-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WghvP2zzoQ1+J1LOTpxiBwR4k+pG/CRBKHWRnOxUzL6OMHfh6h1t6SXPDKPfbwe4 huYVI55UG8gsZYorq7dJZg== 0000896058-96-000108.txt : 19960711 0000896058-96-000108.hdr.sgml : 19960711 ACCESSION NUMBER: 0000896058-96-000108 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19960710 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MEDIWARE INFORMATION SYSTEMS INC CENTRAL INDEX KEY: 0000874733 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 112209324 STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-41734 FILM NUMBER: 96593010 BUSINESS ADDRESS: STREET 1: 1121 OLD WALT WHITMAN RD CITY: MELVILLE STATE: NY ZIP: 11747-3005 BUSINESS PHONE: 5164237800 MAIL ADDRESS: STREET 1: 1121 OLD WALT WHITMAN RD CITY: MELVILLE STATE: NY ZIP: 11747-3005 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MEDIWARE INFORMATION SYSTEMS INC CENTRAL INDEX KEY: 0000874733 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 112209324 STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 1121 OLD WALT WHITMAN RD CITY: MELVILLE STATE: NY ZIP: 11747-3005 BUSINESS PHONE: 5164237800 MAIL ADDRESS: STREET 1: 1121 OLD WALT WHITMAN RD CITY: MELVILLE STATE: NY ZIP: 11747-3005 SC 13D/A 1 SCHEDULE 13D AMENDMENT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 1) Mediware Information Services, Inc. ---------------------------------------- (Name of Issuer) Common Stock, par value $.10 ---------------------------------- (Title of Class of Securities) 584946107 ------------------- (CUSIP Number) Lawrence Auriana 143 East 45th Street, 43rd Floor New York, New York 10012 (212) 922-2999 --------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) June 17, 1996 ------------------- (Date of Event which Requires Filing of this Statement) 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 the following: [ ] Check the following box if a fee is being paid with this Statement [ ]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class.) (See Rule 13d-7.) Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D - ---------------------------- | CUSIP NO. 584946107 | | - ---------------------------- - -------------------------------------------------------------------------------- 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Lawrence Auriana - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS PF as to 138,462 shares; SC as to 25,500 shares; OO as to 117,120 shares - -------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION United States of America - -------------------------------------------------------------------------------- NUMBER OF SHARES 7. SOLE VOTING POWER 990,777 ----------------------------------------------- BENEFICIALLY OWNED BY 8. SHARED VOTING POWER ----------------------------------------------- EACH PERSON WITH 9. SOLE DISPOSITIVE POWER 990,777 ----------------------------------------------- 10. SHARED DISPOSITIVE POWER ----------------------------------------------- - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 990,777 - -------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT ON ROW (11) 17.5% - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON IN Item 1. Security and Issuer ------------------- This Statement amends and restates the Schedule 13D dated August 6, 1991, relating to the Common Stock, $.10 par value (hereafter "Common Stock"), of Mediware Information Systems, Inc. (the "Company") filed by Lawrence Auriana. The Company has its principal executive offices at 1121 Old Walt Whitman Road, Melville, New York 11747. Each of the Items listed below are hereby amended and restated in their entirety. Item 2. Identity and Background ----------------------- (a) This Amended and Restated Schedule 13D is being filed on behalf of Lawrence Auriana ("Reporting Person"). (b) The business address of the Reporting Person is c/o The Kaufmann Fund, 140 East 45th Street, 43rd Floor, New York, New York 10017. (c) The Reporting Person is Chairman, a director and Portfolio Co-Manager of The Kaufmann Fund, 140 East 45th Street, 43rd Floor, New York, New York 10017. (d) During the last five years, the Reporting Person has not been convicted in a criminal proceeding. (e) During the last five years, the Reporting Person has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which he was or is 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. (f) The Reporting Person is a citizen of the United States of America. Item 3. Source and Amount of Funds or Other Consideration ------------------------------------------------- Of the 990,777 shares (the "Shares") of Common Stock beneficially owned by the Reporting Person: 109,120 shares were acquired either with personal funds of the Reporting Person or as consideration for services rendered as a director of the Company; 8,000 shares were received as an investment banking fee in connection with the acquisition of Digimedics Corporation in May 1990; 25,500 shares were granted in consideration for services rendered in fiscal years 1993, 1994 and 1996 as Chairman of the Board of the Company; 35,000 shares may be acquired upon the exercise of options granted in consideration for services rendered in fiscal years 1992 through 1996 as a director and Chairman of the Board of the Company; 674,695 shares may be acquired upon the exercise of warrants purchased in 1993, 1994 and 1995 with the Reporting Person's personal funds; and 138,462 shares were acquired in June 1996 with the Reporting Person's personal funds. Item 4. Purpose of Transaction ---------------------- All of the Shares, including the options and warrants to purchase shares of Common Stock, have been acquired for investment purposes. The Reporting Person has no current plans to bring about the actions referred to in Item 4 of the instructions to Schedule 13D. Item 5. Interest in Securities of the Issuer ------------------------------------ (a) As of June 17, 1996, the Reporting Person beneficially owned 990,777 shares of Common Stock of the Company (computed as provided in Rule 13D-3(d)(1) and including 709,695 shares which the Reporting Person has a right to acquire). On a percentage basis, the Reporting Person's ownership of the Shares represents the ownership of 17.5% of the outstanding shares of Common Stock of the Company (computed as provided below). The percentage calculation herein is based upon the number of shares of Common Stock outstanding as reported in the Company's Quarterly Report on Form 10-QSB for the quarter ended March 31, 1996, plus (i) share certificates which were distributed to directors in consideration for services rendered in fiscal year ended June 30, 1994; (ii) shares issued in May 1996 upon the exercise of warrants; (iii) shares issued on June 17, 1996 in connection with the Pharmakon Transaction (as defined and described below); (iv) shares issued as a fee in connection with the Pharmakon Transaction; (v) shares issued to directors on July 1, 1996 in consideration for services rendered in fiscal year ended June 30, 1996; and (vi) as provided in Rule 13D-3(d)(1), the number of shares not outstanding which are subject to the option and warrant exercise privileges of the Reporting Person. (b) The Reporting Person has sole voting power and sole disposition power over all of the Shares. (c) On June 17, 1996, the Reporting Person acquired 138,462 shares of Common Stock from the Company at a price of $3.25 per share in the private placement financing of the acquisition by a wholly owned subsidiary of the Company of the Pharmakon division of Continental Healthcare Systems, Inc.("Pharmakon Transaction"). On May 6, 1996, the Reporting Person received certificates for 7,500 shares of Common Stock from the Company as confirmation of consideration for services rendered in -2- fiscal year ended June 30, 1994. On July 1, 1996, the Reporting Person received 7,500 shares of Common Stock from the Company as consideration for services rendered in fiscal year ended June 30, 1996. The Reporting Person has not effected any other transactions with respect to the Common Stock during the past sixty days. (d) No person other than the Reporting Person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer -------------------------------------------------------------- Pursuant to eleven Warrant Agreements entered into between the Company and the Reporting Person in 1993, 1994 and 1995, the Reporting Person purchased (i) warrants to purchase 470,000 shares of Common Stock at a price of $.50 per share; (ii) warrants to purchase 75,000 shares of Common Stock at a price of $.50 per share; and (iii) warrants to purchase 129,695 shares of Common Stock at a price of $1.25 per share. All of such warrants expire on September 30, 2004. The Reporting Person received 8,000 shares as an investment banking fee in connection with the acquisition of Digimedics Corporation in May 1990, which was approved by the stockholders of the Company in April 1990. Pursuant to a Stock Purchase Agreement between the Company and the Reporting Person dated June 17, 1996, the Reporting Person has agreed that he will not sell, assign, pledge, give, transfer or otherwise dispose of the shares of Common Stock purchased thereunder except pursuant to a registration of such shares under the Securities Act of 1933 and all applicable state securities laws, or in an exempt transaction. Pursuant to a Registration Rights Agreement between the Company and the Reporting Person dated June 17, 1996, the Reporting Person has agreed, in connection with any registration of the Company's securities, not to sell or otherwise dispose of shares of Common Stock (other than those included in the registration) without the prior written consent of the Company or the underwriters of such registration, from the effective date of such registration for a period of time of up to 180 days. There are no other contracts, arrangements, understandings or relationships (legal or otherwise) between the Reporting Person and any other person with respect to any securities of the Company, including but not limited to transfer, or voting of any of the securities, finder's fees, joint -3- ventures, loans or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies. None of the Shares are pledged or otherwise subject to a contingency, the occurrence of which would give another person voting or investment power over the Shares. Item 7. Material to be Filed as Exhibits -------------------------------- 7.1 Form of Warrant Agreement by and among the Company and Reporting Person. 7.2 Stock Purchase Agreement dated June 17, 1996 by and among the Company and certain shareholders of the Company. 7.3 Registration Rights Agreement dated June 17, 1996 by and among the Company and certain shareholders of the Company. -4- S I G N A T U R E ----------------- 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. July 3, 1996 - ------------ Date /s/ Lawrence Auriana ____________________ Signature -5- EXHIBIT INDEX 7.1 Form of Warrant Agreement by and among the Company and Lawrence Auriana. 7.2 Stock Purchase Agreement dated June 17, 1996 by and among the Company and certain shareholders of the Company. 7.3 Registration Rights Agreement dated June 17, 1996 by and among the Company and certain shareholders of the Company. EX-99.1 2 FORM OF WARRANT AGREEMENT EXHIBIT 7.1 DRAFT: 5/3/91 [FORM] THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO A REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. HOWEVER, NEITHER THE WARRANTS NOR SUCH SHARES MAY BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) A POST-EFFECTIVE AMENDMENT TO SUCH REGISTRATION STATEMENT, (ii) A SEPARATE REGISTRATION STATEMENT UNDER SUCH ACT, OR (iii) AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT. THE TRANSFER OF THIS WARRANT IS RESTRICTED AS DESCRIBED HEREIN. MEDIWARE INFORMATION SYSTEMS, INC. Warrant for the Purchase of Shares of Common Stock, par value $[ ] per Share No. 1 [ ] Shares THIS CERTIFIES that, for receipt in hand of [$ ] and other value received, COMMONWEALTH ASSOCIATES, One Exchange Plaza, New York, New York 10006 (the "Holder"), is entitled to subscribe for and purchase from MEDIWARE INFORMATION SYSTEMS, INC., a New York corporation, (the "Company"), upon the terms and conditions set forth herein, at any time or from time to time after _________ __, 1992, and before 5:00 P.M. on May __, 1996, New York time (the "Exercise Period"), [ ] shares of the Company's Common Stock, par value $[ ] per share ("Common Stock"), at a price of $[ ] per share (the "Exercise Price"). This Warrant may not be sold, transferred, assigned or hypothecated until May __, 1992 except that it may be transferred, in whole or in part, to (i) one or more officers or partners of the Holder (or the officers or partners of any such partner); (ii) any other underwriting firm or member of the selling group which participated in the public offering of Common Stock which commenced on ___________ __, 1991 (or the officers or partners of any such firm); (iii) a successor to the Holder, or the officers or partners of such successor; (iv) a purchaser of substantially all of the assets of the Holder; or (v) by operation of law; and the term the "Holder" as used herein shall include any transferee to whom this Warrant has been transferred in accordance with the above. As used herein the term "this Warrant" shall mean and include this Warrant and any Warrant or Warrants hereafter issued as a consequence of the exercise or transfer of this Warrant in whole or in part. The number of shares of Common Stock issuable upon exercise of this Warrant (the "Warrant Shares") and the Exercise Price may be adjusted from time to time as hereinafter set forth. 1. This Warrant may be exercised during the Exercise Period as to the whole or any lesser number of whole Shares, by the surrender of this Warrant (with the election at the end hereof duly executed) to the Company at its office at 1121 Old Walt Whitman Road, Melville, New York 11747, or such other place as is designated in writing by the Company, together with a certified or bank cashier's check payable to the order of the Company in an amount equal to the Exercise Price multiplied by the number of Warrant Shares for which this warrant is being exercised. 2. Upon each exercise of the Holder's rights to purchase the Warrant Shares granted pursuant to this Warrant, as reissued from time to time, the Holder shall be deemed to be the holder of record of the Warrant Shares issuable upon such exercise notwithstanding that the transfer books of the Company shall then be closed or certificates representing such Warrant Shares shall not then have been actually delivered to the Holder. As soon as practicable after each such exercise of this Warrant, the Company shall issue and deliver to the Holder a certificate or certificates for the Warrant Shares, registered in the name of the Holder or its designee. If this Warrant should be exercised in part only, the Company shall, upon surrender of this Warrant for cancellation, execute and deliver a new Warrant evidencing the right of the Holder to purchase the balance of the Warrant Shares (or portions thereof) subject to purchase hereunder. 3. Any Warrants issued upon the transfer or exercise in part of this Warrant (together with this Warrant, the "Warrants") shall be numbered and shall be registered in a Warrant Register as they are issued. The Company shall be entitled to treat the registered holder of any Warrant on the Warrant Register as the owner in fact thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in such Warrant on the part of any other person, and shall not be liable for any registration or transfer of Warrants which are registered or to be registered in the name of a fiduciary or the nominee of a fiduciary unless made with the actual knowledge that a fiduciary or nominee is committing a breach of trust in requesting such registration or transfer, or with the knowledge of such facts that its participation therein amounts to bad faith. The Warrants shall be transferable only on the books of the company upon delivery thereof duly endorsed by the Holder or by his duly authorized attorney or representative, or accompanied by proper evidence of succession, assignment or -2- authority to transfer. In all cases of transfer by an attorney, executor, administrator, guardian or other legal representative, duly authenticated evidence of his or its authority shall be produced. Upon any registration of transfer, the Company shall deliver a new Warrant or Warrants to the person entitled thereto. The Warrants may be exchanged, at the option of the Holder thereof, for another Warrant, or other Warrants of different denominations, of like tenor and representing in the aggregate the right to purchase a like number of Warrant Shares (or portions thereof) upon surrender to the Company or its duly authorized agent. Notwithstanding the foregoing, the Company shall have no obligation to cause Warrants to be transferred on its books to any person if, in the opinion of counsel to the Company, such transfer does not comply with the provisions of the Securities Act of 1933, as amended (the "Act"), and the rules and regulations thereunder. 4. The Company shall at all times reserve and keep available out of its authorized and unissued Common Stock, solely for the purpose of providing for the exercise of the rights to purchase all Warrant Shares granted pursuant to this Warrant, such number of shares of Common Stock as shall, from time to time, be sufficient therefor. The Company covenants that all shares of Common Stock issuable upon exercise of this Warrant, upon receipt by the Company of the purchase price therefor, shall be validly issued, fully paid, nonassessable, and free of preemptive rights. 5. (a) In case the Company shall at any time after the date of this Warrant (i) declare a dividend on the outstanding Common Stock in shares of its capital stock, (ii) subdivide the outstanding Common Stock, (iii) combine the outstanding Common Stock into a smaller number of shares, or (iv) issue any shares of its capital stock by reclassification of the Common Stock (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing corporation), then, in each case, the Exercise Price, and the number and kind of shares of Common Stock receivable upon exercise of this Warrant, in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination, or reclassification, shall be proportionately adjusted so that the Holder after such time shall be entitled to receive the aggregate number and kind of shares which, if such Warrant had been exercised immediately prior to such time, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination, or reclassification. Such adjustment shall be made successively whenever any event listed above shall occur. (b) In case the Company shall issue or fix a record date for the issuance of rights, options, or warrants to all holders of Common Stock entitling them to subscribe for or purchase Common Stock (or securities convertible into or exchangeable for Common Stock) at a price per share (or having a -3- conversion price per share, if a security convertible into or exchangeable for Common Stock) less than the Current Market Price per share of Common Stock (as defined in section 5(e) hereof) on such record date, then, in each case, the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such record date plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price and the denominator of which shall be the number of shares of Common Stock outstanding on such record date plus the number of additional shares of Common Stock to be offered for subscription or purchase (or into which the convertible or exchangeable securities so to be offered are initially convertible or exchangeable). Such adjustment shall become effective at the close of business on such record date; provided, however, that, to the extent the shares of Common Stock (or securities convertible into or exchangeable for shares of Common Stock) are not delivered, the Exercise Price shall be readjusted after the expiration of such rights, options, or warrants (but only with respect to Warrants exercised after such expiration), to the Exercise Price which would then be in effect had the adjustments made upon the issuance of such rights, options, or warrants been made upon the basis of delivery of only the number of shares of Common Stock (or securities convertible into or exchangeable for shares of Common Stock) actually issued. In case any subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the board of directors of the Company, whose determination shall be conclusive absent manifest error. Shares of Common Stock owned by or held for the account of the Company or any majority-owned subsidiary shall not be deemed outstanding for the purpose of any such computation. (c) In case the Company shall distribute to all holders of Common Stock (including any such distribution made to the shareholders of the Company in connection with a consolidation or merger in which the Company is the continuing corporation) evidences of its indebtedness or assets (other than cash dividends or distributions and dividends payable in shares of Common Stock), or subscription rights, options, or warrants or convertible or exchangeable securities containing the right to subscribe for or purchase shares of Common Stock (excluding those referred to in section 5(b) hereof), then, in each case, the Exercise Price shall be adjusted by multiplying the Exercise Price in effect immediately prior to the record date for the determination of shareholders entitled to receive such distribution by a fraction, the