--------------------------------------------------------------------------------
STOCK PURCHASE AGREEMENT
DATED AS OF MAY 14, 2001
BY AND AMONG
THE SAGEMARK COMPANIES LTD.
PAMELS CORP.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ REVOCABLE TRUST
▇▇▇▇ CAPITAL, INC.
BOCARA CORPORATION
MERCURY CAPITAL CORP.
PREMIER P.E.T. IMAGING INTERNATIONAL, INC.
AND
PREMIER CYCLOTRON INTERNATIONAL CORP.
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page No.
--------
1. Purchase of Sellers' Shares...................................... 2
1.1. Sale and Purchase of the Sellers' Shares................ 2
1.2. Purchase Price for the Sellers' Shares.................. 2
2. The Closing...................................................... 2
3. The Purchaser's Due Diligence.................................... 3
4. Unaudited Balance Sheets......................................... 3
5. Representations and Warranties of Sellers........................ 3
5.1. Organization and Standing............................... 3
5.2. Subsidiaries and Affiliates............................. 3
5.3. Enforceability as to Selling Stockholders............... 4
5.4. Authority............................................... 4
5.5. No Conflict............................................. 4
5.6. Capitalization.......................................... 4
5.7. Ownership of the Sellers' Shares........................ 5
5.8. Financial Representations............................... 5
5.9. Title to Properties; Encumbrances....................... 6
5.10. Leases.................................................. 6
5.11. No Litigation........................................... 6
5.12. Contracts and Commitments............................... 6
5.13. Status of Agreements.................................... 7
5.14. Labor Relations......................................... 7
5.15. Employee Benefit Plans.................................. 7
5.16. Books and Records....................................... 8
5.17. No Undisclosed Liabilities.............................. 8
5.18. Investment Representations.............................. 8
5.19. Broker's or Finder's Fee................................ 9
5.20. Accuracy of Information................................. 9
6. Representations and Warranties of the Purchaser.................. 9
6.1. Organization and Standing............................... 9
6.2. Enforceability as to the Purchaser...................... 9
6.3. Authority............................................... 10
-ii-
6.4. Capitalization.......................................... 10
6.5. Investment Representation............................... 10
6.6. Broker's or Finder's Fee................................ 10
6.7. Accuracy of Information................................. 10
7. Additional Rights, Covenants and Conditions...................... 11
7.1. Redemption.............................................. 11
7.2. Working Capital and Guaranty............................ 11
7.3. Executive Employment Agreement.......................... 11
7.4. Registration Rights..................................... 12
7.5. Agreement Terminations.................................. 14
7.6. Reservation of Shares................................... 15
8. Conduct of the Company's Business Prior to Closing............... 15
8.1. Conduct in Ordinary Course.............................. 15
8.2. Liens, Agreements, Capital Stock, Waiver and
Reorganizations......................................... 16
9. Conditions to the Purchaser's Obligations........................ 16
9.1. Representations and Warranties.......................... 16
9.2. Delivery of Sellers' Shares............................. 16
9.3. Adverse Changes......................................... 16
9.4. Absence of Litigation................................... 17
9.5. Compliance.............................................. 17
9.6. Due Diligence........................................... 17
9.7. Fairness Opinion........................................ 17
9.8. Tax-Free Transaction.................................... 17
9.9. Unaudited Balance Sheets................................ 17
9.10. Executive Employment Agreement.......................... 17
9.11. Closing of DVI Loan..................................... 17
9.12. Lease with S&D Holding LLC.............................. 17
9.13. Medical Advisory Board.................................. 18
9.14. Delivery................................................ 18
10. Conditions to the Selling Stockholders' Obligations.............. 18
10.1. Representations and Warranties.......................... 18
10.2. Delivery of Initial Sagemark Shares..................... 18
10.3. Absence of Litigation................................... 18
10.4. Compliance.............................................. 18
10.5. Tax-Free Transaction.................................... 18
10.6. Executive Employment Agreement.......................... 19
10.7. Closing of DVI Loan..................................... 19
-iii-
10.8. Lease with S&D Holding LLC.............................. 19
10.9. Delivery................................................ 19
11. Documents to be Delivered by the Selling Stockholders at the
Closing.......................................................... 19
11.1. Certificates of Incorporation........................... 19
11.2. Good Standing........................................... 19
11.3. By-Laws................................................. 19
11.4. Financials.............................................. 19
11.5. Corporate Books and Records............................. 19
11.6. Certificate............................................. 19
11.7. Resolutions of Premier and PCI.......................... 19
11.8. Contracts............................................... 20
11.9. Consents................................................ 20
11.10. Executive Employment Agreement.......................... 20
11.11. Lease with S&D Holding LLC.............................. 20
11.12. Stock Certificates...................................... 20
11.13. Other Documents......................................... 20
12. Documents to be Delivered by the Purchaser at the Closing........ 20
12.1. Certificate............................................. 20
12.2. Purchaser Resolutions................................... 20
12.3. Stock Certificates...................................... 20
12.4. Other Documents......................................... 20
13. Termination of Agreement Prior to the Closing.................... 21
13.1. Purchaser's Termination Right........................... 21
13.2. Selling Stockholders' Termination Right................. 21
13.3. Remedies................................................ 21
14. Indemnification.................................................. 21
14.1. Indemnification of the Purchaser........................ 21
14.2. Indemnification of the Selling Stockholders............. 21
14.3. Procedure for Indemnification........................... 22
15. Public Announcements............................................. 23
16. Miscellaneous.................................................... 23
16.1. Sole Agreement.......................................... 23
16.2. Notices................................................. 23
16.3. Governing Law........................................... 24
-iv-
16.4. Arbitration............................................. 24
16.5. Binding Effect.......................................... 24
16.6. Severability............................................ 24
16.7. Schedules and Exhibits.................................. 25
16.8. Headings................................................ 25
16.9. Further Assurances...................................... 25
16.10. Expenses................................................ 25
-v-
STOCK PURCHASE AGREEMENT
AGREEMENT made as of the 14th day of May, 2001 by and among THE
SAGEMARK COMPANIES LTD., a New York corporation with offices at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "PURCHASER"), PAMELS CORP., a
Florida corporation with offices at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ("PAMELS"), ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ REVOCABLE TRUST ("▇▇▇▇▇▇▇▇▇
TRUST"), a Trust with offices c/o Premier P.E.T. Imaging International, Inc.,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ CAPITAL, INC., a
Delaware corporation with offices c/o Premier P.E.T. Imaging International,
Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ("▇▇▇▇"), BOCARA
CORPORATION, a Nevada corporation with offices c/o Premier P.E.T. Imaging
International, Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
("BOCARA") and MERCURY CAPITAL CORP., a Kansas corporation with offices c/o
Premier P.E.T. Imaging International, Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ("MERCURY") (Pamels, ▇▇▇▇▇▇▇▇▇ Trust, ▇▇▇▇, Bocara and
Mercury are sometimes hereinafter referred to individually as a "SELLING
STOCKHOLDER" or collectively as the "SELLING STOCKHOLDERS"), PREMIER P.E.T.
