or result in any
violation of the federal or state securities laws. Subject to Section 8.1 of
this Agreement, any certificate or other document that may be issued
representing any shares of Registrable Securities or the Warrants may be
endorsed with a legend to this effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Investor that:
Section 4.1 Organization of the Company. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite power and authority to own, lease and
operate its properties and to carry on its business as now being conducted.
Except as set forth in the SEC Documents, the Company does
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<PAGE> 9
not own more than fifty percent (50%) of the outstanding capital stock of or
control any other business entity. The Company is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, other than those in which the failure so to qualify
would not have a Material Adverse Effect.
Section 4.2 Authority. (i) The Company has the requisite corporate
power and authority to enter into and perform its obligations under this
Agreement, the Registration Rights Agreement, the Warrants and the Escrow
Agreement and to issue the Put Shares, the Warrants, the Warrant Shares; (ii)
the execution and delivery of this Agreement and the Registration Rights
Agreement, and the execution, issuance and delivery of the Warrants, by the
Company and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action and no
further consent or authorization of the Company or its Board of Directors or
stockholders is required; and (iii) each of this Agreement and the Registration
Rights Agreement has been duly executed and delivered, and the Warrants have
been duly executed, issued and delivered, by the Company and constitute valid
and binding obligations of the Company enforceable against the Company in
accordance with their respective terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application.
Section 4.3 Capitalization. As of September 28, 1998, the authorized
capital stock of the Company is as set forth on Schedule 4.3.
Section 4.4 Common Stock. The Company has registered its Common Stock
pursuant to Section 12(b) or 12(g) of the Exchange Act and is in full compliance
with all reporting requirements of the Exchange Act, and the Company has
maintained all requirements for the continued listing or quotation of its Common
Stock, and such Common Stock is currently listed or quoted on the Principal
Market. As of the date hereof, the Principal Market is the American Stock
Exchange.
Section 4.5 SEC Documents. The Company has delivered or made available
to the Investor true and complete copies of the SEC Documents (including,
without limitation, proxy information and solicitation materials). The Company
has not provided to the Investor any information that, according to applicable
law, rule or regulation, should have been disclosed publicly prior to the date
hereof by the Company, but which has not been so disclosed. As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
other federal, state and local laws, rules and regulations applicable to such
SEC Documents, and none of the SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Documents comply as to form and
substance in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC or other applicable rules and
regulations with respect thereto. Such financial statements have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may include summary notes
and may be condensed or summary statements) and fairly present in all material
respects the financial position of the Company as of the dates thereof and the
results of operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments).]
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Section 4.6 Exemption from Registration; Valid Issuances. The sale and
issuance of the Warrants, the Warrant Shares, and the Put Shares in accordance
with the terms and on the bases of the representations and warranties set forth
in this Agreement, may and shall be properly issued pursuant to Rule 4(2),
Regulation D and/or any applicable state law. When issued and paid for as herein
provided, the Put Shares and the Warrant Shares shall be duly and validly
issued, fully paid, and nonassessable. Neither the sales of the Put Shares, the
Warrants, or the Warrant Shares pursuant to, nor the Company's performance of
its obligations under, this Agreement, the Registration Rights Agreement, or the
Warrants shall (i) result in the creation or imposition of any liens, charges,
claims or other encumbrances upon the Put Shares, the Warrant Shares, or any of
the assets of the Company, or (ii) entitle the holders of Outstanding Capital
Shares to preemptive or other rights to subscribe to or acquire the Capital
Shares or other securities of the Company. The Put Shares and the Warrant Shares
shall not subject the Investor to personal liability by reason of the ownership
thereof.
Section 4.7 No General Solicitation or Advertising in Regard to this
Transaction. Neither the Company nor any of its affiliates nor any distributor
or any person acting on its or their behalf (i) has conducted or will conduct
any general solicitation (as that term is used in Rule 502(c) of Regulation D)
or general advertising with respect to any of the Put Shares, the Warrants, or
the Warrant Shares, or (ii) made any offers or sales of any security or
solicited any offers to buy any security under any circumstances that would
require registration of the Common Stock under the Securities Act.
Section 4.8 Corporate Documents. The Company has furnished or made
available to the Investor true and correct copies of the Company's Certificate
of Incorporation, as amended and in effect on the date hereof (the
"Certificate"), and the Company's By-Laws, as amended and in effect on the date
hereof (the "By-Laws").
Section 4.9 No Conflicts. The execution, delivery and
performance of this Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby, including without limitation the
issuance of the Put Shares, the Warrants and the Warrant Shares do not and will
not (i) result in a violation of the Certificate or By-Laws or (ii) conflict
with, or constitute a material default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any material agreement,
indenture, instrument or any "lock-up" or similar provision of any underwriting
or similar agreement to which the Company is a party, or (iii) result in a
violation of any federal, state, local or foreign law, rule, regulation, order,
judgment or decree (including federal and state securities laws and regulations)
applicable to the Company or by which any property or asset of the Company is
bound or affected (except for such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect) nor is the
Company otherwise in violation of, conflict with or in default under any of the
foregoing; provided, however, that for purposes of the Company's representations
and warranties as to violations of foreign law, rule or regulation referenced in
clause (iii), such representations and warranties are made only to the best of
the Company's knowledge insofar as the execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby are or may be affected by the status of the
Investor under or pursuant to any such foreign law, rule or regulation. The
business of the Company is not being conducted in violation of any law,
ordinance or regulation of any governmental entity, except for possible
violations that either singly or in the aggregate do not and will not have a
Material Adverse Effect. The Company is not required under federal, state or
local law, rule or regulation to obtain any consent, authorization or order of,
or make any filing or registration with, any court or governmental agency in
order for it to execute, deliver or perform any of its obligations under this
Agreement or issue and sell the Common Stock or the Warrants in accordance with
the terms
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hereof (other than any SEC, NASD or state securities filings that may be
required to be made by the Company subsequent to any Closing, any registration
statement that may be filed pursuant hereto, and any shareholder approval
required by the rules applicable to companies whose common stock trades on the
American Stock Exchange); provided that, for purposes of the representation made
in this sentence, the Company is assuming and relying upon the accuracy of the
relevant representations and agreements of the Investor herein.
Section 4.10 No Material Adverse Change. Since December 31, 1997, no
event has occurred that would have a Material Adverse Effect on the Company,
except as disclosed in the SEC Documents.
Section 4.11 No Undisclosed Liabilities. The Company has no liabilities
or obligations that are material, individually or in the aggregate, and that are
not disclosed in the SEC Documents or otherwise publicly announced, other than
those incurred in the ordinary course of the Company's businesses since December
31, 1997 and which, individually or in the aggregate, do not or would not have a
Material Adverse Effect on the Company.
Section 4.12 No Undisclosed Events or Circumstances. Since December 31,
1997, no event or circumstance has occurred or exists with respect to the or its
businesses, properties, prospects, operations or financial condition, that,
under applicable law, rule or regulation, requires public disclosure or
announcement prior to the date hereof by the Company but which has not been so
publicly announced or disclosed in the SEC Documents.
Section 4.13 No Integrated Offering. Neither the Company, nor any of
its affiliates, nor any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, other than pursuant to this Agreement, under circumstances
that would require registration of the Common Stock under the Securities Act.
Section 4.14 Litigation and Other Proceedings. Except as may be set
forth in the SEC Documents, there are no lawsuits or proceedings pending or to
the best knowledge of the Company threatened, against the Company, nor has the
Company received any written or oral notice of any such action, suit, proceeding
or investigation, which might have a Material Adverse Effect. Except as set
forth in the SEC Documents, no judgment, order, writ, injunction or decree or
award has been issued by or, so far as is known by the Company, requested of any
court, arbitrator or governmental agency which might result in a Material
Adverse Effect.
Section 4.15 No Misleading or Untrue Communication. The Company, any
Person representing the Company, and, to the knowledge of the Company, any other
Person selling or offering to sell the Put Shares, the Warrants or the Warrant
Shares in connection with the transactions contemplated by this Agreement, have
not made, at any time, any oral communication in connection with the offer or
sale of the same which contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the statements, in
the light of the circumstances under which they were made, not misleading.
Section 4.16 Material Non-Public Information. The Company is not in
possession of, nor has the Company or its agents disclosed to the Investor, any
material non-public information that (i) if disclosed, would, or could
reasonably be expected to have, an effect on the price of the Common Stock and
(ii) according to applicable law, rule or regulation, should have been disclosed
publicly by the Company prior to the date hereof but which has not been so
disclosed.
ARTICLE V
COVENANTS OF THE INVESTOR
Section 5.1 Compliance. The Investor's trading activities with respect
to shares of the Company's Common Stock will be in compliance with all
applicable state and federal securities
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laws, rules and regulations and the rules and regulations of the Principal
Market on which the Company's Common Stock is listed.
Section 5.2 Short Sale. The Investor or its affiliates shall not engage
in any Short Sale of the Common Stock during the Commitment Period.
ARTICLE VI
COVENANTS OF THE COMPANY
Section 6.1 Registration Rights. The Company shall cause the
Registration Rights Agreement to remain in full force and effect and the Company
shall comply in all respects with the terms thereof.
Section 6.2 Reservation of Common Stock. As of the date hereof, the
Company has available and the Company shall reserve and keep available at all
times, free of preemptive rights, shares of Common Stock for the purpose of
enabling the Company to satisfy any obligation to issue the Put Shares and the
Warrant Shares; such amount of shares of Common Stock to be reserved shall be
calculated based upon the minimum Purchase Price for the Put Shares under the
terms and conditions of this Agreement and the Exercise price of the Incentive
Warrant and the maximum amount of Additional Warrant Shares issuable pursuant to
the Registration Rights Agreement. The number of shares so reserved from time to
time, as theretofore increased or reduced as hereinafter provided, may be
reduced by the number of shares actually delivered hereunder.
Section 6.3 Listing of Common Stock. The Company shall exercise best
efforts to maintain the listing of the Common Stock on a Principal Market, and
as soon as practicable (but in any event prior to the Closing Date for any Put)
will cause the Put Shares and the Warrant Shares with respect to such Put to be
listed on the Principal Market. The Company further shall, if the Company
applies to have the Common Stock traded on any other Principal Market, include
in such application the Put Shares and the Warrant Shares, and shall take such
other action as is necessary or desirable in the opinion of the Investor to
cause the Common Stock to be listed on such other Principal Market as promptly
as possible. The Company shall use commercially reasonable efforts to continue
the listing and trading of its Common Stock on the Principal Market (including,
without limitation, maintaining sufficient net tangible assets) and will comply
in all respects with the Company's reporting, filing and other obligations under
the bylaws or rules of the NASD and the Principal Market.