numerator of which shall be the Current Market Price per share of Common Stock on such record date, less the fair market value (as determined in good faith by the board of directors of the Company, whose determination shall -4- be conclusive absent manifest error) of the portion of the evidences of indebtedness or assets so to be distributed, or of such subscription rights, options, or warrants or convertible or exchangeable securities containing the right to subscribe for or purchase shares of Common Stock, applicable to one share, and the denominator of which shall be such Current Market Price per share of Common Stock. Such adjustment shall be made whenever any such distribution is made, and shall become effective on the date of such distribution retroactive to the record date for the determination of shareholders entitled to receive such distribution. (d) In case the Company shall issue shares of Common Stock or rights, options, warrants to subscribe for or purchase shares of Common Stock, or convertible or exchangeable securities containing the right to subscribe for or to convert into or purchase shares of Common Stock (excluding shares, rights, options, warrants, or convertible or exchangeable securities issued or issuable (i) in any of the transactions described in sections 5(a), 5(b), or 5(c) above, or (ii) upon exercise of the Warrants), at a price per share (determined, in the case of such rights, options, warrants, or convertible or exchangeable securities, by dividing (x) the total amount received or receivable by the Company in consideration of the sale and issuance of such rights, options, warrants, or convertible or exchangeable securities, plus the minimum aggregate consideration payable to the Company upon exercise, conversion, or exchange thereof, by (y) the maximum number of shares covered by such rights, options, warrants, or convertible or exchangeable securities) lower than the Current Market Price per share of Common Stock in effect immediately prior to such issuance, then the Exercise Price shall be reduced on the date of such issuance to a price (calculated to the nearest cent) determined by dividing (i) an amount equal to the sum of (A) the number of shares of Common Stock outstanding immediately prior to such issuance multiplied by the then existing Exercise Price plus (B) the consideration received by the Company upon such issuance by (ii) the total number of shares of Common Stock outstanding immediately after such issuance. For the purposes of such adjustments, the maximum number of shares which the holders of any such rights, options, warrants, or convertible or exchangeable securities shall be entitled to initially subscribe for or purchase shall be deemed to be issued and outstanding as of the date of such issuance, and the consideration received by the Company therefor shall be deemed to be the consideration received by the Company for such rights, options, warrants, or convertible or exchangeable securities, plus the minimum aggregate consideration or premiums stated in such rights, options, warrants, or convertible or exchangeable securities to be paid for the shares covered thereby. No further adjustment of the Exercise Price shall be made as a result of the actual issuance of shares of Common Stock on exercise of such rights, options, or warrants or on conversion or exchange of such convertible or exchangeable securities. On the expiration or the -5- termination of such rights, options, or warrants, or the termination of such right to convert or exchange, the Exercise Price shall be readjusted to such Exercise Price as would have obtained had the adjustments made upon the issuance of such rights, options, warrants, or convertible or exchangeable securities been made upon the basis of the delivery of only the number of shares of Common Stock actually delivered upon the exercise of such rights, options, or warrants or upon the conversion or exchange of any such securities; and on any change of the number of shares of Common Stock deliverable upon the exercise of any such rights, options, or warrants or conversion or exchange of such convertible or exchangeable securities or any change in the consideration to be received by the Company upon such exercise, conversion, or exchange, including, but not limited to, a change resulting from the antidilution provisions thereof, the Exercise Price, as then in effect, shall forthwith be readjusted to such Exercise Price as would have been obtained had an adjustment been made upon the issuance of such rights, options, or warrants not exercised prior to such change, or securities not converted or exchanged prior to such change, on the basis of such change. In case the company shall issue shares of Common Stock or rights, options, warrants, or convertible or exchangeable securities containing the right to subscribe for or purchase shares of common Stock, for a consideration consisting, in whole or in part, of property other than cash or its equivalent, then the "price per share" and the "consideration received by the Company" for purposes of the first sentence of this section 5(d) shall be as determined in good faith by the board of directors of the Company, whose determination shall be conclusive absent manifest error. Shares of Common Stock owned by or held for the account of the Company or any majority-owned subsidiary shall not be deemed outstanding for the purpose of any such computation. (e) For the purpose of any computation under this section 5, the Current Market Price per share of Common Stock on any date shall be deemed to be the average of the daily closing prices for the 30 consecutive trading days immediately preceding the date in question. The closing price for each day shall be the last reported sales price regular way or, in case no such reported sale takes place on such day, the closing bid price regular way, in either case on the principal national securities exchange (including, for purposes hereof, the NASDAQ National Market System) on which the Common Stock is listed or admitted to trading or, if the Common Stock is not listed or admitted to trading on any national securities exchange, the highest reported bid price for the Common Stock as furnished by the National Association of Securities Dealers, Inc. through NASDAQ or a similar organization if NASDAQ is no longer reporting such information. If on any such date the Common Stock is not listed or admitted to trading on any national securities exchange and is not quoted by NASDAQ or any similar organization, the fair value of a share of Common Stock on such date, as determined in good faith by the board of directors of the Company, whose -6- determination shall be conclusive absent manifest error, shall be used. (f) No adjustment in the Exercise Price shall be required if such adjustment is less than $.05; provided, however, that any adjustments which by reason of this section 5 are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this section 5 shall be made to the nearest cent or to the nearest one-thousandth of a share, as the case may be. (g) In any case in which this section 5 shall require that an adjustment in the Exercise Price be made effective as of a record date for a specified event, the Company may elect to defer, until the occurrence of such event, issuing to the Holder, if such holder exercised after such record date, the shares of Common Stock, if any, issuable upon such exercise over and above the shares of Common Stock, if any, issuable upon such exercise on the basis of the Exercise Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional shares upon the occurrence of the event requiring such adjustment. (h) Upon each adjustment of the Exercise Price as a result of the calculations made in sections 5(a), 5(b), 5(c), or 5(d) hereof, each Warrant outstanding prior to the making of the adjustment in the Exercise Price shall thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of shares (calculated to the nearest thousandth) obtained by dividing (A) the product obtained by multiplying the number of shares purchasable upon exercise of a Warrant prior to adjustment of the number of shares by the Exercise Price in effect prior to adjustment of the Exercise Price by (B) the Exercise Price in effect after such adjustment of the Exercise Price. (i) Whenever there shall be an adjustment as provided in this section 5, the Company shall promptly cause written notice thereof to be sent by registered mail, postage prepaid, to the Holder, at its principal office, which notice shall be accompanied by an officer's certificate setting forth the number of Warrant Shares purchasable upon the exercise of this Warrant and the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment and the computation thereof, which officer's certificate shall be conclusive evidence of the correctness of any such adjustment absent manifest error. (j) The Company shall not be required to issue fractions of shares of Common Stock or other capital stock of the Company upon the exercise of the Warrants. If any fraction of a share would be issuable on the exercise of any Warrant (or specified portions thereof), the Company shall purchase such fraction for an amount in cash equal to the same fraction of the -7- Current Market Price of such share of Common Stock on the date of exercise of the Warrant. 6. (a) In case of any consolidation with or merger of the Company with or into another corporation (other than a merger or consolidation in which the Company is the surviving or continuing corporation), or in case of any sale, lease or conveyance to another corporation of the property of the Company as an entirety or substantially as an entirety, such successor, leasing or purchasing corporation, as the case may be, shall (i) execute with the Holder an agreement providing that the Holder shall have the right thereafter to receive upon exercise of this Warrant solely the kind and amount of shares of stock and other securities, property, cash or any combination thereof receivable upon such consolidation, merger, sale, lease or conveyance by a holder of the number of shares of Common Stock for which this Warrant might have been exercised immediately prior to such consolidation, merger, sale, lease or conveyance, and (ii) make effective provision in its certificate of incorporation or otherwise, if necessary, in order to effect such agreement. Such agreement shall provide for adjustments which shall be as nearly equivalent as practicable to the adjustments in section 5. (b) In case of any reclassification or change of the shares of Common Stock issuable upon exercise of this Warrant (other than a change in par value or from no par value to a specified par value, or as a result of a subdivision or combination, but including any change in the shares into two or more classes or series of shares), or in case of any consolidation or merger of another corporation into the Company in which the Company is the continuing corporation and in which there is a reclassification or change (including a change to the right to receive cash or other property) of the shares of Common Stock (other than a change in par value, or from no par value to a specified par value, or as a result of a subdivision or combination, but including any change in the shares into two or more classes or series of shares), the Holder shall have the right thereafter to receive upon exercise of this Warrant solely the kind and amount of shares of stock and other securities, property, cash or any combination thereof receivable upon such reclassification, change, consolidation or merger by a holder of the number of shares of Common Stock for which this Warrant might have been exercised immediately prior to such reclassification, change, consolidation or merger. Thereafter, appropriate provision shall be made for adjustments which shall be as nearly equivalent as practicable to the adjustments in section 5. (c) The above provisions of this section 6 shall similarly apply to successive reclassifications and changes of shares of Common Stock and to successive consolidations, mergers, sales, leases or conveyances. 7. In case at any time the Company shall propose -8- (a) to pay any dividend or make any distribution on shares of Common Stock in shares of Common Stock or make any other distribution (other than regularly scheduled cash dividends which are not in a greater amount per share than the most recent such cash dividend) to all holders of Common Stock; or (b) to issue any rights, warrants or other securities to all holders of Common Stock entitling them to purchase any additional shares of Common Stock or any other rights, warrants or other securities; or (c) to effect any reclassification or change of outstanding shares of Common Stock, or any consolidation, merger, sale, lease or conveyance of property, described in section 6; or (d) to effect any liquidation, dissolution, or winding-up of the Company; or (e) to take any other action which would cause an adjustment to the Exercise Price; then, and in any one or more of such cases, the Company shall give written notice thereof, by registered mail, postage prepaid, to the Holder at the Holder's address as it shall appear in the Warrant Register, mailed at least 15 days prior to (i) the date as of which the holders of record of shares of Common Stock to be entitled to receive any such dividend, distribution, rights, warrants or other securities are to be determined, (ii) the date on which any such reclassification, change of outstanding shares of Common Stock, consolidation, merger, sale, lease, conveyance of property, liquidation, dissolution, or winding-up is expected to become effective, and the date as of which it is expected that holders of record of shares of Common Stock shall be entitled to exchange their shares for securities or other property, if any, deliverable upon such reclassification, change of outstanding shares, consolidation, merger, sale, lease, conveyance of property, liquidation, dissolution, or winding-up; or (iii) the date of such action which would require an adjustment to the Exercise Price. 8. The issuance of any shares or other securities upon the exercise of this Warrant, and the delivery of certificates or other instruments representing such shares or other securities, shall be made without charge to the Holder for any tax or other charge in respect of such issuance. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery of any certificate in a name other than that of the Holder and the Company shall not be required to issue or deliver any such certificate unless and until the person or persons requesting the issue thereof shall have paid to the Company the amount of such -9- tax or shall have established to the satisfaction of the Company that such tax has been paid. 9. (a) If, at any time during the six-year period commencing on ___________ __, 1992, the Company shall file a registration statement (other than on Form S-4, Form S-8, or any successor form) with the Securities and Exchange Commission (the "Commission") while Warrant Shares are available for purchase upon exercise of this Warrant or while any Warrant Shares previously purchased upon exercise of this Warrant (which have not been so registered and actually sold) are outstanding, the Company shall give the Holder and all the then holders of such Warrant Shares at least 45 days' prior written notice of the filing of such registration statement. If requested by the Holder or by any such holder in writing within 30 days after receipt of any such notice, the Company shall, at the Company's sole expense (other than the fees and disbursements of counsel for the Holder or such holder and the underwriting discounts, if any, payable in respect of the Warrants and Warrant Shares sold by the Holder or any such holder), register or qualify all of any portion of the Warrants and Warrant Shares (collectively, the "Underwriters' Securities") of the Holder or any such holders who shall have made such request concurrently with the registration of such other securities, all to the extent requisite to permit the public offering and sale of the Underwriters' Securities through the facilities of all appropriate securities exchanges and the over-the-counter market, and will use its best efforts through its officers, directors, auditors and counsel to cause such registration statement to become effective as promptly as practicable. Notwithstanding the foregoing, if the managing underwriter of any such offering shall advise the Company in writing that, in its opinion, the distribution of all or a portion of the Underwriters' Securities requested to be included in the registration concurrently with the securities being registered by the Company would materially adversely affect the distribution of such securities by the Company for its own account, then the Holder or any such holder who shall have requested registration of his or its Underwriters' Securities shall delay the offering and sale of such Underwriters' Securities (or the portions thereof so designated by such managing underwriter) for such period, not to exceed 90 days, as the managing underwriter shall request, provided that no such delay shall be required as to any Underwriters' Securities if any securities of the Company are included in such registration statement for the account of any person other than the Company and the Holder or any such holder unless the securities included in such registration statement for such other person shall have been reduced pro rata to the reduction of the Underwriters' Securities which were requested to be included in such registration. (b) If, at any time during the six-year period commencing _____________ __, 1992, the Company shall receive a written request from holders of -10- Underwriters' Securities, who in the aggregate own (or upon exercise of all Warrants will own) a majority of the total number of shares of Common Stock issued or issuable upon exercise of the Warrants, to register the sale of all or part of such securities, the Company shall, as promptly as practicable, prepare and file with the Commission a registration statement sufficient to permit the public offering and sale of such Underwriters' Securities through the facilities of all appropriate securities exchanges and the over-the-counter market, and will use its best efforts through its officers, directors, auditors and counsel to cause such registration statement to become effective as promptly as practicable; provided, however, that the Company shall only be obligated to file one such registration statement for which all expenses incurred in connection with such registration (other than the fees and disbursements of counsel for the Holder or such holders and underwriting discounts, if any, payable in respect of the Underwriters' Securities sold by the Holder or any such holder) shall be borne by the Company and one additional such registration statement for which all such expenses shall be paid by the Holder and such holders. Within three days after receiving any request contemplated by this section 9(b), the Company shall give written notice to all the other holders of Underwriters' Securities, advising them that the Company is proceeding with such registration and offering to include therein all or any portion of any such other holder's Underwriters' Securities, provided that the Company receives a written request to do so from such holder within 30 days after receipt by him or it of the Company's notice. (c) In the event of a registration pursuant to the provisions of this section 9, the Company shall use its best efforts to cause the Underwriters' Securities so registered to be registered or qualified for sale under the securities or blue sky laws of such jurisdictions as the Holder or such holders may reasonably request; provided, however, that the Company shall not be required to qualify to do business in any state by reason of this section 9(c) in which it is not otherwise required to qualify to do business. (d) The Company shall keep effective any registration or qualification contemplated by this section 9 and shall from time to time amend or supplement each applicable registration statement, preliminary prospectus, final prospectus, application, document and communication for such period of time as shall be required to permit the Holder or such holders to complete the offer and sale of the Underwriters' Securities covered thereby. The Company shall in no event be required to keep any such registration or qualification in effect for a period in excess of nine months from the date on which the Holder and such holders are first free to sell such Underwriters' Securities; provided, however, that if the Company is required to keep any such registration or qualification in effect with respect to securities other than the Underwriters' Securities beyond such period, the Company shall keep such registration or qualification -11- in effect as it relates to the Underwriters' Securities for so long as such registration or qualification remains or is required to remain in effect in respect of such other securities. (e) In the event of a registration pursuant to the provisions of this section 9, the Company shall furnish to the Holder and to each such holder such number of copies of the registration statement and of each amendment and supplement thereto (in each case, including all exhibits), such reasonable number of copies of each prospectus contained in such registration statement and each supplement or amendment thereto (including each preliminary prospectus), all of which shall conform to the requirements of the Act and the rules and regulations thereunder, and such other documents, as the Holder or such holders may reasonably request in order to facilitate the disposition of the Underwriters' Securities included in such registration. (f) In the event of a registration pursuant to the provisions this section 9, the Company shall furnish the Holder and each holder of any Underwriters' Securities so registered with an opinion of its counsel (reasonably acceptable to the Holder) to the effect that (i) the registration statement has become effective under the Act and no order suspending the effectiveness of the registration statement, preventing or suspending the use of the registration statement, any preliminary prospectus, any final prospectus, or any amendment or supplement thereto has been issued, nor has the Commission or any securities or blue sky authority of any jurisdiction instituted or threatened to institute any proceedings with respect to such an order, (ii) the registration statement and each prospectus forming a part thereof (including each preliminary prospectus), and any amendment or supplement thereto, complies as to form, with the Act and the rules and regulations thereunder, and (iii) such counsel has no knowledge or reason to know of any material misstatement or omission in such registration statement or any prospectus, as amended or supplemented. Such opinion shall also state the jurisdictions in which the Underwriters' Securities have been registered or qualified for sale pursuant to the provisions of section 9(c). (g) In the event of a registration pursuant to the provision of this section 9, the Company shall enter into a cross-indemnity agreement and a contribution agreement, each in customary form, with each underwriter, if any, and each holder of Underwriters' Securities included in such registration statement; and, if requested, enter into an underwriting agreement containing conventional representations, warranties, allocation of expenses, and customary closing conditions, including, but not limited to, opinions of counsel and accountants' cold comfort letters, with any underwriter who acquires any Underwriters' Securities. -12- (h) The Company agrees that until all the Underwriters' Securities have been sold under a registration statement or pursuant to Rule 144 under the Act, it shall keep current in filing all reports, statements and other materials required to be filed with the Commission to permit holders of the Underwriters' Securities to sell such securities under Rule 144. 