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Exhibit 5.1
Form of Frankfurt, Garbus, Kurnit, Klein & Selz, PC Opinion
H.C. Wainwright & Co., Inc.
Roth Capital Partners, Inc.
As Representatives of the Several Underwriters
Listed on Schedule A hereto
c/o H.C. Wainwright & Co., Inc.
One Boston Place, 40th Floor
Boston, Massachusetts 02108
Ladies and Gentlemen:
In connection with a Registration Statement (File No. 333-33516) on
Form S-1 (the "Registration Statement") and the prospectus included therein (the
"Prospectus"), as filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
under the Act (the "Rules"), this opinion is furnished to you, as the
representatives of the several underwriters listed on Schedule A attached hereto
(the "Underwriters"), in connection with the sale on the date hereof to the
Underwriters by Dynacs Inc., a Delaware corporation (the "Company"), of an
aggregate of 3,000,000 shares of the Company's common stock, par value $0.01 per
share (the "Common Stock"), an additional 450,000 shares of Common Stock
(collectively referred to herein as the "Shares") which may be offered by the
Company and certain selling stockholders in order to cover over-allotments and
the sale to H.C. Wainwright & Co., Inc. ("Wainwright") warrants (the
"Representative Warrants") for the purchase of an additional 300,000 shares of
Common Stock (the "Representative Shares") pursuant to a representative's
warrant agreement (the "Representative's Warrant Agreement").
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of the following
documents (collectively, the "Documents"): (i) the Registration Statement, (ii)
the Prospectus, (iii) the form of Underwriting Agreement (included as Exhibit 1
to the Registration Statement), (iv) the Company's Restated Certificate of
Incorporation and Restated Bylaws, and (v) records of certain of the Company's
corporate proceedings and such other documents as we have deemed necessary or
appropriate as a basis for the opinions hereinafter expressed. We express no
opinion as to the enforceability or effect of any document not specifically
described herein.
In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as certified or
photostatic copies and the authenticity of the originals of such latter
documents. As to various questions of fact material to this opinion, we have
relied
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solely upon the representations and warranties of the Company contained in the
respective Documents and upon a certificate of an officer of the Company, but
without any further independent investigation. In addition, we have obtained and
relied upon such certificates and written assurances from public officials as we
have deemed necessary. We have assumed that such representations and warranties,
and such certifications and assurances are true, correct and complete.
As used in this opinion, the expression "to our knowledge" with
reference to matters of fact means that, after an examination of documents made
available to us by Company and based on the respective representations and
warranties of Company in the respective Documents and upon such certificate of
an officer of Company, but without any further independent factual
investigation, we find no reason to believe that the opinions expressed herein
are factually incorrect. Further, the expression "to our knowledge" with
reference to matters of fact refers to the current actual knowledge of attorneys
of this firm who have worked on matters for Company solely in connection with
the Documents. Except to the extent expressly set forth hereinabove, we have not
undertaken any independent investigation to determine the existence or absence
of any fact, and no inference as to our knowledge of the existence or absence of
any fact should be drawn from our representation of Company or the rendering of
the opinions set forth below.
In rendering the opinions expressed herein, we have also assumed (i)
the due authorization of the Documents by all parties thereto other than
Company; (ii) that all parties to the Documents other than Company have the full
power and legal right to enter into the Documents and to consummate the
transactions contemplated thereby and the Documents are enforceable against such
parties in accordance with their terms (except to the extent stated in the
opinion expressed in paragraph 7); (iii) that all parties to the Documents other
than Company have duly executed and delivered the Documents; and (iv) that all
parties to the Documents other than Company will fully and completely perform
their respective obligations under the Documents.
We are members of the bar of the State of New York and we do not herein
express any opinion as to any matters governed by any laws other than the laws
of the State of New York, the General Corporation Law of the State of Delaware
and the laws of the United States of America.
Certain of the opinions rendered herein are qualified by the discussion
following the numbered paragraphs in our opinion.
