AGREEMENT OF STOCK PURCHASE AND PLAN OF RECAPITALIZATION
Agreement of Stock Purchase and Plan of
Recapitalization dated November 26, 1996, by and among
ADVANCED MEDICAL, INC., a Delaware Corporation ("AM"),
DECISIONS INCORPORATED, a Delaware corporation ("Decisions")
and Xxxxxx X. Picower, an individual residing at 0000 Xxxxx
Xxxxx Xxxxxxxxx, Xxxx Xxxxx, XX 00000.
WHEREAS, AM and Mr. Picower have entered into a
letter agreement (the "Letter Agreement") pursuant to which
Mr. Picower agreed, among other things, directly or through an
affiliate (the "Designee"), to: (i) purchase AM common stock
from AM at a price of $3.00 per share for an aggregate
purchase price of $40 million (the "Takedown Amount") as a
means of providing equity financing to AM in connection with
AM acquiring a company and entering into a merger agreement
(the "Merger Agreement") in connection therewith (the
"Transaction")(the transaction described in this clause (i)
being referred to as the "Stock Purchase"); and (ii) pursuant
to a written plan of recapitalization, cause the transfer of
three outstanding notes (described in Section 4.5 below) (the
"Notes") held by Decisions to AM in exchange for shares (the
"Shares")of AM common stock, par value $.01 per share ("Common
Stock") in a transaction that will qualify as a
recapitalization within the meaning of Section 368(a)(1)(E) of
the Internal Revenue Code of 1986, as amended (the "Code")(the
transaction described in this clause (ii) being referred to as
the "Plan of Recapitalization"); and
WHEREAS, the parties hereto agree that the Stock
Purchase provided for herein constitutes the purchase for fair
market value of AM common stock by Mr. Picower; and
WHEREAS, the parties hereto agree that the Plan of
Recapitalization provided for herein constitutes an exchange
of equal values and is fair to AM and Decisions; and
WHEREAS, Decisions has entered into an agreement
with Mr. Picower pursuant to which Decisions assumed all of
the obligations and was assigned all of the rights of Mr.
Picower under the Letter Agreement and Mr. Picower has
designated Decisions as the Designee and Decisions agrees to
act as the Designee hereunder; and
WHEREAS, AM and Mr. Picower now desire to formalize
the terms of the Letter Agreement;
NOW, THEREFORE, in consideration of the premises and
mutual representations, warranties, covenants and agreements
hereinafter set forth, the parties hereto, desiring to be
legally bound, do hereby agree as follows:
1. Additional Financing. Mr. Picower hereby
agrees to purchase or cause the Designee to purchase Common
Stock from AM at a price of $3.00 per share at an aggregate
purchase price equal to the Takedown Amount which amount will
be provided by Mr. Picower or Designee to AM in order for AM
to pay: (i) the purchase price in connection with the
Transaction; (ii) additional working capital requirements
resulting from the Transaction; and (iii) related transaction
expenses and the cost of other transactions currently
contemplated (collectively, the "Additional Financing").
2. Plan of Recapitalization.
2.1 Exchange. The parties hereto agree that
the Plan of Recapitalization constitutes a plan of
reorganization within the meaning of Section 368 of the Code
and the Treasury Regulations promulgated thereunder whereby
Decisions will transfer the Notes to AM, and AM, in exchange
therefor, will transfer 29,416,086 shares of Common Stock to
Decisions in a transaction qualifying as a recapitalization
under Section 368(a)(1)(E) of the Code.
2.2 Interest. AM agrees that it will pay to
Decisions, in cash, all accrued and unpaid interest on the
Notes through the date of Closing.
3. Closing. The closing (the "Closing") of the
transactions contemplated hereby will take place at the
offices of Xxxxxx Xxxxxx Butowsky Xxxxxxx Xxxxxx & Xxxx, 000
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other place
as the parties may agree, contemporaneously with the closing
of the Transaction. At the Closing, Decisions shall deliver
the Takedown Amount and the Notes to AM and AM shall deliver
a stock certificate representing the Shares to Decisions.
4. Representations and Warranties of Mr. Picower
and Decisions. Mr. Picower and Decisions (collectively, the
"Picower Parties") hereby jointly and severally represent and
warrant to AM that:
4.1 Authorization; Binding Agreement. This
Agreement constitutes the legal, valid and binding agreement
of each of the Picower Parties, enforceable against each in
accordance with its terms, except to the extent that enforce-
ability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of
creditors' rights generally or by general equitable
principles. No restrictions (whether legal capacity or
otherwise) exist with respect to any Picower Parties' right
and ability to enter into this Agreement and perform all of
its obligations hereunder.
4.2 Organization. Decisions is a corporation
duly organized, validly existing and in good standing under
the laws of the State of Delaware. Decisions has the
requisite corporate power to conduct its businesses as it is
currently conducted and is duly qualified to do business in
each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it
makes such qualification necessary, except where the lack of
such qualification would not in the aggregate have a material
adverse effect on the business, results of operations or
financial condition of Decisions taken as a whole.
