COMMON STOCK PURCHASE AGREEMENT
Among
AMERICA'S DOCTOR, INC.,
MEDICAL ADVISORY SYSTEMS, INC.
and
PREMIER RESEARCH WORLDWIDE, LTD.
Dated July 2, 1998
COMMON STOCK PURCHASE AGREEMENT, dated July 2, 1998, between AMERICA'S
DOCTOR, INC., a Delaware corporation (the "Company"), and MEDICAL ADVISORY
SYSTEMS, INC., a Delaware corporation ("MAS"), and PREMIER RESEARCH WORLDWIDE,
LTD., a Delaware corporation ("PRWW"). MAS and PRWW are at times herein
individually referred to as a "Purchaser" and collectively as the "Purchasers".
WHEREAS the Company wishes to issue and sell to each Purchaser an
aggregate of 50,000 shares of Series A Common Stock, $0.01 par value, of the
Company (the "Stock"), at a purchase price of $20 per share, payable as provided
herein;
WHEREAS each Purchaser wishes to purchase said shares, all on the terms
and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and the mutual
covenants herein contained, the parties hereby agree as follows:
I.
THE SHARES
SECTION 1.01 Purchase and Sale of the Shares.
(a) Subject to the terms and conditions set forth herein, the Company
shall sell to each Purchaser, and each Purchaser shall purchase from the
Company, on the Closing Date, 50,000 authorized but unissued shares of Stock
(said shares being herein called the "Shares") at a purchase price of $20 per
share for an aggregate purchase price equal to $1,000,000, and the Company shall
issue and deliver a stock certificate or certificates in definitive form,
registered in the name of the Purchaser, evidencing the Shares being purchased
by it hereunder.
(b) As payment in full for the Shares to be purchased by it, and
against delivery of the stock certificate or certificates therefor as aforesaid,
PRWW shall deliver to the Company on the Closing Date a certified or official
bank check in Philadelphia Clearing House funds payable to the order of the
Company in the amount of $1,000,000, or shall transfer such sum to the account
of the Company by wire transfer.
(c) As payment in full for the Shares to be purchased by MAS hereunder,
MAS shall:
(i) Provide to the Company during the Pre-Start-Up Period (as such
term is defined in the MAS Service Agreement referred to in paragraph 4(i)
below) the systems hardware, software and ongoing support specified more fully
in paragraph 13(a) of the MAS Service Agreement, for which MAS shall receive a
credit of $360,000, representing the purchase price for 18,000 shares of the
Stock hereunder; and
(ii) Make the twelve consecutive monthly payments specified below
(with the first such payment due in the month following the end of the
Pre-Start-Up Period), representing payment of the purchase price for the
indicated number of shares of the Stock:
A. Eleven monthly payments of $53,320 each, each representing
the purchase price for 2,666 shares.
B. A twelfth payment of $53,480, representing the purchase
price for 2,674 shares.
At the Closing, the Company shall execute 13 stock certificates
representing the respective shares of the Stock, the purchase price for which is
to be satisfied by MAS pursuant to clauses (i) and (ii) above. The Company shall
deliver each such certificate to MAS as the
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purchase price for the Stock represented thereby has been satisfied or paid in
accordance with the above provisions.
SECTION 1.02 Closing Date. The closing of the sale and purchase of the
Shares shall take place at the office of Xxxxxx & Xxxxxxx, A Professional
Corporation, Xxx Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx 00000, at 10:00
a.m., on July 2, 1998, or at such other date and time as may be mutually agreed
upon between the Purchasers and the Company (such date and time of closing being
herein called the "Closing Date").
II.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchasers as follows:
SECTION 2.01 Organization, Qualifications and Corporate Power. The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, and is duly licensed or
qualified as a foreign corporation in each other jurisdiction in which the
nature of the business transacted by it or the character of the properties owned
or leased by it makes such licensing or qualification necessary and where the
failure to be so qualified would have a material adverse effect upon the
business or assets of the Company. The Company has the corporate power and
authority to own and hold its properties and to carry on its business as
currently conducted, to execute, deliver and perform this Agreement, the
Registration Rights Agreement, the PRWW Service Agreement, the MAS Service
Agreement, the Stockholders Agreement and the Warrants (as such terms are
defined in Article IV or VI below) (collectively, the "Operative Documents"),
and to issue, sell and deliver the Shares and the Warrant Shares. The copies of
the Company's Certificate of
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Incorporation and by-laws heretofore delivered to the Purchasers are complete
and correct. The Company does not own any capital stock of or other equity
interest in any other corporation or organization.