Based upon the foregoing, and subject to the qualifications and
exceptions heretofore and hereinafter set forth, we are of the opinion that:
1. the Company and each of its subsidiaries (each, a "Subsidiary"): (A)
has been duly organized and is validly existing as a corporation in good
standing under the laws of its jurisdiction of organization, (B) is duly
qualified and licensed and in good standing as a foreign corporation in each
jurisdiction in which its ownership or leasing of any properties or the
character of its operations requires such qualification or licensing, and (C)
has all requisite corporate power and authority; and the Company and each
Subsidiary has obtained any and all necessary authorizations, approvals, orders,
licenses, certificates, franchises and permits of and from all governmental or
regulatory officials and bodies (including, without limitation, those having
jurisdiction over environmental or similar matters), to own or lease their
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respective properties and conduct their respective business as described in the
Prospectus; the Company and each Subsidiary is and has been doing business in
material compliance with all such authorizations, approvals, orders, licenses,
certificates, franchises and permits and all federal, state and local laws,
rules and regulations; the Company and each Subsidiary has not received any
notice of proceedings relating to the revocation or modification of any such
authorization, approval, order, license, certificate, franchise, or permit
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would materially adversely affect the business, operations,
condition, financial or otherwise, or the earnings, business affairs, position,
prospects, value, operation, properties, business or results of operations of
the Company or any Subsidiary. The disclosures in the Registration Statement
concerning the effects of federal, state and local laws, rules and regulations
on the business of the Company or any Subsidiary as currently conducted and as
contemplated are correct in all material respects and do not omit to state a
fact necessary to make the statements contained therein not misleading in light
of the circumstances in which they were made;
2. to the best of such counsel's knowledge, other than the Subsidiaries
the Company does not own an interest in any other corporation, partnership,
joint venture, trust or other business entity;
3. the Company has a duly authorized, issued and outstanding
capitalization as set forth in the Prospectus, and any amendment or supplement
thereto, under "Capitalization" and "Description of Securities," and neither the
Company nor any Subsidiary is a party to or bound by any instrument, agreement
or other arrangement providing for it to issue any capital stock, rights,
warrants, options or other securities, except for this Agreement, the
Representative's Warrant Agreement and as described in the Prospectus. The
Securities, and all other securities issued or issuable by the Company conform
in all material respects to all statements with respect thereto contained in the
Registration Statement and the Prospectus. All issued and outstanding securities
of the Company have been duly authorized and validly issued and are fully paid
and non-assessable; the holders thereof have no rights of rescission with
respect thereto, and are not subject to personal liability by reason of being
such holders; and none of such securities were issued in violation of the
preemptive rights of any holders of any security of the Company or any
Subsidiary, as the case may be. The Shares, the Representative's Warrants and
the Representative's Shares to be sold by the Company hereunder and under the
Representative's Warrant Agreement are not and will not be subject to any
preemptive or other similar rights of any stockholder, have been duly authorized
and, when issued, paid for and delivered in accordance with the terms hereof,
will be validly issued, fully paid and non-assessable and conform to the
description thereof contained in the Prospectus; the holders thereof will not be
subject to any liability solely as such holders; all corporate action required
to be taken for the authorization, issue and sale of the Shares, the
Representative's Warrants and the Representative's Shares has been duly and
validly taken, and the certificates representing the Shares and the
Representative's Warrants are in due and proper form. The Representative's
Warrants constitute valid and binding obligations of the Company to issue and
sell, upon exercise thereof and payment therefor, the number and type of
securities of the Company called for thereby. Upon the issuance and delivery
pursuant to this Agreement and the Representative's Warrant Agreement of the
Shares and the Representative's Warrants, respectively, to be sold by the
Company, the Underwriters and the Representatives, respectively, will acquire
good and marketable title to the Shares and the Representative's Warrants free
and clear of any pledge, lien, charge, claim, encumbrance, pledge, security
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interest, or other restriction or equity of any kind whatsoever. No transfer tax
is payable by or on behalf of the Underwriters in connection with (A) the
issuance by the Company of the Shares, (B) the purchase by the Underwriters and
the Representatives of the Shares and the purchase by Wainwright of the
Representative's Warrants, respectively, from the Company, (C) the consummation
by the Company of any of its obligations under this Agreement or the
Representative's Warrant Agreement, or (D) resales of the Shares in connection
with the distribution contemplated hereby;
4. the Registration Statement is effective under the Act, and, if
applicable, filing of all pricing information has been timely made in the
appropriate form under Rule 430A, and no stop order suspending the use of the
Preliminary Prospectus, the Registration Statement or Prospectus or any part of
any thereof or suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
pending or, to the best of such counsel's knowledge threatened or contemplated
under the Act;
5. each of the Preliminary Prospectus, the Registration Statement, and
the Prospectus and any amendments or supplements thereto (other than the
financial statements and other financial and statistical data included therein,
as to which no opinion need be rendered) comply as to form in all material
respects with the requirements of the Act and the Rules and Regulations;
6. to the best of such counsel's knowledge, (A) there are no
agreements, contracts or other documents required by the Act to be described in
the Registration Statement and the Prospectus and filed as exhibits to the