10. (a) Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless the Holder, any holder of any of the Underwriters' Securities, their officers, directors, partners, employees, agents and counsel, and each person, if any, who controls any such person within the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), from and against any and all loss, liability, charge, claim, damage and expense whatsoever (which shall include, for all purposes of this Section 10, but not be limited to, attorneys' fees and any and all expense whatsoever incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), as and when incurred, arising out of, based upon, or in connection with (i) any untrue statement or alleged untrue statement of a material fact contained (A) in any registration statement, preliminary prospectus or final prospectus (as from time to time amended and supplemented), or any amendment or supplement thereto, relating to the sale of any of the Underwriters' Securities, or (B) in any application or other document or communication (in this Section 10 collectively called an "application") executed by or on behalf of the Company or based upon written information furnished by or on behalf of the Company filed in any jurisdiction in order to register or qualify any of the Underwriters' Securities under the securities or blue sky laws thereof or filed with the Commission or any securities exchange; or any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, unless such statement or omission was made in reliance upon and in conformity with written information furnished to the Company with respect to the Holder or any holder of any of the Underwriters' Securities by or on behalf of such person expressly for inclusion in any registration statement, preliminary prospectus, or final prospectus, or any amendment or supplement thereto, or in any application, as the case may be, or (ii) any breach of any representation, warranty, covenant or agreement of the Company contained in this Warrant. The foregoing agreement to indemnify shall be in addition to any liability the Company may otherwise have, including liabilities arising under this Warrant. If any action is brought against the Holder or any holder of any of the Underwriters' Securities or any of its officers, directors, partners, employees, agents or counsel, or any controlling persons of such person (an "indemnified party") in respect of which indemnity may be sought against the Company pursuant to the foregoing paragraph, such indemnified party or -13- parties shall promptly notify the Company in writing of the institution of such action (but the failure so to notify shall not relieve the Company from any liability except to the extent it may have been prejudiced in any material respect by such failure, or from any liability it may have other than pursuant to this section 10(a)) and the Company shall promptly assume the defense of such action, including the employment of counsel (reasonably satisfactory to such indemnified party or parties) and payment of expenses. Such indemnified party or parties shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless the employment of such counsel shall have been authorized in writing by the Company in connection with the defense of such action or the Company shall not have promptly employed counsel reasonably satisfactory to such indemnified party or parties to have charge of the defense of such action or such indemnified party or parties shall have reasonably concluded that there may be one or more legal defenses available to it or them or to other indemnified parties which are different from or additional to those available to the Company, in any of which events such fees and expenses shall be borne by the Company and the Company shall not have the right to direct the defense of such action on behalf of the indemnified party or parties. Anything in this section to the contrary notwithstanding, the Company shall not be liable for any settlement of any such claim or action effected without its written consent. (b) The Holder agrees to indemnify and hold harmless the Company, each director of the Company, each officer of the Company who shall have signed any registration statement covering Underwriters' Securities held by the Holder, each other person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, and its or their respective counsel, to the same extent as the foregoing indemnity from the Company to the Holder in section 10(a), but only with respect to statements or omissions, if any, made in any registration statement, preliminary prospectus, or final prospectus (as from time to time amended and supplemented), or any amendment or supplement thereto, or in any application, in reliance upon and in conformity with written information furnished to the Company with respect to the Holder by or on behalf of the Holder expressly for inclusion in any such registration statement, preliminary prospectus, or final prospectus, or any amendment or supplement thereto, or in any application, as the case may be. If any action shall be brought against the Company or any other person so indemnified based on any such registration statement, preliminary prospectus, or final prospectus, or any amendment or supplement thereto, or in any application, and in respect of which indemnity may be sought against the Holder pursuant to this section 10(b), the Holder shall have the rights and duties given to the Company, and the Company and each other person so indemnified shall have the -14- rights and duties given to the indemnified parties, by the provisions of section 10(a). (c) To provide for just and equitable contribution, if (i) an indemnified party makes a claim for indemnification pursuant to section 10(a) or 10(b) (subject to the limitations thereof) but it is found in a final judicial determination, not subject to further appeal, that such indemnification may not be enforced in such case, even though this Agreement expressly provides for indemnification in such case, or (ii) any indemnified or indemnifying party seeks contribution under the Act, the Exchange Act or otherwise, then the Company (including for this purpose any contribution made by or on behalf of any director of the Company, any officer of the Company who signed any such registration statement, any controlling person of the Company, and its or their respective counsel), as one entity, and the Holder and any holder of any of the Underwriters' Securities included in such registration in the aggregate (including for this purpose any contribution by or on behalf of an indemnified party), as a second entity, shall contribute to the losses, liabilities, claims, damages and expenses whatsoever to which any of them may be subject, on the basis of relevant equitable considerations such as the relative fault of the Company and the Holder or any such holder in connection with the facts which resulted in such losses, liabilities, claims, damages and expenses. The relative fault, in the case of an untrue statement, alleged untrue statement, omission or alleged omission, shall be determined by, among other things, whether such statement, alleged statement, omission or alleged omission relates to information supplied by the Company, by the Holder or by any holder of Underwriters' Securities included in such registration, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement, alleged statement, omission or alleged omission. The Company and the Holder agree that it would be unjust and inequitable if the respective obligations of the Company and the Holder for contribution were determined by pro rata or per capita allocation of the aggregate losses, liabilities, claims, damages and expenses (even if the Holder and the other indemnified parties were treated as one entity for such purpose) or by any other method of allocation that does not reflect the equitable considerations referred to in this section 10(c). No person guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who is not guilty of such fraudulent misrepresentation. For purposes of this section 10(c), each person, if any, who controls the Holder or any holder of any of the Underwriters' Securities within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and each officer, director, partner, employee, agent and counsel of each such person, shall have the same rights to contribution as such person and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, each officer of the Company who shall have signed any such -15- registration statement, each director of the Company, and its or their respective counsel, shall have the same rights to contribution as the Company, subject in each case to the provisions of this section 10(c). Anything in this section 10(c) to the contrary notwithstanding, no party shall be liable for contribution with respect to the settlement of any claim or action effected without its written consent. This section 10(c) is intended to supersede any right to contribution under the Act, the Exchange Act or otherwise. 11. Unless registered pursuant to the provisions of section 9 hereof, the Warrant Shares issued upon exercise of the Warrants shall be subject to a stop transfer order and the certificate or certificates evidencing such Warrant Shares shall bear the following legend: "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO A REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. HOWEVER, SUCH SHARES MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) A POST-EFFECTIVE AMENDMENT TO SUCH REGISTRATION STATEMENT, (ii) A SEPARATE REGISTRATION STATEMENT UNDER SUCH ACT, OR (iii) AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT." 12. Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of any Warrant (and upon surrender of any Warrant if mutilated), and upon reimbursement of the Company's reasonable incidental expenses, the Company shall execute and deliver to the Holder thereof a new Warrant of like date, tenor and denomination. 13. The Holder of any Warrant shall not have, solely on account of such status, any rights of a stockholder of the Company, either at law or in equity, or to any notice of meetings of stockholders or of any other proceedings of the Company, except as provided in this Warrant. 14. This Warrant shall be construed in accordance with the laws of the -16- State of New York applicable to contracts made and performed within such State, without regard to principles of conflicts of law. Dated: __________ __, 1991 MEDIWARE INFORMATION SYSTEMS, INC. By:________________________________ Colin Shanks, President [Seal] - ----------------------------- Secretary -17- FORM OF ASSIGNMENT (To be executed by the registered holder if such holder desires to transfer the attached Warrant.) FOR VALUE RECEIVED, _______________________ hereby sells, assigns and transfers unto _______________________ a Warrant to purchase ____________ Shares of Mediware Information Systems, Inc. (the "Company"), together with all,right, title and interest therein, and does hereby irrevocably constitute and appoint _______________________ attorney to transfer such Warrant on the books of the Company, with full power of substitution. Dated:_____________________ Signature____________________________ Signature Guaranteed: NOTICE The signature on the foregoing Assignment must correspond to the name as written upon the face of this Warrant in every particular, without alteration or enlargement or any change whatsoever. To: MEDIWARE INFORMATION SYSTEMS, INC. 1121 Old Walt Whitman Road Melville, New York 11747 ELECTION TO EXERCISE The undersigned hereby exercises his or its rights to purchase _________ Warrant Shares covered by the within Warrant and tenders payment herewith in the amount of $__________ in accordance with the terms thereof, and requests that certificates for such securities be issued in the name of, and delivered to: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print Name, Address and Social Security or Tax Identification Number) and, if such number of Warrant Shares shall not be all the Warrant Shares covered by the within Warrant, that a new Warrant for the balance of the Warrant Shares covered by the within Warrant be registered in the name of, and delivered to, the undersigned at the address stated below. Dated: ------------------------- Name--------------------------- (Print) Address:------------------------------------------------------------------------ ----------------------------- (Signature) EX-99.2 3 STOCK PURCHASE AGREEMENT Exhibit 7.2 STOCK PURCHASE AGREEMENT dated June 17 , 1996 among HOLLAND AMERICA INVESTMENT CORPORATION, INFORMATION HANDLING SERVICES GROUP, INC. and DIGIMEDICS CORP. TABLE OF CONTENTS ARTICLE I DEFINITIONS Page 1.01 "Acquisition Documents" ........................................... 1 1.02 "Action" .......................................................... 1 1.03 "Affiliate"........................................................ 1 1.04 "Agreement" or "this Agreement".................................... 1 1.05 "Asset Purchase Agreement"......................................... 2 1.06 "Assets"........................................................... 2 1.07 "Business Day"..................................................... 2 1.08 "Closing".......................................................... 2 1.09 "Closing Date"..................................................... 2 1.10 "Copyrights"....................................................... 2 1.11 "Disclosure Schedule".............................................. 2 1.12 "Encumbrance"...................................................... 2 1.13 "Environmental Laws"............................................... 2 1.14 "Environmental Permits"............................................ 2 1.15 "Financial Statements"............................................. 2 1.16 "Governmental Authority"........................................... 2 1.17 "Governmental Order"............................................... 3 1.18 "IHSG"............................................................. 3 1.19 "Indemnified Party"................................................ 3 1.20 "Indemnifying Party"............................................... 3 1.21 "Intellectual Property"............................................ 3 1.22 "Inventories"...................................................... 3 1.23 "JAC".............................................................. 3 1.24 "Law".............................................................. 3 1.25 "Liabilities"...................................................... 3 1.26 "Losses"........................................................... 3 1.27 "Material Adverse Effect".......................................... 3 1.28 "Material Contracts"............................................... 3 1.29 "Non-Competition Agreement"........................................ 4 1.30 "Patents".......................................................... 4 1.31 "Permits".......................................................... 4 1.32 "Permitted Encumbrances"........................................... 4 1.33 "Person"........................................................... 4 1.34 "Purchase Price"................................................... 4 1.35 "Purchaser"........................................................ 4 1.36 "Related Agreements"............................................... 4 1.37 "Seller"........................................................... 4 i 1.38 "Shares"........................................................... 5 1.39 "Tangible Personal Property"....................................... 5 1.40 "Tax" or "Taxes"................................................... 5 1.41 "Third Party Claims"............................................... 5 1.42 "Trademarks"....................................................... 5 1.43 "Trade Secrets".................................................... 5 1.44 "U.S. GAAP"........................................................ 5 ARTICLE II PURCHASE AND SALE OF SHARES 2.01 Shares to Be Purchased and Sold.................................... 5 2.02 Purchase Price..................................................... 5 2.03 Closing Deliveries by Seller....................................... 5 2.04 Closing Deliveries by Purchaser.................................... 6 ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER 3.01 Organization and Authority of JAC.................................. 7 3.02 apitalization of JAC............................................... 7 3.03 Ownership of Shares................................................ 7 3.04 Dividends.......................................................... 7 3.05 Subsidiaries....................................................... 8 3.06 Intentionally Omitted.............................................. 8 3.07 Organization and Authority of Seller and IHSG ..................... 8 3.08 No Conflict........................................................ 8 3.09 Consents and Approvals............................................. 9 3.10 Financial Information.............................................. 9 3.11 No Undisclosed Liabilities......................................... 9 3.12 Inventories........................................................ 