Section 6.4 Exchange Act Registration. After each Registration
Statement becomes effective, the Company shall cause the Common Stock covered by
such Registration Statement to continue to be registered under Section 12(g) or
12(b) of the Exchange Act, will comply in all respects with its reporting and
filing obligations under said Act, and will not take any action or file any
document (whether or not permitted by said Act or the rules thereunder) to
terminate or suspend such registration or to terminate or suspend its reporting
and filing obligations under said Act.
Section 6.5 Legends. The certificates evidencing the Put Shares and the
Warrant Shares shall be free of legends, except as provided for in Article VIII.
Section 6.6 Corporate Existence. The Company shall take all steps
necessary to preserve and continue the corporate existence of the Company.
Section 6.7 Additional SEC Documents. During the Commitment Period, the
Company shall deliver to the Investor, as and when the originals thereof are
submitted to the SEC for filing, copies of all SEC Documents so furnished or
submitted to the SEC.
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Section 6.8 Notice of Certain Events Affecting Registration; Suspension
of Right to Make a Put. The Company shall immediately notify the Investor upon
the occurrence of any of the following events in respect of a Registration
Statement or related prospectus in respect of an offering of Registrable
Securities: (i) receipt of any request for additional information by the SEC or
any other federal or state governmental authority during the period of
effectiveness of the registration statement for amendments or supplements to the
registration statement or related prospectus; (ii) the issuance by the SEC or
any other federal or state governmental authority of any stop order suspending
the effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose; (iii) receipt of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; (iv) the happening of any event
that makes any statement made in such Registration Statement or related
prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of any
changes in the registration statement, related prospectus or documents so that,
in the case of a Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that in the case of the related prospectus, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and (v) the Company's
reasonable determination that a post-effective amendment to the registration
statement would be appropriate, and the Company shall promptly make available to
the Investor any such supplement or amendment to the related prospectus. The
Company shall not deliver to the Investor any Put Notice during the continuation
of any of the foregoing events.
Section 6.9 Consolidation; Merger. The Company shall not, at any time
after the date hereof, effect any merger or consolidation of the Company with or
into, or a transfer of all or substantially all of the assets of the Company to,
another entity unless the resulting successor or acquiring entity (if not the
Company) assumes by written instrument the obligation to deliver to the Investor
such shares of stock and/or securities as the Investor is entitled to receive
pursuant to this Agreement and the Warrants.
Section 6.10 Issuance of Put Shares, Warrant Shares and Additional
Shares. The sale of the Put Shares and the issuance of the Warrant Shares
pursuant to exercise of the Warrants shall be made in accordance with the
provisions and requirements of Regulation D and any applicable state law.
Issuance of the Warrant Shares pursuant to exercise of the Warrants through a
cashless exercise shall be made in accordance with the provisions and
requirements of Section 3(a)(9) under the Securities Act and any applicable
state law.
Section 6.11 Legal Opinion on Subscription Date. The Company's
independent counsel shall deliver to the Investor on the Subscription Date an
opinion in the form of Exhibit D, except for paragraph 7 thereof.
Section 6.12 No Similar Arrangements. The Company shall refrain from
entering into any other agreements, arrangements or understandings granting to
the Company the right to put shares of its securities to one or more investors
in placements exempt from registration under the Securities Act until two (2)
months after this Agreement is terminated pursuant to Section 2.4 hereof;
provided, however that nothing herein shall prohibit the Company from entering
into such arrangements in connection with any acquisition.
ARTICLE VII
CONDITIONS TO DELIVERY OF
PUT NOTICES AND CONDITIONS TO CLOSING
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Section 7.1 Conditions Precedent to the Obligation of the Company to
Issue and Sell Common Stock. The obligation hereunder of the Company to issue
and sell the Put Shares to the Investor incident to each Closing is subject to
the satisfaction, at or before each such Closing, of each of the conditions set
forth below.
(a) Accuracy of the Investor's Representation and Warranties.
The representations and warranties of the Investor shall be
true and correct in all material respects as of the date of
this Agreement and as of the date of each such Closing as
though made at each such time.
(b) Performance by the Investor. The Investor shall have
performed, satisfied and complied in all respects with all
covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the
Investor at or prior to such Closing.
Section 7.2 Conditions Precedent to the Right of the Company to Deliver
a Put Notice and the Obligation of the Investor to Purchase Put Shares.
Following completion of the first Put, the right of the Company to deliver a Put
Notice and the obligation of the Investor hereunder to acquire and pay for the
Put Shares incident to a Closing is subject to the satisfaction, on (i) the
applicable Put Date and (ii) the applicable Closing Date (each a "Condition
Satisfaction Date"), of each of the following conditions:
(a) Registration of the Registrable Securities with the SEC.
As set forth in the Registration Rights Agreement, the Company
shall have filed with the SEC: (i) a Registration Statement
covering the resale of the Common Stock purchased by the
Investor through the first Put that shall have been declared
effective by the SEC in no event later than one hundred and
fifty (150) days after the Subscription Date, and (ii) a
Registration Statement covering the resale of the Common Stock
purchased by the Investor through each subsequent Put that
shall have been declared effective by the SEC in no event
later than ninety (90) days after the applicable Closing Date.
(b) Effective Registration Statement. As set forth in the
Registration Rights Agreement, each Registration Statement
shall have previously become effective and shall remain
effective on each Condition Satisfaction Date and (i) neither
the Company nor the Investor shall have received notice that
the SEC has issued or intends to issue a stop order with
respect to a Registration Statement or that the SEC otherwise
has suspended or withdrawn the effectiveness of a Registration
Statement, either temporarily or permanently, or intends or
has threatened to do so (unless the SEC's concerns have been
addressed and the Investor is reasonably satisfied that the
SEC no longer is considering or intends to take such action),
(ii) no other suspension of the use or withdrawal of the
effectiveness of such Registration Statement or related
prospectus shall exist and (iii) the Company shall have
notified the Investor in writing at least 15 days prior to the
delivery of any Put Notice that the Registration Statement
covering the Registrable Securities purchased by the Investor
through the immediately preceding Put has been declared
effective by the SEC.
(c) Accuracy of the Company's Representations and Warranties.
The representations and warranties of the Company shall be
true and correct as of each Condition Satisfaction Date as
though made at each such time (except for representations and
warranties specifically made as of a particular date).
(d) Performance by the Company. The Company shall have
performed, satisfied and complied in all respects with all
covenants, agreements and conditions required by this
Agreement, the Registration Rights Agreement and the
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<PAGE> 15
Warrants to be performed, satisfied or complied with by the
Company at or prior to each Condition Satisfaction Date.
(e) No Injunction. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted,
entered, promulgated or adopted by any court or governmental
authority of competent jurisdiction that prohibits the
transactions contemplated by this Agreement or otherwise has a
Material Adverse Effect, and no actions, suits or proceedings
shall be in progress, pending or threatened by any Person,
that seek to enjoin or prohibit the transactions contemplated
by this Agreement or otherwise could reasonably be expected to
have a Material Adverse Effect. For purposes of this paragraph
(e), no proceeding shall be deemed pending or threatened
unless one of the parties has received written or oral
notification thereof prior to the applicable Closing Date.
(f) No Suspension of Trading In or Delisting of Common Stock.
The trading of the Common Stock shall not have been suspended
by the SEC, the Principal Market or the NASD and the Common
Stock shall have been approved for listing or quotation on and
shall not have been delisted from the Principal Market. The
issuance of shares of Common Stock with respect to the
applicable Closing, if any, shall not violate the shareholder
approval requirements of the Principal Market.
(g) Legal Opinion. The Company shall have caused to be
delivered to the Investor, within five (5) Trading Days of the
effective date of a Registration Statement, an opinion of the
Company's independent counsel in the form of Exhibit E hereto,
addressed to the Investor.
(h) Due Diligence. No dispute between the Company and the
Investor shall exist pursuant to Section 7.3 as to the
adequacy of the disclosure contained in the Registration
Statement.
(i) Ten Percent Limitation. On each Closing Date, the number
of Put Shares then to be purchased by the Investor shall not
exceed the number of such shares that, when aggregated with
all other shares of Registrable Securities then owned by the
Investor beneficially or deemed beneficially owned by the
Investor, would result in the Investor owning no more than
9.9% of all of such Common Stock as would be outstanding on
such Closing Date, as determined in accordance with Section 16
of the Exchange Act and the regulations promulgated
thereunder. For purposes of this Section, in the event that
the amount of Common Stock outstanding as determined in
accordance with Section 16 of the Exchange Act and the
regulations promulgated thereunder is greater on a Closing
Date than on the date upon which the Put Notice associated
with such Closing Date is given, the amount of Common Stock
outstanding on such Closing Date shall govern for purposes of
determining whether the Investor, when aggregating all
purchases of Common Stock made pursuant to this Agreement and,
if any, Warrant Shares would own more than 9.9% of the Common
Stock following such Closing Date.
(j) Minimum Sale Price. The Sale Price equals or exceeds the
Floor Price on each of the seven Trading Days immediately
preceding the Subscription Date and on each Trading Day during
any Put Notice Period, and the Lowest Average Price with
respect to any Put Date equals or exceeds the Floor Price.
(k) Minimum Average Daily Trading Volume. The Average Daily
Trading Volume for the Common Stock equals or exceeds 20,000
shares per Trading Day during the thirty (30) Trading Day
period immediately preceding the Subscription Date and during
any applicable Put Notice Period.
(l) No Knowledge. The Company shall have no knowledge of any
event more likely than not to have the effect of causing any
Registration Statement to be suspended or otherwise
ineffective (which event is more likely than not to occur
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<PAGE> 16
within the fifteen Trading Days following the Trading Day on
which such Notice is deemed delivered).
(m) Minimum Time Interval. The Minimum Time Interval shall
have elapsed since the immediately preceding Put Date.
(n) Shareholder Vote. The issuance of shares of Common Stock
with respect to the applicable Closing, if any, shall not
violate the shareholder approval requirements of the Principal
Market.
(o) No Lock-up Agreement. The Investor shall not be a party to
any effective "lock-up" agreement in connection with a
Piggyback Registration (as defined in the Registration Rights
Agreement), including, without limitation, the type of
"lock-up" agreement described in Section 1(b) of the
Registration Rights Agreement.
