RESTATED STOCK PURCHASE AND WARRANT AGREEMENT
This Restated Stock Purchase and Warrant Agreement (the
"Agreement") is entered into as of March 14, 1997 between Medicus Systems
Corporation, a Delaware corporation (the "Company"), and Xxxxxxx X. Xxxxxxx (the
"Shareholder").
W I T N E S S E T H
WHEREAS, the Stock Purchase and Warrant Agreement dated as of
January 2, 1997, between the Company and the Shareholder, originally provided
for the sale of 550,000 shares of the Company's Common Stock (the "Shares"), and
275 shares of the Company's Voting Preferred Stock by the Shareholder to the
Company;
WHEREAS, the Shareholder holds an option (the "Option") to
purchase all 500 of the authorized shares of the Company's Voting Preferred
Stock;
WHEREAS, the Shareholder intends to exercise the Option;
WHEREAS, the Shareholder desires to sell the Shares and 500
shares of Voting Preferred Stock to the Company (the "Voting Preferred Shares");
WHEREAS, the Board of Directors (the "Board") of the Company
has determined that it is in the best interest of its stockholders for the
Company to acquire the Shares and 500 shares of its Voting Preferred Stock, all
upon the terms and subject to the conditions set forth in this Agreement;
NOW THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, the Company and the
Shareholder hereby agree as follows:
1. The Purchase. Subject to the terms and conditions set forth
in this Agreement, the Company agrees to purchase from the Shareholder, and the
Shareholder agrees to sell, assign and transfer to the Company on the Closing
Date (as defined below), all of the Shareholder's right, title and interest in
the Shares and all of the Shareholder's right, title and interest in the Voting
Preferred Shares.
2. The Closing. The Closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of Xxxx, Xxxx
& Xxxxx, Three First Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx not later than April 15,
1997, unless the parties otherwise agree. The date upon which the Closing occurs
is herein referred to as the Closing Date.
3. Payment and Delivery.
(a) Sale of Shares. At the Closing, (a) the Company shall
deliver to the Shareholder as payment for and in consideration of receipt of the
Shares (i) cash consideration of $1,650,000, (ii) a promissory note, in
substantially the form of Exhibit A hereto, with 50% of the principal amount
maturing in one year and the balance one year thereafter and bearing 8%
interest, in the aggregate principal amount of $1,100,000 (the "Promissory
Note"), and (iii) a Warrant to purchase 220,000 shares of Common Stock at an
exercise price of $8.00 per share which shall be substantially in the form of
Exhibit B hereto (the "Warrant"), and (b) the Shareholder shall deliver to the
Company certificates representing all of the Shares, together with duly executed
stock powers with respect to the Shares in blank in form satisfactory to the
Company. The Company shall make payment of $1,650,000 pursuant to this paragraph
(a) of Section 3 on the Closing Date by wire transfer to an account designated
by the Shareholder.
(b) Sale of Voting Preferred Shares. At the Closing, (a) the
Company shall deliver to the Shareholder as payment for and in consideration of
receipt of the Voting Preferred Shares cash consideration of $1,500,000, and (b)
the Shareholder shall deliver to the Company certificates representing all of
the Voting Preferred Shares, together with duly executed stock powers with
respect to the Shares in blank in form satisfactory to the Company. The Company
shall make payment of $1,500,000 pursuant to this paragraph (b) of Section 3 on
the Closing Date by check in the amount of $500,000 and wire transfer of the
balance to an account designated by the Shareholder.