SECTION 2.02 Authorization of Agreement, Etc.
(a) The execution, delivery and performance by the Company of the
Operative Documents and the issuance, sale and delivery of the Shares and the
Warrant Shares, have been fully authorized by all requisite corporate action and
will not violate any provision of law, any order of any court or other agency of
government, the Certificate of Incorporation or Bylaws of the Company, or any
provision of any indenture, agreement or other instrument by which the Company
or any of its properties or assets is bound or affected, or conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a
default under any such indenture, agreement or other instrument, or result in
the creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the properties or assets of the Company.
(b) The Shares and the Warrant Shares have been duly authorized and,
when issued and delivered in accordance with this Agreement or the Warrant (as
applicable), will be validly issued, fully paid and non-assessable shares of
Stock. The issuance, sale and delivery of the Shares and the Warrant Shares is
not subject to any preemptive rights of shareholders of the Company or to any
right of first refusal or other similar right in favor of any person.
SECTION 2.03 Validity. This Agreement has been fully executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company, enforceable in accordance with its terms. The other Operative
Documents, when executed and
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delivered in accordance with this Agreement, will constitute the legal, valid
and binding obligation of the Company, enforceable in accordance with their
respective terms.
SECTION 2.04 Capital Stock. The authorized capital stock of the Company
consists of 1,000,000 shares of the Stock. The shareholders of the Company and
the number of shares of capital stock owned by each are set forth in Schedule
2.04A hereto. Except for the options, warrants and convertible unsecured
promissory notes, the terms of which are fully described in Schedule 2.04B
hereto, (i) no subscription, warrant, option, convertible security or other
right (contingent or other) to purchase or acquire any shares of any class of
capital stock of the Company is authorized or outstanding, (ii) there is not any
commitment of the Company to issue any shares, warrants, options or other such
rights or to distribute to holders of any class of its capital stock any
evidences of indebtedness or assets, (iii) the Company has no obligation
(contingent or other) to purchase, redeem or otherwise acquire any shares of its
capital stock or any interest therein or to pay any dividend or make any other
distribution in respect thereof, and (iv) to the Company's knowledge, there are
no existing rights of first refusal, registration rights or voting agreements
with respect to any of the Company's outstanding shares, except as described on
Schedule 2.04C. A true and correct copy of the Stock Option Agreement to Xxxxx
Xxxxxx, M.D., is set forth as Schedule 2.04D. All of the outstanding shares of
the Stock have been issued in compliance with all applicable Federal securities
law.
SECTION 2.05 Financial and Other Data. All financial and other data
pertaining to the Company and its business, assets and affairs, which has been
or hereafter prior to the Closing shall be furnished to either Purchaser by the
Company, are or will be at the time the same are so furnished, true, accurate
and complete in all material respects. To the best
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knowledge and belief of the Company, except as described herein or in the
Business Plan (as defined below), the Company has no obligations or liabilities,
absolute, accrued or contingent, which in accordance with generally accepted
accounting principles should be listed on a balance sheet or described on the
notes thereto. To the date hereof, the Company has operated in a pre-start-up
phase consistent with the Business Plan.
SECTION 2.06 Events Subsequent to January 1, 1998. Since January 1,
1998 except as set forth in Schedule 2.06 hereto, the Company has not (i) issued
any stock, bonds or other corporate securities, (ii) borrowed any amount or
incurred any liabilities (absolute or contingent), except current liabilities
incurred, and liabilities under contracts entered into, in the ordinary course
of business, none of which, individually or in the aggregate, are material to
the Company, (iii) discharged or satisfied any lien or incurred or paid any
obligation or liability (absolute or contingent) other than current liabilities
incurred in the ordinary course of business, (iv) declared or made any payment
or distribution to shareholders or purchased or redeemed any shares of its
capital stock or other securities, (v) mortgaged, pledged or subjected to lien
any of its assets, tangible or intangible, other than liens of taxes not yet due
and payable, (vi) sold, assigned or transferred any of its tangible assets,
except in the ordinary course of business, or canceled any debts or claims,
(vii) sold, assigned or transferred any patents, trademarks, trade names,
copyrights, trade secrets or other intangible assets, (viii) suffered any
losses, or waived any rights of substantial value, whether or not in the
ordinary course of business, (ix) made any changes in officer compensation,
except in the ordinary course of business and consistent with past practice, or
(x) entered into any transaction except in the ordinary course of business
(recognizing that the Company is in a start-up phase of its
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business). Since such date, except as set forth in said Schedule 2.06, there has
been no material change in the accounting methods or practices of the Company.