(p) Other. On each Condition Satisfaction Date, the Investor
shall have received and been reasonably satisfied with such
other certificates and documents as shall have been reasonably
requested by the Investor in order for the Investor to confirm
the Company's satisfaction of the conditions set forth in this
Section 7.2., including, without limitation, a certificate in
substantially the form and substance of Exhibit F hereto,
executed in either case by an executive officer of the Company
and to the effect that all the conditions to such Closing
shall have been satisfied as at the date of each such
certificate.
Section 7.3 Due Diligence Review; Non-Disclosure of Non-Public
Information.
(a) The Company shall make available for inspection and review
by the Investor, advisors to and representatives of the
Investor (who may or may not be affiliated with the Investor
and who are reasonably acceptable to the Company), any
Underwriter, any Registration Statement or amendment or
supplement thereto or any blue sky, NASD or other filing, all
financial and other records, all SEC Documents and other
filings with the SEC, and all other corporate documents and
properties of the Company as may be reasonably necessary for
the purpose of such review, and cause the Company's officers,
directors and employees to supply all such information
reasonably requested by the Investor or any such
representative, advisor or Underwriter in connection with such
Registration Statement (including, without limitation, in
response to all questions and other inquiries reasonably made
or submitted by any of them), prior to and from time to time
after the filing and effectiveness of such Registration
Statement for the sole purpose of enabling the Investor and
such representatives, advisors and Underwriters and their
respective accountants and attorneys to conduct initial and
ongoing due diligence with respect to the Company and the
accuracy of such Registration Statement.
(b) Each of the Company, its officers, directors, employees
and agents shall in no event disclose non-public information
to the Investor, advisors to or representatives of the
Investor unless prior to disclosure of such information the
Company identifies such information as being non-public
information and provides the Investor, such advisors and
representatives with the opportunity to accept or refuse to
accept such non-public information for review. The Company
may, as a condition to disclosing any non-public information
hereunder, require the Investor's advisors and representatives
to enter into a confidentiality agreement in form reasonably
satisfactory to the Company and the Investor.
(c) Nothing herein shall require the Company to disclose
non-public information to the Investor or its advisors or
representatives, and the Company represents that it does not
disseminate non-public information to any investors
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<PAGE> 17
who purchase stock in the Company in a public offering, to
money managers or to securities analysts; provided, however,
that notwithstanding anything herein to the contrary, the
Company shall, as hereinabove provided, immediately notify the
advisors and representatives of the Investor and any
Underwriters of any event or the existence of any circumstance
(without any obligation to disclose the specific event or
circumstance) of which it becomes aware, constituting
non-public information (whether or not requested of the
Company specifically or generally during the course of due
diligence by such persons or entities), which, if not
disclosed in the prospectus included in the applicable
Registration Statement would cause such prospectus to include
a material misstatement or to omit a material fact required to
be stated therein in order to make the statements, therein, in
light of the circumstances in which they were made, not
misleading. Nothing contained in this Section 7.3 shall be
construed to mean that such persons or entities other than the
Investor (without the written consent of the Investor prior to
disclosure of such information) may not obtain non-public
information in the course of conducting due diligence in
accordance with the terms and conditions of this Agreement and
nothing herein shall prevent any such persons or entities from
notifying the Company of their opinion that based on such due
diligence by such persons or entities, that such Registration
Statement contains an untrue statement of a material fact or
omits a material fact required to be stated in such
Registration Statement or necessary to make the statements
contained therein, in light of the circumstances in which they
were made, not misleading.
ARTICLE VIII
LEGENDS
Section 8.1 Legends. Each of the Warrant and, unless otherwise provided
below, each certificate representing Registrable Securities will bear the
following legend (the "Legend"):
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY OTHER APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN
RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND SUCH OTHER SECURITIES LAWS. NEITHER THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED OR OTHERWISE
DISPOSED OF, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO A TRANSACTION THAT IS EXEMPT
FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS
CERTIFICATE IS THE BENEFICIARY OF CERTAIN OBLIGATIONS OF THE COMPANY
SET FORTH IN A STOCK PURCHASE AGREEMENT BETWEEN INFOCURE CORPORATION
AND CRESCENT INTERNATIONAL LIMITED DATED AS OF SEPTEMBER 28, 1998. A
COPY OF THE PORTION OF THE AFORESAID AGREEMENT EVIDENCING SUCH
OBLIGATIONS MAY BE OBTAINED FROM THE COMPANY'S EXECUTIVE OFFICES.
As soon as practicable after the execution and delivery hereof, but in
any event within five (5) Trading Days hereafter, the Company shall issue to the
transfer agent for its Common Stock (and to any substitute or replacement
transfer agent for its Common Stock upon the Company's appointment of any such
substitute or replacement transfer agent) instructions in substantially the form
of Exhibit G hereto, with a copy to the Investor. Other than as required as
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<PAGE> 18
a result of change in law, such instructions shall be irrevocable by the Company
from and after the date hereof or from and after the issuance thereof to any
such substitute or replacement transfer agent, as the case may be, except as
otherwise expressly provided in the Registration Rights Agreement. It is the
intent and purpose of such instructions, as provided therein, to require the
transfer agent for the Common Stock from time to time upon transfer of
Registrable Securities by the Investor to issue certificates evidencing such
Registrable Securities free of the Legend during the following periods and under
the following circumstances and without consultation by the transfer agent with
the Company or its counsel and without the need for any further advice or
instruction or documentation to the transfer agent by or from the Company or its
counsel or the Investor:
(a) At any time after the applicable Effective Date, upon
surrender of one or more certificates evidencing Common Stock
that bear the Legend, to the extent accompanied by a notice
requesting the issuance of new certificates free of the Legend
to replace those surrendered; provided that (i) the applicable
Registration Statement shall then be effective and (ii) if
reasonably requested by the transfer agent the Investor
confirms to the transfer agent that the Investor has
transferred the Registrable Securities pursuant to such
Registration Statement and has complied with the prospectus
delivery requirement.
(b) At any time upon any surrender of one or more certificates
evidencing Registrable Securities that bear the Legend, to the
extent accompanied by a notice requesting the issuance of new
certificates free of the Legend to replace those surrendered
and containing representations that (i) the Investor is
permitted to dispose of such Registrable Securities without
limitation as to amount or manner of sale pursuant to Rule
144(k) under the Securities Act.
Section 8.2 No Other Legend or Stock Transfer Restrictions. No legend
other than the one specified in Section 8.1 has been or shall be placed on the
share certificates representing the Common Stock and no instructions or "stop
transfers orders," so called, "stock transfer restrictions," or other
restrictions have been or shall be given to the Company's transfer agent with
respect thereto other than as expressly set forth in this Article VIII.
Section 8.3 Investor's Compliance. Nothing in this Article VIII shall
affect in any way the Investor's obligations under any agreement to comply with
all applicable securities laws upon resale of the Common Stock.
ARTICLE IX
INDEMNIFICATION
Section 9.1 Indemnification. (a) The Company agrees to indemnify and
hold harmless the Investor, its partners, affiliates, officers, directors,
employees, and duly authorized agents, and each Person or entity, if any, who
controls the Investor within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, together with the Controlling Persons (as
defined in the Registration Rights Agreement) from and against any Damages,
joint or several, and any action in respect thereof to which the Investor, its
partners, affiliates, officers, directors, employees, and duly authorized
agents, and any such Controlling Person becomes subject to, resulting from,
arising out of or relating to any misrepresentation, breach of warranty or
nonfulfillment of or failure to perform any covenant or agreement on the part of
Company contained in this Agreement, as such Damages are incurred, unless such
Damages result primarily from the Investor's gross negligence, recklessness or
bad faith in performing its obligations under this Agreement; provided, however,
that the maximum aggregate liability of the Company shall be limited to the
amount actually invested by the Investor under this Agreement, and provided
further that in no event shall this provision be deemed to limit any rights to
indemnification arising under the Registration Rights Agreement.
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<PAGE> 19
(b) The Investor agrees to indemnify and hold harmless the
Company, its partners, affiliates, officers, directors,
employees, and duly authorized agents, and each Person or
entity, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange
Act, together with the Controlling Persons from and against
any Damages, joint or several, and any action in respect
thereof to which the Company, its partners, affiliates,
officers, directors, employees, and duly authorized agents,
and any such Controlling Person becomes subject to, resulting
from, arising out of or relating to any misrepresentation,
breach of warranty or nonfulfillment of or failure to perform
any covenant or agreement on the part of the Investor
contained in this Agreement, as such Damages are incurred,
unless such Damages result primarily from the Company's gross
negligence, recklessness or bad faith in performing its
obligations under this Agreement; provided, however, that the
maximum aggregate liability of the Investor shall be limited
to the amount actually invested by the Investor under this
Agreement, and provided further that in no event shall this
provision be deemed to limit any rights to indemnification
arising under the Registration Rights Agreement.
Section 9.2 Method of Asserting Indemnification Claims. All claims for
indemnification by any Indemnified Party (as defined below) under Section 9.1
shall be asserted and resolved as follows:
(a) In the event any claim or demand in respect of which any
person claiming indemnification under any provision of Section
9.1 (an "Indemnified Party") might seek indemnity under
Section 9.1 is asserted against or sought to be collected from
such Indemnified Party by a person other than the Company, the
Investor or any affiliate of the Company or (a "Third Party
Claim"), the Indemnified Party shall deliver a written
notification, enclosing a copy of all papers served, if any,
and specifying the nature of and basis for such Third Party
Claim and for the Indemnified Party's claim for
indemnification that is being asserted under any provision of
Section 12.2 against any person (the "Indemnifying Party"),
together with the amount or, if not then reasonably
ascertainable, the estimated amount, determined in good faith,
of such Third Party Claim (a "Claim Notice") with reasonable
promptness to the Indemnifying Party. If the Indemnified Party
fails to provide the Claim Notice with reasonable promptness
after the Indemnified Party receives notice of such Third
Party Claim, the Indemnifying Party shall not be obligated to
indemnify the Indemnified Party with respect to such Third
Party Claim to the extent that the Indemnifying Party's
ability to defend has been irreparably prejudiced by such
failure of the Indemnified Party. The Indemnifying Party shall
notify the Indemnified Party as soon as practicable within the
period ending thirty (30) calendar days following receipt by
the Indemnifying Party of either a Claim Notice or an
Indemnity Notice (as defined below) (the "Dispute Period")
whether the Indemnifying Party disputes its liability or the
amount of its liability to the Indemnified Party under Section
9.1 and whether the Indemnifying Party desires, at its sole
cost and expense, to defend the Indemnified Party against such
Third Party Claim.