4. Representations and Warranties of the Shareholder. The
Shareholder hereby represents and warrants to the Company that:
(a) This Agreement has been duly executed by the Shareholder
and is the legal, valid and binding obligation of the Shareholder,
enforceable against the Shareholder in accordance with its terms. Such
execution and delivery do not, and performance of this Agreement will
not, (i) conflict with, violate or breach any order, judgment,
injunction or decree of any court, arbitrator, government or
governmental agency or instrumentality against or binding on the
Shareholder or by which any of his assets or properties are bound or
affected, (ii) constitute a violation by the Shareholder of any law,
rule, regulation, order, judgment or decree applicable to the
Shareholder or by which any property or asset of the Shareholder is
bound or affected or (iii) conflict with, violate, breach or cause a
default (or an event which 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 agreement or instrument
to which the Shareholder is party or by which any of his assets or
properties are bound or affected or result in the creation of a lien or
other encumbrance on any of his Shares.
(b) The Shareholder has had access to such information
concerning the Company, its business and its financial condition as he
deemed necessary in connection with the transactions contemplated by
this Agreement.
(c) On the Closing Date, the Shareholder will have valid title
to all of the Shares and the Voting Preferred Shares, in each case free
and clear of any liens, charges or encumbrances, and such Shares and
Voting Preferred Shares will not be subject to any claims by virtue of
rights, options, contracts, calls, agreements or otherwise.
(d) The sale by the Shareholder pursuant to this Agreement and
the delivery of the certificate(s) representing the Shares and the
Voting Preferred Shares to the Company will transfer to the Company
good and valid title to the Shares and the Voting Preferred Shares free
and clear of all claims, liens, encumbrances, security interests,
proxies, voting and other restrictions or interests of any nature
whatsoever.
(e) The Shareholder acknowledges (i) that representatives of
the Company have strongly recommended that the Shareholder engage
separate counsel to represent the Shareholder in connection with the
negotiation of this Agreement, and (ii) that the Shareholder has
determined, nevertheless, not to be represented by counsel in the
negotiation of this Agreement. The Shareholder has made this decision
in part based upon his own extensive business and investment
experience, as well as the involvement of Xxxxxxx X. Xxxxx, a director
and secretary of the Company, and a partner in the law firm of Xxxx,
Xxxx & Xxxxx, counsel to the Company, in the negotiation and
preparation of the Agreement and related documents, Xx. Xxxxx having
had a long-standing personal and business relationship with the
Shareholder; however, the Shareholder acknowledges that Xx. Xxxxx has
been acting solely as a representative of the Company, and has not been
representing the Shareholder's interests, in such matters. The
Shareholder represents that he has read and fully understands this
Agreement, the Warrant and the Promissory Note.
5. Representations and Warranties of the Company. The Company
hereby represents and warrants to the Shareholder that:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power and authority and all necessary
governmental approvals to own, lease and operate its properties and to
carry on its business as it is now been conducted.
(b) The Company has all necessary corporate power and
authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by the Company and
the consummation by the Company of the purchase of the Shares pursuant
hereto have been duly and validly authorized by all necessary corporate
action and no other corporate proceedings on the part of the Company
are necessary to authorize this Agreement or to consummate the purchase
of the Shares hereunder, other than the stockholder approval
contemplated in Sections 6(f) and 7(c) below. This Agreement has been
duly and validly executed and delivered by the Company and is the
legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms.
(c) The execution and delivery of this Agreement by the
Company do not, and performance of this Agreement by the Company will
not, (i) conflict with, violate or breach the Certificate of
Incorporation or By-laws of the Company, (ii) conflict with, violate or
breach any order, judgment, injunction or decree of any court,
arbitrator, government or governmental agency or instrumentality
against or binding on the Company or by which any of its assets or
properties are bound or affected, (iii) constitute a violation by the
Company of any law, rule, regulation, order, judgment or decree
applicable to the Company or by which any property or asset of the
Company is bound or affected or (iv) conflict with, violate, breach or
cause a default (or an event which 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 agreement
or instrument to which the Company is a party or by which any of the
Company's assets or properties are bound or affected or result in the
creation of a lien or other encumbrance on any of its assets or
properties.