Between the date hereof and the Closing Date, the Company will not do
any of the things listed in Section 2.06 above, except as contemplated by
Schedule 2.06 hereto.
SECTION 2.07 Actions Pending. There is no action, suit, investigation
or proceeding pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its properties or rights, before any court or by
or before any governmental body or arbitration board or tribunal. To the best
knowledge and belief of the Company, there does not exist any basis for any such
action, suit, investigation or proceeding. The foregoing includes, without
limiting its generality, actions pending or threatened (or any basis therefor
known to the Company) involving the prior employment of any employees or
prospective employees of the Company or their use, in connection with the
Company's business, of any information or techniques which might be alleged to
be proprietary to their former employers. There are no decrees, injunctions or
orders of any court or governmental department or agency outstanding against the
Company.
SECTION 2.08 Trade Secrets. No third party has claimed that any person
affiliated with the Company has, in respect of his activities to date, violated
any of the terms or conditions of his employment contract with such third party,
or disclosed or utilized any trade secrets or proprietary information or
documentation of such third party, or interfered in the employment relationship
between such third party and any of its employees. The Company is not aware that
any person affiliated with it has employed or will employ any trade secrets or
any information or documentation proprietary to any former employer, or that
any person
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affiliated with the Company has violated any confidential relationship which
such person may have had with any third party, in connection with the
development, manufacture and sale of any products of the Company. To the
Company's knowledge, there is no infringement by the Company of any third party
intellectual property right. All employees of the Company with access to
confidential information and who have executed employment agreements have
executed and delivered to the Company a non-disclosure and non-competition
agreement.
SECTION 2.09 Title to Properties. The Company has good and marketable
title to all its real property and owns outright all its other properties and
assets, free and clear of mortgages/pledges, security interests, liens, charges
and other encumbrances, except (i) as described in Schedule 2.09 hereto, (ii)
liens for current taxes not yet due and (iii) minor imperfections of title, if
any, not material in amount and not materially detracting from the value or
impairing the use of the property subject thereto or impairing the operations or
proposed operations of the Company.
SECTION 2.10 Leasehold Interests. Each lease or agreement to which the
Company is a party under which it is a lessee of any property, real or personal,
owned by any third party is a valid and subsisting agreement, without any
default of the Company thereunder and, to the best knowledge and belief of the
Company, without any default thereunder of the other party thereto. The
Company's possession of such property has not been disturbed nor has any claim
been asserted against the Company adverse to its rights in such leasehold
interests,
SECTION 2.11 Taxes. The Company has filed or caused to be filed all
Federal, state and local tax returns and reports which are required to be filed
and has paid or caused to be paid all taxes as shown on all Federal, state and
local tax returns filed by it or on any
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assessment received by it to the extent that such taxes have become due, and all
of the foregoing are correct and complete in all material respects. All accruals
for taxes owed by the Company are adequately reflected on the financial
statements described in Section 2.05 above. No issues have been raised or
deficiencies asserted by any taxing authority with respect to the Company's tax
liabilities or any of its tax returns or reports.
SECTION 2.12 Patents, Trademarks, Etc. To the best knowledge and belief
of the Company, the Company owns the patents, trademarks, service marks, trade
names, copyrights and licenses listed in Schedule 2.12 hereto without conflict
with the rights of others, the same constitute all the patents, trademarks,
service marks, trade names, copyrights and licenses necessary in the conduct of
the business of the Company, and, except as indicated in said Schedule 2.12,
there exists no right of any person to receive a royalty with respect thereto or
to utilize or otherwise appropriate the same, and the Company has no
distribution, marketing or other agreements granting rights to third parties
relating in whole or in part to any items of the foregoing categories, except
licenses granted in the ordinary course of its business. All technical
information developed by and belonging to the Company which has not been
patented by it is and will continue to be protected by measures deemed prudent
by the Company for the maintenance of secrecy relating thereto.
SECTION 2.13 Governmental Approvals. No registration or filing with, or
consent or approval of, or other action by, any Federal, state or other
governmental agency or instrumentality is or will be necessary for the valid
execution, delivery and performance of the Operative Documents and the issuance,
sale and delivery of the Shares, the Warrants and the Warrant Shares hereunder.