(i) If the Indemnifying Party notifies the
Indemnified Party within the Dispute Period that the
Indemnifying Party desires to defend the Indemnified
Party with respect to the Third Party Claim pursuant
to this Section 9.2(a), then the Indemnifying Party
shall have the right to defend, with counsel
reasonably satisfactory to the Indemnified Party, at
the sole cost and expense of the Indemnifying Party,
such Third Party Claim by all appropriate
proceedings, which proceedings shall be vigorously
and diligently prosecuted by the Indemnifying Party
to a final conclusion or
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will be settled at the discretion of the Indemnifying
Party (but only with the consent of the Indemnified
Party in the case of any settlement that provides for
any relief other than the payment of monetary damages
or that provides for the payment of monetary damages
as to which the Indemnified Party shall not be
indemnified in full pursuant to Section 9.1). The
Indemnifying Party shall have full control of such
defense and proceedings, including any compromise or
settlement thereof; provided, however, that the
Indemnified Party may, at the sole cost and expense
of the Indemnified Party, at any time prior to the
Indemnifying Party's delivery of the notice referred
to in the first sentence of this clause (i), file any
motion, answer or other pleadings or take any other
action that the Indemnified Party reasonably believes
to be necessary or appropriate to protect its
interests; and provided further, that if requested by
the Indemnifying Party, the Indemnified Party will,
at the sole cost and expense of the Indemnifying
Party, provide reasonable cooperation to the
Indemnifying Party in contesting any Third Party
Claim that the Indemnifying Party elects to contest.
The Indemnified Party may participate in, but not
control, any defense or settlement of any Third Party
Claim controlled by the Indemnifying Party pursuant
to this clause (i), and except as provided in the
preceding sentence, the Indemnified Party shall bear
its own costs and expenses with respect to such
participation. Notwithstanding the foregoing, the
Indemnified Party may take over the control of the
defense or settlement of a Third Party Claim at any
time if it irrevocably waives its right to indemnity
under Section 9.1 with respect to such Third Party
Claim.
(ii) If the Indemnifying Party fails to notify the
Indemnified Party within the Dispute Period that the
Indemnifying Party desires to defend the Third Party
Claim pursuant to Section 9.2(a), or if the
Indemnifying Party gives such notice but fails to
prosecute vigorously and diligently or settle the
Third Party Claim, or if the Indemnifying Party fails
to give any notice whatsoever within the Dispute
Period, then the Indemnified Party shall have the
right to defend, at the sole cost and expense of the
Indemnifying Party, the Third Party Claim by all
appropriate proceedings, which proceedings shall be
prosecuted by the Indemnified Party in a reasonable
manner and in good faith or will be settled at the
discretion of the Indemnified Party (with the consent
of the Indemnifying Party, which consent will not be
unreasonably withheld). The Indemnified Party will
have full control of such defense and proceedings,
including any compromise or settlement thereof;
provided, however, that if requested by the
Indemnified Party, the Indemnifying Party will, at
the sole cost and expense of the Indemnifying Party,
provide reasonable cooperation to the Indemnified
Party and its counsel in contesting any Third Party
Claim which the Indemnified Party is contesting.
Notwithstanding the foregoing provisions of this
clause (ii), if the Indemnifying Party has notified
the Indemnified Party within the Dispute Period that
the Indemnifying Party disputes its liability or the
amount of its liability hereunder to the Indemnified
Party with respect to such Third Party Claim and if
such dispute is resolved in favor of the Indemnifying
Party in the manner provided in clause (iii) below,
the Indemnifying Party will not be required to bear
the costs and expenses of the Indemnified Party's
defense pursuant to this clause (ii) or of the
Indemnifying Party's participation therein at the
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Indemnified Party's request, and the Indemnified
Party shall reimburse the Indemnifying Party in full
for all reasonable costs and expenses incurred by the
Indemnifying Party in connection with such
litigation. The Indemnifying Party may participate
in, but not control, any defense or settlement
controlled by the Indemnified Party pursuant to this
clause (ii), and the Indemnifying Party shall bear
its own costs and expenses with respect to such
participation.
(iii) If the Indemnifying Party notifies the
Indemnified Party that it does not dispute its
liability or the amount of its liability to the
Indemnified Party with respect to the Third Party
Claim under Section 9.1 or fails to notify the
Indemnified Party within the Dispute Period whether
the Indemnifying Party disputes its liability or the
amount of its liability to the Indemnified Party with
respect to such Third Party Claim, the Loss in the
amount specified in the Claim Notice shall be
conclusively deemed a liability of the Indemnifying
Party under Section 9.1 and the Indemnifying Party
shall pay the amount of such Loss to the Indemnified
Party on demand. If the Indemnifying Party has timely
disputed its liability or the amount of its liability
with respect to such claim, the Indemnifying Party
and the Indemnified Party shall proceed in good faith
to negotiate a resolution of such dispute, and if not
resolved through negotiations within the Resolution
Period, such dispute shall be resolved by arbitration
in accordance with paragraph (c) of this Section 9.2.
(b) In the event any Indemnified Party should have a claim
under Section 9.1 against the Indemnifying Party that does not
involve a Third Party Claim, the Indemnified Party shall
deliver a written notification of a claim for indemnity under
Section 9.1 specifying the nature of and basis for such claim,
together with the amount or, if not then reasonably
ascertainable, the estimated amount, determined in good faith,
of such claim (an "Indemnity Notice") with reasonable
promptness to the Indemnifying Party. The failure by any
Indemnified Party to give the Indemnity Notice shall not
impair such party's rights hereunder except to the extent that
the Indemnifying Party demonstrates that it has been
irreparably prejudiced thereby. If the Indemnifying Party
notifies the Indemnified Party that it does not dispute the
claim or the amount of the claim described in such Indemnity
Notice or fails to notify the Indemnified Party within the
Dispute Period whether the Indemnifying Party disputes the
claim or the amount of the claim described in such Indemnity
Notice, the Loss in the amount specified in the Indemnity
Notice will be conclusively deemed a liability of the
Indemnifying Party under Section 9.1 and the Indemnifying
Party shall pay the amount of such Loss to the Indemnified
Party on demand. If the Indemnifying Party has timely disputed
its liability or the amount of its liability with respect to
such claim, the Indemnifying Party and the Indemnified Party
shall proceed in good faith to negotiate a resolution of such
dispute, and if not resolved through negotiations within the
Resolution Period, such dispute shall be resolved by
arbitration in accordance with paragraph (c) of this Section
9.2.
(c) Any dispute under this Agreement or the Warrants shall be
submitted to arbitration (including, without limitation,
pursuant to this Section 12.3) and shall be finally and
conclusively determined by the decision of a board of
arbitration consisting of three (3) members (the "Board of
Arbitration") selected as hereinafter provided. Each of the
Indemnified Party and the Indemnifying Party shall select one
(1) member and the third member shall be selected by mutual
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agreement of the other members, or if the other members fail
to reach agreement on a third member within twenty (20) days
after their selection, such third member shall thereafter be
selected by the American Arbitration Association upon
application made to it for such purpose by the Indemnified
Party. The Board of Arbitration shall meet on consecutive
business days in New York County, New York or such other place
as a majority of the members of the Board of Arbitration
determines more appropriate, and shall reach and render a
decision in writing (concurred in by a majority of the members
of the Board of Arbitration) with respect to the amount, if
any, which the Indemnifying Party is required to pay to the
Indemnified Party in respect of a claim filed by the
Indemnified Party. In connection with rendering its decisions,
the Board of Arbitration shall adopt and follow such rules and
procedures as a majority of the members of the Board of
Arbitration deems necessary or appropriate. To the extent
practical, decisions of the Board of Arbitration shall be
rendered no more than thirty (30) calendar days following
commencement of proceedings with respect thereto. The Board of
Arbitration shall cause its written decision to be delivered
to the Indemnified Party and the Indemnifying Party. Any
decision made by the Board of Arbitration (either prior to or
after the expiration of such thirty (30) calendar day period)
shall be final, binding and conclusive on the Indemnified
Party and the Indemnifying Party and entitled to be enforced
to the fullest extent permitted by law and entered in any
court of competent jurisdiction. The non-prevailing party to
any arbitration shall bear the expense of both parties in
relation thereto, including but not limited to the parties'
attorneys' fees, if any, and the expenses and fees of the
Board of Arbitration.
ARTICLE X
MISCELLANEOUS
Section 10.1 Fees and Expenses. Each of the Company and the Investor
agrees to pay its own expenses incident to the performance of its obligations
hereunder, except that the Company shall pay the fees, expenses and
disbursements of the Investor's counsel in an amount not to exceed $10,000.
Section 10.2 Reporting Entity for the Common Stock. The reporting
entity relied upon for the determination of the trading price or trading volume
of the Common Stock on any given Trading Day for the purposes of this Agreement
shall be the American Stock Exchange. The written mutual consent of the Investor
and the Company shall be required to employ any other reporting entity.
Section 10.3 Brokerage. Each of the parties hereto represents that it
has no dealings in connection with this transaction with any finder or broker
which would impose a legal obligation to pay any fee or commission. The Company
on the one hand, and the Investor, on the other hand, agree to indemnify the
other against and hold the other harmless from any and all liabilities to any
persons claiming brokerage commissions or finder's fees on account of services
purported to have been rendered on behalf of the indemnifying party in
connection with this Agreement or the transactions contemplated hereby.
Section 10.4 Notices. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (i) personally served,
(ii) deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice given in accordance herewith. Any notice or
other communication required or permitted
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to be given hereunder shall be deemed effective (a) upon hand delivery or
delivery by facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a
business day during normal business hours where such notice is to be received),
or the first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be:
If to the Company:
Infocure Corporation
1765 The Exchange, Suite 450
Atlanta, GA 30339
Attention: Richard Perlman, Chairman
Telephone: (770) 221 9990
Facsimile: (770) 857 1300
with a copy (which shall not constitute notice) to:
Morris, Manning & Martin, LLP
1600 Atlanta Financial Center
3343 Peachtree Road, N.E.
Atlanta, GA 30326
Attention: Oby Brewer, Esq.
Telephone: 404 233 7000
Facsimile: 404 365 9532
If to the Investor:
Crescent International Limited
c/o Greenlight (Switzerland) SA
84, av Louis-Casai, P.O. Box 161
1216 Geneva, Cointrin
Switzerland
Attention: Melvyn Craw/Maxi Brezzi
Telephone: +41 22 791 72 56
Facsimile: +41 22 929 53 94
with a copy (which shall not constitute notice) to:
Rogers & Wells LLP
200 Park Avenue, 52nd Floor
New York, NY 10166
Attention: Sara Hanks, Esq.