6. Conditions Precedent to the Company's Obligations. The
obligations of the Company to purchase the Shares and the Voting Preferred
Shares pursuant to this Agreement are subject to the fulfillment of the
following conditions:
(a) The representations and warranties of the Shareholder
contained in this Agreement shall be true and correct in all material respects
on and as of the Closing Date, with the same force and effect as if made as of
the Closing Date;
(b) The performance of this Agreement by the Company shall not
conflict with or violate any order, judgment or decree applicable to the Company
or by which any of its assets or properties are bound or affected;
(c) The Shareholder shall have delivered to the Company
certificate(s) evidencing all of the Shares, together with stock powers in form
satisfactory to the Company executed in blank;
(d) The Shareholder shall have delivered to the Company
certificate(s) evidencing all of the Voting Preferred Shares, together with
stock powers in form satisfactory to the Company executed in blank;
(e) The Shareholder shall have delivered to the Company his
resignation as Chairman of the Company, it being understood that the Shareholder
will remain a director of the Company;
(f) The stockholders of the Company shall have approved the
transactions contemplated by this Agreement; and
(g) All conditions to the closing of the transactions
contemplated by the Restated Stock Purchase and Warrant Agreement dated the date
hereof between Boston Safe Deposit and Trust Company of California, or its
successors, as trustee of the Xxxxxxx X. Xxxxxxx Charitable Remainder Unitrust
dated August 3, 1993 (the "Trust") and the Company (the "Trust Agreement") shall
have been satisfied.
7. Conditions Precedent to the Shareholder's Obligations. The
obligations of the Shareholder to sell the Shares and Voting Preferred Shares
pursuant to this Agreement are subject to the fulfillment of the following
conditions:
(a) The representations and warranties of the Company
contained in this Agreement shall be true and correct in all material respects
on and as of the Closing Date, with the same force and effect as if made as of
the Closing Date;
(b) The Company shall have delivered to the Shareholder (i) by
wire transfer an amount equal to the Cash Consideration, (ii) the Promissory
Note, and (iii) the Warrant;
(c) The stockholders of the Company shall have approved the
transactions contemplated by this Agreement; and
(d) All conditions to the closing of the transactions
contemplated by the Trust Agreement shall have been satisfied.
8. Additional Agreements of the Shareholder.
(a) The Shareholder agrees that, for a period of five years
from the date of this Agreement, the Shareholder will not, without the prior
consent of the disinterested members of the Board, transfer any shares of Common
Stock held by the Shareholder immediately after the Closing (the "Remaining
Shares"), or any shares of Common Stock issuable upon exercise of the Warrant
("Warrant Shares"), except as provided in the following sentence. The
restriction set forth above shall lapse as to 20% of the Remaining Shares and as
to 20% of any outstanding Warrant Shares on each anniversary of the date of this
Agreement, provided that any transfer of Remaining Shares or Warrant Shares as
to which such restriction has lapsed may only be made (i) to a member of the
immediate family of the Shareholder or any trust, partnership, or corporation
beneficially owned in its entirety by members of the immediate family of the
Shareholder, (ii) as a gift to any tax-exempt organization, or (iii) in a
transaction satisfying the requirements of Rule 144 promulgated under the
Securities Act of 1933.