IMAGING INTERNATIONAL, INC., A Delaware corporation with offices at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("PREMIER") and PREMIER CYCLOTRON
INTERNATIONAL CORP., a Delaware corporation with offices at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇-▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("PCI").
W I T N E S S E T H :
WHEREAS, Premier was formed to establish, own and operate outpatient
diagnostic imaging centers (the "PET CENTERS") throughout the United States,
utilizing positron emission tomography scanning equipment ("PET SCANNING
EQUIPMENT"). PCI was formed to own and operate equipment which manufactures
fluoro deoxyglucose and other radioisotopes utilized in the diagnostic imaging
procedures performed by the PET Scanning Equipment; and
WHEREAS, Premier has expended considerable time and effort in
investigating and selecting prospective sites for the PET Centers and
negotiating leases for at least two prospective sites therefor, investigating
and evaluating the positron emission tomography technology (including trade show
attendance at which comprehensive due diligence inquiries were made of industry
experts and representatives), structuring and negotiating financing commitments
for the purchase of the PET Scanning Equipment including, without limitation,
the negotiation and consummation of a financing commitment with DVI Financial
Services, Inc. and negotiation and consummation of a purchase order with CTI,
Inc. for certain PET Scanning Equipment; and
WHEREAS, the Selling Stockholders own all of the issued and outstanding
shares of the capital stock, $.01 par value per share, of Premier and PCI in the
respective amounts and percentages set forth in Exhibit A hereto (the "SELLERS'
SHARES"); and
WHEREAS, the Selling Stockholders desire to sell, and the Purchaser
desires to purchase from the Selling Stockholders, the Sellers' Shares in a
tax-free exchange pursuant to Section 368(b) of the U.S. Internal Revenue Code
of 1986, as amended and, thereafter, to engage in the business for which Premier
and PCI were formed using the knowledge, experience and expertise of ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ and others who are currently employed by or otherwise rendering
services to Premier, all on and subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants, promises, and
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. PURCHASE OF THE SELLERS' SHARES.
1.1 SALE AND PURCHASE OF THE SELLERS' SHARES. Upon and subject
to the terms and conditions herein set forth, the Selling Stockholders hereby
agree to sell the Sellers' Shares to the Purchaser on the Closing Date
(hereinafter defined), and the Purchaser hereby agrees to purchase the Sellers'
Shares from the Selling Stockholders on the Closing Date, free and clear of all
security interests, mortgages, liens, charges, claims, encumbrances and
restrictions of any kind, except for restrictions on transfer imposed by Federal
and state securities laws, solely in exchange for shares of the common stock,
$.01 par value per share, of the Purchaser (the "PURCHASER'S COMMON STOCK").
1.2. PURCHASE PRICE FOR THE SELLERS' SHARES.
(a) In consideration of the sale and transfer of the
Sellers' Shares by the Selling Stockholders to the Purchaser on the Closing
Date, the Purchaser hereby agrees to issue and deliver to the Selling
Stockholders on the Closing Date, an aggregate of Six Thousand (6,000) shares of
the Purchaser's Common Stock (the "INITIAL SAGEMARK SHARES"), which shares will
be allocated and delivered to each of the Selling Stockholders in the
percentages as set forth opposite each of their names in Exhibit A hereto. To
the extent that there are any transfer or similar taxes or charges payable with
respect to the transfer of the Initial Sagemark Shares or the Additional
Sagemark Shares (as hereinafter defined), such payment will be the sole
responsibility of the Selling Stockholders and paid by them at the Closing or
otherwise when due.
(b) In the event that any of the first six PET Centers
established by Premier achieve positive EBITDA in any month during their first
eighteen (18) months of operation, the Purchaser will issue and deliver to the
Selling Stockholders an aggregate of Three Hundred Nineteen Thousand Five
Hundred (319,500) shares of the Purchaser's Common Stock for each of such Pet
Centers; PROVIDED, HOWEVER, that the Purchaser will not be required to issue
more than One Million Nine Hundred Seventeen Thousand (1,917,000) shares of its
Common Stock pursuant to this subsection 1.2(b). Any shares of the Purchaser's
Common Stock that may be issued pursuant to this subsection will be allocated to
the Selling Stockholders in the percentages as set forth opposite each of their
names in Exhibit A hereto. Shares of the Purchaser's Common Stock issued and
delivered pursuant to this subsection 1.2(b), if any, are hereinafter referred
to as the "ADDITIONAL SAGEMARK SHARES."
2. THE CLOSING. The closing of the transactions contemplated by
this Agreement (the "CLOSING") shall take place at 10:00 a.m. at the offices of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
within five (5) business days after all of the conditions set forth in Sections
-2-
9 and 10 of this Agreement have been fulfilled or waived (the "CLOSING DATE"),
or on such earlier or later date or at such other location on which the
Purchaser and the Selling Stockholders may mutually agree. Notwithstanding the
foregoing, in the event that all of the conditions to the Purchaser's obligation
to close this transaction as provided in Section 9 hereof have not been
satisfied or waived by the Purchaser by June 19, 2001, the Purchaser may
terminate this Agreement in accordance with the provisions of subsection 13.1
hereof.
3. THE PURCHASER'S DUE DILIGENCE. The Purchaser, at its sole cost
and expense, shall have the right to conduct an examination and inspection of
all of the books, records, contracts, documents and all other information
relating to, and all of the assets and property of, Premier and PCI at any time
during normal business hours from the date hereof until the day prior to the
Closing Date. The Selling Stockholders will cooperate with the Purchaser in
connection with such examination and inspection. The Purchaser shall have the
right to determine, in its sole and absolute discretion, whether the results of
such examination and inspection are satisfactory to it. If the results of the
aforesaid due diligence examination are not satisfactory to the Purchaser, the
Purchaser may terminate this Agreement pursuant to the applicable provisions of
subsection 13.1 hereof. In the event of any termination of this Agreement
pursuant to this Section, none of the parties hereto shall have any further
rights or obligations under or in connection with this Agreement, except with
respect to the provisions of Section 15 and subsection 16.10 hereof.