Registration Statement other than those described in the Registration Statement
(or required to be filed under the Exchange Act if upon such filing they would
be incorporated, in whole or in part, by reference therein) and the Prospectus
and filed as exhibits thereto, and the exhibits which have been filed are
correct copies of the documents of which they purport to be copies; (B) the
descriptions in the Registration Statement and the Prospectus and any supplement
or amendment thereto of contracts and other documents to which the Company or
any Subsidiary is a party or by which it is bound, including any document to
which the Company or any Subsidiary is a party or by which it is bound,
incorporated by reference into the Prospectus and any supplement or amendment
thereto, are accurate in all material respects and fairly represent the
information required to be shown by Form S-1; (C) there is not pending or
threatened against the Company any action, arbitration, suit, proceeding,
inquiry, investigation, litigation, governmental or other proceeding (including,
without limitation, those involving environmental or similar matters), domestic
or foreign, pending or threatened against (or circumstances that may give rise
to the same), or involving the properties or business of the Company or any
Subsidiary which (x) is required to be disclosed in the Registration Statement
which is not so disclosed, (and such proceedings as are summarized in the
Registration Statement are accurately summarized in all material respects), (y)
questions the validity of the capital stock of the Company or any Subsidiary or
this Agreement or the Representative's Warrant Agreement, or of any action taken
or to be taken by the Company pursuant to or in connection with any of the
foregoing; (D) no statute or regulation or legal or governmental proceeding
required to be described in the Prospectus is not described as required; and (E)
there is no action, suit or proceeding pending, or threatened, against or
affecting the Company or any Subsidiary before any court or arbitrator or
governmental body, agency or official (or any basis thereof known to such
counsel) in which there is a reasonable possibility of an adverse decision which
may result in a material adverse
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change in the condition, financial or otherwise, or the earnings, position,
prospects, stockholders' equity, value, operation, properties, business or
results of operations of the Company or any Subsidiary, which could adversely
affect the present or prospective ability of the Company to perform its
obligations under this Agreement or the Representative's Warrant Agreement or
which in any manner draws into question the validity or enforceability of this
Agreement or the Representative's Warrant Agreement;
7. the Company has full legal right, power and authority to enter into
each of this Agreement and the Representative's Warrant Agreement and to
consummate the transactions provided for herein and therein; and each of this
Agreement and the Representative's Warrant Agreement has been duly authorized,
executed and delivered by the Company. Each of this Agreement and the
Representative's Warrant Agreement, assuming due authorization, execution and
delivery by each other party thereto constitutes a legal, valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms (except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
relating to or affecting enforcement of creditors' rights and the application of
equitable principles in any action, legal or equitable, and except as rights to
indemnity or contribution may be limited by applicable law), and none of the
Company's execution or delivery of this Agreement and the Representative's
Warrant Agreement, its performance hereunder or thereunder, its consummation of
the transactions contemplated herein or therein, or the conduct of its business
as described in the Registration Statement, the Prospectus and any amendments or
supplements thereto, conflicts with or will conflict with or results or will
result in any breach or violation of any of the terms or provisions of, or
constitutes or will constitute a default under, or result in the creation or
imposition of any lien, charge, claim, encumbrance, pledge, security interest,
defect or other restriction or equity of any kind whatsoever upon, any property
or assets (tangible or intangible) of the Company or any Subsidiary pursuant to
the terms of, (A) the articles of incorporation or by-laws of the Company or any
Subsidiary, (B) any license, contract, indenture, mortgage, deed of trust,
voting trust agreement, stockholders' agreement, note, loan or credit agreement
or any other agreement or instrument to which the Company or any Subsidiary is a
party or by which any of them is or may be bound or to which any of their
respective properties or assets (tangible or intangible) is or may be subject,
or any indebtedness, or (C) any statute, judgement, decree, order, rule or
regulation applicable to the Company or any Subsidiary of any arbitrator, court,
regulatory body or administrative agency or other governmental agency or body
(including, without limitation, those having jurisdiction over environmental or
similar matters), domestic or foreign, having jurisdiction over the Company or
any Subsidiary or any of their respective activities or properties;
8. except as described in the Prospectus, no consent, approval,
authorization or order of, and no filing with, any court, regulatory body,
government agency or other body (other than such as may be required under Blue
Sky laws, as to which no opinion need be rendered) is required in connection
with the issuance of the Shares pursuant to the Prospectus, the issuance of the
Representative's Warrants, the performance of this Agreement and the
Representative's Warrant Agreement and the transactions contemplated hereby and
thereby;
9. the properties and business of the Company and the Subsidiaries
conform in all material respects to the description thereof contained in the
Registration Statement and the Prospectus; and the Company and each Subsidiary
has good and marketable title to, or valid
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and enforceable leasehold estates in, all items of real and personal property
stated in the Prospectus to be owned or leased by it, in each case free and
clear of all liens, charges, claims, encumbrances, pledges, security interests,
defects or other restrictions or equities of any kind whatsoever, other than
those referred to in the Prospectus, and liens for taxes not yet due and
payable;
10. to the best knowledge of such counsel, none of the Company nor any