(b) The Shareholder further agrees that, from the date hereof
through and including the fifth anniversary of the date hereof, without the
Company's prior written consent, the Shareholder will not:
(i) acquire, announce an intention to acquire, offer or
propose to acquire, or agree to acquire, directly or indirectly, by
purchase or otherwise beneficial ownership of any Common Stock or other
voting securities of the Company (collectively the "Voting Securities")
or direct or indirect rights or options to acquire (through purchase,
exchange, conversion or otherwise) any Voting Securities;
(ii) make, or in any way participate, directly or indirectly
(other than solely as a member of the Company's Board of Directors in
connection with solicitations by the entire Board of Directors), in any
"solicitation" of proxies (as such terms are defined in Rule 14a-1
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) to vote any Voting Securities, seek to advise, encourage or
influence any person or entity with respect to the voting of any Voting
Securities, initiate or propose any shareholder proposal or induce or
attempt to induce any other person to initiate any shareholder
proposal;
(iii) make any statement or proposal, whether written or oral,
to the Board of Directors of the Company, or to any director, officer
or agent of the Company, or make any public announcement or proposal
whatsoever with respect to a merger or other business combination, sale
or transfer of assets, recapitalization, dividend, share repurchase,
liquidation or other extraordinary corporate transaction with the
Company or other transaction which could result in a change of control,
or solicit or encourage any other person to make such statement or
proposal;
(iv) after consummation of the Closing, form, join or in any
way participate in a "group" (within the meaning of Section 13(d)(3) of
the Exchange Act) with respect to any securities of the Company;
(v) otherwise act, alone or in concert with others, to seek to
exercise any control over the management, Board of Directors or
policies of the Company, other than in the performance in the normal
course of his duties as a director of the Company;
(vi) make a public request to the Company (or its directors,
officers, shareholders, employees or agents) to amend or waive any
provisions of this Agreement, the Certificate of Incorporation or
By-Laws of the Company;
(vii) take any action which might require the Company to make
a public announcement regarding the possibility of any transaction
referred to in paragraph (ii) above or similar transaction or, advise,
assist or encourage any other persons in connection with the foregoing;
or
(viii) disclose any intention, plan or arrangement
inconsistent with the foregoing.
(c) The Shareholder agrees that he will vote in favor of
approval of the transactions contemplated by this Agreement at least that number
of shares of Common Stock as represents the same percentage of the Shareholder's
holdings of Common Stock as the number of shares of Common Stock voted in favor
of such approval by holders other than the Shareholder represents of all shares
voted on such proposal (excluding shares which are not present, are not voted or
abstain) by holders other than the Shareholder.
(d) The Shareholder agrees that he will resign as Chairman of
the Board (while remaining a director) concurrently with the closing of the
purchase and sale contemplated herein.
9. Additional Agreements of the Company. The Company agrees
that it will use its reasonable best efforts to cause its upcoming Annual
Meeting of Stockholders (the "Annual Meeting") to be held on March 3, 1997 or as
soon thereafter as practicable, that it will seek approval of the transactions
contemplated in this Agreement at the Annual Meeting, and that it will promptly
prepare and file with the Securities and Exchange Commission ("SEC") preliminary
proxy materials, and as promptly as practicable following SEC review, mail
definitive proxy materials to stockholders, in connection with the Annual
Meeting.
10. Registration Rights. The Shareholder shall have the
following rights with respect to the Warrant Shares.
10.1 Demand Registrations.
(a) Upon the written request of the Shareholder that the
Company register all or part of the Warrant Shares then owned by the Shareholder
or which the Shareholder has a right to acquire upon exercise of the Warrant
(which request shall satisfy the requirements of paragraph (c) of this Section
10.1), the Company shall, subject in all cases to the provisions of paragraph
(b) of this Section 10.1, thereupon, use its reasonable best efforts to cause
the Warrant Shares specified in such request to be so registered as soon as
practicable, but not later than 90 days after the date of the Shareholder's
written request to register.
(b) The Company's obligation to register all or part of the
Warrant Shares pursuant to paragraph (a) of this Section 10.1 shall in all cases
be subject to the following limitations and qualifications:
(i) The Company shall (x) be required to effect only
one such registration if such registration is ordered or declared
effective and (y) not be obligated to file a registration statement at
any time if a special audit of the Company would be required by the
rules and regulations of the Securities and Exchange Commission (the
"Commission") in connection therewith; and
(ii) The Company shall be entitled to postpone for a
reasonable period of time not to exceed 90 days the filing of any
registration statement otherwise required to be prepared and filed by
it if, at the time it receives a request for registration, the Company
determines, in its reasonable judgment, that such registration would
materially interfere with any financing, acquisition, corporate
reorganization or other material transaction then being contemplated by
its Board of Directors, involving the Company, and promptly gives the
Shareholder written notice of such determination and the reasons
therefor, provided that the Company shall not defer its obligations in
this manner more than twice in any twelve month period and the Company
shall not defer its obligations until 90 days have expired after any
prior deferral. In such event, the Shareholder shall have the right to
withdraw the request for registration by giving written notice to the
Company within 30 days after receipt of the notice of postponement
(and, in the event of such withdrawal, such request shall be ignored
for purposes of counting the demand registration to which the
Shareholder is entitled pursuant to this paragraph (b)).