4. UNAUDITED BALANCE SHEETS. Each of Premier and PCI will prepare an
unaudited balance sheet with respect to each such entities for the period from
inception through March 31, 2001 (the "BALANCE SHEETS"). Premier will promptly
deliver a copy of the Balance Sheets to the Purchaser upon the completion
thereof and the Purchaser shall have the right to accept or disapprove of such
Balance Sheets within ten (10) business days following the Purchaser's receipt
thereof. In the event that the Balance Sheets have not been completed by May 15,
2001, or in the event that the Balance Sheets have been completed by such date
and, after delivery to the Purchaser, are determined by the Purchaser not to be
acceptable to it, the Purchaser may terminate this Agreement upon five (5) days
notice to the Selling Stockholders.
5. REPRESENTATIONS AND WARRANTIES OF SELLERS. The Selling
Stockholders severally, but not jointly, represent and warrant to the Purchaser,
as follows:
5.1. ORGANIZATION AND STANDING. Premier and PCI are
corporations duly organized, validly existing, and in good standing under the
laws of the State of Delaware, with full corporate power and authority to carry
on the business for which each of them was formed and to own, lease and operate
their respective properties as required by or as may be desirable in connection
with such business. As of the date hereof and on the Closing Date, the only
officers and directors of Premier and PCI, are and on the Closing Date will be,
those persons set forth in Schedule 5.1 hereto.
5.2. SUBSIDIARIES AND AFFILIATES. Premier and PCI have no
domestic or foreign subsidiaries or any domestic or foreign corporations in
which they have any ownership interest, other than Premier P.E.T. Imaging of
-3-
Wichita, Inc., a wholly-owned subsidiary of Premier incorporated under the laws
of the State of Kansas ("PET WICHITA"). As of the date hereof and on the Closing
Date, the only officers and directors of Pet Wichita are and on the Closing Date
will be those persons set forth in Schedule 5.2 hereto.
5.3. ENFORCEABILITY AS TO SELLING STOCKHOLDERS. This Agreement
constitutes a valid and binding obligation of each of the Selling Stockholders,
enforceable against each of them in accordance with its terms except as such
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization, or other similar laws affecting the enforcement of creditor's
rights generally and general principles of equity.
5.4. AUTHORITY. Each Selling Stockholder who is a natural
person has the right, power, legal capacity, and authority to enter into and
perform his or their obligations under this Agreement and no consent of any
third party is necessary with respect thereto. The execution and delivery of
this Agreement, the consummation of the transactions herein contemplated and the
performance, observance, and fulfillment by ▇▇▇▇, Bocara and the ▇▇▇▇▇▇▇▇▇ Trust
of all of the terms and conditions on its part to be performed, observed, and
fulfilled under this Agreement have been duly approved and authorized by each of
them.
5.5. NO CONFLICT. Attached hereto as Exhibit B are certified
copies of the Certificates of Incorporation of Premier, PCI and PET Wichita, as
amended through the date hereof. Neither the execution and delivery of this
Agreement nor the consummation of any of the transactions contemplated herein
will (a) violate any provision of such Certificates of Incorporation or the
By-Laws of such companies, (b) violate, or be in conflict with, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or excuse performance by any person of any of Premier's
or PCI's obligations under, or cause the acceleration of the maturity of any
debt or obligation pursuant to, or result in the creation or imposition of any
lien or other encumbrance upon any property or assets of Premier, PCI, PET
Wichita or any of the Selling Stockholders under any agreement, commitment or
other instrument or arrangement to which any of them are parties or by which any
of their respective properties or assets are bound, or (c) to the best of their
knowledge, violate any judgment, decree, order, regulation or rule of any court
or other governmental body applicable to Premier, PCI, PET Wichita or any of the
Selling Stockholders.
5.6. CAPITALIZATION. The authorized capital stock of Premier
consists of 15,000,000 shares of common stock, $.01 par value per share, of
which 100,000 shares are issued and outstanding and 1,000,000 shares of
preferred stock, $.01 par value per share, of which no shares are issued and
outstanding. The issued and outstanding shares of the common stock of Premier
are owned by the Selling Stockholders as set forth opposite their names in
Exhibit A hereto. The authorized capital stock of PCI consists solely of 100,000
shares of common stock, $.01 par value per share, of which 100,000 shares are
issued and outstanding and owned by the Selling Stockholders as set forth
opposite their names in Exhibit A hereto. The authorized capital stock of PET
Wichita consists solely of 200 shares of common stock, no par value, of which
200 shares are issued and outstanding and owned by Premier. The Sellers' Shares
are duly authorized, validly issued, fully paid, and non-assessable. There are
-4-
no outstanding options, warrants, calls, commitments, or other rights or
agreements obligating Premier, PCI, PET Wichita or the Selling Stockholders to
sell or issue, or convert any obligation into, shares of capital stock or other
securities of either Premier, PCI or PET Wichita except as provided under the
Stockholders Agreement (hereinafter defined). Except as provided under the
Stockholders Agreement, no holders of the Sellers' Shares are entitled to
preemptive rights and there is no agreement or other document which relates to
the voting of the Sellers' Shares on any matter or restricts the transfer of the
Sellers' Shares. None of the Sellers' Shares have been issued in violation of
any preemptive rights.
5.7. OWNERSHIP OF THE SELLERS' SHARES. The Selling Stockholders
own all of the Sellers' Shares, of record and beneficially, in the amounts and
percentages set forth in Exhibit A hereto and will sell and transfer the
Sellers' Shares to Purchaser on the Closing Date, free and clear of all liens,
claims, encumbrances and restrictions of any kind except for restrictions on
transfer imposed by Federal and state securities laws, solely in exchange for
shares of the Purchaser's Common Stock. The delivery of certificates for the
Sellers' Shares to Purchaser on the Closing Date, duly endorsed for transfer to
Purchaser, will result in Purchaser's acquisition of the sole record and
beneficial ownership of the Sellers' Shares, free and clear of all liens,
claims, encumbrances and restrictions of any kind, except restrictions on
transfer imposed by Federal and state securities laws.