Telephone: (212) 878-8000
Facsimile: (212) 878-8375
Either party hereto may from time to time change its address or
facsimile number for notices under this Section by giving at least ten
(10) days' prior written notice of such changed address or facsimile
number to the other party hereto.
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Section 10.5 Assignment. Neither this Agreement nor any rights of the
Investor or the Company hereunder may be assigned by either party to any other
person. Notwithstanding the foregoing, the Investor's interest in this Agreement
may be assigned at any time, in whole or in part, to any affiliate of the
Investor upon the prior written consent of the Company, which consent shall not
to be unreasonably withheld provided, however, that any such assignment or
transfer shall relieve the Investor of its duties under this Agreement only upon
performance thereof by any such assignee or transferee and no such assignment
shall alter the undertaking of the Parent Company to the Investor under the
Letter of Comfort.
Section 10.6 Amendment; No Waiver. No party shall be liable or bound to
any other party in any manner by any warranties, representations or covenants
except as specifically set forth in this Agreement or therein. Except as
expressly provided in this Agreement, neither this Agreement nor any term hereof
may be amended, waived, discharged or terminated other than by a written
instrument signed by both parties hereto. The failure of the either party to
insist on strict compliance with this Agreement, or to exercise any right or
remedy under this Agreement, shall not constitute a waiver of any rights
provided under this Agreement, nor estop the parties from thereafter demanding
full and complete compliance nor prevent the parties from exercising such a
right or remedy in the future.
Section 10.7 Annexes and Exhibits; Entire Agreement. All annexes and
exhibits to this Agreement are incorporated herein by reference and shall
constitute part of this Agreement. This Agreement, the Warrants, the
Registration Rights Agreement and the Letter Agreement set forth the entire
agreement and understanding of the parties relating to the subject matter hereof
and thereof and supersede all prior and contemporaneous agreements, negotiations
and understandings between the parties, both oral and written, relating to the
subject matter hereof.
Section 10.8 Survival. The provisions of Articles VI, VIII, IX and X,
and of Section 7.3, shall survive the termination of this Agreement.
Section 10.9 Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that such severability shall be
ineffective if it materially changes the economic benefit of this Agreement to
any party.
Section 10.10 Title and Subtitles. The titles and subtitles used in
this Agreement are used for the convenience of reference and are not to be
considered in construing or interpreting this Agreement.
Section 10.11 Counterparts. This Agreement may be executed in multiple
counterparts, each of which may be executed by less than all of the parties and
shall be deemed to be an original instrument which shall be enforceable against
the parties actually executing such counterparts and all of which together shall
constitute one and the same instrument.
Section 10.12 Choice of Law. This Agreement shall be construed under
the laws of the State of New York.
Section 10.13 Other Expenses. In the event that a dispute between the
parties is not determined by a Board of Arbitration, the non-prevailing party in
any action, suit or proceeding shall bear all investigative, legal and other
expenses reasonably incurred in connection with, and any and all amounts paid in
defense or settlement of such action, suit or proceeding.
IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase
Agreement to be executed by the undersigned, thereunto duly authorized, as of
the date first set forth above.
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<PAGE> 25
CRESCENT INTERNATIONAL LIMITED
By:
-------------------------------------
Melvyn Craw
INFOCURE CORPORATION
By:
-------------------------------------
Richard Perlman
Chairman
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<PAGE> 26
ANNEX A
MAXIMUM PUT AMOUNT
Subject to Section 2.1(b), the Maximum Put Amount with respect to a Put
shall be determined based on the daily average trading value of the Common Stock
in denomination of US dollars (the "Daily Average Trading Value") during thirty
(30) Trading Days immediately before the relevant Put Date.
<TABLE>
<CAPTION>
Minimum Daily Average Trading Value ($) Maximum Put Amount ($)
- --------------------------------------- ----------------------
<S> <C>
$200,000 - 499,999 $1,000,000
$500,000 - 799,999 $1,500,000
$800,000 or more $2,000,000
</TABLE>
Daily Average Trading Value is determined, with respect to each Trading
Day, as the product of the trading volume for such Trading Day multiplied by the
Sale Price, as published by the Principal Trading Market.
35
<PAGE> 1
EXHIBIT 7.2
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
September 28, 1998, is made and entered into by and between INFOCURE CORP., a
Delaware corporation (the "Company"), and CRESCENT INTERNATIONAL LIMITED, a
Bermuda corporation (the "Investor").
WHEREAS, the Company and the Investor have entered into that certain
Stock Purchase Agreement, dated as of the date hereof (the "Stock Purchase
Agreement"), pursuant to which the Company will issue, from time to time, to the
Investor up to $10,000,000 worth of shares of Common Stock, at par value $0.001
per share, of the Company (the "Common Stock");
WHEREAS, pursuant to the terms of, and in partial consideration for,
the Investor entering into the Stock Purchase Agreement, the Company has issued
to the Investor an incentive warrant dated as of the date hereof, exercisable
from time to time within five (5) years following the date of issuance (the
"Incentive Warrant") for the purchase of an aggregate of up to 100,000 shares of
Common Stock at a price specified in such Incentive Warrant;
WHEREAS, pursuant to the terms of, and in partial consideration for,
the Investor entering into the Stock Purchase Agreement, the Company will issue
to the Investor the Additional Warrant, which may become exercisable from time
to time as described in the Stock Purchase Agreement (the "Additional Warrant"
and together with the Incentive Warrant, the "Warrants") for the purchase of a
number of shares of Common Stock and at a price to be determined as described in
each such Additional Warrant;
WHEREAS, pursuant to the terms of, and in partial consideration for,
the Investor's agreement to enter into the Stock Purchase Agreement, the Company
has agreed to provide the Investor with certain registration rights with respect
to the shares issued to the Investor and any additional shares of Common Stock
issued or distributed to the Investor by way of a dividend, stock split, or
other distribution with respect of the Shares, or acquired by way of any rights
offering or similar offering made in respect of the shares (collectively, the
"Registrable Securities");
NOW, THEREFORE, in consideration of the premises, the representations,
warranties, covenants and agreements contained herein, in the Warrants, and in
the Stock Purchase Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, intending to be legally
bound hereby, the parties hereto agree as follows (capitalized terms used herein
and not defined herein shall have the respective meanings ascribed to them in
the Stock Purchase Agreement):
ARTICLE I
REGISTRATION RIGHTS
Section 1.1. REGISTRATION STATEMENTS.
(a) Filing of Registration Statements. Subject to the terms
and conditions of this Agreement the Company shall file with the SEC on or
before:
(i) the end of a twenty (20) calendar day period
immediately following the Subscription Date, a registration statement or
statements on such form promulgated by the SEC for which the Company qualifies,
that counsel for the Company shall deem appropriate and which form shall be
available for the sale of the shares of Common Stock purchased by the Investor
through the first Put (the "Initial Shares"), the Incentive Warrant
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<PAGE> 2
Shares, and a number of Additional Warrant Shares equal to 125% of the Initial
Shares to be registered thereunder in accordance with the provisions of this
Agreement (the "Initial Registration Statement"); and
(ii) the end of a twenty (20) calendar day period
immediately following each Closing Date, a registration statement on such form
promulgated by the SEC for which the Company qualifies, that counsel for the
Company shall deem appropriate and which form shall be available for the sale of
the shares of Common Stock purchased by the Investor through the applicable Put
(the "Applicable Shares") and a number of Additional Warrant Shares equal to
125% of the Applicable Shares to be registered thereunder in accordance with the
provisions of this Agreement (each a "Subsequent Registration Statement" and
together with the Initial Registration Statement, the "Registration
Statements").
(b) Piggyback Registrations. If the Company at any time
proposes to commence a public offering of Company securities of the same class
as any Registrable Securities, after the date hereof, it shall each such time
provide prompt written notice to the Investor of its intention to do so,
including a description of the intended method of the Company's disposition of
such securities, and of the Investor's rights. The Investor shall be able to
request that the underwriter register under the secondary public offering any
unsold Registrable Securities not covered by any effective Registration
Statement shares held by the Investor on the effective date of the registration
statement relating to such secondary public offering (effecting a "Piggyback
Registration"). The Company will pay all Registration Expenses (as defined in
Section 2.2 hereof) incurred in connection with each Piggyback Registration. If
(i) a Piggyback Registration pursuant to this Section 1.1(b) involves an
underwritten offering of the securities being registered, whether or not for
sale for the account of the Company, to be distributed by or through one or more
underwriters under underwriting terms appropriate for such a transaction, and
(ii) the managing underwriter of such underwritten offering shall inform the
Company of its belief that the distribution of all or a specified number of such
unsold shares held by the Investor concurrently with the securities being
distributed by such underwriters would interfere with the successful marketing
of the securities being distributed by such underwriters (such writing to state
the basis of such belief and the approximate number of such shares which may be
distributed without such effect), then the Company may, upon written notice to
the Investor, reduce (the "Underwriter's Cut-back") if and to the extent stated
by such managing underwriter to be necessary to eliminate such effect the number
of such unsold shares the registration of which shall have been requested by the
Investor so that the resultant aggregate number of such securities so included
in such registration by the Investor and any and all other stockholders shall be
equal to the number of shares that such managing underwriter shall indicate may
be included for sale by selling stockholders. The Underwriter's Cut-back shall
also be applied by the Company pro rata among the shares of other stockholders
whose shares are to be included in such registration statement unless the
Company's agreements with such other stockholders do not permit the Company to
apply the Underwriter's Cut-back to reduce the number of shares of such other
stockholders;
and any securities of the Company so excluded shall be withdrawn from and
shall not be included in such Piggyback Registration, but excluded
securities shall be covered by the applicable Registration Statement.
In the event that Investor elects to include Registrable
Securities in a Piggyback Registration, then at the request of the
underwriter, Investor shall timely execute and deliver to the underwriter a
"lock-up" agreement (in customary form as requested by the Underwriter)
pursuant to which Investor shall agree not to sell any other shares of
Common Stock purchased pursuant to the Stock Purchase Agreement or the
Warrants, other than the
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<PAGE> 3
Registrable Securities included in the Piggyback Registration, for a period
which is the same as the lock-up period agreed to by executive officers and
directors of the Company, not to exceed 180 days.
The Investor's election to include Registrable Securities in a
Piggyback Registration shall not relieve the Company of its other obligations
under this Agreement.