For purposes of this paragraph (b), "special audit" shall mean
an audit other than a year-end audit, requiring an opinion of the Company's
independent public accountants.
(c) Any written request of the Shareholder made pursuant to
paragraph (a) of this Section 10.1 shall:
(i) specify the number of the Warrant Shares which
the Shareholder intends to offer and intends to sell;
(ii) state the firm intention of the Shareholder to
offer such shares for sale;
(iii) describe the intended method of distribution of
such shares; and
(iv) contain an undertaking on the part of the
Shareholder to provide all such information and materials concerning
the Shareholder and take all such action as may be required to permit
the Company to comply with all applicable requirements of the
Commission and to obtain acceleration of the effective date of the
registration statement.
10.2 Participation Registrations.
(a) If, at any time from the date hereof, the Company shall
propose to register under the Securities Act an offering of Common Stock to be
offered and sold by it or any stockholder, it shall give written notice of such
proposed registration to the Shareholder as promptly as possible and shall,
subject in all cases to paragraph (b) of this Section 10.2, use its reasonable
best efforts to include in the offering such number of the Warrant Shares then
owned by the Shareholder as the Shareholder shall request, within 10 days after
the giving of such notice, to be included, such offering to be upon the same
terms (including the method of distribution) as the Common Stock being sold by
the Company pursuant to any such offering.
(b) The Company's obligation to include the Warrant Shares
owned by the Shareholder in any offering pursuant to paragraph (a) of this
Section 10.2 shall in all cases be subject to the following limitation and
qualifications:
(i) The Company shall not be required to give notice
to the Shareholder or include such shares in any such registration if
the proposed registration is (x) a registration of stock option or
compensation plan or of the Company Common Stock issued or issuable
pursuant to any such plan, or (y) a registration of the Company Common
Stock proposed to be issued in exchange for securities or assets of, or
in connection with a merger or consolidation with, another corporation;
(ii) The Company may require that the number of such
shares requested to be included in such registration be reduced, or
that all such shares be excluded from any such registration, if it is
advised in writing by its managing underwriter that such reduction or
exclusion, as the case may be, is necessary to permit the orderly sale
and distribution of the securities being offered by the Company. Any
reduction shall be made pro rata among all Selling Shareholders in
proportion to the relative number of shares sought by each to be
registered. If the Company shall require such a reduction, the
Shareholder shall have the right to withdraw from the offering;
(iii) The Company may, in its sole discretion and
without the consent of the Shareholder, withdraw such registration
statement and abandon the proposed offering in which the Shareholder
had requested to participate; and
(iv) The Company shall be required to effect only one
such registration; provided that the Shareholder's right to
registration under this Section 10.2 shall not expire unless all shares
the Shareholder has requested under Section 10.2(a) to be registered
have been so registered.
