EXHIBIT 10.21
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
term 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 purchase
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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 ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, A Professional
Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, 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 Incorporation and by-laws heretofore delivered to
the Purchasers are complete and correct. The
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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 By-laws 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 delivered in accordance with this Agreement, will
constitute the legal, valid and binding obligation of the Company, enforceable
in accordance with their respective terms.
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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 ▇▇▇▇▇
▇▇▇▇▇▇, 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 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
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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 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.
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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 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.
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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 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
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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.
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
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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 2.15 B 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 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
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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.
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,
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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 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
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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 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
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hereunder by the other Purchaser and, at its option, is further subject to the
satisfaction, on or before such date, of the following conditions:
(a) Opinion of Counsel. The Purchaser shall have received from
Rifkin, Livingston, ▇▇▇▇▇▇▇ & 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
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default under any such agreement or other instrument.
(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.
(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
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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 "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
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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.
(l) 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 Amex 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 "▇▇▇▇▇▇▇ Group"), for an aggregate consideration, paid in cash, of
$500,000.
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
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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 duty 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.
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 in Annex VIII hereto (the "Warrants"), to PRWW, MAS,
the Wyndhurst Group and the ▇▇▇▇▇▇▇ 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.
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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.
(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
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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.
(f) Budgets and Operating Forecast. The Company will promptly
provide each Purchaser with 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
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connection therewith may properly and advantageously be conducted at all times.
(h) Payment of Debts, Taxes. 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
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
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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.
(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 Thereto. 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:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(b) if to PRWW, at:
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Premier Research Worldwide, Ltd.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: CEO
(c) If to MAS, at:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
--------------------------------
President
MEDICAL ADVISORY SYSTEMS, INC.
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇, President
--------------------------------
PREMIER RESEARCH WORLDWIDE, LTD.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Chief Financial Officer
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