9 3.13 Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions...................................10 3.14 Litigation.........................................................11 3.15 Compliance With Laws...............................................11 3.16 Permits............................................................11 3.17 Material Contracts.................................................12 3.18 Intellectual Property..............................................13 3.19 Assets.............................................................15 3.20 Employee Benefit Matters...........................................15 3.21 Labor Matters......................................................16 3.22 Taxes..............................................................17 3.23 Insurance..........................................................17 3.24 Full Disclosure....................................................18 3.25 Brokers............................................................18 3.26 Accounts Receivable................................................18 3.27 Memorandum and Articles of Association.............................18 3.29 Returns............................................................18 3.30 Indebtedness.......................................................18 3.31 Insolvency.........................................................18 3.32 Trading............................................................19 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER 4.01 Organization and Authority of Purchaser............................19 4.02 No Conflict........................................................20 4.03 Consents and Approvals.............................................20 4.04 Litigation.........................................................20 4.05 Brokers............................................................20 4.06 Full Disclosure....................................................20 ARTICLE V ADDITIONAL AGREEMENTS 5.01 Non-Competition....................................................21 5.02 Access to Information.............................................21 5.03 Confidentiality....................................................22 5.04 Use of Intellectual Property.......................................22 5.05 Taxes..............................................................23 5.06 No Infringement....................................................23 5.07 Further Action.....................................................23 5.08 Returns............................................................23 5.09 Mail...............................................................23 5.10 Communications Software License....................................23 ARTICLE VI INDEMNIFICATION 6.01 Survival of Representations and Warranties.........................24 6.02 Indemnification by Seller..........................................24 6.03 Indemnification by Purchaser.......................................24 6.04 Indemnification Procedures ........................................24 6.05 Limitation on Indemnification......................................26 ARTICLE VII GENERAL PROVISIONS 7.01 Expenses...........................................................26 7.02 Notices............................................................26 7.03 Public Announcements...............................................27 7.04 Headings...........................................................27 7.05 Severability.......................................................27 7.06 Entire Agreement...................................................27 7.07 Assignment.........................................................27 7.08 No Third Party Beneficiaries.......................................27 7.09 Amendment..........................................................27 7.10 Governing Law; Consent to Jurisdiction.............................28 7.11 Dispute Resolution.................................................28 7.12 Counterparts.......................................................29 7.13 Specific Performance...............................................29 7.14 Receipt of Money or Other Assets...................................29 7.15 Schedules and Exhibits.............................................29 EXHIBITS 2.06(f) Form of Legal Opinion of Counsel to Seller 2.07(e) Form of Legal Opinion of Counsel to Purchaser 3.22(b) Form of Tax Deed 5.01 Form of Non-Competition Agreement DISCLOSURE SCHEDULE The Disclosure Schedule shall include the following Sections 3.04 Dividends 3.10 Financial Statements 3.11 Balance Sheet 3.15 Governmental Orders 3.17(a) Material Contracts 3.17(b) Defaults 3.17(c) Notice of Termination of Material Contracts 3.18(a) Intellectual Property 3.20(a) Employment Benefit Matters 3.23 Insurance 3.26 Accounts Receivable STOCK PURCHASE AGREEMENT, dated June 17, 1996, among Information Handling Services Group, Inc., a Delaware corporation ("IHSG"), Holland America Investment Corporation, a Delaware corporation ("Seller"), which is a wholly-owned subsidiary of IHSG, and Digimedics Corp., a California corporation ("Purchaser"). WITNESSETH: WHEREAS, Seller owns all of the issued and outstanding capital stock of J.A.C. Computer Services Limited, a United Kingdom corporation ("JAC"), consisting of 30,000 ordinary shares of (pound)1 each (the "Shares"); WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, all right, title and interest of Seller in and to the Shares and WHEREAS, Seller and Purchaser desire to provide for an orderly transition of JAC from Seller to Buyer, and for other arrangements ancillary to the purchase and sale of the Shares. NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, the parties hereby agree as follows: ARTICLE I DEFINITIONS As used in this Agreement, the following terms shall have the following meanings: 1.01 "Acquisition Documents" means this Agreement, the Related Agreements, and any certificate, or other document delivered at the Closing pursuant to this Agreement or the transactions contemplated hereby. 1.02 "Action" means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority. 1.03 "Affiliate" means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person. 1.04 "Agreement" or "this Agreement" means this Stock Purchase Agreement, dated June 17, 1996, between Seller and Purchaser (including the Exhibits hereto and the Disclosure Schedule) and all amendments hereto made in accordance with the provisions of Section 7.09. 1.05 "Asset Purchase Agreement" means the Asset Purchase Agreement among Information Handling Systems Group, Inc., Continental Healthcare Systems, Inc. and Purchaser and dated the date hereof. 1.06 "Assets" means all assets, properties, goodwill, rights and business of every kind and description and wherever located, whether tangible or intangible, real, personal or mixed, directly or indirectly owned by JAC or to which it is directly or indirectly entitled, regardless of whether such assets, properties, goodwill and business are accounted for or otherwise recorded as such in the books of account and other financial records of JAC. 1.07 "Business Day" means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in New York City, New York. 1.08 "Closing" means the closing of the transactions contemplated by this Agreement, to occur simultaneous to the execution hereof. 1.09 "Closing Date" means the date of this Agreement. 1.10 "Copyrights" means all copyrights, domestic or foreign, whether registered or unregistered, owned or controlled by JAC, and all materials and matter (and if in writing, shall include machine-readable forms) to which such copyrights relate. 1.11 "Disclosure Schedule" means the Disclosure Schedule attached hereto, dated as of the date hereof, and forming a part of this Agreement. 1.12 "Encumbrance" means any security interest, pledge, mortgage, lien (including, without limitation, environmental and tax liens), charge, encumbrance, adverse claim (with respect to title), preferential arrangement, or restriction of any kind, including, without limitation, any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership. 1.13 "Environmental Laws" means any Law, now in effect, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, relating to the environment, health, safety or hazardous materials. 1.14 "Environmental Permits" means all permits, approvals, identification numbers, licenses and other authorizations required under any applicable Environmental Law in connection with the operations of JAC in the manner in which it is currently conducted. 1.15 "Financial Statements" has the meaning specified in Section 3.10. 1.16 "Governmental Authority" means any national, state or local government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body. 2 1.17 "Governmental Order" means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority. 1.18 "IHSG" has the meaning specified in the first paragraph of this Agreement. 1.20 "Indemnified Party" has the meaning specified in Section 6.04(a). 1.21 "Indemnifying Party" has the meaning specified in Section 6.04(a). 1.22 "Intellectual Property" means all intellectual property rights owned or licensed from a third party by JAC, including all Copyrights, Patents, Trademarks, Trade Secrets source codes, object codes and all rights to sue and recover and retain damages and costs and attorneys' fees for present and past infringement of any of the Intellectual Property rights hereinabove set out. 1.22 "Inventories" means all inventory (including inventory shipped on consignment), merchandise, work in process, finished goods, and raw materials, packaging, supplies and other personal property related to the Business, maintained, held or stored by or for JAC on the Closing Date and any prepaid deposits for purchases of any of the same. 1.23 "JAC" has the meaning set forth in the preliminary statement to this Agreement. 1.24 "Law" means any federal, state, local or foreign statute, law, ordinance, regulation, rule, code, order or requirement. 1.25 "Liabilities" means any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, matured or unmatured or determined or determinable, including, without limitation, those arising under any Law, Action or Governmental Order and those arising under any contract, agreement, arrangement, commitment or undertaking. 1.26 "Losses" has the meaning specified in Section 6.02. 1.27 "Material Adverse Effect" means any circumstance, change in, or effect on, the JAC or its business that, individually or in the aggregate with any other circumstances, changes in, or effects on JAC or its business: (a) is, or could reasonably be expected to be, materially adverse to the business, operations, assets or liabilities (including, without limitation, contingent liabilities), results of operations or the condition (financial or otherwise) of JAC or (b) could materially adversely affect the continued operation or conduct of the business of JAC in the manner in which it is currently conducted. 1.28 "Material Contracts" has the meaning specified in Section 3.17. 3 1.29 "Non-Competition Agreement" means the Non-Competition Agreement to be executed and delivered at closing between Seller and Purchaser as more fully described in Section 5.01 hereof. 1.30 "Patents" means all patents and patent applications (and any patents issuing therefrom) owned or licensed by JAC, together with any extensions, reissues, renewals, divisions, continuations or continuations-in-part thereof and any foreign equivalents of any of the foregoing. 1.31 "Permits" has the meaning specified in Section 3.16. 1.32 "Permitted Encumbrances" means such of the following as to which no enforcement, collection, execution, levy or foreclosure proceeding shall have been commenced: (a) liens for taxes, assessments and governmental charges or levies not yet due and payable; (b) Encumbrances imposed by Law, such as materialmen's, mechanics', carriers', workmen's and repairmen's liens and other similar liens arising in the ordinary course of business securing obligations that (i) are not overdue for a period of more than thirty (30) days and (ii) are not in excess of $5,000 in the case of a single property or $25,000 in the aggregate at any time; (c) pledges or deposits to secure obligations under workers' compensation laws or similar legislation or to secure public or statutory obligations and (d) other liens which are not material in amount and which do not interfere in any material way with the operation of JAC's business. 1.33 "Person" means any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. 1.34 "Purchase Price" has the meaning specified in Section 2.05. 1.35 "Purchaser" has the meaning specified in the first paragraph to this Agreement. 1.36 "Related Agreements" means the Asset Purchase Agreement, the Non-Competition Agreement and all instruments and other agreements and documents to be executed and delivered at closing by Seller, Purchaser or their Affiliates. 1.37 "Seller" has the meaning specified in the first paragraph to this Agreement. 1.38 "Shares" has the meaning specified in the first paragraph. 1.39 "Tangible Personal Property" means machinery, equipment, tools, supplies, furniture, fixtures, personalty, vehicles, rolling stock and other tangible personal property. 1.40 "Tax" or "Taxes" means any and all taxes, fees, levies, duties, tariffs, imposts, and other tax charges of any kind (together with any and all interest, penalties, additions to tax 4 and additional amounts imposed with respect thereto) imposed by any government or taxing authority, including, without limitation: taxes or other charges on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, social security, workers' compensation, unemployment compensation, or net worth; taxes or other charges in the nature of excise, withholding, ad valorem, stamp, transfer, value added, or gains taxes; license, registration and documentation fees; and customs' duties, tariffs, and similar charges. 1.41 "Third Party Claims" has the meaning specified in Section 6.04. 1.42 "Trademarks" means all U.S. and foreign trademarks, tradenames or service marks owned or licensed by JAC, whether registered, under application or under common law, or with respect to which an Intent To Use filing has been made as of the Closing Date. 1.43 "Trade Secrets" means any and all information developed by or for JAC and/or owned or controlled by JAC at the Closing which relates to the Business, including but not limited to any formula; data processing, engineering or manufacturing techniques or methods; research or development information; technology in process; patterns; devices; compilations; programs; methods; ideas; inventions; discoveries; know-how; show-how; improvements; procedures; results; drawings; designs; processes; parts of processes; product components or composition; product quality protocols and specifications; production manuals; files; records; plans; proposals; notebooks, production and quality control data; books and publications, business information; computer programs and data. 1.44 "U.S. GAAP" means generally accepted accounting principles and practices. ARTICLE II PURCHASE AND SALE OF SHARES 2.01 Shares to Be Purchased and Sold. On the terms and subject to the conditions of this Agreement, simultaneous with the execution of this Agreement by the parties, Seller shall sell, assign, transfer, convey and deliver to Purchaser with full title guarantee and Purchaser shall purchase from Seller all of the Shares. 2.02 Purchase Price. The purchase price for the Shares shall be One Million Five Hundred Thousand Dollars (US $1,500,000) (the "Purchase Price"). The Purchase Price is payable in cash at the Closing. 2.03 Closing Deliveries by Seller. At the Closing, Seller shall deliver or cause to be delivered to Purchaser: 5 (a) a stock certificate evidencing the Shares and such stock powers and other instruments as are necessary and reasonable to vest in Purchaser all right, title and interest in and to the Shares; (b) a receipt for the Purchase Price; (c) all of the Related Agreements required to be executed and delivered hereunder by Seller; (d) a true and complete copy, certified by the Secretary or an Assistant Secretary or Director of Seller, of the resolutions duly and validly adopted by the Board of Directors of Seller evidencing its authorization of the execution and delivery of this Agreement and the Related Agreements and the consummation of the transactions contemplated hereby and thereby; (e) a certificate of the Secretary or an Assistant Secretary or Director of Seller certifying the names and signatures of the respective officers of Seller authorized to sign this Agreement and the Related Agreements and the other documents to be delivered hereunder and thereunder; (f) a legal opinion from Stephen Green, counsel to Seller, IHSG and JAC, addressed to Purchaser and dated the Closing Date, substantially in the form of Exhibit 2.03(f); (g) a list certified by an officer or Director of Seller setting forth the names of all of the officers and directors of JAC, together with the resignations of all of such directors as of the Closing Date. 2.04 Closing Deliveries by Purchaser. At the Closing, Purchaser shall deliver or cause to be delivered to Seller: (a) A wire transfer to an account designated by Seller in the amount of One Million Five Hundred Thousand Dollars (US $1,500,000) in payment of the Purchase Price; (b) All of the Related Agreements required to be executed and delivered hereunder by Purchaser and its Affiliates; and (c) a true and complete copy, certified by the Secretary or an Assistant Secretary of Purchaser, of the resolutions duly and validly adopted by the Board of Directors of Purchaser evidencing its authorization of the execution and delivery of this Agreement and the Related Agreements to which it is a party and the consummation of the transactions contemplated hereby and thereby; (d) a certificate of the Secretary or an Assistant Secretary of Purchaser certifying the names and signatures of the officers of Purchaser 6 authorized to sign this Agreement and the Related Agreements and the other documents to be delivered hereunder and thereunder; (e) a legal opinion from Winthrop, Stimson, Putnam & Roberts addressed to Seller and dated the Closing Date, substantially in the form of Exhibit 2.04(e); ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER As an inducement to Purchaser to enter into this Agreement, Seller and IHSG jointly and severally hereby represent and warrant to Purchaser as follows: 3.01 Organization and Authority of JAC. JAC is a corporation duly organized, validly existing and in good standing under the laws of the United Kingdom and is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or its operations make such licensing or qualification necessary, except to the extent that the failure to be so licensed or qualified would not adversely affect JAC. JAC has all requisite corporate power and authority to conduct its business as now conducted and to own or lease and operate the assets and properties now owned or leased and operated by it. 3.02 Capitalization of JAC. The aggregate number of shares which JAC is authorized to issue is 100,000 ordinary shares of (pound)1 each of which 30,000 shares are issued and presently outstanding, all of which are owned by Seller. All of such issued shares have been validly issued and are fully paid and non-assessable. JAC has no outstanding subscriptions, contracts, options, warrants or other obligations (including conversion or preemptive rights) to issue, sell or otherwise dispose of, or to purchase, redeem or otherwise acquire any of its capital stock. The sales of the Shares to Purchaser will not give rise to any rights of first refusal of any person or entity. No other Person owns shares of JAC other than Seller. 3.03 Ownership of Shares. Seller owns all of the Shares free and clear of any Encumbrance. Seller has the complete and unrestricted power and unqualified authority to transfer the Shares to Purchaser without penalty or other adverse consequence. Upon transfer of the Shares to Purchaser, Purchaser shall receive title to the Shares free and clear of Encumbrances (subject to the obligation of Purchaser to pledge the Shares to an Affiliate of Seller). 3.04 Dividends. JAC has not paid any dividends during the last three years except as set forth on Section 3.04 of the Disclosure Schedule. All dividends, if any, required to be paid by JAC pursuant to the charter, by-laws or other organizational document of JAC, or pursuant to any agreement to which JAC is a party, have been paid as of the date hereof. 7 3.05 Subsidiaries. JAC has no subsidiaries, except Continental Healthcare Systems UK Limited, a dormant company. Such subsidiary has no Liabilities, contingent or otherwise. 3.06 Intentionally Omitted. 3.07 Organization and Authority of Seller and IHSG. Seller and IHSG are each a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller and IHSG each have all requisite corporate power and authority to enter into and carry out their respective obligations hereunder and under the Related Agreements and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Related Agreements by Seller and IHSG and the performance by Seller and IHSG of their respective obligations hereunder and thereunder and the consummation by Seller and IHSG of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of Seller and IHSG. This Agreement has been, and upon their execution the Related Agreements will be, duly executed and delivered by Seller and IHSG, and (assuming due authorization, execution and delivery by Purchaser) this Agreement constitutes, and upon its execution the Related Agreements will constitute, legal, valid and binding obligations of Seller and IHSG enforceable against Seller and IHSG in accordance with their respective terms, except that (i) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors rights generally and (ii) the remedy of specific performance and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. 3.08 No Conflict. (a) Assuming that all consents, approvals, authorizations, orders, actions, filings and notifications required to assign any of the contracts of JAC have been obtained, the execution, delivery and performance by Seller of this Agreement and the Related Agreements do not and will not (a) violate, conflict with or result in the breach of any provision of the charter or by-laws (or similar organizational documents) of either Seller, IHSG or JAC, (b) conflict with or violate (or cause an event which could have a Material Adverse Effect as a result of) any Law or Governmental Order applicable to Seller, IHSG or JAC or any of their respective assets, properties or businesses or (c) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, or result in the creation of any Encumbrance on the Shares or any of the Assets pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which Seller, IHSG or JAC is a party or which effect the Shares. (b) Seller and JAC have not violated any applicable statute, order, rule or regulation which would prevent the consummation of the transactions contemplated herein. 