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SECTION 2.14 Use of Proceeds. Unless otherwise agreed to by the PRWW
board representative, the Company will apply the proceeds of the issuance and
sale of the Shares for start up and operating costs as described in the Business
Plan. In no event will the proceeds of the issuance and sale of the Shares to
PRWW be utilized to retire any portion of the Bridge Loan (as defined in
subparagraph (k) of Article IV below).
SECTION 2.15 Disclosure. The Company has furnished to the Purchasers a
copy of the Company's business plan attached as Schedule 2.15A, used in
connection with its offer of the Shares (the "Business Plan"). In addition, the
Purchasers have had lengthy discussions regarding this investment and the
Company in general with representatives of the Company. To the Company's best
knowledge and belief, after due inquiry, the Business Plan and this Agreement do
not contain any untrue statement of material fact or omit to state any material
fact necessary in order to make the statements contained therein or herein, in
light of the circumstances under which they are made, not misleading. The
projections of financial results contained in the Business Plan were in all
material respects prepared accurately based upon the assumptions described
therein, which assumptions the Company believes to be realistic. The Company is
a start-up company without any meaningful financial or operating history and the
Purchasers were made aware of the speculative nature and high degree of risk of
loss involved with this purchase as set forth in Schedule 2.15B hereto.
SECTION 2.16 Offering of the Shares. Neither the Company nor any person
authorized or employed by the Company as agent, broker, dealer or otherwise in
connection with the offering or sale of the Shares or any similar security of
the Company has offered the Shares or any such security for sale to, or
solicited any offers to buy the Shares or any similar
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security of the Company from, or otherwise approached or negotiated with respect
thereto with, any person or persons other than the Purchasers and not more than
35 non-accredited investors (including, if applicable, the Purchasers). Neither
the Company nor any person acting on its behalf has taken or will take any
action (including, without limitation, any offer, issuance or sale of any
security of the Company, pursuant to the Business Plan or otherwise), under
circumstances which might require the integration of such security with the
Shares under the Securities Act of 1933 (the "Securities Act") or the rules and
regulations of the Securities and Exchange Commission (the "Commission")
thereunder which might subject the offering, issuance or sale of the Shares to
the registration provisions of the Securities Act. The offering, issuance and
sale of the Shares hereunder is exempt from the federal registration
requirements.
SECTION 2.17 Employment Contracts, Etc.; Certain Material
Transactions. Except as set forth in Schedule 2.17 hereto, (i) the Company is
not a party to any employment or deferred compensation agreements, (ii) the
Company does not have any bonus, incentive or profit-sharing plans, (iii) the
Company does not have any pension, retirement or similar plans or obligations,
and (iv) there are no existing material arrangements or proposed material
transactions between the Company and any officer or director or holder of more
than 10% of the capital stock of the Company. The Company is not a party to any
collective bargaining agreement and, to the best of its knowledge, no
organizational efforts are currently being made with respect to any of its
employees. Any employment agreements to be entered into in the future or
contemplated and listed on Schedule 2.17 but not executed on or before the
Closing Date, will be approved by the Company's Compensation Committee.
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SECTION 2.18 Other Contracts and Commitments. The Company is not in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in the Company's Certificate of Incorporation
or by-laws or in any agreement or instrument to which it is a party which may
result in any material adverse change in the condition, financial or other, of
the Company, and, to the best knowledge and belief of the Company, there are no
existing such defaults by the other parties thereto. Attached hereto as Schedule
2.18 is a true, complete and correct copy of the Interactive Services Agreement
between the Company and America Online, Inc. (the "AOL Agreement"). The AOL
Agreement is a valid and subsisting agreement, and no default has occurred
thereunder by the Company or AOL.
SECTION 2.19 Compliance With Law. The Company is not in default under
any order of any court, governmental authority or arbitration board or tribunal
to which the Company is or was subject or in violation of any laws, ordinances,
governmental rules or regulations to which the Company is or was subject, except
for such violations which do not, individually or in the aggregate, have a
material adverse effect on the Company. The Company has not failed to obtain any
licenses, permits, franchises or other governmental authorizations necessary to
the ownership of the properties of the Company or to the conduct of the business
of the Company and the failure of which to obtain would have a material adverse
effect on the Company.
SECTION 2.20 Employee Benefits Plans. The Company has never been a
party to a multi-employer retirement plan. The Company has no Employee Benefit
Plans subject to the
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provisions of the Employee Retirement Income Security Act of 1974 (as such term
is defined therein).