5.8. FINANCIAL REPRESENTATIONS.
(a) BALANCE SHEETS. The Selling Stockholders have
delivered to the Purchaser the Balance Sheets. The Balance Sheets are true,
complete, and accurate and fairly present the financial condition of each of
Premier and PCI as at the dates thereof and for the periods therein referred to
subject to all adjustments required to conform the Balance Sheet with Generally
Accepted Accounting Principles.
(b) TAXES. No tax liens have been filed against either
Premier, PCI or PET Wichita as of the date hereof with respect to any taxes,
including payroll taxes, and no taxes are due for any of such companies (except
for franchise taxes).
(c) ABSENCE OF CERTAIN CHANGES OR EVENTS. Since the date
on which Premier and PCI were formed, neither Premier nor PCI has engaged in any
business activities other than organizational activities, activities related to
the transactions that constitute the subject matter of this Agreement,
activities related to identifying suppliers of the equipment to be used in the
proposed businesses of Premier and PCI and sources of financing for the
acquisition of such equipment, activities relating to locating sites for the PET
Centers and the proposed business of PCI, staffing activities and other
activities relating to the foregoing. Since such date, to the best of the
Selling Stockholders' knowledge and except as set forth in Schedule 5.8(c)
hereto, there has not been (i) any material adverse change in the operations,
assets, or financial condition of either Premier or PCI; (ii) any material
liability or obligation of any nature whatsoever incurred by either Premier or
PCI other than those incurred in the ordinary course of business (and, with
respect to any such ordinary course liabilities which exceed $5,000, such
liabilities have been set forth on Schedule 5.8(c) hereto); (iii) any damage,
-5-
destruction, or loss affecting the assets of Premier or PCI; (iv) any dividends
or other payment or distribution with respect to, or any split, combination,
reclassification, or repurchase, of shares of the capital stock of either
Premier or PCI; (v) any issuance or sale or grant of any warrant, option, or
other right to purchase any of the capital stock of either Premier or PCI; (vi)
any mortgage, pledge of, or lien or any other charge or encumbrance upon, any of
the assets of either Premier or PCI; or (vii) the issuance of any guarantees by
either Premier or PCI of the obligations of any third parties.
5.9. TITLE TO PROPERTIES; ENCUMBRANCES. Neither Premier nor PCI
owns any real or personal property or any interests therein, except as set forth
on Schedule 5.9 hereto.
5.10. LEASES. Except as set forth in Schedule 5.10 hereto,
neither Premier nor PCI leases any real or personal property.
5.11. NO LITIGATION. There is no action, suit, or proceeding by
or before any court or governmental or other body pending, or to the best
knowledge of the Selling Stockholders, threatened against or involving either
Premier or PCI. Neither Premier nor PCI is subject to any injunction, writ,
judgment, order or decree of any court or governmental or other body. Neither
Premier nor PCI is in default under or in violation of any agreement or
commitment to which it is a party or by which it is bound. None of the Selling
Stockholders is a party or otherwise subject to any action, suit or proceeding
in any way relating to this Agreement or the transactions contemplated hereby
nor, to the best knowledge of the Selling Stockholders, is any such action, suit
or proceeding threatened against any of the Selling Stockholders. There is no
action, suit or proceeding by Premier or PCI or any of the Selling Stockholders
relating in any way to the business or proposed business of Premier or PCI
currently pending or which Premier, PCI or any of the Selling Stockholders
intend to initiate.
5.12. CONTRACTS AND COMMITMENTS. Except as set forth in Schedule
5.12 hereto, neither Premier nor PCI:
(a) has agreements, proposals, letters of intent or
commitments relating to its proposed business or operations;
(b) has agreements or commitments with officers,
employees, agents, consultants, advisors, salesmen, sales representatives,
distributors or dealers which are not cancelable on notice of not longer than
thirty (30) days and without liability, penalty or premium, or any agreement or
arrangement providing for the payment of any bonus or commission, whether based
on sales or earnings or otherwise;
(c) has any employment agreements, arrangements or
commitments, or any other agreements, arrangements or commitments, including any
such agreement, arrangement or commitment that contains any severance or
termination pay liabilities or obligations;
(d) has any collective bargaining or union agreements or
commitments;
-6-
(e) is a party to any loan, note or credit agreement or
other agreement or commitment with respect to indebtedness for borrowed money,
has no indebtedness for borrowed money, and has no guarantee of or agreement or
commitment to acquire any indebtedness, liability or obligation of others;
(f) is party to any security agreement, mortgage or other
agreement or commitment that creates or may create any lien, claim, or
encumbrance on any of its properties or assets;
(g) has any outstanding loan made to any person;
(h) has any agreement or commitment to make any capital
expenditures or to acquire any property or assets other than raw materials and
supplies utilized or to be utilized in the normal course of their respective
businesses or proposed businesses;
(i) has any power of attorney outstanding or any
obligations or liabilities (whether absolute, accrued, contingent or otherwise)
as guarantor, surety, co-signer, endorser, co-maker, indemnitor or otherwise in
respect of the obligation of any person; or
(j) is a party to or bound by any agreement or commitment
having a remaining term in excess of one year.
5.13. STATUS OF AGREEMENTS. All binding contracts, agreements,
arrangements, commitments and leases to which Premier or PCI are parties which
are disclosed or required to be disclosed in this Agreement and in the Schedules
or Exhibits hereto are valid and enforceable and are in full force and effect;
there are no existing defaults (or events which, with notice or lapse of time or
both, would constitute a default) by Premier or PCI, or to the best knowledge of
Selling Stockholders, any other party, thereunder; and true and complete copies
thereof will be delivered to the Purchaser at the Closing.
5.14. LABOR RELATIONS. Premier and PCI have each paid in full to
employees all wages, salaries, commissions, bonuses and other direct
compensation that are due for all services performed by them, if any, net of
taxes and other deductions required to be made by an employer, other than
amounts that have not yet become payable in accordance with their customary
practices. Neither Premier or PCI is liable for any severance pay or other
payments on account of termination of any former employee. Neither Premier nor
PCI is a party to any collective bargaining agreements.
5.15. EMPLOYEE BENEFIT PLANS. Neither Premier nor PCI has any
obligation with respect to, any bonus, deferred compensation, pension,
profit-sharing, retirement, stock purchase, stock option, or other fringe
benefit plan, arrangement or practice, or any other employee benefit plan (as
defined in Section 3(3) of ERISA). Neither Premier nor PCI has any commitment or
obligation to create any such plan.
-7-
5.16. BOOKS AND RECORDS. The books of account, minute books,
stock record books and other books and records of Premier and PCI are materially
complete and accurate and have been maintained in accordance with sound business
practices. All of such books and records are in the possession of the company to
which they apply.