8 3.09 Consents and Approvals. (a) The execution, delivery and performance by Seller of this Agreement and the Related Agreements do not and will not require any consent, approval, authorization or other order of, action by, filing with or notification to, any Governmental Authority. (b) The execution and delivery of this Agreement and the Related Agreements by Seller do not, and the performance by Seller of this Agreement and the Related Agreements will not, require any third-party consents, approvals, authorizations or actions on the part of Seller, except consents required to assign any of the contracts of JAC or (ii) where failure to obtain such consents, approvals, authorizations or actions would not have a Material Adverse Effect. 3.10 Financial Information. True and complete copies of the audited financial statements of JAC for the years ended November 30, 1995 and November 30, 1994, together with all related notes and schedules thereto, accompanied by the reports thereon of Price Waterhouse (collectively, the "Financial Statements"),are attached as Section 3.10 of the Disclosure Schedule. The Financial Statements (i) were prepared in accordance with the books of account and other financial records of JAC; (ii) present fairly in all material respects the financial condition and results of operations of JAC as of the dates thereof or for the periods covered thereby and (iii) have been converted into U.S. GAAP on a basis consistent throughout the periods involved. 3.11 No Undisclosed Liabilities. There are no Liabilities of JAC required to be reflected or reserved against in a balance sheet of JAC converted into U.S. GAAP other than (i) Liabilities reflected or reserved against on the unaudited balance sheet as at April 30, 1996 attached as Section 3.11 of the Disclosure Schedule, (ii) Liabilities reflected in Section 3.11 or the other Sections of the Disclosure Schedule or in this Agreement and (iii) Liabilities incurred since April 30, 1996 in the ordinary course of business which will not have a Material Adverse Effect. Liabilities are reflected on the Financial Statements against all Liabilities of JAC in amounts that have been established in accordance with U.S. GAAP. 3.12 Inventories. (a) JAC presently has good and valid title to the Inventories free and clear of all Encumbrances (except Permitted Encumbrances). The Inventories reflected on the April 30, 1996 balance sheet of JAC does not include items in excess of (pound)10,000 in the aggregate that are obsolete, damaged or slow-moving. The Inventories listed on the balance sheet at April 30, 1996 do not consist of any items held on consignment. (b) The Inventories reflected on the April 30, 1996 balance sheet of JAC are in good and merchantable condition in all material respects, are suitable and usable for the purposes for which they are intended, other than items that do not exceed (pound)10,000 in the aggregate. 9 3.13 Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions. Since November 30, 1995, the business of JAC has been conducted in the ordinary course and consistent with past practice. As amplification and not limitation of the foregoing, except such as would not have a Material Adverse Effect, since November 30, 1995, JAC and Seller have not, with respect to JAC, and other than in the ordinary course of the business consistent with past practice; (i) permitted or allowed any of the Assets (whether tangible or intangible) to be subjected to any Encumbrance; (ii) written up (or failed to write down in accordance with U.S. GAAP consistent with past practice) the value of any Inventories or revalued any Assets of JAC; (iii) made any change in any method of accounting or accounting practice or policy used by JAC adversely affecting any of the Assets, other than such changes required by U.S. GAAP; (iv) sold, transferred, leased, subleased, licensed or otherwise disposed of any properties or assets, real, personal or mixed (including, without limitation, leasehold interests and intangible property), other than the sale of Inventories in the ordinary course of the business of JAC consistent with past practice; (v) failed to pay any creditor of JAC any amount owed to such creditor when due; (vi) disclosed any secret or confidential Intellectual Property (except by way of issuance of a patent) or permitted to lapse or go abandoned any of the Intellectual Property (or any registration or grant thereof or any application relating thereto) to which, or under which, Seller has any right, title, interest or license; (vii) allowed any Permit that was issued or relates to JAC to lapse or terminate or failed to renew any insurance policy or Permit that is scheduled to terminate or expire on or prior to the Closing Date; (viii) had knowledge of any labor trouble involving any union or other group of employees connected with JAC; (ix) increased the salaries, benefits or other compensations of, made any advances or loan to, any of its officers or employees connected with JAC, except for increases consistent with JAC's past practices; or (x) agreed, whether in writing or otherwise, to take any of the actions specified in this Section 3.13 or granted any options to purchase, rights of first refusal, rights 10 of first offer or any other similar rights with respect to any of the actions specified in this Section 3.13, except as expressly contemplated by this Agreement and the Related Agreements. 3.14 Litigation. There are no Actions by or against Seller or JAC which affect any of the Shares, the Assets or the business of JAC, pending or, to the best knowledge of Seller threatened, which, if decided adversely against Seller or JAC, would have a Material Adverse Effect. Neither Seller, JAC nor any of the Assets is subject to any Governmental Order relating to JAC, the Shares or the Assets (nor, to the best knowledge of Seller after due inquiry, are there any such Governmental Orders threatened to be imposed by any Governmental Authority) or which would adversely affect the ability of Seller or IHSG to execute, deliver and carry out their respective obligations under this Agreement and the Related Agreements. There are no Actions pending or, to the best knowledge of Seller, threatened against Seller, IHSG or JAC before any Governmental Authority which questions or challenges the validity of this Agreement, any of the Related Agreements, or any of the actions to be taken hereunder or thereunder. 3.15 Compliance with Laws. JAC has used the Assets and conducted and continues to conduct the Business in all material respects in accordance with all Laws and Governmental Orders applicable to JAC, any of the Assets, or the Business, and JAC is not in material violation of any such Law or Governmental Order. There is no Governmental Order currently directed towards JAC, and no such Governmental Order will have or has had a Material Adverse Effect. 3.16 Permits. (a) JAC currently holds all material permits, licenses, authorizations, certificates, exemptions, agreements, waivers and approvals of Governmental Authorities, including, without limitation, all health, safety and Environmental Permits (collectively, "Permits"), necessary or proper to own, lease, use and operate the Assets and for the conduct of its business. All such Permits are valid and in full force and effect, and no suspension, cancellation or other limitation of any of the Permits is pending or, to the best knowledge of Seller, threatened. JAC has not received any notice from any Governmental Authority revoking, canceling, rescinding, materially modifying or refusing to renew any Permit or providing written notice of violations under any Law. JAC is in all material respects in compliance with all Permits and all applicable Laws. (b) Seller has all authorizations from Governmental Authorities, creditors and other third parties necessary for it to execute, deliver, consummate and perform this Agreement and the Related Agreements. 11 3.17 Material Contracts. (a) The contracts, agreements, licenses, leases and sales and purchase orders listed in Section 3.17(a) of the Disclosure Schedule are all of the maintenance contracts in effect with JAC's customers and other contracts, agreements, licenses, leases and sales and purchase orders applicable to the operation of the Assets and the conduct of the business of JAC (other than contracts which involve amounts of less than (pound)7,500), including, without limitation (i) any contract for the purchase, sale or lease of real property; (ii) any contract for the lease or sublease of tangible personal property, under which JAC's undischarged obligations exceed (pound)7,500; (iii) any contract for the purchase or sale of raw materials, commodities, merchandise, supplies, other materials or tangible personal property or for the furnishing or receipt of services which calls for performance over a period of more than thirty (30) days and involves more than the sum of (pound)7,500; (iv) any material distributor, dealer, manufacturer's representative, sales, agency or advertising contract; (v) any customer contract which involves more than the sum of (pound)7,500; and (vii) any other material contract, whether or not made in the ordinary course of business, which affects the Assets or the business of JAC. Such contracts and agreements, together with all agreements relating to Intellectual Property set forth in Section 3.18(a) of the Disclosure Schedule, being "Material Contracts"). (b) Each Material Contract: (i) is valid and binding on the respective parties thereto and is in full force and effect, (ii) upon consummation of the transactions contemplated by this Agreement and the Related Agreements, except to the extent that any consents to assignment are not obtained, shall continue in full force and effect without penalty or other Material Adverse Effect. Except as set forth in Section 3.17(b) of the Disclosure Schedule, JAC is not in material breach of, or default under, any Material Contract. To the best knowledge of Seller, except as set forth in Section 3.17(b) of the Disclosure Schedule, no other party to any Material Contract is in breach thereof or default thereunder. There is no contract, agreement or other arrangement granting any Person any preferential right to purchase any of the Assets. (c) JAC has not received any written notice, or to the best knowledge of Seller, non-written notice, of cancellation or termination of any Material Contract, except as set forth on Section 3.17(c) of the Disclosure Schedule. (d) The leases of real estate set forth on Section 3.17(a) of the Disclosure Schedule are all of the leases of real property to which JAC is a party and cover all of the premises used in JAC's operation of its business. All of such leases are in full force and effect and in good standing, valid and enforceable by JAC in accordance with its terms. The leases and operation of JAC's business as currently conducted are not in violation of any applicable certificate of occupancy or zoning or in material violation of other Laws. No event has occurred which, with notice or lapse of time or both, would constitute a default by JAC under any such lease. 12 3.18 Intellectual Property. (a) Section 3.18(a) of the Disclosure Schedule sets forth a true and complete list and a brief description, including a complete identification, of all Patents, Trademarks and Registered Copyrights owned or licensed by JAC. In each registration or patent or application for registration or patent listed in Section 3.18(a) of the Disclosure Schedule held by assignment, the assignment has been recorded with the applicable Patent and Trademark Office from which the original registration issued or before which the application for registration is pending. The rights of JAC in or to such Intellectual Property owned by JAC do not conflict with or infringe on the rights of any other Person and neither Seller nor JAC have not received any written claim or notice from any Person to such effect. JAC is not subject to any Governmental Order or agreement restricting its use of the Intellectual Property, except for such restrictions contained in Intellectual Property licensed from third parties, which licensed Intellectual Property (other than "off the shelf" software such as word processing and spreadsheet programs) is listed in Section 3.18(a) of the Disclosure Schedule. (b) The Intellectual Property owned by JAC is free and clear of Encumbrances. No Actions have been made or asserted or are pending or, to the best knowledge of Seller, threatened against JAC either (i) based upon or challenging or seeking to deny or restrict the use by JAC of any of the Intellectual Property or (ii) alleging that any services provided, or products manufactured or sold by JAC are being provided, manufactured or sold in violation of any patents or trademarks, or any other rights of any Person. To the best knowledge of Seller, no Person is using any patents, copyrights, trademarks, service marks, trade names, trade secrets or similar property or that infringe upon the Intellectual Property or upon the rights of JAC. JAC has not granted any license or other right to any other Person with respect to the Intellectual Property, except for licenses of software to customers. The consummation of the transactions contemplated by this Agreement will not result in the termination or impairment of any of the Intellectual Property owned by JAC. (c) Seller has, or has caused to be, made available to Purchaser correct and complete copies of all licenses and sublicenses for Intellectual Property licensed from third parties set forth in Section 3.18(a) of the Disclosure Schedule and any and all ancillary documents pertaining thereto (including, but not limited to, all amendments, consents and evidence of commencement dates and expiration dates). With respect to each of such licenses and sublicenses: (i) such license or sublicense, together with all ancillary documents made available pursuant to the first sentence of this Section 3.18(c), is valid, binding, enforceable and in full force and effect and represents the entire agreement between the respective licensor and licensee with respect to the subject matter of such license or sublicense; (ii) subject to obtaining any necessary consent to assignment from the licensor, such license or sublicense will not cease to be valid, binding, enforceable and in full force and effect on the terms currently in effect as a result of the consummation of the 13 transactions contemplated by this Agreement, nor will the consummation of the transactions contemplated by this Agreement constitute a breach or default under such license or sublicense or otherwise give the licensor or sublicensor a right to terminate such license or sublicense; (iii) with respect to each such license or sublicense; (A) JAC has not received any notice of cancellation or termination under such license or sublicense and no licensor or sublicensor has any right of termination or cancellation under such license or sublicense except in connection with the default of Seller thereunder, (B) JAC has not received any notice of a breach or default under such license or ublicense, which breach or default has not been cured, and (C) JAC has not granted to any other Person any rights, adverse or otherwise, under such license or sublicense (except for licenses of software to customers); (iv) neither JAC nor, to the best knowledge of Seller, any other party to such license or sublicense, is in breach or default in any material respect, and no event has occurred with respect to JAC, or to the best knowledge of Seller, such other party, that, with notice or lapse of time would constitute such a breach or default or permit termination, modification or acceleration under such license or sublicense; (v) no Actions have been made or asserted or are pending or, to the best knowledge of Seller, threatened against JAC either (A) based upon or challenging or seeking to deny or restrict the use by JAC of any of the licensed Property or (B) alleging that any licensed Intellectual Property is being licensed, sublicensed or used in violation of any patents or trademarks, or any other rights of any Person; and (vi) to the best knowledge of Seller, no Person is using any patents, copyrights, trademarks, service marks, trade names, trade secrets or similar property or that infringe upon JAC's use of the licensed Intellectual Property or upon the rights of JAC therein. (d) Neither Seller nor JAC is aware of any reason that would prevent any pending applications to register Trademarks, Copyrights or any pending Patent applications from being granted. (e) Upon the Closing, JAC shall own or possess, or own or possess adequate and enforceable licenses, sublicenses or other rights to use, all the Intellectual Property. (f) Other than "off the shelf" software, such as word processing and spreadsheet software, the Intellectual Property set forth in Section 3.18(a) of the Disclosure Schedule constitutes all the Intellectual Property used in and necessary to the conduct of JAC's business, as currently conducted, and there are no other items of Intellectual Property that are material to JAC. 14 3.19 Assets. (a) JAC owns, leases or has the legal right to use all the Assets, including, without limitation, the Intellectual Property and the Tangible Personal Property, and, with respect to contract rights, is a party to and enjoys the right to the benefits of all of the Material Contracts. JAC has good and valid title to, or, in the case of leased or subleased Assets, valid and subsisting leasehold interests in, all the Assets, free and clear of all Encumbrances, except Permitted Encumbrances. (b) At all times since April 30, 1995, JAC has caused the Assets to be maintained in accordance with good business practice, and all items of Tangible Personal Property are in good operating condition and repair, subject to ordinary wear and tear, and are suitable for the purposes for which they are used and intended. 3.20 Employee Benefit Matters. (a) Plans and Material Documents. Section 3.20(a) of the Disclosure Schedule lists all employee benefit plans, and all pension, bonus, stock option, stock purchase, restricted stock, incentive, deferred compensation, retiree medical or life insurance, supplemental retirement, severance or other benefit plans, programs or arrangements, and all employment, termination, severance or other contracts or agreements, whether legally enforceable or not, to which Seller is a party, with respect to which JAC has any obligation or which are maintained, contributed to or sponsored by JAC for the benefit of any current or former employee, officer or director of JAC (collectively, the "Plans"). Each Plan is in writing and Seller has furnished Purchaser with a complete and accurate copy of each Plan. JAC does not have any express or implied commitment, whether legally enforceable or not, (i) to create, incur liability with respect to or cause to exist any other employee benefit plan, program or arrangement, (ii) to enter into any contract or agreement to provide compensation or benefits to any individual or (iii) to modify, change or terminate any Plan, other than with respect to a modification, change or termination required by applicable Laws. Each Plan is an "Exempt Approved Scheme" within Section 592(1) of the Income and Corporation Taxes Act 1988. (b) Absence of Certain Types of Plans. None of the Plans provides for the payment of separation, severance, termination or similar-type benefits to any Person (other than pursuant to notice provisions in the employment contracts with each of JAC's current employees or obligates Seller to pay separation, severance, termination or similar-type benefits solely as a result of any transaction contemplated by this Agreement or as a result of a change in control of JAC. Each of the Plans is subject only to the laws of the United Kingdom or a political subdivision thereof. (c) Compliance with Applicable Law. Each Plan is now and always has been operated in all respects in accordance with the requirements of all applicable Law. JAC has performed all obligations required to be performed by it under, is not in any respect in default under or in violation of, and has no knowledge of any default or violation by any party to, any 15 Plan. No legal action, suit or claim is pending or, to the best knowledge of Seller, threatened with respect to any Plan (other than claims for benefits in the ordinary course) and no fact or event exists that could give rise to any such action, suit or claim. (d) Plan Contributions and Funding. All contributions, premiums or payments required to be made with respect to any Plan have been made on or before their due dates as prescribed by any such Plan and applicable Law. All such contributions have been fully deducted for Tax purposes and no such deduction has been challenged or disallowed by any Government Authority and no fact or event exists which could give rise to any such challenge or disallowance. The consummation of the transactions contemplated by this Agreement will not result in an increase in the amount of compensation payable to or in respect of any employee of JAC. 3.21 Labor Matters. (a) JAC is not a party to any collective bargaining agreement or other labor union contract applicable to persons employed by JAC and currently there are no organizational campaigns, petitions or other unionization activities seeking recognition of a collective bargaining unit which could affect JAC; (b) there are no strikes, slowdowns or work stoppages pending or, to the best knowledge of Seller, threatened between JAC and any of its employees, and JAC has not experienced any such strike, slowdown or work stoppage within the past three years; (c) JAC has not breached or otherwise failed to comply with the provisions of any collective bargaining or union contract and there are no grievances outstanding against Seller under any such agreement or contract that could have a Material Adverse Effect; (d) there are no unfair labor practice complaints pending against JAC before any Governmental Authority or any current union representation questions involving employees of JAC; (e) JAC is currently and at all times has been in compliance in all material respects with all applicable Laws relating to the employment of labor, including, without limitation, the Employment Protection Consolidation Act 1978, the Wages Act 1986, the Sex Discrimination Act 1975, the Race Relations Act 1976, and those related to wages, hours, collective bargaining and the payment and withholding of taxes and other sums as required by the appropriate Governmental Authority and has withheld and paid to the appropriate Governmental Authority or is holding for payment not yet due to such Governmental Authority all amounts required to be withheld from employees of JAC and is not liable for any arrears of wages, taxes, penalties or other sums for failure to comply with any of the foregoing; (f) JAC has paid in full to all its employees or adequately accrued for in accordance with the Statement of Standard Accounting Practices consistently applied all wages, salaries, commissions, bonuses, benefits and other compensation due to or on behalf of such employees; (g) there is no claim with respect to payment of wages, salary or over-time pay that has been asserted or is now pending or, to the best knowledge of Seller, threatened before any Governmental Authority with respect to any Persons currently or formerly employed by JAC; (h) JAC is not a party to, or otherwise bound by, any consent decree with, or citation by, any Governmental Authority relating to employees or employment practices and (i) there is no charge or proceeding with respect to a violation of any occupational safety or health standards that has 16 been asserted or is now pending or, to the best knowledge of Seller, threatened with respect to JAC. 3.22 Taxes. (a)(i) All returns and reports in respect of Taxes required to be filed (or filing extensions applied for) with respect to JAC have been timely and properly filed, except for filings in jurisdictions where the failure to file would not have a Material Adverse Effect or result in the creation of any Encumbrance on the Shares or the Assets; (ii) all Taxes required to be shown on such returns and reports or otherwise due have been timely paid ; (iii) all such returns and reports are true, correct and complete in all material respects; (iv) there are no Tax liens on any of the Assets except Permitted Encumbrances; and (v) since November 30, 1995, JAC has not, nor have any of its Affiliates, made, or caused or permitted to be made, any Tax election that effects JAC. (b) Simultaneous with the execution of this Agreement, Seller is executing and delivering the Tax Deed in the form attached as Exhibit 3.22(b). 