SECTION 2.21 Insurance. The Company maintains insurance with
responsible and reputable insurance companies in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general area in which the Company operates
or owns such properties.
III.
REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER
Each Purchaser represents and warrants to the Company (for itself and
not for the other Purchaser) that it is acquiring the Shares for its own account
for the purpose of investment and not with a view to or for sale in connection
with any distribution thereof. Each Purchaser represents and warrants that it is
an "accredited investor" as such term is defined under the Securities Act of
1933, as amended (the "Securities Act") or that it has sufficient knowledge and
experience in financial and business matters to be capable of evaluating the
merits and risks of this purchase. Each Purchaser further represents that it
understands that (i) the Shares have not been registered under the Securities
Act by reason of their issuance in a transaction exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) and 4(6) thereof,
(ii) the Shares must be held indefinitely unless a subsequent disposition
thereof is registered under the Securities Act or is exempt from such
registration, (iii) the Shares will bear a legend to such effect (to be removed
when such restrictions are no longer applicable), and (iv) the Company will make
a notation on its transfer books to such effect. The Purchaser further
understands that the exemption from registration afforded by Rule 144 under the
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Securities Act depends on the satisfaction of various conditions and that, if
applicable, Rule 144 affords the basis of sales of the Shares in limited amounts
under certain conditions. The Purchaser acknowledges that it has had a full
opportunity to request from the Company all instruments, documents, records and
books pertaining to this investment, all of which requested documentation has
been made available by the Company, and the Purchaser has received such
information that it deems relevant in making a decision to purchase the Shares
being purchased by it hereunder. The Purchaser has had the full and fair
opportunity to have the Company's Business Plan, other documents and this
Agreement reviewed thoroughly by independent, competent advisors and counsel or,
if not, then the Purchaser has made the fully informed, independent decision not
to do so, and the Purchaser has duly considered the factors listed on Schedule
2.15 hereto (provided that the review and receipt of any such information shall
not in any manner qualify or diminish the representations of the Company
contained in Article II). The Purchaser will comply with any restrictions on
transferability of the Shares contained in the Registration Rights Agreement and
the Stockholders Agreement.
IV.
CONDITIONS TO THE OBLIGATIONS
OF EACH PURCHASER
The obligation of each Purchaser to purchase and pay for the Shares
being purchased by it on the Closing Date is, at its option, subject to the
simultaneous Closing of the purchase of Shares hereunder by the other Purchaser
and, at its option, is further subject to the satisfaction, on or before such
date, of the following conditions:
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(a) Opinion of Counsel. The Purchaser shall have received from Rifkin,
Livingston, Xxxxxxx & Silver, LLC, counsel for the Company, an opinion dated the
Closing Date, in form and substance satisfactory to the Purchaser and its
counsel, to the effect that:
(i) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware. The
Company has the corporate power and authority to own and hold its properties and
to carry on its business as currently conducted, to execute, deliver and perform
the Operative Documents, and to issue, sell and deliver the Shares and the
Warrant Shares.
(ii) The authorized capital stock of the Company consists of
1,000,000 shares of Series A Common Stock, of which 234,651 shares are
outstanding, which outstanding shares have been validly issued and are fully
paid and non-assessable.
(iii) Such counsel, without independent investigation, is not aware
of any non-compliance with any Federal securities laws in connection with the
original issuance of the presently outstanding shares of the Company's capital
stock.
(iv) The execution, delivery and performance by the Company of the
Operative Documents, and the issuance, sale and delivery of the Shares and the
Warrant Shares, have been duly authorized by all requisite corporate action, and
will not violate any provision of law, the Certificate of Incorporation or
by-laws of the Company or, to the knowledge of such counsel, without independent
investigation, any provision of any material agreement or other instrument by
which the Company or any of its properties or assets is bound or affected, or
conflict with, result in a breach of or constitute a default under any such
agreement or other instrument.
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(v) Each of the Operative Documents has been duly executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company, enforceable in accordance with its terms (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency
and similar laws, to moratorium laws from time to time in effect and to general
equity principles), except that such counsel need express no opinion as to the
indemnification provisions of the Registration Rights Agreement.
(vi) The Shares have been issued, sold and delivered by the Company
pursuant to this Agreement and are duly authorized, validly issued, fully paid
and nonassessable shares of Stock.
(vii) The issuance, sale and delivery of the Shares to the
Purchaser, under the circumstances contemplated by this Agreement, are exempt
from the registration requirements of the Federal securities laws.