5.17. NO UNDISCLOSED LIABILITIES. Except as set forth on
Schedule 5.17 hereto, neither Premier nor PCI has any material liabilities or
obligations of any nature (absolute, accrued, contingent, or otherwise), of the
type required to be reflected or disclosed in a balance sheet (or the notes
thereto) prepared in accordance with generally accepted accounting principles,
that are not fully reflected or reserved against in the Balance Sheet and, to
the best of the Selling Stockholders' knowledge, none have arisen subsequent to
the date of the Balance Sheet.
5.18. INVESTMENT REPRESENTATIONS. The Selling Stockholders
understand and acknowledge that the Sagemark Shares have not been and will not
be registered under the Securities Act of 1933, as amended (the "ACT") and are
being issued and delivered hereunder pursuant to an exemption from the
registration requirements of Section 5 of the Act on the basis that the issuance
of the Sagemark Shares involves a transaction by an issuer not involving any
public offering and that reliance upon such exemption is predicted in part upon
the following representations and warranties, hereby made to the Purchaser by
each of the Selling Stockholders:
(a) Each of the Selling Stockholders is acquiring the
Sagemark Shares for investment purposes only, for their account, and not for,
with any view to, or in connection with any distribution or public offering
thereof within the meaning of the Act;
(b) Each of the Selling Stockholders understands that the
Sagemark Shares have not been registered under the Act or any state securities
law by reason of their issuance in a transaction which is exempt from the
registration requirements of the Act and such laws and the Sagemark Shares must
be held indefinitely unless they are subsequently registered under the Act and
such laws or a subsequent disposition thereof is exempt from registration under
the applicable provisions of the Act and such laws. The resale of the Sagemark
Shares can only be made in accordance with appropriate exemptions or
registration under the Act and in compliance with state securities laws, the
certificates evidencing the Sagemark Shares will bear a legend reciting such
restrictions on transfer and stating that such shares are subject to the
Purchaser's right of redemption as provided in subsection 7.1 hereof and a "stop
order" will be placed against the transfer of such Shares;
(c) Each of the Selling Stockholders has sufficient
knowledge and expertise in business and financial matters so as to enable them
to analyze and evaluate the merits and risks of the investment in Purchaser
contemplated hereby and is able to bear the economic risk of such investment
including a complete loss of such investment in the Sagemark Shares;
(d) Each of the Selling Stockholders acknowledges that
they have made detailed inquiry concerning the Purchaser and its business and
financial condition and that the Purchaser has made available to the Selling
-8-
Stockholders any and all written information which they have requested and have
answered to the Selling Stockholders' satisfaction all inquiries made by the
Selling Stockholders; and
(e) The transactions provided for in this Agreement with
respect to the Sagemark Shares are not part of any pre-existing plan or
arrangements for, and there is no agreement or other understanding with respect
to, the distribution by the Selling Stockholders of any of the Sagemark Shares.
5.19. BROKER'S OR FINDER'S FEE. Neither Premier, PCI nor the
Selling Stockholders have engaged or dealt with any broker, finder, or other
person who is entitled to any brokerage fee or commission with respect to the
execution of this Agreement and the consummation of the transactions
contemplated hereby.
5.20. ACCURACY OF INFORMATION. No representation, warranty,
statement, document, or information made or furnished by the Selling
Stockholders to the Purchaser in this Agreement, including the Exhibits and
Schedules hereto, contains any untrue statement of a material fact or omits any
material fact necessary, in light of the circumstances under which it is made,
to make the information contained in such representation, warranty, statement,
document or information not misleading. All of the representations and
warranties of the Selling Stockholders contained in this Section shall be true
and correct as of the date hereof and as of the Closing Date and will survive
the Closing for a period of six (6) months and shall not be merged therein. The
Selling Stockholders will each deliver a Certificate to the Purchaser at the
Closing confirming the accuracy of such representations and warranties as of the
Closing Date. Except as set forth in this Section 5 or as otherwise expressly
provided in this Agreement, the Selling Stockholders have made no other
representations or warranties to the Purchaser in connection with the
transactions contemplated by this Agreement.
6. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
represents and warrants to the Selling Stockholders as follows:
6.1. ORGANIZATION AND STANDING. The Purchaser is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of New York with full corporate power and authority to own, lease, and
operate its properties and to carry on its business as currently conducted. The
Purchaser is duly qualified to do business as a foreign corporation under the
laws of each others jurisdiction in which the nature of its operations requires
such qualification, unless the failure to be so qualified would not have an
material adverse effect upon the Purchaser, its business or assets.
6.2. ENFORCEABILITY AS TO THE PURCHASER. This Agreement, the
consummation of the transactions herein contemplated, and the performance,
observance, and fulfillment by the Purchaser of all of the terms and conditions
contained herein on its part to be performed, observed, and fulfilled, have been
duly approved and authorized by its Board of Directors. This Agreement has been
duly and validly executed and delivered by an authorized officer of the
Purchaser and constitutes its valid, binding obligation enforceable in
accordance with its terms except as such enforceability may be limited by
-9-
bankruptcy, insolvency, moratorium, reorganization, or other similar laws
affecting the enforcement of creditor's rights generally and general principles
of equity.
6.3. AUTHORITY. The Purchaser has the right, power, legal
capacity, and authority to enter into and perform its obligations under this
Agreement and no consent of any third party is necessary with respect thereto.
Neither the execution or delivery of this Agreement nor the consummation of the
transactions herein contemplated will conflict with or result in any violation
of or constitute a default under any provision of the Purchaser's Certificate of
Incorporation, By-Laws, or any agreement to which the Purchaser is a party.
6.4. CAPITALIZATION. The Purchaser's authorized capital stock
consists of 2,000,000 shares of Preferred Stock, $1.00 par value per share, of
which 2,962 shares are issued and outstanding and 25,000,000 shares of Common
Stock, $.01 par value per share, of which 1,584,247 are issued and outstanding.
There are an aggregate of 333,333 shares of the Purchaser's Common Stock
reserved for issuance under currently outstanding warrants, options or other
equity-based incentives to acquire shares of the Purchaser's Common Stock. The
Sagemark Shares will, when issued, be duly authorized, validly issued, fully
paid and non- assessable shares of common stock of the Purchaser, free and clear
of all liens, claims, encumbrances and restrictions of any kind, except
restrictions on transfer imposed by Federal and state securities laws.