3.23 Insurance. (a) The Assets and all material risks of JAC are covered by valid and currently effective insurance policies or binders of insurance (including, without limitation, general liability insurance), issued in favor of JAC, in each case with responsible insurance companies, in such types and amounts and covering such risks as are consistent with customary practices and standards of companies engaged in businesses and operations similar to those of JAC. Section 3.23(a) of the Disclosure Schedule sets forth all such policies or binders held by or on behalf of Seller currently in effect (specifying the insurer, the policy number or covering note number with respect to binders, and describing each open claim thereunder, setting forth the aggregate amounts paid out under each such policy and specifying the aggregate limits of liability thereunder). Each such insurance policy and binder is legal, valid, binding and enforceable in accordance with its terms and is in full force and effect. Neither Seller nor any Person holding any such policy or binder is in breach or default with respect to any provision contained in any such policy or binder, and no event has occurred which, with notice or the lapse of time, would constitute such a breach or default or permit termination or modification under the policy, nor has Seller or any such policyholder failed to give any notice of any claim under any such policy or binder in due or timely fashion. Neither Seller nor any such policyholder has cancelled or failed to renew any such policy or binder, has knowledge of any material inaccuracy in any application for such policies or binders, has failed to pay premiums when due, has knowledge of any similar state of facts that might form the basis for termination of any such insurance, or given notice of any such circumstance. (b) At the time of the Closing, all insurance policies currently in effect will be outstanding and duly in force. 17 3.24 Full Disclosure. No representation or warranty of Seller in this Agreement, any of the Related Agreements nor any statement or certificate furnished to Purchaser on the date hereof pursuant to this Agreement, or furnished to Purchaser on the date hereof in connection with the transactions contemplated by this Agreement, contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading. 3.25 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement or the Related Agreements based upon arrangements made by or on behalf of Seller. 3.26 Accounts Receivables. Section 3.26 of the Disclosure Schedule sets forth a true and complete list of all of the accounts receivable of JAC. All of such accounts receivable arose from the sale of inventory or services to persons, corporations, partnerships or other entitles not affiliated with JAC, Seller or IHSG and in the ordinary course of business consistent with past practice. 3.27 Memorandum and Articles of Association. The copy of the Memorandum and Articles of Association of JAC made available to Purchaser is true and complete and sets out if full the rights and restrictions attaching to each class of JAC's share capital. 3.28 Returns. All returns, particulars, resolutions and other documents required under the UK Companies Act 1985 to be delivered on behalf of JAC to the Registrar of Companies have been duly and properly made and delivered. 3.29 Indebtedness. JAC has no borrowings or other indebtedness for borrowed money, and has not agreed to create any borrowings, from its bankers or any other source. 3.30 Insolvency. (a) No order has been made and no resolution has been passed for the winding up of JAC or for a provisional liquidator to be appointed in respect of JAC and no petition has been presented and no meeting has been convened for the purpose of winding up JAC. (b) No administration order has been made and no petition for such an order has been presented in respect of JAC. (c) No receiver (including, but not limited to, an administrative receiver) has been appointed in respect of JAC or all or any of the Assets. (d) JAC is not insolvent or unable to pay its debts within the meaning of Section 123 UK Insolvency Act 1986 nor has it stopped paying its debts as they fall due. 18 (e) No voluntary arrangement has been proposed under Section 1 UK Insolvency Act 1986 in respect of JAC. (f) JAC has not been party to any transaction at an undervalue as defined in Section 238 UK Insolvency Act 1986 nor has it given or received any preference as defined in Section 239 UK Insolvency Act 1986, in either case within the period of two years ending on the date of this Agreement. (g) No unsatisfied judgment is outstanding against JAC. (h) No guaranty, loan capital, borrowed money or interest is overdue for payment. 3.31 Trading. There currently is no agreement, practice or arrangement carried on by JAC or to which JAC is a party which infringes in any material respect any competition, restrictive trade practice, anti-trust or consumer protection law or legislation applicable in the United Kingdom or any other country in which JAC does business. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER As an inducement to Seller and IHSG enter into this Agreement, Purchaser hereby represents and warrants and Seller as follows: 4.01 Organization and Authority of Purchaser. Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of California and has all necessary corporate power and authority to enter into this Agreement and the Related Agreements, to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Related Agreements by Purchaser, the performance by Purchaser of its obligations hereunder and thereunder and the consummation by Purchaser of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of Purchaser. This Agreement has been, and upon their execution the Related Agreements will be, duly executed and delivered by Purchaser, and (assuming due authorization, execution and delivery by Seller) this Agreement constitutes, and upon their execution the Related Agreements will constitute, legal, valid and binding obligations of Purchaser, enforceable against Purchaser in accordance with their respective terms, except that (i) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors rights generally and (ii) the remedy of specific performance and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. 19 4.02 No Conflict. Assuming the making and obtaining of all filings, notifications, consents, approvals, authorizations and other actions referred to in Section 4.03, and that all consents, authorizations, orders, actions, filings and notifications required to be obtained or made by Seller have been obtained or made, the execution, delivery and performance by Purchaser of this Agreement and the Related Agreements do not and will not (a) violate, conflict with or result in the breach of any provision of the certificate of incorporation or by-laws of Purchaser, (b) conflict with or violate any Law or Governmental Order applicable to Purchaser or (c) conflict with, or result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, or result in the creation of any Encumbrance on any of the assets or properties of Purchaser pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which Purchaser is a party or by which any of such assets or properties is bound or affected, which would have a material adverse effect on the ability of Purchaser to consummate the transactions contemplated by this Agreement. 4.03 Consents and Approvals. (a) The execution, delivery and performance of this Agreement and the Related Agreements to which it is a party by Purchaser do not and will not require any consent, approval, authorization or other order of, action by, filing with, or notification to, any Governmental Authority. (b) The execution and delivery of this Agreement and the Related Agreements by Purchaser do not, and the performance by Purchaser of this Agreement and the Related Agreements will not, require any third-party consents, approvals, authorizations or actions on the part of Purchaser. 4.04 Litigation. No Action by or against Purchaser is pending or, to the best knowledge of Purchaser, threatened, which seeks to delay or prevent the consummation of, or which would be reasonably likely to materially adversely affect Purchaser's ability to consummate the transactions contemplated by this Agreement and the Related Agreements. 4.05 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Purchaser, except for Purchaser's obligation to Quadrocom which will be paid by Purchaser. 4.06 Full Disclosure. No representation or warranty of Purchaser in this Agreement, nor any statement or certificate furnished to Seller on the date hereof pursuant to this Agreement, or furnished to Seller on the date hereof in connection with the transactions contemplated by this Agreement, contains or will contain any untrue statement of a material fact, 20 or omits or will omit to state a material fact necessary to make the statements contained herein or therein not misleading. ARTICLE V ADDITIONAL AGREEMENTS 5.01 Non-Competition. At Closing, Seller and IHSG shall execute and deliver to Purchaser a Non-Competition Agreement substantially in the form of Exhibit 5.03 attached hereto. 5.02 Access to Information. (a) In order to facilitate the resolution of any claims made against or incurred by Seller with respect to JAC on or prior to the Closing Date, for a period of seven years after the Closing, Purchaser shall cause JAC to (i) retain the books and records of JAC relating to periods on or prior to the Closing Date and (ii) upon reasonable notice, afford the officers, employees and authorized agents and representatives of Seller reasonable access (including the right to make, at Seller's expense, photocopies), during normal business hours, to such books and records. (b) In order to facilitate the resolution of any claims made by or against or incurred by Purchaser or JAC after the Closing or for any other reasonable purpose, for a period of seven years following the Closing, Seller shall (i) retain all books and records of Seller which are not transferred to Purchaser pursuant to this Agreement or the related Agreements or retained by JAC and which relate to JAC for periods on or prior to the Closing Date and which shall not otherwise have been delivered to Purchaser or retained by JAC and (ii) upon reasonable notice, afford the officers, employees and authorized agents and representatives of Purchaser reasonable access (including the right to make, at Purchaser's expense, photocopies), during normal business hours, to such books and records. Upon the reasonable request of Purchaser in writing, Seller agrees, for a period of two years following the Closing, to make available its employees and officers, and to the extent possible, its attorneys, accountants, agents and other representatives, for the purpose of giving testimony or such other reasonable assistance as Purchaser may reasonably require for the preparation and defense or prosecution of any claim, action or other proceeding against any third party relating to JAC. Seller's reasonable costs and expenses in connection therewith shall be reimbursed by Purchaser. 5.03 Confidentiality. (a) Seller and IHSG agree to: (i) treat and hold as confidential (and not disclose or provide access to any Person to all Confidential Information relating to the Intellectual Property and any other Confidential Information with respect to JAC, (ii) in the 21 event that Seller or any agent, representative, Affiliate, employee, officer or director becomes legally compelled to disclose any such information, provide Purchaser with prompt written notice of such requirement so that Purchaser may seek a protective order or other remedy or waive compliance with this Section 5.03, (iii) in the event that such protective order or other remedy is not obtained, or Purchaser waives compliance with this Section 5.03, furnish only that portion of such confidential information which is legally required to be provided and exercise its best efforts to obtain assurances that confidential treatment will be accorded such Confidential Information, and (iv) promptly furnish (prior to, at, or as soon as practicable following, the Closing) to Purchaser any and all copies (in whatever form or medium) of all such Confidential Information then in the possession or control of Seller or IHSG and destroy any and all additional copies then in the possession or control of Seller or IHSG and of any analyses, compilations, studies or other documents prepared, in whole or in part, on the basis thereof; provided, however, that this sentence shall not apply to any information that, at the time of disclosure, is or becomes available publicly and which Seller can prove by written evidence was not disclosed in breach of this Agreement by Seller, or any of its agents, representatives, Affiliates, employees, officers or directors. Seller and IHSG agree and acknowledge that remedies at Law for any breach of its obligations under this Section 5.03 are inadequate and that Purchaser will suffer irreparable harm as the result of such breach. Accordingly, in addition to all other remedies available to Purchaser, Purchaser shall be entitled to seek equitable relief, including injunction and specific performance, in the event of any such breach, without the necessity of demonstrating the inadequacy of monetary damages and Seller and IHSG will not raise as a defense that Purchaser has an adequate remedy at law. The provisions of this Section 5.03 shall survive the execution of this Agreement and the Closing. (b) For the purpose of this Agreement, Confidential Information means all tangible forms of confidential information, including, without limitation, product information, technical information, drawings, blueprints, designs, parameters of design, monographs, specifications, flowsheets, sketches, descriptions, technical data source codes, object codes, customer lists, pricing data and other tangible material related thereto. 5.04 Use of Intellectual Property. (a) From and after the Closing, Seller shall not use any of the Intellectual Property. (b) As promptly as practicable following the Closing, Seller shall remove or obliterate any Trademarks from letterheads and other materials remaining in its possession or under its control, and Seller shall not use or put into use after the Closing any materials that bear any trademark, service mark, trade dress, logo, trade name or corporate name contained in the Intellectual Property. 22 5.05 Taxes. (a) Purchaser shall pay the stamp duty in connection with the sale of the Shares. Purchaser shall execute and deliver all instruments and certificates necessary to enable Seller to comply with the foregoing. (b) From and after the date of this Agreement, Seller shall not without the prior written consent of Purchaser (which may, in its sole and absolute discretion, withhold such consent) make, or cause to permit to be made, any Tax election that would affect JAC or the Assets. 5.06 No Infringement. Seller, on behalf of itself and its Affiliates, covenants and agrees not to claim or contend hereafter at any time against Purchaser and its successors that the business of JAC as currently conducted infringes in any respect any patent (or patent which may hereafter be issued on any existing patent application or technology) which is owned or controlled by Seller or its Affiliates as of the date of this Agreement and which is not conveyed to Seller under this Agreement or the Asset Purchase Agreement. 5.07 Further Action. Each party shall use its best efforts to perform or comply with, and to cause others to perform or comply with, all of the terms and conditions set forth in this Agreement. Each of the parties hereto shall its best efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things necessary, proper or advisable under applicable Laws, and execute and deliver such documents and other papers, as may be required to carry out the provisions of this Agreement and the Related Agreements and consummate and make effective the transactions contemplated by this Agreement and the Related Agreements. 5.09 Mail. After the Closing Date and for a period of one year thereafter Seller shall remit to Purchaser all mail that relates to JAC and the Assets. 5.10 Communications Software License. Seller hereby grants to JAC a nonexclusive perpetual, royalty-free, transferable right and license to use the Communications Software, with the right to grant sublicenses. ARTICLE VI INDEMNIFICATION 6.01 Survival of Representations and Warranties. All representations and warranties shall survive the Closing for a period of two years from the date hereof. 6.02 Indemnification by Seller and IHSG. Purchaser, its Affiliates, and their respective stockholders, officers, directors, employees, agents, successors and assigns shall be indemnified and held harmless by Seller and IHSG, jointly and severally, for any and all Liabilities, losses, 23 damages, claims, costs and expenses, interest, awards, judgments, penalties, assessments, audits and investigations (including, without limitation, attorneys', auditors' and consultants' fees and expenses) ("Losses") actually suffered or incurred by them (including, without limitation, any Action brought or otherwise initiated by any of them) arising out of or resulting from: (i) the breach of any representation or warranty made by Seller contained in the Acquisition Documents and (ii) the breach of any covenant or agreement by Seller contained in the Acquisition Documents. 6.03 Indemnification by Purchaser. Each of Seller, IHSG, its Affiliates, and their respective stockholders, officers, directors, employees, agents, successors and assigns shall be indemnified and held harmless by Purchaser for any and all Losses arising out of or resulting from: (i) the breach of any representation or warranty made by Purchaser contained in the Acquisition Documents or (ii) the breach of any covenant or agreement by Purchaser contained in the Acquisition Documents. 