(viii) Such counsel does not represent the Company with respect to
pending or overtly threatened litigation, and to its knowledge without
independent investigation there is no such pending or threatened litigation
outstanding.
(ix) Such counsel is not aware of any material default by the
Company under any agreement or instrument of the Company or any failure by the
Company to comply with applicable law.
(x) To the knowledge of such counsel, all consents and approvals
required for the execution, delivery and performance by the Company of this
Agreement have been duly obtained.
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(b) Representations and Warranties to be True and Correct; Performance.
The representations and warranties contained in Article II hereof shall be true
and correct on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date; the Company
shall have performed and complied with all agreements and conditions contained
herein required to be performed or complied with by it prior to or at the
Closing Date; and each Purchaser shall have received a certificate dated the
Closing Date, executed by the Company's president or vice president, to each
such effect.
(c) Consents and Approvals. All necessary consents and approvals from
governmental and third parties required for the sale and issuance of the Shares
hereunder and the other actions contemplated hereby shall have been duly
obtained.
(d) Secretary's Certificate. Each Purchaser shall have received a
certificate from the Secretary or Assistant Secretary of the Company, with
respect to the Company's Certificate of Incorporation and by-laws and
resolutions of the Company's Board of Directors authorizing the transactions
contemplated hereby.
(e) Election of Directors. Each Purchaser's designee shall have been
elected to the Company's Board of Directors.
(f) Stockholders' and Voting Agreement. On the Closing Date, the
Company and the other parties thereto shall have executed and delivered the
Stockholders' and Voting Agreement among the Company and its shareholders, in
the form of Annex III hereto (the "Stockholders Agreement").
(g) Registration Rights Agreement. On the Closing Date the Company
shall have executed and delivered the Registration Rights Agreement, in the form
of Annex IV hereto (the
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"Registration Rights Agreement").
(h) [RESERVED]
(i) MAS Service Agreement. On the Closing Date, the Company and MAS
shall have executed and delivered the Services Agreement in the form of Annex V
hereto (the "MAS Service Agreement").
(j) PRWW Service Agreement. On the Closing Date, the Company and PRWW
shall have executed and delivered the Services Agreement in the form of Annex VI
hereto (the "PRWW Service Agreement").
(k) Bridge Loan. At or prior to the Closing, the Company shall have
received a $900,000 bridge loan from Mercantile Safe Deposit & Trust Co., on
terms and conditions satisfactory to each Purchaser, guaranteed by the
individuals listed on Schedule 4(k) hereto (the "Loan Guarantors"), for which
the Loan Guarantors shall receive in the aggregate warrants to acquire not more
than 7,500 shares of the Stock, on terms and conditions satisfactory to each
Purchaser.
(1) Additional Equity Funding. Unless otherwise agreed to by the PRWW
board representative, at or prior to the Closing, the Company shall have issued
and sold 25,000 shares of the Stock to the individual investors listed in Part A
of Annex VII hereto (the "Wyndhurst Group"), for an aggregate consideration,
paid in cash, of $500,000, and shall have issued and sold 25,000 shares of the
Stock to the individual investors listed in Part B of said Annex (the "Xxxxxxx
Group"), for an aggregate consideration, paid in cash, of $500,000.
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V.
CONDITIONS TO THE OBLIGATIONS OF THE COMPANY
The obligation of the Company to issue and sell the Shares to the
Purchasers on the Closing Date is, at its option, subject to the satisfaction,
on or before such date, of the following conditions:
(a) Representations and Warranties to be True and Correct. The
representations and warranties contained in Article III hereof shall be true and
correct on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date.
(b) Operative Documents. The other parties thereto shall have executed
and delivered to the Company the Operative Documents.
(c) Consents and Approvals. All necessary consents and approvals from
governmental and third parties required for the sale and issuance of the Shares
hereunder shall have been duly obtained.
VI.
ADDITIONAL EQUITY OFFERING; ISSUANCE OF WARRANTS
SECTION 6.01 Equity Offering. The Company shall use its best efforts to
sell, within 45 days of the Closing Date, 150,000 shares of the Stock to as yet
undetermined investors (the "Prospective Investors"), for an aggregate
consideration of $3,000,000, payable in cash. Such issuance shall be on terms
(for example, purchase price, payment terms, registration rights, etc.) no more
favorable than those provided hereunder to MAS and PRWW.