(c) Effectiveness of the Registration Statements. The Company
shall use its best efforts: (i) to have the Initial Registration Statement
declared effective by the SEC in no event later than one hundred and fifty (150)
calendar days after the Subscription Date, (ii) to have each Subsequent
Registration Statement declared effective by the SEC in no event later than
ninety (90) calendar days after each applicable Closing Date and (iii) to insure
that each Registration Statement remains in effect for a period ending 180 days
following the earlier of termination of the Commitment Period and termination of
the Investor's obligations pursuant to Section 2.7 of the Stock Purchase
Agreement; provided that such period shall be extended one day for each day
after the applicable Effective Date, that the Registration Statement covering
(i) shares purchased by the Investor through the applicable Put and (ii) the
Additional Warrant Shares related to such Put, is not effective during the
period such Registration Statement is required to be effective pursuant to this
Agreement.
(d) Failure to Obtain or Maintain Effectiveness of
Registration Statements. In the event the Company fails for any reason to obtain
the effectiveness of any of the Registration Statements within the time periods
set forth in Section 1.1(c), or unless the Registrable Securities covered by any
such Registration Statement have become freely tradeable pursuant to Rule 144(k)
of the Securities Act or have been otherwise sold, if the Company fails for any
reason to maintain the effectiveness of any of the Registration Statements (or
the underlying prospectus) for a period ending 180 days following the earlier of
termination of the Commitment Period and termination of the Investor's
obligations pursuant to Section 2.7 of the Stock Purchase Agreement (provided
that such period shall be extended one day for each day after the applicable
Effective Date, that the Registration Statement covering (i) shares purchased by
the Investor through the applicable Put and (ii) the Additional Warrant Shares
related to such Put, is not effective during the period such Registration
Statement is required to be effective pursuant to this Agreement), at any time
during any period of such ineffectiveness (an "Ineffective Period"), then, in
either event the Company shall pay to the Investor in immediately available
funds into an account designated by the Investor an amount equal to one and a
half percent (1.5%) of the aggregate Purchase Price of all of the Registrable
Securities then held by the Investor for each calendar month and for each
portion of a calendar month, pro rata, during an Ineffective Period. Such
payments shall be made on the first Trading Day after the earliest to occur of
(i) the expiration of the applicable Ineffective Period and (ii) the last day of
each calendar month during an Ineffective Period.
(e) Failure to Register Sufficient Shares. If an Additional
Warrant becomes exercisable for a number of shares in excess of the number of
Additional Warrant Shares included in the applicable Registration Statement
("Excess Shares"), then the Company shall immediately amend such Registration
Statement (or file a new Registration Statement) to cover the Excess Shares
(such amended or new Registration Statement is referred to herein as an "Excess
Registration Statement") and, subject to Section 1.1(g), the Company shall pay
to the Investor in immediately available funds into an account designated by the
Investor an amount equal to one and a half percent (1.5%) of the product of (x)
the number of Excess Shares multiplied by (y) the Sale Price of the Common Stock
on the applicable Effective Date, for each calendar month and for each portion
of a calendar month, pro rata, during the period from the Effective Date of the
applicable Registration Statement and the Effective Date of the applicable
Excess Registration Statement.
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<PAGE> 4
(f) Liquidated Damages. The Company and the Investor hereto
acknowledge and agree that the sums payable under subsection 1(d) and 1(e)
hereof shall constitute liquidated damages and not penalties. The parties
further acknowledge that (i) the amount of loss or damages likely to be incurred
is incapable or is difficult to estimate precisely, (ii) the amounts specified
in such subsections bear a reasonable proportion and are not plainly or grossly
disproportionate to the probable loss likely to be incurred in connection with
any failure by the Company to obtain or maintain the effectiveness of a
Registration Statement, (iii) one of the reasons for the Company and the
Investor reaching an agreement as to such amounts was the uncertainty and cost
of litigation regarding the question of actual damages, and (iv) the Company and
the Investor are sophisticated business parties and have been represented by
sophisticated and able legal and financial counsel and negotiated this Agreement
at arm's length.
(g) Redemption Option. In lieu of paying the liquidated
damages described in Section 1(d), the Company may redeem any or all of the
Excess Shares by delivering written notice to the Investor of its intention to
redeem such Excess Shares no later than one day following the Effective Date of
the applicable Registration Statement (the "Redemption Option"). If the Company
chooses the Redemption Option, then it shall deliver the Redemption Price (as
defined below) by wire transfer of immediately available funds to an account
designated by the Investor within three (3) Trading Days after delivering notice
of its intention to redeem such Excess Shares. Upon receipt of full payment for
the redeemed Excess Shares, the Investor shall deliver to the Company
certificates representing such redeemed Excess Shares.
Redemption Price shall mean the product of (x) the Sale Price
of one share of Common Stock on the Effective Date of the applicable
Registration Statement multiplied by (y) the number of Excess Shares redeemed by
the Company pursuant to this Section 1(g).
ARTICLE II
REGISTRATION PROCEDURES
Section 2.1. FILINGS; INFORMATION. The Company will effect the
registration of the Registrable Securities in accordance with the
intended methods of disposition thereof as furnished to the Company by
any proposed seller of such Registrable Securities. Without limiting
the foregoing, the Company in each such case will do the following as
expeditiously as possible, but in no event later than the deadline, if
any, prescribed therefor in this Agreement:
(a) The Company shall (i) prepare and file with the SEC a
separate Registration Statement covering shares through each Put, as is defined
in subsection 1.1(a) above; (ii) use its best efforts to cause such filed
Registration Statement to become and remain effective (pursuant to Rule 415
under the Securities Act or otherwise) for the period prescribed by Section
1.1(c); (iii) prepare and file with the SEC such amendments and supplements to
each Registration Statement and the prospectus used in connection therewith as
may be necessary to keep each Registration Statement effective for the time
period prescribed by Section 1.1(c); and (iv) comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by each
Registration Statement during such period in accordance with the intended
methods of disposition by the Investor set forth in each Registration Statement.
(b) The Company shall file all necessary amendments to each
Registration Statement in order to effectuate the purpose of this Agreement, the
Stock Purchase Agreement, and the Warrants.
(c) Five (5) Trading Days prior to filing each Registration
Statement or prospectus, or any amendment or supplement thereto (excluding
amendments deemed to result from the filing of documents incorporated by
reference therein), the Company shall deliver to the
39
<PAGE> 5
Investor and one firm of counsel representing the Investor, in accordance with
the notice provisions of Section 4.8, copies of such Registration Statement as
proposed to be filed, together with exhibits thereto, which documents will be
subject to review by the Investor and such counsel, and thereafter deliver to
the Investor and such counsel, in accordance with the notice provisions of
Section 4.8, such number of copies of such Registration Statement, each
amendment and supplement thereto (in each case including all exhibits thereto),
the prospectus included in such Registration Statement (including each
preliminary prospectus) and such other documents or information as the Investor
or counsel may reasonably request in order to facilitate the disposition of the
Registrable Securities.
(d) The Company shall deliver, in accordance with the notice
provisions of Section 4.8, to each seller of Registrable Securities covered by
each Registration Statement such number of conformed copies of such Registration
Statement and of each amendment and supplement thereto (in each case including
all exhibits and documents incorporated by reference), such number of copies of
the prospectus contained in such Registration Statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 promulgated under the Securities Act relating to such
seller's Registrable Securities, and such other documents, as such seller may
reasonably request to facilitate the disposition of its Registrable Securities.
(e) After the filing of each Registration Statement, the
Company shall promptly notify the Investor of any stop order issued or
threatened by the SEC in connection therewith and take all commercially
reasonable actions required to prevent the entry of such stop order or to remove
it if entered.
(f) The Company shall use its best efforts to (i) register or
qualify the Registrable Securities under such other securities or blue sky laws
of such jurisdictions in the United States as the Investor may reasonably (in
light of its intended plan of distribution) request, and (ii) cause the
Registrable Securities to be registered with or approved by such other
governmental agencies or authorities in the United States as may be necessary by
virtue of the business and operations of the Company and do any and all other
acts and things that may be reasonably necessary or advisable to enable the
Investor to consummate the disposition of the Registrable Securities; provided,
however, that the Company will not be required to qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this paragraph (f), subject itself to taxation in any such jurisdiction,
or consent or subject itself to general service of process in any such
jurisdiction.
(g) The Company shall immediately notify the Investor upon the
occurrence of any of the following events in respect of any Registration
Statement or related prospectus in respect of an offering of Registrable
Securities: (i) receipt of any request by the SEC or any other federal or state
governmental authority for additional information, amendments or supplements to
such Registration Statement or related prospectus; (ii) the issuance by the SEC
or any other federal or state governmental authority of any stop order
suspending the effectiveness of such Registration Statement or the initiation of
any proceedings for that purpose; (iii) receipt of any notification with respect
to the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; (iv) the happening of any event
that makes any statement made in such Registration Statement or related
prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of any
changes in such Registration Statement, related prospectus or documents so that,
in the case of such Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
that in the case of the related
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<PAGE> 6
prospectus, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; and (v) the Company's reasonable determination that a
post-effective amendment to such Registration Statement would be appropriate and
the Company will promptly make available to the Investor any such supplement or
amendment to the related prospectus.
(h) The Company shall enter into customary agreements and take
such other actions as are reasonably required in order to expedite or facilitate
the disposition of such Registrable Securities.
(i) The Company shall make available to the Investor (and will
deliver to Investor's counsel), subject to restrictions imposed by the United
States federal government or any agency or instrumentality thereof, copies of
all correspondence between the SEC and the Company, concerning any Registration
Statement, and will also make available for inspection by the Investor and any
attorney, accountant or other professional retained by the Investor
(collectively, the "Inspectors"), all financial and other records, pertinent
corporate documents and properties of the Company (collectively, the "Records")
as shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers and employees to supply all
information reasonably requested by any Inspectors in connection with any
Registration Statement. Records that the Company determines, in good faith, to
be confidential and that it notifies the Inspectors are confidential shall not
be disclosed by the Inspectors unless (i) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in any Registration
Statement or (ii) the disclosure or release of such Records is requested or
required pursuant to oral questions, interrogatories, requests for information
or documents or a subpoena or other order from a court of competent jurisdiction
or other process; provided, however, that prior to any disclosure or release
pursuant to clause (ii), the Inspectors shall provide the Company with prompt
notice of any such request or requirement so that the Company may seek an
appropriate protective order or waive such Inspectors' obligation not to
disclose such Records; and, provided, further, that if failing the entry of a
protective order or the waiver by the Company permitting the disclosure or
release of such Records, the Inspectors, upon advice of counsel, are compelled
to disclose such Records, the Inspectors may disclose that portion of the
Records that counsel has advised the Inspectors that the Inspectors are
compelled to disclose. The Investor agrees that information obtained by it
solely as a result of such inspections (not including any information obtained
from a third party who, insofar as is known to the Investor after reasonable
inquiry, is not prohibited from providing such information by a contractual,
legal or fiduciary obligation to the Company) shall be deemed confidential and
shall not be used by it as the basis for any market transactions in the
securities of the Company or its affiliates unless and until such information is
made generally available to the public. The Investor further agrees that it
will, upon learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company, at its
expense, to undertake appropriate action to prevent disclosure of the Records
deemed confidential.