6.04 Indemnification Procedures. (a) Any Person seeking indemnification under this Article VI (an "Indemnified Party") shall give prompt notice to the party or parties from whom such indemnification is sought (the "Indemnifying Party"), stating the amount of the Loss, if known, and method of computation thereof, and containing a reference to the provisions of this Agreement in respect of which such right of indemnification is claimed or arises. The obligations and Liabilities of the Indemnifying Party under this Article VI with respect to Losses arising from claims of any third party which are subject to the indemnification provided for in this Article VI ("Third Party Claims") shall be governed by and contingent upon the following additional terms and conditions: if an Indemnified Party shall receive notice of any Third Party Claim, the Indemnified Party shall give the Indemnifying Party notice of such Third Party Claim within 15 days of the receipt by the Indemnified Party of such notice; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Article VI except to the extent the Indemnifying Party is materially prejudiced by such failure and shall not relieve the Indemnifying Party from any other obligation or liability that it may have to any Indemnified Party otherwise than under this Article VI. If the Indemnifying Party acknowledges in writing its obligation to indemnify the Indemnified Party hereunder against any Losses that may result from such Third Party Claim, then the Indemnifying Party shall be entitled to assume and control the defense of such Third Party Claim at its expense and through counsel of its choice (subject to the consent of the Indemnified Party to such counsel, such consent not to be unreasonably withheld) if it gives notice of its intention to do so to the 24 Indemnified Party within five Business Days of the receipt of such notice from the Indemnified Party; provided, however, that (i) if there exists or is reasonably likely to exist a conflict of interest that would make it inappropriate for the same counsel to represent both the Indemnified Party and the Indemnifying Party, then the Indemnified Party shall be entitled to retain its own counsel, in each jurisdiction for which the Indemnified Party determines counsel is required, at the expense of the Indemnifying Party, (ii) the Indemnifying Party shall not thereby permit to exist any lien, encumbrance or other adverse charge upon any asset of the Indemnified Party or settle such action without first obtaining the consent of the Indemnified Party, which consent will not be unreasonably withheld, except for settlements solely covering monetary matters for which the Indemnifying Party has acknowledged responsibility for payment; (iii) the Indemnifying Party shall permit the Indemnified Party (at the Indemnified Party's sole cost and expense) to participate in such settlement or defense through counsel chosen by the Indemnified Party and (iv) the Indemnifying Party shall agree promptly to reimburse the Indemnified Party for the full amount of any loss resulting from such claim and all related expenses incurred by the Indemnified Party, except for those costs expressly assumed by Indemnified Party hereunder. In the event the Indemnifying Party exercises the right to undertake any such defense against any such Third Party Claim as provided above, the Indemnified Party shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party, at the Indemnifying Party's expense, all witnesses, pertinent records, materials and information in the Indemnified Party's possession or under the Indemnified Party's control relating thereto as is reasonably required by the Indemnifying Party. Similarly, in the event the Indemnified Party is, directly or indirectly, conducting the defense against any such Third Party Claim, the Indemnifying Party shall cooperate with the Indemnified Party in such defense and make available to the Indemnified Party, at the Indemnifying Party's expense, all such witnesses, records, materials and information in the Indemnifying Party's possession or under the Indemnifying Party's control relating thereto as is reasonably required by the Indemnified Party. (b) To the extent that the undertakings of the Indemnifying Party set forth in this Article VI may be unenforceable, Seller or Purchaser, as the case may be, shall contribute the maximum amount that it is permitted to contribute under applicable Law to the payment and satisfaction of all Losses incurred by Seller or Purchaser, as the case may be. (c) The provisions of Section 7.11 below shall govern any dispute between the parties with respect to their respective rights and obligations under this Article VI. 6.05 Limitation on Indemnification. Notwithstanding anything to the contrary in Sections 6.02 and 6.03, an Indemnifying Party shall not be required to make any payment with respect to indemnification pursuant to Section 6.02 or Section 6.03 for breach of warranty or misrepresentation until the aggregate amount of Losses for breaches of warranty and misrepresentations (including those under the Asset Purchase Agreement) exceeds on a cumulative basis $50,000. In such case, the Indemnifying Party will be responsible for all Losses incurred by Indemnified Party, including but not limited to the first $50,000 thereof. 25 ARTICLE VII GENERAL PROVISIONS 7.01 Expenses. Except as otherwise specified in this Agreement, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement, the Related Agreements and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the Closing shall have occurred. 7.02 Notices. All notices, requests, waivers, claims, demands and other communications which are required or permitted hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by courier service for which a written receipt is given, by cable, by telecopy (providing evidence of receipt and providing a confirming copy is delivered by one or the other methods permitted by this Section 7.02), by telegram, by telex or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 7.02): (a) if to Seller: Holland America Investments Corporation. c/o TBG Services, Inc. 565 Fifth Avenue New York, New York 10017 Telecopy No.: (212) 850-8530 Attention: Stephen Green, Esq. and Information Handling Services Group, Inc. 15 Inverness Way East Englewood, Colorado 80112 Telecopy No.: (303) 792-9034 Attention: President with a copy to: 26 TBG Services, Inc. 565 Fifth Avenue New York, New York 10017 Telecopy No.: (212) 850-8530 Attention: Stephen Green, Esq. (b) if to Purchaser: Digimedics Corp. 1600 Green Hills Road Scotts Valley, California 95066 Telecopy No.:(408) 438-8422 Attention: Les Dace with a copy to: Mediware Information Systems, Inc. 1121 Old Walt Whitman Road Melville, New York 11747-3005 Telecopy No.: (516) 423-0161 Attention: President Hackmyer & Nordlicht 645 Fifth Avenue New York, New York 10022 Telecopy No.: (212) 421-0499 Attention: Ira S. Nordlicht, Esq. Winthrop, Stimson, Putnam & Roberts One Battery Park Plaza New York, NY 10004 Telecopy No.: (212) 858-1500 Attention: Jonathan H. Churchill, Esq. All such notices shall be deemed to have been given on the date personally delivered, upon possession of a receipt establishing that a facsimile transmission was received or five days after mailed in the manner provided above. Any party may change its address for delivery of notice by providing written notice to the other parties in the manner discussed above. 7.03 Public Announcements. No party to this Agreement shall make, or cause to be made, any press release or public announcement in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without prior consultation with the other party except as required by applicable law. The parties shall cooperate as to the timing and contents of any such press release or public announcement. 27 7.04 Headings. The descriptive headings contained in this Agreement and the Exhibits and Schedules hereto are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. 7.05 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible. 7.06 Entire Agreement. The Acquisition Documents constitute the entire agreement of the parties hereto with respect to the subject matter hereof and supersede all prior agreements and undertakings, both written and oral, among Seller and Purchaser with respect to the subject matter hereof and there have been and are no agreements, representations or warranties among Continental, IHSG and Purchaser exceptions set forth in the Acquisition Documents and any other documents executed at the Closing.. 7.07 Assignment. This Agreement may not be assigned by operation of Law or otherwise without the express written consent of Seller, IHSG and Purchaser (which consent may be granted or withheld in the sole discretion of Seller, IHSG and Purchaser). 7.08 No Third Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person, including, without limitation, any union or any employee or former employee of Seller, any legal or equitable right, benefit or remedy of any nature whatsoever, including, without limitation, any rights of employment for any specified period, under or by reason of this Agreement. 7.09 Amendment. This Agreement may not be amended or modified except (a) by an instrument in writing signed by, or on behalf of, Seller, IHSG and Purchaser. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition, of this Agreement. the failure of any party to assert any of its rights hereunder shall not constitute a waiver of any of such rights. 7.10 Governing Law; Consent to Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts executed in and to be performed entirely within that state. Subject to Section 7.11, all actions and proceedings arising out of or relating to this Agreement shall be heard and determined in any New York state or federal court sitting in the City of New York. Any process or notice of motion or other application to any of such courts may be served within or without such court's jurisdiction by registered mail or by personal service, provided a reasonable time for appearance 28 is allowed. With respect to such courts, Purchaser, Seller hereby expressly waive any defense based on doctrines of venue or forum non conveniens or similar rules or doctrines. 7.11 Dispute Resolution. (a) In the event of any controversy, claim or dispute, other than disputes under Section 5.03 for which equitable relief is available, the party initiating the controversy, claim or dispute shall provide to the other party a written notice containing a brief and concise statement of the matter, together with relevant supporting facts. During a period of thirty (30) days or such longer period as mutually agreed, the parties shall attempt to settle the matter by good faith negotiation. Such efforts shall include, but not be limited to, full presentation by each party of its claims, with or without counsel, to the President of the other party. (b) If efforts under Section 7.11(a) are not successful, such dispute shall be settled by binding arbitration in New York, New York, under the Commercial Rules of the American Arbitration Association then in effect (except as otherwise set forth in the Agreement). The failure to comply with Section 7.11(a) with respect to such dispute shall be an absolute bar to the institution of arbitration proceedings with respect thereto. The arbitration shall be conducted in the English language before a panel of three arbitrators, one of whom is selected by Seller and IHSG jointly, one of whom is selected by Purchaser, and one of whom is selected by Seller, IHSG and Purchaser jointly (or by the other two arbitrators, if the parties cannot agree). The parties will cooperate with each other in causing the arbitration to be held in as efficient and expeditious a manner as practicable. If either party fails to appoint an arbitrator in thirty days, the other party may request that the American Arbitration Association make such appointment. The arbitrators will be required to render a full and complete written report of their decision. The decision of a majority of the arbitrators will constitute the arbitrators' decision. Any award rendered by the arbitrators shall be binding upon the parties hereto and shall be final, subject to review by a court of competent jurisdiction under the statutory standard of review applicable to arbitrations. Judgment on the award may be entered in any court of record having competent jurisdiction. Each party shall pay its own expenses of arbitration and the expenses of the arbitrators shall be equally shared except that if, in the opinion of the arbitrators, any claim or position by a party hereto, or any defense or objection thereto by another party was unreasonable or frivolous, the arbitrators may in their discretion assess as part of their award all or any part of the arbitration expenses of the other party or parties (including reasonable attorneys' fees) and expenses of the arbitrators against such party. Nothing herein shall prevent the parties from settling any dispute by mutual agreement at any time. The law of the State of New York shall govern the validity, scope and effect of this Section 7.11. 7.12 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. 29 7.13 Specific Performance. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at Law or equity without the necessity of demonstration the inadequacy of monetary damages. 7.14 Receipt of Money or Other Assets. If any money or other assets are received by Seller or Purchaser to which the other party is entitled pursuant to this Agreement, such party shall hold such money or assets in trust and shall promptly notify and account therefore to the other within fifteen (15) days of receipt. 7.15 Schedules and Exhibits. The Schedules and Exhibits to this Agreement shall be construed with and as an integral part of this Agreement to the same extent as if the same had been set forth verbatim herein. 30 IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized. HOLLAND AMERICA INVESTMENT CORPORATION By: /s/ Stephen Green _____________________ Name: Stephen Green Title: Vice President INFORMATION HANDLING SERVICES GROUP, INC. By: /s/ Stephen Green ______________________ Name: Stephen Green Title: Vice President DIGIMEDICS CORP. By: /s/ Lawrence Auriana _______________________ Name: Lawrence Auriana Title: Secretary 31 EX-99.3 4 REGISTRATION RIGHTS AGREEMENT Exhibit 7.3 REGISTRATION RIGHTS AGREEMENT Agreement made and entered into this 17th day of June, 1996, by and between Mediware Information Services, Inc., a New York corporation, whose address is 1121 Walt Whitman Road, Melville, New York 11747-3005 (the "Company"), and the stockholders listed on the Annex attached hereto (the "Stockholders"). WHEREAS, the Company desires to enter into a Stock Purchase Agreement dated June 17, 1996, among the Company and the Stockholders, pursuant to which the Stockholders will receive an aggregate of one million, six hundred ninety two thousand, three hundred seven (1,692,307) shares of the common stock, $.10 par value, of the Company (the "Shares"), which will be newly-issued by the Company; WHEREAS, the Stockholders will acquire the Shares for investment, and not with a view to reselling or distributing any of the Shares, and have no present intention of reselling or otherwise disposing of any of the Shares, except to the extent that the Shares are registered under the Securities Act of 1933 (the "Act") and appropriate state securities laws, or exempt from such laws; and WHEREAS, as a condition to their willingness to purchase the Shares, the Stockholders desire that the Shares be registered, and the Company is willing to provide for the registration of the Shares upon the terms and conditions herein contained; NOW, THEREFORE, in consideration of the foregoing, and of the mutual covenants, agreements, undertakings, representations, and warranties contained herein, the Company and the Stockholders agree as follows: 1. Definitions. As used herein, the term "Stockholders" means and includes the Stockholders executing this Agreement, the successors of a Stockholder, any parties to whom any Shares may be transferred other than in a bona fide public offering or under Rule 144(k) under the Act, and the successors and assigns of any of such persons. Any successor, transferee, pledgee, or assignee, upon the transfer to it of record of any of the Shares shall give the Company written notice of its name and address. However, if any successor, transferee, pledgee, or assignee, directly or indirectly, would not be deemed an "Underwriter" for the purpose of the Act in connection with any public offering by such party of any of the Shares, that person will no longer be deemed a Stockholder hereunder. 2. Opinion of Counsel. If any Stockholder, notwithstanding its present intention to hold the Shares for investment, decides to dispose of any of the Shares by gift, private placement, or in a public offering claimed to be exempt under Section 4(2) of the Act, such Stockholder shall not do so unless there is issued an opinion of counsel to the effect that no registration under the Act is required for the transaction. The opinion may be issued either by counsel for the Company, or by any counsel selected by such Stockholder and approved by the Company. The following counsel are approved by the Company for this purpose: WINTHROP, STIMSON, PUTNAM & ROBERTS One Battery Park Plaza New York, New York 10004-1490 O'SULLIVAN GRAEV & KARABELL, L.L.P. 30 Rockefeller Plaza 41st Floor New York, New York 10112 If an opinion is issued by such Stockholder's counsel, a copy thereof shall be delivered promptly to the Company. If the opinion is requested from the Company's counsel, such Stockholder shall promptly furnish such counsel, upon request, with whatever information that may be necessary or proper for the expression of the opinion. In such event, the Company shall cause its counsel to render the opinion, at the Company's expense, within one week after it is requested. Any opinion shall be of the scope reasonably required by transfer agents, registrars and selling brokers in connection with similar transactions. 3. Registration Statement. (a) Notwithstanding the Stockholders' present intention to acquire Shares for the purpose of investment, the Company shall use diligent efforts to cause to be filed, on or before October 31, 1996, a registration statement under the Act, on a shelf registration or delayed offering basis under Rule 415 of the Act, providing for the sale by the Stockholders of all of the Shares then owned by such Stockholders which is the number of shares listed on the Annex next to the name of such Stockholder (or such other number that may result from stock splits, recaps or similar transactions). The Company shall use diligent efforts to make the registration statement effective as promptly as practicable. The Company agrees to use diligent efforts to keep the registration statement continuously effective until all Shares may be sold under Rule 144(k) of the Act, but no less than the second anniversary of the date such registration statement is declared effective by the Commission, or such shorter period which will terminate when all of the Shares covered by the registration statement have been sold pursuant to the registration statement. The Company may include additional shares of Common Stock in such registration statement besides shares owned by Stockholders. -2- (b) In connection with the registration statement, the Company shall: (i) promptly 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 comply with the provisions of the Act, and to keep such registration statement effective for that period of time specified in Section 3(a)(i) above; (ii) furnish a copy of the registration statement and such number of prospectuses and other documents incident thereto as a Stockholder from time to time may reasonably request; (iii) use diligent efforts to obtain the withdrawal of any order suspending the effectiveness of a registration statement, or the lifting of any suspension of the qualification of any of the Shares for sale in any jurisdiction, at the earliest possible moment; (iv) register or qualify such Shares for offer and sale under the securities or Blue Sky laws of such jurisdictions as any Stockholder or underwriter reasonably requires, and keep such registration or qualification effective during the period set forth in Section 3(b)(i) above, except in states in which the Company would be required to execute a general consent to service of process in effecting such registration; (v) on or prior to date of effectiveness of Registration Statement cause all Shares covered by such registration to be listed on each securities exchange, including NASDAQ, on which similar securities issued by the Company are then listed; (vi) notify the Stockholders as soon as practicable after notice thereof is received by the Company (i) when the registration statement or any amendment thereto has been filed or becomes effective or the prospectus or any amendment or supplement thereto has been filed, (ii) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to the registration statement or the prospectus or for additional information, (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the registration statement or any order preventing or suspending the use of any preliminary prospectus or prospectus or the initiation or threatening of any proceedings for such purposes and (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Shares for offering or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; -3- (vii) promptly notify the Shareholders when the Company becomes aware of the happening of any event as a result of which the registration statement or the prospectus included therein or any supplement to the prospectus (as then in effect) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein (in the case of the prospectus and any preliminary prospectus, in light of the circumstances under which they were made) not misleading and, as promptly as practicable thereafter, prepare and file with the Commission and furnish without charge to the Shareholders a supplement or amendment to such registration statement or prospectus