10.3 Certain Covenants of the Company.
(a) In connection with any registration of the Warrant Shares
undertaken by the Company pursuant to Section 10.1 and, if and to the extent
appropriate, Section 10.2, the Company shall:
(i) prepare and file with the Commission a
registration statement with respect to such shares and use its best
efforts to cause such registration statement to become effective;
(ii) prepare and file with the Commission such
amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep
such registration statement current for such period not to exceed 270
days as the Shareholder shall request and to comply with the provisions
of the Securities Act with respect to the sale of all the Warrant
Shares covered by such registration statement during such period;
(iii) provide the Shareholder a reasonable
opportunity to review and, in the case of registrations effected
pursuant to Section 10.1, approve prior to filing (x) any registration
statement filed by the Company in connection with a registration
effected pursuant to Section 10.1 or Section 10.2 and (y) any
amendments or supplements to such registration statement and any
prospectus used in connection therewith;
(iv) furnish to the Shareholder such number of
conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all exhibits),
such number of copies of the prospectus included in such registration
statement (including each preliminary prospectus and prospectus
supplement), copies of which are in conformity with the requirements of
the Securities Act, and such other documents as the Shareholder may
reasonably request in order to facilitate the sale of the Warrant
Shares covered by such registration statement;
(v) use its best efforts to register or qualify the
Warrant Shares covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as the Shareholder
shall reasonably request, and do any and all other acts and things
which may be reasonably necessary or advisable to enable the
Shareholder to consummate the sale in such jurisdictions of such
shares; provided that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation
in any jurisdiction wherein it would not but for the requirements of
this paragraph (v) be obligated to be so qualified, to subject itself
to taxation in any such jurisdiction or to consent to general service
of process in any such jurisdiction;
(vi) notify the Shareholder, at any time when a
prospectus relating to the Warrant Shares covered by such registration
statement is required to be delivered under the Securities Act, of the
Company's becoming aware that the prospectus included in such
registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and at the
request of the Shareholder promptly prepare and furnish to the
Shareholder a reasonable number of copies of a prospectus supplemented
or amended so that, as thereafter delivered to the purchasers of such
shares, such prospectus shall not include 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 not misleading in
light of the circumstances then existing;
(vii) use its best efforts to cause all the Warrant
Shares covered by such registration statement to be listed on each
securities exchange on which securities of the same class issued by the
Company are then listed or, if there shall then be no such listing, to
be accepted for quotation on NASDAQ;
(viii) provide a transfer agent and registrar for the
Warrant Shares covered by such registration statement not later than
the effective date of such registration statement; and
(ix) enter into such agreements (including an
underwriting agreement in customary form) and take such other actions
as the Shareholder reasonably requests in order to expedite or
facilitate the disposition of such shares.
(b) The Company shall take all reasonable actions necessary so
as to enable the Shareholder to make sales of the Warrant Shares under Rule 144
(or any successor rule) under the Securities Act and in accordance with
applicable laws, rules and regulations, the requirements of the Company's
transfer agent(s), and the reasonable requirements of the broker through which
the sales are proposed to be executed.
(c) From and after the date of this Agreement, the Company
shall not, without the written consent of the Shareholder, enter into any
agreement granting to any person or entity any registration rights that are more
favorable than the registration rights granted to the Shareholder under this
Note, unless the same rights are granted to the Shareholder.
10.4 Standstill. In the event of a registered public offering,
the Shareholder will agree with the underwriters not to sell any Shares for up
to 180 days following commencement of the offering if and only if the
Shareholder has been offered the opportunity to participate in the offering and
the underwriters have not reduced the number of shares that the Shareholder may
sell.
10.5 Expenses.
(a) The Shareholder shall pay all out-of-pocket expenses
incurred by the Company in connection with any registration of the Warrant
Shares pursuant to Section 10.1 including, without limitation, all registration
and filing fees, printing expenses, underwriting discounts, commissions and
expenses, fees and disbursements of the Company's legal counsel and accountants,
transfer agents and registrars, and expenses incidental to any post-effective
amendment to any such registration statement. For purposes of this Section 10.5,
"out-of-pocket expenses" shall not include salaries of the Company employees or
expenses attributable to the Company's corporate overhead.
(b) In connection with any registration pursuant to Section
10.2, the Company shall pay all registration and filing fees, underwriting
discounts, commissions and expenses (other than those attributable to the
Warrant Shares being sold by the Shareholder), printing expenses, fees and
disbursements of the Company's legal counsel and accountants, transfer agents
and registrars fees, and expenses incidental to any post-effective amendment to
any such registration statement. The Shareholder shall pay all other
out-of-pocket expenses attributable to the inclusion in the offering of the
Warrant Shares being sold by it including, without limitation, registration and
filing fees and underwriting discounts, commissions and expenses attributable
thereto and fees and disbursements of the Shareholder's legal counsel and
accountants.