(j) To the extent required by law or reasonably necessary to
effect a sale of Registrable Securities in accordance with prevailing business
practices at the time of any sale of Registrable Securities pursuant to a
Registration Statement, the Company shall deliver to the Investor a signed
counterpart, addressed to the Transfer Agent, of an opinion or opinions of
counsel to the Company.
(k) The Company shall otherwise comply with all applicable
rules and regulations of the SEC, including, without limitation, compliance with
applicable reporting requirements under the Exchange Act.
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<PAGE> 7
(l) The Company shall appoint a transfer agent and registrar
for all of the class that includes the Registrable Securities covered by a
Registration Statement not later than the effective date of a Registration
Statement.
(m) The Company may require the Investor to furnish promptly
in writing to the Company such information as may be legally required in
connection with any registration including, without limitation, all such
information as may be requested by the SEC or the National Association of
Securities Dealers. The Investor agrees to provide such information requested in
connection with any registration within five (5) Trading Days after receiving
such written request and the Company shall not be responsible for any delays in
obtaining or maintaining the effectiveness of a Registration Statement caused by
the Investor's failure to timely provide such information. Each seller of
Registrable Securities shall notify the Company as promptly as practicable of
any inaccuracy or change in information previously furnished by such seller to
the Company or of the occurrence of any event, in either case as a result of
which any prospectus relating to the Registrable Securities contains or would
contain an untrue statement of a material fact regarding such seller or its
intended method of disposition of such Registrable Securities or omits to state
any material fact regarding such seller or such seller's intended method of
disposition of such Registrable Securities required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and promptly furnish to the Company
any additional information required to correct and update any previously
furnished information or required so that such prospectus shall not contain,
with respect to such seller or the disposition of such Registrable Securities,
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
Section 2.2. REGISTRATION EXPENSES. In connection with each
Registration Statement, the Company shall pay all registration expenses
incurred in connection with the registration thereunder (the
"Registration Expenses"), including, without limitation: (i) all
registration, filing, securities exchange listing and fees required by
the National Association of Securities Dealers, (ii) all registration,
filing, qualification and other fees and expenses of compliance with
securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of
the Registrable Securities required hereby), (iii) all of the Company's
word processing, duplicating, printing, messenger and delivery
expenses, (iv) the Company's internal expenses (including, without
limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), (v) the fees and expenses
incurred by the Company in connection with the listing of the
Registrable Securities, (vi) reasonable fees and disbursements of
counsel for the Company and customary fees and expenses for independent
certified public accountants retained by the Company hereof), (vii) the
fees and expenses of any special experts retained by the Company in
connection with such registration, (viii) premiums and other costs of
policies of insurance purchased at the discretion of the Company
against liabilities arising out of any public offering of the
Registrable Securities being registered, and (ix) any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities, but excluding underwriting fees, discounts, transfer taxes
or commissions, if any, attributable to the sale of Registrable
Securities, which shall be payable by each holder of Registrable
Securities pro rata on the basis of the number of Registrable
Securities of each such holder that are included in a registration
under this Agreement.
Section 2.3. BLACKOUT PERIOD. Investor agrees by acquisition of
Registrable Securities that, upon receipt of written notice from the
Company of the occurrence of any
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<PAGE> 8
event of the kind described in Section 2.1(g)(iv), for a period not to
exceed 120 days the Investor shall forthwith discontinue the Investor's
offer of the Registrable Securities pursuant to the Registration
Statement relating to such Registrable Securities until the Investor
shall have received copies of the supplemented or amended prospectus
contemplated by Section 2.1(g)(iv) and, if so directed by the Company,
will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in the Investor's possession, of
the prospectus relating to such Registrable Securities at the time of
receipt of such notice. In the event that any Investor uses a
prospectus in connection with the offering and sale of any of the
Registrable Securities covered by such prospectus, such Investor will
use only the latest version of such prospectus provided by the Company
to the Investor.
ARTICLE III
INDEMNIFICATION AND CONTRIBUTION
Section 3.1. INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless the Investor, its partners, affiliates,
officers, directors, employees and duly authorized agents, and each
Person or entity, if any, who controls the Investor within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange Act,
together with the partners, Affiliates, officers, directors, employees
and duly authorized agents of such controlling Person or entity
(collectively, the "Controlling Persons"), from and against any and all
losses, claims, damages, liabilities, costs and expenses (including,
without limitation, any and all reasonable attorneys' fees and
disbursements and costs and expenses of investigating and defending any
such claim and any and all amounts paid in settlement of, any action,
suit or proceeding between any of the indemnified parties and any
indemnifying parties or between any indemnified party and any third
party, or otherwise, or any claim asserted) (collectively, "Damages"),
joint or several, and any action or proceeding in respect thereof to
which the Investor, its partners, affiliates, officers, directors,
employees and duly authorized agents, and any Controlling Person, may
become subject under the Securities Act, the Exchange Act or other
federal or state statutory law or regulation, at common law or
otherwise, as and when incurred, insofar as such Damages (or actions or
proceedings in respect thereof) (i) arise out of, or are based upon,
any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, or in any preliminary
prospectus, final prospectus, summary prospectus, documents filed under
the Exchange Act and deemed to be incorporated by reference into any
Registration Statement, application or other document executed by or on
behalf other Company or based on written information furnished by or on
behalf of the Company filed in any jurisdiction in order to qualify the
Registrable Securities under the securities or blue sky laws thereof or
filed with the SEC, amendment or supplement relating to the Registrable
Securities or (ii) arise out of, or are based upon, any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
shall reimburse the Investor, its partners, affiliates, officers,
directors, employees and duly authorized agents, and each such
Controlling Person, for any legal and other expenses reasonably
incurred by the Investor, its partners, affiliates, officers,
directors, employees and duly authorized agents, or any such
Controlling Person, as incurred, in investigating or defending or
preparing to defend against any such Damages or actions or proceedings;
provided, however, that the Company shall not be liable to the extent
that any such Damages arise out of the Investor's failure to send or
give a copy of the final prospectus or supplement to the persons
asserting an untrue statement or alleged untrue statement or omission
or alleged omission at or prior to the written confirmation of the sale
of Registrable Securities to such person if such statement or omission
was corrected in such final prospectus or supplement; provided,
further, that the Company shall not be liable to the extent that any
such Damages arise out of or are based upon an untrue statement or
alleged untrue statement
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or omission or alleged omission made in such Registration Statement, or
any such preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by the Investor or any other
person who participates as a seller or as an underwriter in the
offering or sale of such securities, in either case, in any
questionnaire or other request by the Company, or otherwise
specifically stating that it is for use in the preparation thereof.
Section 3.2. INDEMNIFICATION BY THE INVESTOR. Investor will, if
Registrable Securities held by it are included in the securities as to
which such registration, qualification or compliance is being effected,
indemnify the Company, each of its directors and officers and each
underwriter, if any, of the Company's securities covered by such
registration statement and each person who controls the Company within
the meaning of Section 15 of the Securities Act, against all claims,
losses, damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement)
of a material fact contained in any such registration statement,
prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company, such directors, officers or
control persons or underwriters for any legal or any other expenses
reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action, in each case to the
extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such
registration statement, prospectus, offering circular or other document
in reliance upon and in conformity with written information furnished
to the Company by the Investor.
Section 3.3. CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after
receipt by any person or entity in respect of which indemnity may be
sought pursuant to Section 3.1 or 3.2 (an "Indemnified Party") of
notice of any claim or the commencement of any action, the Indemnified
Party shall, if a claim in respect thereof is to be made against the
person or entity against whom such indemnity may be sought (the
"Indemnifying Party"), notify the Indemnifying Party in writing of the
claim or the commencement of such action. In the event an Indemnified
Party shall fail to give such notice as provided in this Section 3.2
and the Indemnifying Party to whom notice was not given was unaware of
the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice, the
indemnification provided for in Section 3.1 shall be reduced to the
extent of any actual prejudice resulting from such failure to so notify
the Indemnifying Party; provided, however, that the failure to notify
the Indemnifying Party shall not relieve the Indemnifying Party from
any liability that it may have to an Indemnified Party otherwise than
under Section 3.1. If any such claim or action shall be brought against
an Indemnified Party, and it shall notify the Indemnifying Party
thereof, the Indemnifying Party shall be entitled to participate
therein, and, to the extent that it wishes, jointly with any other
similarly notified Indemnifying Party, to assume the defense thereof
with counsel reasonably satisfactory to the Indemnified Party. After
notice from the Indemnifying Party to the Indemnified Party of its
election to assume the defense of such claim or action, the
Indemnifying Party shall not be liable to the Indemnified Party for any
legal or other expenses subsequently incurred by the Indemnified Party
in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the Indemnified Party shall have
the right to employ separate counsel to represent the Indemnified Party
and its Controlling Persons who may be subject to liability arising out
of any claim in respect of which indemnity may be sought by the
Indemnified Party against the Indemnifying Party, but the fees and
expenses of such counsel shall be for the account of such Indemnified
Party, unless (i) the Indemnifying Party and the Indemnified Party
shall have mutually agreed to the
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retention of such counsel or (ii) in the reasonable judgment of the
Company and such Indemnified Party, representation of both parties by
the same counsel would be inappropriate due to actual or potential
conflicts of interest between them, it being understood, however, that
the Indemnifying Party shall not, in connection with any one such claim
or action or separate but substantially similar or related claims or
actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of
more than one separate firm of attorneys (together with appropriate
local counsel) at any time for all Indemnified Parties, or for fees and
expenses that are not reasonable. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any
settlement of any claim or pending or threatened proceeding in respect
of which the Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party,
unless such settlement includes an unconditional release of such
Indemnified Party from all liability arising out of such claim or
proceeding. Whether or not the defense of any claim or action is
assumed by the Indemnifying Party, such Indemnifying Party will not be
subject to any liability for any settlement made without its consent,
which consent will not be unreasonably withheld.