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SECTION 6.02 Issuance of Warrants. On the 45th day following the
Closing Date, the Company will issue warrants to purchase its Stock,
substantially in the form an Annex VIII hereto (the "Warrants"), to PRWW, MAS,
the Wyndhurst Group and the Xxxxxxx Group, pro rata to the Stock owned by each.
The Warrants will permit the holder thereof to purchase the number of shares of
Stock represented thereby (herein, the "Warrant Shares"), at any time during a
10 year period, for a purchase price of $.01 per share. The aggregate number of
Warrant Shares issuable under all of the Warrants shall equal the result of (a)
$3,000,000, minus (b) the aggregate purchase price received from the Prospective
Investors, divided by (c) $3,000,000, multiplied by (d) 50,000 shares.
VII.
COVENANTS OF THE COMPANY
The Company covenants and agrees that, unless the Purchasers shall
otherwise consent in writing:
(a) Financial Statements. The Company shall furnish to each Purchaser
the financial statements and other information required to be provided to
holders of the Common Stock pursuant to the Stockholders Agreement.
(b) Insurance. The Company will maintain insurance with responsible and
reputable insurance companies in such amounts and covering such risks as is
usually carried by companies engaged in similar businesses and owning similar
properties in the same general area in which the Company operates or owns such
properties.
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(c) Key Man Insurance. The Company will use best efforts to obtain
within 90 days of the Closing Date, and thereafter will maintain in effect, key
man life insurance in an amount of not less than $1,000,000 on the life of its
CEO.
(d) Non-Disclosure Agreements. The Company will maintain in effect with
each of its employees who are privy to confidential information of the Company,
and who have or shall execute an employment agreement, a covenant, in form and
substance reasonably deemed to be appropriate by the Company, pursuant to which
each such employee shall agree not to disclose or utilize confidential or
proprietary information of the Company or to compete with the Company.
(e) Access to Records. The Company shall afford to each Purchaser and
its employees, counsel and other authorized representatives free and full
access, on a reasonable basis during normal business hours, to all of the books,
records and properties of the Company and to all officers and employees of the
Company for any reasonable purpose whatsoever; provided that such free and full
access does not unreasonably interfere with the normal business operations of
the Company. The Purchaser'shall use its best efforts to maintain the
confidentiality of any confidential and proprietary information so obtained by
it which is not otherwise available from other sources; provided, however, that
the foregoing shall in no way limit or otherwise restrict the ability of the
Purchaser or such authorized representatives to disclose any such information
concerning the Company which it may be required to disclose (i) to its partners
to the extent required to satisfy its fiduciary obligations to such persons, or
(ii) otherwise pursuant to or required by law.
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(f) Budgets and Operating Forecast. The Company will promptly provide
each Purchaser will copies of any budgets which it may from time to time adopt,
which in any event shall include an annual budget to be prepared and distributed
not later than 45 days after the commencement of each fiscal year.
(g) Existence; Maintenance of Property. The Company shall do or cause
to be done all things necessary to maintain, preserve and keep in full force and
effect its corporate existence and all rights, licenses, permits and franchises
necessary to the proper conduct of its business and the ownership, leasing or
operation of its properties. The Company shall maintain and operate its
business and properties in accordance with all applicable laws and regulations
and take all reasonable action which may be required to obtain, preserve, renew
and extend all licenses, permits, authorizations, trade names, trademarks,
copyrights and patents which may be necessary for the continuance of the
operation of any such property by it. The Company shall at all times maintain
and preserve all property necessary in the conduct of its business and keep the
same in good repair, working order and condition, and from time to time make, or
cause to be made, all necessary and proper repairs, renewals, replacements,
betterments and improvements thereto so that the business carried on in
connection therewith may properly and advantageously be conducted at all times.
(h) Payment of Debts, Taxes, Etc. The Company shall pay all
indebtedness and obligations promptly and in accordance with normal terms and
pay and discharge promptly all taxes, assessments and governmental charges or
liens imposed upon it or upon its income or receipts or in respect of any of its
property, before the same shall become in default, as well as all lawful claims
which, if unpaid, might result in the creation of a lien or charge upon such
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properties or any part thereof; provided, however, that the Company shall not be
required to pay and discharge or to cause to be paid and discharged any such
indebtedness, obligation or tax so long as the validity or amount thereof shall
be contested in good faith and the Company shall set aside on its books such
reserves as are required by generally accepted accounting principles with
respect to any such indebtedness, obligation or tax.