6.5. INVESTMENT REPRESENTATION. The Sellers' Shares are being
acquired by the Purchaser for its own account, for investment purposes only, and
not with a view to the resale or any distribution thereof. The Purchaser
understands that the Sellers' Shares are not registered under the Act, that
resale of the Sellers' Shares can only be made in accordance with appropriate
exemptions or registration under the Act, and that the certificates evidencing
the Sellers' Shares will bear a legend reciting such restrictions on transfer
and a "stop transfer" order will be placed against such shares.
6.6. BROKER'S OR FINDER'S FEES. The Purchaser has not engaged
or dealt with any broker, finder, or other person who is entitled to any
brokerage fee or commission with respect to the execution of this Agreement and
the consummation of the transactions contemplated hereby.
6.7. ACCURACY OF INFORMATION. No representation, warranty,
statement, or information made or furnished by the Purchaser to the Selling
Stockholders in this Agreement contains any untrue statement of a material fact
or omits any material fact necessary, in light of the circumstances under which
it is made, to make the information contained in such representation, warranty,
statement or information not misleading. All of the representations and
warranties of the Purchaser contained in this Section shall be true and correct
as of the date hereof and as of the Closing Date and will survive the Closing
for a period of six (6) months and shall not be merged therein. The Purchaser
will deliver a Certificate to the Selling Stockholders at the Closing signed by
an officer of the Purchaser confirming the accuracy of such representations and
warranties as of the Closing Date. Except as set forth in this Section 6 or as
-10-
otherwise expressly provided in this Agreement, the Purchaser has made no other
representations or warranties to the Selling Stockholders in connection with the
transactions contemplated by this Agreement.
7. ADDITIONAL RIGHTS, COVENANTS AND CONDITIONS.
7.1. REDEMPTION. In the event that all of the Pet Centers
either discontinue their operations or are adjudicated bankrupt within two (2)
years after the Closing Date, Purchaser will have the right to redeem, for a
redemption price of One ($1.00) Dollar (the "REDEMPTION PRICE"), all of the
Sagemark Shares owned by the Selling Stockholders on the date the notice of
redemption is given. The Redemption Price must be paid in full at the time of
redemption and a notice from Purchaser must be provided to the Selling
Stockholders ten (10) days prior to the date of any such redemption, which
notice must indicate the election by Purchaser to redeem such shares. In the
event that such notice of redemption is not timely provided, as aforesaid,
Purchaser will have no further right of redemption with respect to the Sagemark
Shares.
7.2. WORKING CAPITAL AND GUARANTY. On the Closing Date,
Purchaser will provide or otherwise make available $1,000,000 of working capital
to Premier which may only be utilized by Premier for the purpose of establishing
and operating the Pet Centers. Such funds will be loaned to Premier by
Purchaser, such loan to be evidenced by a subordinated promissory note of
Premier, the terms of which shall not require the payment of any principal or
interest thereon (except to the extent required under applicable IRS
regulations) until three (3) years from the date that the first of such funds
are provided to Premier and shall provide for the subordination of the
indebtedness evidenced by such note to any indebtedness of Premier resulting
from the financing of any PET Scanning Equipment. In addition, and to the extent
required, Purchaser will guarantee any and all obligations incurred by Premier
pursuant to any lease or purchase agreements for Pet Scanning Equipment between
Premier and the manufacturer or supplier of such Pet Scanning Equipment or
between Premier and any entity that provides financing for the acquisition of
any such Pet Scanning Equipment including, but not limited to, DVI Financial
Services, Inc.
7.3. EXECUTIVE EMPLOYMENT AGREEMENT. At the Closing hereunder
Premier and ▇▇▇▇▇▇▇▇ will enter into a five (5) year Employment Agreement,
pursuant to which ▇▇▇▇▇▇▇▇ will serve as the Chief Executive Officer of Premier,
in substantially the form attached hereto as Exhibit C (the "EXECUTIVE
EMPLOYMENT AGREEMENT"). In addition, Purchaser agrees that, for the term of such
agreement, it will vote its shares in Premier so as to elect ▇▇▇▇▇▇▇▇ as
Chairman of the Board of Directors of Premier and will nominate ▇▇▇▇▇▇▇▇ to
serve as a member of Purchaser's Board of Directors.
-11-
7.4. REGISTRATION RIGHTS.
(a) Subject to the provisions of subsection (h) of this
subsection 7.4, each Selling Stockholder may, at any time following the second
anniversary of the Closing Date, notify Purchaser that the Selling Stockholder
desires that all or any specified portion of the Sagemark Shares held by him or
it (collectively, the "REGISTRABLE SECURITIES") be registered under the Act (a
"DEMAND"). Purchaser, at its sole expense, will prepare and file a registration
statement pursuant to the Act to the end that Registrable Securities shall be
permitted to be sold under the Act, as promptly as practical after any such
notice from the Selling Stockholder and Purchaser shall use its best efforts to
cause such registration statement to become effective; PROVIDED, HOWEVER, that
the Selling Stockholder requesting such registration shall furnish Purchaser
with all information required in connection therewith as Purchaser shall
reasonably request in writing and bear the fees of any counsel retained by him
or it in connection therewith and any transfer taxes and underwriting discounts
or commissions applicable to the Registrable Securities sold by the Selling
Stockholder pursuant thereto. Nothing contained herein shall require Purchaser
to conduct a financial audit, other than in the ordinary course of business at
the end of its fiscal year.
(b) In the event Purchaser receives a demand from a
Selling Stockholder, Purchaser shall give notice to the other Selling
Stockholders within ten (10) days of the receipt of such demand. Within twenty
(20) days of the giving of such notice, each Selling Stockholder to whom or
which such notice has been given shall advise Purchaser whether or not he or it
desires to include any or all of his or its Registrable Securities in the
registration statement to be filed by Purchaser. Upon timely receipt of any such
notice electing to include Registrable Securities in the registration statement
to be filed by Purchaser, Purchaser, at its sole cost and expense, will include
such Registrable Securities in the registration statement to be filed pursuant
to subparagraph (a) of subsection 7.4 above; PROVIDED, HOWEVER, that the Selling
Stockholder requesting such registration shall furnish Purchaser with all
information required in connection therewith as Purchaser shall reasonably
request in writing and bear the fees of any counsel retained by him or it in
connection therewith and any transfer taxes and underwriting discounts or
commissions applicable to the Registrable Securities sold by the Selling
Stockholder pursuant thereto. In the event a Selling Stockholder does not
respond to notice that a demand for registration has been made, or responds
negatively to any such notice, such Selling Stockholder will no longer have the
rights provided by subparagraph (a) of subsection 7.4 above.