Subsidiary is in breach of, or in default under, any term or provision of any
license, contract, indenture, mortgage, installment sale agreement, deed of
trust, lease, voting trust agreement, stockholders' agreement, partnership
agreement, note, loan or credit agreement or any other agreement or instrument
evidencing an obligation for borrowed money, or any other agreement or
instrument to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary may be bound or to which the property or assets
(tangible or intangible) of the Company is subject or affected; and neither the
Company nor any Subsidiary is in violation of any term or provision of its
certificate of incorporation by-laws, or in violation of any franchise, license,
permit, judgment, decree, order, statute, rule or regulation;
11. the statements in the Prospectus under "BUSINESS," "MANAGEMENT,"
"PRINCIPAL STOCKHOLDERS," "CERTAIN TRANSACTIONS," and "DESCRIPTION OF
SECURITIES" have been reviewed by such counsel, and insofar as they refer to
statements of law, descriptions of statutes, licenses, rules or regulations or
legal conclusions, are correct in all material respects;
12. the Shares have been accepted for quotation on Nasdaq;
13. except as described in the Prospectus, to such counsel's knowledge,
no person, corporation, trust, partnership, association or other entity has the
right to include and/or register any securities of the Company in the
Registration Statement, require the Company to file any registration statement
or, if filed, to include any security in such registration statement;
14. except as described in the Prospectus, to such counsel's knowledge,
there are no claims, payments, issuances, arrangements or understandings for
services in the nature of a finder's or origination fee with respect to the sale
of the Securities hereunder or financial consulting arrangement or any other
arrangements, agreements, understandings, payments or issuances that may affect
the Underwriters' compensation, as determined by the NASD;
15. assuming due execution by the parties thereto other than the
Company, the Lock-up Agreements are legal, valid and binding obligations of
parties thereto, enforceable against the party and any subsequent holder of the
securities subject thereto in accordance with its terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application relating to or
affecting enforcement of creditors' rights and the application of equitable
principles in any action, legal or equitable, and except as rights to indemnity
or contribution may be limited by applicable law); and
16. except as described in the Prospectus, the Company does not (A)
maintain, sponsor or contribute to any ERISA Plans, (B) maintain or contribute,
now or at any time previously, to a defined benefit plan, as defined in Section
3(35) of ERISA, and (C) has never completely or partially withdrawn from a
"multiemployer plan".
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Such counsel shall state that such counsel has participated in
conferences with officers and other representatives of the Company and
representatives of the independent public accountants for the Company at which
conferences such counsel made inquiries of such officers, representatives and
accountants and discussed the contents of the Preliminary Prospectus, the
Registration Statement, the Prospectus, and related matters were discussed and,
although such counsel is not passing upon and does not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Preliminary Prospectus, the Registration Statement and Prospectus, on the basis
of the foregoing, no facts have come to the attention of such counsel which lead
them to believe that either the Registration Statement or any amendment thereto,
at the time such Registration Statement or amendment became effective or the
Preliminary Prospectus or Prospectus or amendment or supplement thereto as of
the date of such opinion contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading (it being understood that such
counsel need express no opinion with respect to the financial statements and
schedules and other financial and statistical data included in the Preliminary
Prospectus, the Registration Statement or Prospectus).
Our opinions in paragraph 7 above, with respect to the enforceability
of the agreements or provisions thereof referred to in such paragraphs are
limited by the following:
a. principles of public policy;
b. the effect of bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws now
or hereafter in effect relating to or affecting the rights
and remedies of creditors generally;
c. the effect of procedural due process, general principles of
equity including, without limitation, principles of
commercial reasonableness, good faith, and fair dealing,
whether such enforcement is considered in a proceeding in
equity or at law, and the discretion of the court before
which any proceeding therefor may be brought, including the
court's failure or refusal to enforce provisions of
agreements or documents if enforcement thereof is based upon
defaults or breaches which are immaterial to the ultimate
performance contemplated thereby or for other reasons deemed
equitable by the court;
d. we express no opinion regarding the availability of the
remedy of specific performance, or of any other equitable
remedy or relief, to enforce any right under any agreement
or document; and
e. we express no opinion as to the enforceability, in any
particular circumstance, of any provision of the Documents
which provides for the severability of illegal or
unenforceable provisions.
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This opinion is solely for your benefit and, without our prior written
consent, shall not be quoted in whole or in part, summarized or otherwise
referred to, relied upon or filed with or supplied to any other person or
entity. We assume no obligation to supplement or update this opinion to reflect
any facts or circumstances which may hereafter come to our attention or any
changes in any laws or court decisions which may hereafter occur. We do not
render any opinion by implication or any opinion with respect to matters other
than those expressly set forth above.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the reference to this firm under the
heading "Legal Matters" in the Prospectus which forms a part of the Registration
Statement. In giving such consent, we do not thereby admit that we are in the
category of persons whose consent is required under Section 7 of the Securities
Act or the rules and regulations of the Commission promulgated thereunder.
Sincerely,
FRANKFURT GARBUS KURNIT KLEIN & SELZ, PC
By:_____________________________________
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