10.6 Indemnification.
(a) In the case of each registration effected by the Company
pursuant to Section 10.1 or Section 10.2, the Company agrees to indemnify and
hold harmless the Shareholder, each underwriter of the Warrant Shares so
registered and each person who controls any such underwriter within the meaning
of Section 15 of the Securities Act, against any and all losses, claims, damages
or liabilities to which they or any of them may become subject under the
Securities Act or any other statute or common law, including any amount paid in
settlement of any litigation, commenced or threatened, if such settlement is
effected with the written consent of the Company, which consent is not
unreasonably withheld in light of all factors which are important to such
indemnified party, and to reimburse them for any legal or other expenses
incurred by them in connection with investigating any claims and defending any
actions, insofar as any such losses, claims, damages, liabilities or actions
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the registration statement relating to
the sale of the Warrant Shares, or any post-effective amendment thereto, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, if used prior to the effective date of
such registration statement, or contained in the final prospectus (as amended or
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplement thereto) if used within the period during which the
Company is required to keep the registration statement to which such prospectus
relates current, or the omission or alleged omission to state therein (if so
used) a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that the indemnification agreement contained in this paragraph (a)
shall not (x) apply to such losses, claims, damages, liabilities or actions
arising out of, or based upon, any such untrue statement or alleged untrue
statement, or any such omission or alleged omission, if such statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Company by the Shareholder or such underwriter for use in
connection with the preparation of the registration statement, any preliminary
prospectus or final prospectus contained in the registration statement, or any
amendment or supplement thereto, or (y) inure to the benefit of any underwriter
or any person controlling such underwriter, if such underwriter failed to send
or give a copy of the final prospectus to the person asserting the claim at or
prior to the written confirmation of the sale of the Warrant Shares to such
person and if the untrue statement or omission concerned had been corrected in
such final prospectus. Notwithstanding the foregoing, the Company agrees to be
subject to such indemnification and contribution provisions as the underwriters
may reasonably request in connection with any underwritten offering and that to
the extent that the provisions on indemnification and contribution contained in
the underwriting agreement entered into in connection with such offerings are in
conflict with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(b) In the case of each registration effected by the Company
pursuant to Section 10.1 or 10.2, the Shareholder and each underwriter of the
Warrant Shares to be registered (each such party and such underwriters being
referred to severally in this paragraph (b) as the "indemnifying party") shall
agree in the same manner and to the same extent as set forth in paragraph (a) of
this Section 10.6 to indemnify and hold harmless the Company, each person who
controls the Company, the directors of the Company and those of its officers who
shall have signed any such registration statement, with respect to any untrue
statement or alleged untrue statement in, or omission or alleged omission from,
such registration statement or any post-effective amendment thereto or any
preliminary prospectus or final prospectus (as amended or as supplemented, if
amended or supplemented as aforesaid) contained in such registration statement,
if such statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by such indemnifying party
specifically for use in connection with the preparation of such registration
statement or any preliminary prospectus or final prospectus contained in such
registration statement or any such amendment or supplement thereto.
(c) Each indemnified party shall, with reasonable promptness
after its receipt of written notice of the commencement of any action against
such indemnified party in respect of which indemnity may be sought from an
indemnifying party on account of an indemnity agreement contained in this
Section 10.6, notify the indemnifying party in writing of the commencement
thereof. In case any such action shall be brought against any indemnified party
and it shall so notify an indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
it may wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under this
Section 10.6 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. Notwithstanding the foregoing, the indemnifying party
shall promptly pay as incurred the reasonable fees and expenses of the counsel
retained by the indemnified party in the event (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and the indemnified party shall have reasonably concluded that there may be a
conflict between the positions of the indemnifying party and the indemnified
party in conducting the defense of any such action or that there may be legal
defenses available to it or other indemnified parties that are different from or
in addition to those available to the indemnifying party. The indemnity
agreements in this Section 10.5 shall be in addition to any liabilities which
the indemnifying parties may have pursuant to law.