which will correct such statement or omission; (viii) cooperate with the Shareholders to facilitate the timely preparation and delivery of certificates representing Shares to be sold and not bearing any restrictive legends; (ix) use diligent efforts to cause the Shares covered by the registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof to consummate the disposition of such Shares; (x) make such representations and warranties to the holders of Shares being registered in form, substance and scope as are customarily made by issuers in primary or secondary underwritten public offerings; (xi) obtain for delivery to the Company, with copies to the holders of Shares being registered, a comfort letter from the Company's independent public accountants in customary form and covering such matters of the type customarily covered by comfort letters as the holders of at least a majority of the Shares being sold reasonably request, dated the effective date of the registration statement and brought down to the closing; (xii) cooperate with each seller of Shares in connection with any filings required to be made with the National Association of Securities Dealers, Inc.; (xiii) use diligent efforts to comply with all applicable rules and regulations of the Commission and make generally available to its security holders, as soon as reasonably practicable (but not more than fifteen months) after the effective date of the registration statement, and earnings statement satisfying the provisions of Section 11(a) of the Act and the rules and regulations promulgated thereunder; and -4- (xiv) as promptly as practicable after filing with the Commission of any documents which is incorporated by reference into the registration statement or the prospectus, provide copies of such document to counsel for the Shareholders. (c) If for any reason less than all of the Shares are included in the registration statement when it becomes effective, or if Shares included in the registration statement are subsequently de-registered as required by the Commission, the Company shall file whatever additional registration statements and comply with all ancillary duties and obligations described in paragraphs (a) and (b) of this Section, that may be necessary for the public offering of such other or additional Shares at any time and from time to time; provided, however, that the Company shall not be required to file a new registration statement unless requested by Stockholders holding at least 250,000 Shares. (d) It is the intention of the parties that, at all times during the periods referring to in subdivision (b) of this paragraph, all of the Shares at the time outstanding and held by persons who would be deemed "underwriters" for the purposes of the Act in connection with any public offering of the Shares shall be covered by an effective registration statement, and there shall be available for delivery whatever supplemented or amended prospectuses as may be necessary to meet the requirements of Sections 10(a)(3) and 17(a) of the Act, and any Commission regulations in connection with the public offering of any of the Shares in ordinary brokerage transactions. If any person whose sale of any of the Shares then covered by an effective registration statement is subject to the prospectus delivery requirements of Section 5(b) of the Act desires to make a public offering of the Shares in any other manner, the Company shall, on request, make any necessary filings under the Act and Rule 145, as amended, as promptly as practicable. (e) If, under the applicable rules, regulations or policies of the Commission, it is not possible for the Company to take all steps provided for in the preceding paragraphs of this Section, the Company shall take such steps to the extent reasonably practicable. In addition, the Company shall, at any time and from time to time, use diligent efforts to make, as promptly as practicable, whatever amendatory filings under the Act that may be necessary to permit the public offering with a reasonable minimum of delay under then applicable provisions of the Act, and the rules, regulations and policies of the Commission. (f) Notwithstanding anything contained in the foregoing paragraphs of this Section, the Company shall not be required to make any Substantial Filing under this or any similar agreements bearing even date with a frequency that yields an interval of less than six months between the effective dates of successive Substantial Filings. For the purposes of this -5- paragraph, a Substantial Filing consists of (i) any registration statement filed by the Company, under which the Shares could be registered for sale to the public, whether filed under this or any similar agreement, or otherwise, and (ii) any supplemented or amended prospectus or any post-effective amendment that involves a greater burden on the Company than preparing, printing and filing a one page sticker to a current prospectus. As soon as possible after the Company commences the preparation of any Substantial Filing, the Company shall notify all Stockholders at their addresses as shown on the Company's records that the filing shall be made. At the written request of any Stockholder, the Company shall include in the Substantial Filing, to the extent then permissible, any Shares then held by any Stockholder. (g) All expenses of every kind incurred in connection with all registrations shall be paid by the Company, including all costs and expenses, and all registration, filing and qualification fees, except Blue Sky expenses, ordinarily incurred in connection with the public offering of securities, including, without limitation, printing costs and fees and expenses of counsel and accountants for the Company. However, the expenses payable by the Company shall not include fees and expenses of counsel for Stockholders or underwriting fees, discounts, commissions or expenses. (h) If a registration statement with respect to the Shares held by a Stockholder shall not have been filed as contemplated herein on or before November 10, 1996, then commencing on such date and at the end of each week thereafter, the Company shall pay to such Shareholder an amount, as liquidated damages, determined by multiplying $.05 per $1,000 of Shares held by such Stockholder at such time. Such liquidated damages shall cease to accrue on the date such registration statement has been filed. 4. Piggyback registration. (a) If at any time or from time to time, the Company decides to file a registration statement to register for public offering any of its securities for its own account or the account of any of its shareholders, other than a registration relating solely to employee benefit plans, a registration relating solely to a SEC Rule 145 transaction or a transaction relating solely to the sale of debt or convertible debt instruments or a registration on any form which does not include substantially the same information as would be required to be included in a registration statement covering the sale of Shares, the Company shall notify the Stockholders and each other stockholder of the Company at their addresses as shown on the Company's records. At the request of any Stockholder, the Company shall include, to the extent permissible under the Act and the rules and regulations of the Commission, any of the Shares owned by such Stockholder in the registration. -6- (b) If the registration under this Section 4 is for a registered public offering involving an underwriting, the Company shall so advise the Stockholders as a part of the written notice. In such event, the right of any Stockholder to registration pursuant to this Section shall be conditioned upon such Stockholder's participation in such underwriting and the inclusion of such Stockholder's Shares in the underwriting to the extent provided herein. All Stockholders proposing to distribute their securities through such underwriting shall (together with the Company and the other holders distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company and reasonably satisfactory to the holders. Notwithstanding any other provision of this Section, if the managing underwriter determines that marketing factors require a limitation of the number of shares to be underwritten, the managing underwriter may limit the number of Shares to be included in the registration and underwriting. The Company shall so advise all Stockholders and the other holders distributing their securities through such underwriting pursuant to piggyback registration rights similar to this Section, and the number of Shares and other securities that may be included in the registration and underwriting shall be allocated among all Stockholders and other holders in proportion, as nearly as practicable, to the respective amounts of Shares held by such Stockholders and other securities held by other holders at the time of filing the registration statement. If any Stockholder disapproves of the terms of any such underwriting, he may elect to withdraw therefrom by written notice to the Company and the managing underwriter. If, by the withdrawal of such Shares, a greater number of Shares held by other Stockholders may be included in such registration (up to the limit imposed by the underwriters), the Company shall offer to all Stockholders who have included Shares in the registration the right to include additional Shares. Any Shares excluded or withdrawn from such underwriting shall be withdrawn from such registration. (c) The Company agrees that, in connection with any registration statement, it shall prepare and file whatever pre-effective and post-effective amendments and whatever supplements or revised prospectuses that the Commission may require and that it shall furnish a reasonable number of preliminary, final, supplemental, and revised prospectuses required under the Act and the rules and regulations of the Commission. 5. Indemnification. (a) In the event of a registration of any of the Shares under the Act pursuant to this Agreement, the Company will indemnify and hold harmless each Stockholder of such Shares thereunder, each underwriter of such Shares thereunder and each other person, if any, who controls such Stockholder or underwriter within the meaning of the Act, against any losses, claims, damages or liabilities, joint or several, to which such Stockholder, underwriter or controlling person may become subject under the Act or otherwise, insofar as -7- such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such Shares were registered under the Act, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon 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 any violation by the Company of any rule or regulation promulgated under the Act or any state securities law applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, and will reimburse each such Stockholder, each of its officers, directors and partners, and each person controlling such Stockholder, each such underwriter and each person who controls any such underwriter, for any reasonable legal and any other expenses incurred in connection with investigating, defending or settling any such claim, loss, damage, liability or action, provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage or liability arises out of or is based on any untrue statement or omission based upon written information furnished to the Company by an instrument duly executed by such Stockholder or underwriter specifically for use therein. (b) Each Stockholder will, if Shares held by or issuable to such Stockholder are included in the securities as to which such registration is being effected, indemnify and hold harmless the Company, each of its directors and officers, each underwriter, if any, of the Company's securities covered by such a registration statement, each person who controls the Company and each underwriter within the meaning of the Act, and each other such Stockholder, each of its officers, directors and partners and each person controlling such Stockholder, against all claims, losses, expenses, damages and liabilities (or actions in respect thereof) arising out of or based upon 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 Stockholders, such directors, officers, partners, persons or underwriters for any reasonable legal or any other expenses incurred in connection with investigating, defending or settling 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 an instrument duly executed by such Stockholder specifically for use therein; provided, however, the total amount for which any Stockholder, -8- its officers, directors and partners, and any person controlling such Stockholder, shall be liable under this Section 5(b) shall not in any event exceed the aggregate proceeds received by such Stockholder from the sale of Shares sold by such Stockholder in such registration. (c) Each party entitled to indemnification under this Section 5 (the "Indemnified Party") shall give notice to the party required to provide indemnification (the "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any claims as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party's expense, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations hereunder, unless such failure resulted in actual detriment to the Indemnifying Party. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect of such claim or litigation. (d) Notwithstanding the foregoing, to the extent that the provisions on indemnification contained in the underwriting agreements entered into among the selling Stockholders, the Company and the underwriters in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall be controlling as to the Shares included in the public offering; provided, however, that if, as a result of this Section 5, any Stockholder, its officers, directors, and partners and any person controlling such Stockholder is held liable for an amount which exceeds the aggregate proceeds received by such Stockholder from the sale of Shares included in a registration, as provided in Section 5 above, pursuant to such underwriting agreement (the "Excess Liability"), the Company shall reimburse any such Stockholder for such Excess Liability. (e) If the indemnification provided for in this Section 5 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one -9- hand and of the indemnified party on the other hand in connection with the statements or omissions which resulted in such loss, liability, claim, damage or expense as well as any other relevant equitable considerations. The relevant fault of the indemnifying party and the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. Notwithstanding the foregoing, the amount any Stockholder shall be obligated to contribute pursuant to this Section 5(e) shall be limited to an amount equal to the proceeds to such Stockholder of the Shares sold pursuant to the registration statement which gives rise to such obligation to contribute (less the aggregate amount of any damages which the Stockholder has otherwise been required to pay in respect of such loss, claim, damage, liability or action or any substantially similar loss, claim, damage, liability or action arising from the sale of such Shares). (f) Survival of Indemnity. The indemnification provided by this Section 5 shall be a continuing right to indemnification and shall survive the registration and sale of any securities by any Person entitled to indemnification hereunder and the expiration or termination of this Agreement. 6. Restrictions on Transferability; Restrictive legend. (a) The Shares shall not be sold, assigned, transferred or pledged except as specified herein, so as to ensure compliance with the Act. Each Stockholder will cause any proposed purchaser, assignee, transferee, or pledgee of the Shares held by it to agree to take and hold such securities subject to the provisions and upon the conditions specified in this Agreement. (b) Each Stockholder will comply with the provisions of Section 6.4 of the Stock Purchase Agreement. 7. Lock-up Agreement. In consideration for the Company agreeing to its obligations under this Agreement, each Stockholder agrees in connection with any registration of the Company's securities (whether or not such Stockholder is participating in such registration) upon the request of the Company and the underwriters managing any underwritten offering of the Company's securities, not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any Shares (other than those included in the registration) without the prior written consent of the Company or such underwriters, as the case may be, for such period of time from the effective date of such registration as the Company and the underwriters may specify up to 180 days, so long as all Stockholders or stockholders holding more than 5% of the outstanding common stock and all officers and directors of the Company are bound by a comparable obligation; provided, however, -10- that nothing herein shall prevent any Stockholder that is a partnership or corporation from making a distribution of Shares to the partners or shareholders or affiliates thereof that is otherwise in compliance with applicable securities laws; provided that prior to any such distribution, such Stockholder delivers to the Company a legal opinion acceptable in form and substance to the Company that such distribution is in compliance with applicable securities laws and such distributees deliver to the Company an undertaking to be bound by provisions of this Agreement. 8. Miscellaneous. (a) Amendments. This Agreement may be amended only by a writing signed by the Stockholders of more than fifty percent (50%) of the Shares, as constituted from time to time. For purposes of this Section, Shares held by the Company or beneficially owned by any officer or employee of the Company shall be disregarded and deemed not to be outstanding. (b) Counterparts. This Agreement may be executed in any number of counterparts, all of which shall constitute a single instrument. (c) Notices. All notices and other communications required or permitted hereunder shall be in writing and may be sent initially by facsimile transmission and shall be mailed by registered or certified mail, postage prepaid, or otherwise delivered by hand or by messenger, addressed (a) if to a Stockholder, at such Stockholder's address set forth on the books of the Company, or at such other address as such Stockholder shall have furnished to the Company in writing, or (b) if to any other holder of any Shares, at such address as such holder shall have furnished the Company in writing, or, until any such holder so furnishes an address to the Company, then to and at the address of the last holder of such securities who has so furnished an address to the Company, or (c) if to the Company, one copy should be sent to the Company's current address at 1121 Walt Whitman Road, Melville, NY 11747-3005, or at such other address as the Company shall have furnished to the Stockholders. Each such notice or other communication shall for all purposes of this Agreement be treated as effective or having been given when delivered personally, or, if sent by first class, postage prepaid mail, at the earlier of its receipt or seventy-two (72) hours after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid. (d) Nonpublic Information. Any other provisions of this agreement to the contrary notwithstanding, the Company's obligation to file a registration statement, or cause such registration statement to become and remain effective, shall be suspended for a period not to exceed 30 days (and for periods not exceeding, in the aggregate, 60 days in any 24-month period) if there exists at the time material non-public information relating -11- to the Company which, in the reasonable opinion of the Company, should not be disclosed. (e) Severability. If any provision of this Agreement shall be held to be illegal, invalid or unenforceable, such illegality, invalidity or unenforceability shall attach only to such provision and shall not in any manner affect or render illegal, invalid or unenforceable any other provision of this Agreement, and this Agreement shall be carried out as if any such illegal, invalid or unenforceable provision were not contained herein. (f) Dilution. If, and as often as, there is any change in the Common Stock by way of a stock split, stock dividend, combination or reclassification, or through a merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions hereof so that the rights and privileges granted hereby shall continue with respect to the Common Stock as so changed. (g) Governing Law. This Agreement shall be governed by and construed under the laws of the State of New York without regard to principles of conflict of law. (h) Entire Agreement. This Agreement constitutes the entire agreement, the parties hereto with respect to the subject matter hereof and supersedes all prior oral and written agreements among the parties hereto with respect to the subject matter hereof. -12- IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day, month and year first above written. MEDIWARE INFORMATION SERVICES, INC. By ______________________________ Name: Title: _______________________________ Stockholder -13- Annex Name Shares of Common Stock - ------------------------- ---------------------- Oracle Partners, L.P. 575,000 Oracle Institutional Partners, 93,000 L.P. GSAM Oracle Fund, Inc. 449,736 Medcap I Corp. 123,077 Promed Partners L.P. 30,769 Lawrence Auriana 138,462 Peter Lerner 15,385 The Travelers Insurance Company 236,110 Soditic Asset Management, S.A. 30,769 TOTAL 1,692,308 -----END PRIVACY-ENHANCED MESSAGE-----