Section 3.4. OTHER INDEMNIFICATION. Indemnification similar to that
specified in the preceding paragraphs of this Article 3 (with
appropriate modifications) shall be given by the Company with respect
to any required registration or other qualification of securities under
any federal or state law or regulation of any governmental authority
other than the Securities Act. The provisions of this Article III shall
be in addition to any other rights to indemnification, contribution or
other remedies which an Indemnified Party may have pursuant to law,
equity, contract or otherwise.
Section 3.5. CONTRIBUTION. If the indemnification and reimbursement
obligations provided for in any section of this Article III is
unavailable or insufficient to hold harmless the Indemnified Parties in
respect of any Damages referred to herein, then the Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such
Damages as between the Company on the one hand and the Investor or
seller on the other, in such proportion as is appropriate to reflect
the relative fault of the Company and of the Investor or seller in
connection with such statements or omissions, as well as other
equitable considerations. The relative fault of the Company on the one
hand and of the Investor or seller on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by such party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company and the Investor agree that it would not be just and
equitable if contribution pursuant to this Section 3.5 were determined
by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an
Indemnified Party as a result of the Damages referred to in the
immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably
incurred by such Indemnified Party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of
this Section 3.5, the Investor or seller shall in no event be required
to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities of the Investor or seller
were sold to the public (less underwriting discounts and commissions)
exceeds the amount of any damages which the Investor or seller has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No Person guilty of
fraudulent
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misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who
was not guilty of such fraudulent misrepresentation.
ARTICLE IV
MISCELLANEOUS
Section 4.1. OUTSTANDING REGISTRATION RIGHTS. Nothing herein shall
prevent or prohibit the Company from granting registration rights which
are pari passu with the rights granted pursuant to this Agreement.
Notwithstanding the immediately preceding sentence, the Company hereby
covenants and agrees to refrain from granting to any other Person
registration rights more favorable than those granted pursuant to this
Agreement. Schedule 4.1 sets forth all agreements with stockholders
which do not permit the Company to apply the Underwriter's Cut-back.
Section 4.2. TERM. The registration rights provided to the holders of
Registrable Securities hereunder shall terminate at such time as all
Registrable Securities have been issued and have ceased to be
Registrable Securities. Notwithstanding the foregoing, paragraphs (c)
and (d) of Section 1.1, Article III, Section 4.8, and Section 4.9 shall
survive the termination of this Agreement.
Section 4.3. RULE 144. If the Company is required to file reports under
the Exchange Act, the Company will file in a timely manner,
information, documents and reports in compliance with the Securities
Act and the Exchange Act and will, at its expense, promptly take such
further action as holders of Registrable Securities may reasonably
request to enable such holders of Registrable Securities to sell
Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by (a) Rule 144 under
the Securities Act ("Rule 144"), as such Rule may be amended from time
to time, or (b) any similar rule or regulation hereafter adopted by the
SEC. If at any time the Company is not required to file such reports,
it will, at its expense, forthwith upon the written request of any
holder of Registrable Securities who intends to make a sale under Rule
144, make available adequate current public information with respect to
the Company within the meaning of paragraph (c)(2) of Rule 144 or such
other information as necessary to permit sales pursuant to Rule 144.
Upon the request of the Investor, the Company will deliver to the
Investor a written statement, signed by the Company's principal
financial officer, as to whether it has complied with such
requirements. This Section 4.3 shall terminate at the same time as the
registration rights as provided in Section 4.2.
Section 4.4. CERTIFICATE. The Company will, at its expense, forthwith
upon the request of any holder of Registrable Securities, deliver to
such holder a certificate, signed by the Company's principal financial
officer, stating (a) the Company's name, address and telephone number
(including area code), (b) the Company's Internal Revenue Service
identification number, (c) the Company's Commission file number, (d)
the number of shares of each class of Stock outstanding as shown by the
most recent report or statement published by the Company, and (e)
whether the Company has filed the reports required to be filed under
the Exchange Act for a period of at least ninety (90) days prior to the
date of such certificate and in addition has filed the most recent
annual report required to be filed thereunder.
Section 4.5. AMENDMENT AND MODIFICATION. Any provision of this
Agreement may be waived, provided that such waiver is set forth in a
writing executed by both parties to this Agreement. The provisions of
this Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the
Company has obtained the written consent of the holders of a majority
of the then outstanding Registrable Securities.
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Notwithstanding the foregoing, the waiver of any provision hereof with
respect to a matter that relates exclusively to the rights of holders
of Registrable Securities whose securities are being sold pursuant to a
Registration Statement and does not directly or indirectly affect the
rights of other holders of Registrable Securities may be given by
holders of at least a majority of the Registrable Securities being sold
by such holders; provided that the provisions of this sentence may not
be amended, modified or supplemented except in accordance with the
provisions of the immediately preceding sentence. No course of dealing
between or among any Person having any interest in this Agreement will
be deemed effective to modify, amend or discharge any part of this
Agreement or any rights or obligations of any person under or by reason
of this Agreement.
Section 4.6. SUCCESSORS AND ASSIGNS; ENTIRE AGREEMENT. This Agreement
and all of the provisions hereof shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns. The Investor may assign its rights under this Agreement to any
subsequent holder the Registrable Securities, provided that the Company
shall have the right to require any holder of Registrable Securities to
execute a counterpart of this Agreement and agree to be bound by the
provisions of this Agreement as a condition to such holder's claim to
any rights hereunder. This Agreement, together with the Stock Purchase
Agreement, the Warrants and the Letter Agreement and the exhibits and
schedules to such agreements together set forth the entire agreement
and understanding between the parties as to the subject matter hereof
and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them.
Section 4.7. SEPARABILITY. In the event that any provision of this
Agreement or the application of any provision hereof is declared to be
illegal, invalid or otherwise unenforceable by a court of competent
jurisdiction, the remainder of this Agreement shall not be affected
except to the extent necessary to delete such illegal, invalid or
unenforceable provision unless that provision held invalid shall
substantially impair the benefits of the remaining portions of this
Agreement.
Section 4.8. NOTICES. All notices, demands, requests, consents,
approvals, and other communications required or permitted hereunder
shall be in writing and shall be (i) deposited in the mail, registered
or certified, return receipt requested, postage prepaid, (ii) delivered
by reputable air courier service with charges prepaid, or (iii)
transmitted by hand delivery, telegram or facsimile, addressed as set
forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication
required or permitted to be given hereunder shall be deemed effective
(a) upon hand delivery or delivery by facsimile, with accurate
confirmation generated by the transmitting facsimile machine, at the
address or number designated below (if delivered on a business day
during normal business hours where such notice is to be received), or
the first business day following such delivery (if delivered other than
on a business day during normal business hours where such notice is to
be received) or (b) on the second business day following the date of
mailing by express courier service, fully prepaid, addressed to such
address, or upon actual receipt of such mailing, whichever shall first
occur. The addresses for such communications shall be:
If to the Company:
Infocure Corp.
1765 The Exchange
Suite 450
Atlanta, GA 30339
Attention: Mr. Richard Perlman,
Chairman
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Telephone: (404) 633-0046
Facsimile: (404) 636-7525
with a copy (which shall not constitute notice) to:
Morris, Manning & Martin LLP
1600 Atlanta Financial Center
3343 Peachtree Road, N.E.
Atlanta, GA 30326
Attention: Oby Brewer, Esq.
Telephone: (404) 233-7000
Facsimile: (404) 365-9532
if to the Investor:
Crescent International Limited
c/o Greenlight (Switzerland), S.A.
84, av Louis-Casai, P.O. Box 161
1216 Geneva, Cointrin
Switzerland
Attention: Melvyn Craw/Maxi Brezzi
Telephone: +41 22 791 72 56
Facsimile: +41 22 929 53 94
with a copy (which shall not constitute notice) to:
Rogers & Wells LLP
200 Park Avenue, 52nd Floor
New York, NY 10166
Attention: Sara Hanks, Esq.
Telephone: (212) 878-8000
Facsimile: (212) 878-8375
Either party hereto may from time to time change its address or
facsimile number for notices under this Section 4.8 by giving at least
ten (10) days' prior written notice of such changed address or
facsimile number to the other party hereto.
Section 4.9. GOVERNING LAW. This Agreement shall be construed under the
laws of the State of Delaware, without giving effect to conflict of law
provisions.
Section 4.10. HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not constitute a part of this
Agreement, nor shall they affect their meaning, construction or effect.
Section 4.11. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original
instrument and all of which together shall constitute one and the same
instrument.
Section 4.12. FURTHER ASSURANCES. Each party shall cooperate and take
such action as may be reasonably requested by another party in order to
carry out the provisions and purposes of this Agreement and the
transactions contemplated hereby.
Section 4.13. ABSENCE OF PRESUMPTION. This Agreement shall be construed
without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to
be drafted.
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Section 4.14. REMEDIES. In the event of a breach or a threatened breach
by any party to this Agreement of its obligations under this Agreement,
any party injured or to be injured by such breach will be entitled to
specific performance of its rights under this Agreement or to
injunctive relief, in addition to being entitled to exercise all rights
provided in this Agreement and granted by law. The parties agree that
the provisions of this Agreement shall be specifically enforceable, it
being agreed by the parties that the remedy at law, including monetary
damages, for breach of any such provision will be inadequate
compensation for any loss and that any defense or objection in any
action for specific performance or injunctive relief that a remedy at
law would be adequate is waived.
IN WITNESS WHEREOF, the parties hereto have caused this
Registration Rights Agreement to be executed by the undersigned, thereunto duly
authorized, as of the date first set forth above.
INFOCURE CORP.
By: /s/ Richard Perlman
----------------------------------------
Name Richard Perlman
CRESCENT INTERNATIONAL LIMITED
By: /s/ Melvyn Craw
----------------------------------------
Name Melvyn Craw
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EXHIBIT 7.3
AGREEMENT OF JOINT FILING
Crescent International Limited and DMI Trust agree that the Statement
on Schedule 13D to which this Agreement is attached as an exhibit, and all
future amendments to this Statement, shall be filed on behalf of each of them.
This Agreement is intended to satisfy the requirements of Rule 13d-1(f)(1)(iii)
under the Securities Exchange Act of 1934, as amended. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
Dated: December 21, 1998
CRESCENT INTERNATIONAL LIMITED
By: /s/ Omar Ali
----------------------------------------
Omar Ali
Director
DMI TRUST
By: /s/ Mohamed Al-Faisal
----------------------------------------
Mohamed Al-Faisal
Director of Dar Al Mal Al Islami
(DMI) SA
50