(i) Litigation or Other Notices. The Company shall deliver to each
Purchaser promptly following the occurrence thereof written notice of the
following:
(A) all events of default under any of the terms or provisions of
any material note, or of any other evidence of material indebtedness or
agreement or contract governing the borrowing of money of the Company;
(B) levy of an attachment, execution or other process against any
of the property or assets, real or personal, of the Company or any of its
subsidiaries, unless the same is reasonably discharged within thirty days and is
so discharged;
(C) the filing or commencement of any action, suit or proceeding by
or before any court or any federal, state, municipal or other governmental
department, commission, instrumentality or agency which may result in material
liability to, or otherwise materially adversely affect, the Company;
(D) any matter of non-general effect which has resulted in, or
which may result in, a material adverse change in the financial condition or
operations of the Company.
(j) Performance of Obligations. The Company shall do and perform every
act and discharge all of the obligations required to be performed and discharged
under any of the Operative Documents at the time or times and in the manner
therein and herein specified.
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(k) Meetings of the Board of Directors. The Company shall call, and use
its best efforts to have, regular meetings of the Board of Directors of the
Company not less than quarterly.
(l) Board of Directors; Membership Thereon. The Board of Directors
shall be of such size and composed of such designees as is more fully specified
in the Stockholders Agreement.
VIII.
[RESERVED]
IX.
MISCELLANEOUS
SECTION 9.01 Expenses. Each party hereto will pay its own expenses in
connection with the transactions contemplated hereby, whether or not such
transactions shall be consummated, provided, however, that the Company shall pay
one half of the fees and disbursements of each Purchaser's counsel. With the
Purchasers' prior knowledge and approval, closing costs of this transaction
payable to third parties have been incurred by the Company which are to be
satisfied by (i) cash payments equal to 8% of the proceeds of the offering
hereunder due out of the offering and (ii) issuance of shares of the Common
Stock equal to 9% of the Company's Common Stock outstanding after the sale and
purchase hereunder; the cash payments will accrue until such time as the Company
has sufficient funds to pay this cost, at the prudent discretion of management.
The Company further confirms that its legal and accounting fees arising from
this offering shall not exceed $50,000.
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SECTION 9.02 Survival of Agreements. All covenants, agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement and the issuance, sale and delivery of the Shares
pursuant hereto.
SECTION 9.03 Brokerage. Each party hereto represents and warrants to
the other that it has incurred no brokerage or other commissions relative to
this Agreement or to the transactions contemplated hereby, based in any way on
agreements, arrangements or understandings made or claimed to have been made by
such party with any third party, except for the consulting fees payable by the
Company included within the closing costs referred to in Section 9.01 above.
Notwithstanding the foregoing, each party hereto will indemnify and hold
harmless the other against and in respect of any claim for brokerage or other
commissions relative to this Agreement or to the transactions contemplated
hereby (other than such consulting fees), based in any way on agreements,
arrangements or understandings made or claimed to have been made by such party
with any third party.
SECTION 9.04 Parties in Interest. All covenants and agreements
contained in this Agreement by or on behalf of any of the parties hereto shall
bind and inure to the benefit of the parties hereto and their respective
successors and assigns.
SECTION 9.05 Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be mailed by first class
registered mail, postage prepaid, addressed as follows:
(a) if to the Company, at:
00000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx Xxxxx, XX 00000
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(b) if to PRWW, at:
Premier Research Worldwide, Ltd.
000 X. 00xx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attn: CEO
(c) If to MAS, at:
0000 Xxxxxxxx Xxxxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the others in accordance with this Section
9.05.
SECTION 9.06 Law Governing Construction. This Agreement shall be
governed by and construed in accordance with the laws of the State of Maryland.
In the event any provision of this Agreement shall be held to be invalid or
unenforceable for any reason, such invalidity or unenforceability shall attach
only to such provision and shall not affect or render invalid or unenforceable
any other provision of this Agreement.
SECTION 9.07 Entire Agreement. This Agreement constitutes the
entire Agreement of the parties with respect to the subject matter hereof and
may not be modified, waived or amended except in writing.
SECTION 9.08 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Company and the Purchaser have executed
this Agreement as of the day and year first above written.
AMERICA'S DOCTOR, INC.
By /s/ Xxxxx Xxxxxx
-------------------------------
President
MEDICAL ADVISORY SYSTEMS, INC.
By: /s/ Xxxxxx Xxxxxxx
------------------------------
PREMIER RESEARCH WORLDWIDE, L.T.D.
By: /s/ Xxxx X. Xxxxxx
-------------------------------
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