4.3 Investment Intent. Decisions is acquiring
the Shares hereunder solely for the purpose of investment for
its own account and not with a view to, or for sale in
connection with, the "distribution," as such term is used in
Section 2(11) of the Securities Act of 1933, as amended (the
"1933 Act"), of any of the Shares in violation of the 1933 Act
or any applicable state securities laws. Decisions
understands that the Shares have not been registered under the
1933 Act or any applicable state securities laws and that it
will not be legally entitled to offer for sale, sell, or
otherwise transfer any of the Shares unless they have been
registered under the 1933 Act and applicable state securities
laws or unless an exemption from registration is available for
such offer, sale, or other transfer under the 1933 Act and
applicable state securities laws.
4.4 Fees. Neither Mr. Picower nor his
affiliates have paid or become obligated to pay any fee or
commission to any investment banker, broker, finder or
intermediary in connections with the transactions contemplated
by this Agreement.
4.5 Notes. Decisions owns, and at the Closing
will own, the Notes free and clear of all liens, pledges,
encumbrances, security interests or other claims of any nature
or kind. The Notes consist of (i) a $6 million 7% convertible
note issued by AM due January 4, 2001, convertible into
6,024,096 shares of AM common stock; (ii) a $6.5 million 9%
convertible note issued by AM due January 4, 2001, convertible
into 10,534,848 shares of AM common stock; and (iii) a $25
million 7% convertible note issued by AM due January 4, 2001,
convertible into 9,523,809 shares of AMI common stock.
4.6 Authority Relative to this Agreement.
Decisions has all necessary corporate power and authority to
execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery
of this Agreement by Decisions and the consummation by
Decisions of the transactions contemplated hereby have been
duly and validly authorized by its Board of Directors and no
other corporate proceedings on the part of Decisions are
necessary to authorize this Agreement or to consummate the
transactions so contemplated. This Agreement has been duly
and validly executed and delivered by Decisions and,
constitutes a valid and binding obligation of Decisions,
enforceable against Decisions in accordance with its terms.
5. Representations and Warranties of AM. AM
represents and warrants to Mr. Picower that:
5.1 Organization. AM is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Delaware. AM has the requisite
corporate power to conduct its businesses as it is currently
conducted and is duly qualified to do business in each
jurisdiction in which the property owned, leased or operated
by it or the nature of the business conducted by it makes such
qualification necessary, except where the lack of such
qualification would not in the aggregate have a material
adverse effect on the business, results of operations or
financial condition of AM taken as a whole.
5.2 Authority Relative to this Agreement. AM
has all necessary corporate power and authority to execute and
deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this
Agreement by AM and the consummation by AM of the transactions
contemplated hereby have been duly and validly authorized by
its Board of Directors and no other corporate proceedings on
the part of AM are necessary to authorize this Agreement or to
consummate the transactions so contemplated. This Agreement
has been duly and validly executed and delivered by AM and
constitutes a valid and binding agreement of AM, enforceable
against AM in accordance with its terms.
5.3 Validity. The Shares to be issued to
Decisions pursuant to this Agreement will be duly authorized,
validly issued, fully paid and non-assessable and free of
preemptive rights.
6. Termination. If: (I) AM does not complete the
Transaction and request that Mr. Picower provide or direct
Designee to provide the Additional Financing as contemplated
above, prior to June 30, 1997; or (ii) the Merger Agreement is
terminated in accordance with its terms, the obligations
hereunder will terminate unless this limitation is waived by
the parties hereto in writing
7. Survival of Representations and Warranties.
The representations and warranties contained herein shall
survive the closing of the transactions contemplated hereby.
8. Miscellaneous.
8.1 Severability and Governing Law. Should
any section or any part of a section within this Agreement be
rendered void, invalid or unenforceable by any court of law
for any reason, such provision shall be construed to be en-
forceable to the maximum extent possible, and such invalidity
or unenforceability shall not void or render invalid or unen-
forceable any other section or part of a section in this
Agreement. This Agreement shall be construed and governed by
the laws of the State of New York.
8.2 Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be
deemed an original but all of which together shall constitute
one and the same instrument.
8.3 Section Headings. Section titles or
captions contained in this Agreement are inserted as a matter
of convenience and for reference purposes only, and in no way
define, limit, extend or describe the scope of this Agreement
or the intent of any provision hereof.
8.4 Singular and Plural, Etc. Whenever the
singular number is used herein and where required by the
context, the same shall include the plural, and the neuter
gender shall include the masculine and feminine genders and
vice versa.
8.5 Successors and Assigns. All rights,
covenants and agreements of the parties contained in this
Agreement shall, except as otherwise provided herein, be
binding upon and inure to the benefit of their respective
successors and assigns.
8.6 Third Party Beneficiaries. Except as
otherwise provided herein, nothing in this Agreement is
intended to, or shall be construed so as to create any third
party beneficiary in this Agreement or otherwise confer any
rights upon any person, firm or corporation that is not a
party hereto.
IN WITNESS WHEREOF, the parties have hereunto set
their hands as of the date first above written.
ADVANCED MEDICAL, INC.
By: /s/ Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title: President
DECISIONS INCORPORATED
By: /s/ Xxxxxx X. Picower
Name: Xxxxxx X. Picower
Title: C of B
/s/ Xxxxxx X. Picower
Xxxxxx X. Picower