11. Cooperation, Etc. The Company and the Shareholder shall
cooperate and use all efforts to take all action, and to do all things
necessary, proper or advisable to consummate the sale of the Shares to the
Company and to otherwise consummate and make effective the transactions
contemplated by this Agreement, and shall refrain from taking any action that
shall be inconsistent with, or contrary to, this Agreement. Each of the parties
hereto shall cooperate and use all reasonable efforts to resist any attempts to
impose any legal prohibition or restraint on the purchase and sale of the Shares
in accordance herewith and, in the event thereof, to remove, vacate and/or
reverse any such prohibition or restraint.
12. Expenses. The Shareholder shall be responsible for any
legal fees or other expenses incurred by the Shareholder in connection with the
transactions contemplated by this Agreement. The Company shall be responsible
for any legal fees or other expenses incurred by it in connection with the
transactions contemplated by this Agreement including the fees due to the
investment banking firm of Punk, Xxxxxx & Xxxxxx ("Punk Xxxxxx") and the
expenses of preparation, printing and mailing of the Company's proxy statement.
13. Non-Disclosure. The Company and the Shareholder
acknowledge that disclosure concerning this Agreement is required by law, and
agree that each party will have the opportunity to review the Company's proxy
materials, the Company's Form 8-K (if any) and the Shareholder's Amendment to
Schedule 13D with respect to this Agreement prior to the filing thereof. Except
for such filings and except to the extent otherwise required by law, neither the
Company nor the Shareholder shall make any disclosure of the terms hereof or the
negotiations with respect hereto (other than to the parties hereto and their
representatives and advisors) except pursuant to a press release which shall be
approved by all of the parties hereto prior to the release thereof. The
Shareholder (and their agents and advisors) shall not make any disparaging
public statements with respect to the Company or any of its employees, and the
Company (and its employees, agents and advisors) shall make no disparaging
public statements concerning the Shareholder.
14. Amendments; Waivers. This Agreement shall not be modified,
amended, altered or supplemented, nor shall any provision of this Agreement be
waived, except upon the execution and delivery of a written agreement executed
by each of the parties hereto.
15. Assignments; Successors.
(a) Neither the Company nor the Shareholder shall assign any
of their rights or delegate any of their duties under this Agreement.
(b) This Agreement shall be binding upon, inure to the benefit
of, and be enforceable by, the parties hereto. Nothing expressed or referred to
in this Agreement is intended or shall be construed to give any person other
than the parties to this Agreement any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
16. Specific Performance and Injunctive Relief. The parties
hereto agree that irreparable damage would occur in the event of the breach of
any provision of this Agreement and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at law
or equity.
17. Notices. All notices and other communications provided for
hereunder shall be in writing (including telex and telecopy communication) and
shall be sent by mail, telex, telecopier or hand delivery: (i) if to the
Company, at its address at Xxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, XX 00000,
Attention: Xxxxxxx X. Xxxxxxx, or (ii) if to the Shareholder, at 0000 Xxxxx
Xxxx, Xxxxx, Xxxxxxxx 00000.
18. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Illinois applicable to
contracts executed in and to be performed in that State.
19. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
20. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
21. Entire Agreement. This Restated Agreement supersedes and
replaces the Stock Purchase and Warrant Agreement dated as of January 2, 1997,
between the parties hereto relating to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above.
MEDICUS SYSTEMS CORPORATION
By /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Xxxxxxx X. Xxxxxxx,
President and Chief
Executive Officer
THE SHAREHOLDER
/s/ Xxxxxxx X. Xxxxxxx
-----------------------
Xxxxxxx X. Xxxxxxx