(c) Subject to the provisions of subparagraph (h) of this
subsection 7.4 if, at any time following the second anniversary of the Closing
Date, Purchaser proposes to register any of its securities under the Act (other
than in connection with a merger, acquisition, or pursuant to a registration
statement on Form S-8 or any successor form), it will give notice to the Selling
Stockholders by certified mail, return receipt requested, at least twenty (20)
days prior to the filing of each such registration statement of its intention to
do so. If a Selling Stockholder notifies Purchaser within ten (10) business days
after receipt of any such notice of the Selling Stockholder's desire to include
any or all of his or its Registrable Securities in such proposed registration
statement, Purchaser shall afford the Selling Stockholder the opportunity to
have any or all of his or its Registrable Securities included in and registered
under such registration statement, all at Purchaser's sole cost and expense,
-12-
except for the fees of any counsel retained by the Selling Stockholder in
connection therewith and any transfer taxes or underwriting discounts or
commissions applicable to the Registrable Securities sold by the Selling
Stockholder pursuant thereto.
(d) Notwithstanding anything contained in this subsection
7.4:
(i) if any of the offerings referred to in this
subsection 7.4 are underwritten offerings and, if in the opinion of Purchaser's
underwriter for any such offering the inclusion of all, or any portion of the
Registrable Securities requested to be so registered by the Selling Stockholder,
when added to the securities being registered by Purchaser (or any other Selling
Stockholder), will exceed the maximum amount of Purchaser's securities which the
underwriter believes can be marketed (x) at a price reasonably related to their
then current market value, or (y) without otherwise materially adversely
affecting the offering, then Purchaser may exclude from such offering all or any
portion of the Registrable Securities requested by the Selling Stockholder to be
registered;
(ii) If securities proposed to be offered for sale
pursuant to any such registration statement are securities owned by other
security holders of Purchaser and the total number of securities to be offered
by the Selling Stockholder of the Registrable Securities and such other selling
security holders is required to be reduced pursuant to a written request from
the underwriter (which request shall be made only for the reasons set forth in
subparagraph (d)(i) above) the aggregate number of Registrable Securities to be
included by Purchaser for the Selling Stockholder in such registration statement
shall equal the number of shares which bears the same ratio to the maximum
number of securities that the underwriter believes may be included for all the
selling security holders (including the Selling Stockholder of the Registrable
Securities) as the original number of Registrable Securities proposed to be
included therein by the Selling Stockholder bears to the total original number
of securities proposed to be included therein by the Selling Stockholder and the
other selling security holders; and
(iii) If any Registrable Securities requested by the
Selling Stockholder to be included in a registration statement under this
subsection 7.4 are not so included because of the operation of the provisions of
this subparagraph (d), then the Selling Stockholder of the Registrable
Securities shall have the right to require Purchaser, at Purchaser's sole cost
and expense, to prepare and file a registration statement under the Act covering
such Registrable Securities.
(e) Notwithstanding the provisions of this subsection
7.4, Purchaser shall have the right at any time after it shall have given
written notice pursuant to this subparagraph (d) (irrespective of whether a
written request for inclusion of any such securities shall have been made by the
Selling Stockholder) to elect not to file any such proposed registration
statement, or to withdraw the same after the filing but prior to the effective
date thereof.
-13-
(f) Purchaser will use its best efforts to cause any such
registration statement covering all or any portion of the Registrable Securities
to become effective as promptly as possible and, if any stop order shall be
issued by the U.S. Securities and Exchange Commission (the "COMMISSION") in
connection therewith, to use its best efforts to obtain the removal of such
order. The Selling Stockholders agree to cooperate in all respects with
Purchaser in effectuating the foregoing.
(g) While any registration statement covering all or any
portion of the Registrable Securities is effective, Purchaser will take all
necessary action which may be required in qualifying or registering the
Registrable Securities for offering and sale under the Blue Sky laws of such
number of states as are reasonably requested by the Selling Stockholder;
PROVIDED, HOWEVER, that Purchaser shall not be obligated to qualify as a foreign
corporation to do business under the laws of any jurisdiction.
(h) Purchaser shall be required to maintain the
effectiveness of any registration statement registering Registrable Securities
under this subsection 7.4 until the earlier of (i) the public sale of all of the
Registrable Securities registered thereunder, or (ii) the expiration of one year
from the date such registration statement has been declared effective by the
Commission.
(i) The giving of any notice by a Selling Stockholder
under this subsection 7.4 shall not impose upon the Selling Stockholder any
obligation to sell any Registrable Securities.
(j) Purchaser agrees that until all Sagemark Shares have
been sold under a registration statement pursuant to this Section or pursuant to
Rule 144 under the Act, it will, if economically practicable, keep current in
filing all materials required to be filed with the Commission in order to permit
the Selling Stockholder of such securities to sell under Rule 144.
(k) Each Selling Stockholder shall provide Purchaser with
such information necessary for the compliance by Purchaser with its obligations
under this Section, as shall from time to time be reasonably requested by
Purchaser.
(l) Notwithstanding the provisions of this subsection 7.4
to the contrary, the registration right provided for in this subsection shall
expire at such time as, in the opinion of Purchaser's counsel, all of the
Sagemark Shares may be sold pursuant to the provisions of Rule 144(k)
promulgated under the Act.
7.5. AGREEMENT TERMINATIONS.
(a) The Selling Stockholders hereby agree that the
Stockholders Agreement dated as of October 8, 2000, as amended, by and between
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ and
Premier (THE "STOCKHOLDERS AGREEMENT"), which contains restrictions on the
transfer of the Sellers' Shares, will be canceled upon and subject to the
Closing, except for the confidentiality and restrictive covenant provisions
-14-
contained in Articles 8 and 9, respectively, of the Stockholders Agreement,
which provisions will survive for so long as Premier owns and/or operates PET
Centers. By virtue of their execution of this Agreement, ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇▇"), ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ hereby
acknowledge that they have read and understand the confidentiality and
restrictive covenant provisions contained in Articles 8 and 9 of the
Stockholders Agreement and hereby agree to be bound by such provisions for so
long as Premier owns and/or operates PET Centers. Additionally, notwithstanding
the foregoing, nothing contained in this Section with respect to the
aforementioned restrictive covenant is intended to nor shall preclude (a) the
rendering of services by ▇▇▇▇▇▇▇▇▇, or his radiology group, pursuant to which he
or they read and interpret diagnostic imaging film produced by positron emission
tomography equipment owned by others, or (b) ▇▇▇▇▇▇▇▇▇ from engaging in a
Precluded Business Activity (as defined in the Stockholders Agreement) if, at
any time during the aforementioned period, both ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ are neither
stockholders, officers, or directors of Purchaser and Premier and PCI, or (c)
▇▇▇▇▇▇▇▇▇ from owning an equity interest in the ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ and Eldorado
Hospitals located in Kansas
(b) ▇▇▇▇▇▇▇▇▇ hereby agrees that Section 2 of that
certain Agreement dated October 8, 2000, as amended, between ▇▇▇▇▇▇▇▇▇ and
Premier will, upon and subject to the Closing, be deemed deleted from such
Agreement and that 50% of any Additional Sagemark Shares that may be issued to
▇▇▇▇▇▇▇▇▇ hereunder shall be subject to redemption by Purchaser for a redemption
price of $1.00 if ▇▇▇▇▇▇▇▇▇ is not rendering services at any time during the
period ending on October 8, 2002 as the System Medical Director or Medical
Director in accordance with the terms of such Agreement. ▇▇▇▇▇▇▇▇▇ acknowledges
that all certificates for any Additional Sagemark Shares will bear a legend with
respect to Purchaser's aforementioned redemption right and that any such shares
may not be sold, transferred, assigned, hypothecated or encumbered in any manner
prior to October 8, 2002, without Purchaser's written consent.
7.6. RESERVATION OF SHARES. The Purchaser will, at all times at
which any Additional Sagemark Shares may be required to be issued pursuant to
the provisions of subsection 1.2(b) of this Agreement, reserve from the
authorized but unissued shares of the Purchaser's Common Stock, the maximum
number of Additional Sagemark Shares as may be or become issuable pursuant to
such subsection.
8. CONDUCT OF THE COMPANY'S BUSINESS PRIOR TO CLOSING.
8.1. CONDUCT IN ORDINARY COURSE. During the period from the
date hereof to the Closing Date, Premier and PCI will operate their respective
businesses only in the regular and ordinary course and will preserve all current
relationships, if any, with key employees, suppliers, banks and other third
parties doing business with them; PROVIDED, HOWEVER, that nothing contained
herein shall be deemed to restrict PET Wichita from preparing for and taking all
action necessary to effect a closing, on the Closing Date and subject to the
simultaneous closing of the transactions provided for herein, of the financing
referred to in that certain financing commitment letter of DVI Financial
Services, Inc. to PET Wichita dated ▇▇▇▇▇ ▇▇, ▇▇▇▇ (▇▇▇ "▇▇▇ COMMITMENT
LETTER").
-15-
8.2. LIENS, AGREEMENTS, CAPITAL STOCK, WAIVER AND
REORGANIZATIONS. During the period from the date hereof to the Closing Date,
Premier and PCI will not:
(a) Create or incur any mortgage, security interest,
lien, charge, claim or encumbrance of any kind on the assets of Premier or PCI;
(b) Make or become a party to any material agreement (or
renew, extend, amend or modify any such agreement) affecting the operations of
Premier or PCI, except in connection with the DVI Commitment Letter or as
otherwise approved by Purchaser;
(c) Issue, or agree to issue, any shares of Premier's or
PCI's capital stock or options, warrants or other rights, notes, debentures, or
any debt instrument, or enter into any agreement or understanding, upon the
exercise or conversion of which, or pursuant to the terms of which, any shares
of any class or series of capital stock of Premier or PCI may be issued;
(d) Waive any right of substantial value; or
(e) Effect any recapitalization, reclassification,
capital reorganization, stock split, or any other change of the outstanding
shares of the capital stock.
9. CONDITIONS TO THE PURCHASER'S OBLIGATIONS. The obligations of the
Purchaser to consummate the transactions contemplated by this Agreement are
subject to and conditioned upon the fulfillment or waiver, on or before the
Closing Date, of each of the following conditions. If any of such conditions are
not fulfilled by the Selling Stockholders or waived by the Purchaser on or
before the Closing Date, the Purchaser may terminate this Agreement upon written
notice to the Selling Stockholders.
9.1. REPRESENTATIONS AND WARRANTIES. The representations,
warranties, covenants and agreements of the Selling Stockholders in this
Agreement shall be true, accurate and complete both on the date of this
Agreement and on the Closing Date and the Selling Stockholders shall have
performed and complied with all agreements, covenants and conditions required by
this Agreement to be performed or complied with by them prior to or on the
Closing Date, and the Purchaser shall have been furnished with a Certificate of
each of the Selling Stockholders, dated as of the Closing Date, certifying to
the fulfillment of the foregoing conditions.
9.2. DELIVERY OF SELLERS' SHARES. The Selling Stockholders
shall have delivered to the Purchaser the Sellers' Shares.
9.3. ADVERSE CHANGES. There shall not be any material adverse
change in the financial condition, results of operations, business or future
prospects of Premier or PCI and there shall be no law, rule or regulation
proposed or enacted, or other event or condition of any character which the
Purchaser determines may adversely effect the operations of Premier or PCI after
the Closing.
-16-
9.4. ABSENCE OF LITIGATION. No order, stay, injunction or
decree of any court of competent jurisdiction shall be in effect that prevents
or delays the consummation of any of the transactions contemplated hereby. No
action, suit or proceeding before any court or any governmental or regulatory
entity shall be pending (or threatened by any governmental or regulatory
entity), and no investigation by any governmental or regulatory entity shall
have been commenced (and be pending), seeking to restrain or prohibit (or
questioning the validity or legality of) the consummation of the transactions
contemplated by this Agreement or seeking damages in connection therewith which
the Purchaser, in good faith and upon the advice of counsel, believes makes it
undesirable to proceed with the consummation of the transactions contemplated
hereby.
9.5. COMPLIANCE. The Selling Stockholders shall have performed
and complied in all material respects with the agreements, covenants, and
obligations contained in this Agreement which are required to be performed and
complied with by them prior to or on the Closing Date.
9.6. DUE DILIGENCE. The Purchaser shall be satisfied with the
results of its due diligence investigation of and with respect to Premier and
PCI in accordance with the provisions of Section 3 hereof.
9.7. FAIRNESS OPINION. The Purchaser shall have obtained, at it
own expense, a fairness opinion with respect to the transactions which are the
subject of this Agreement, from a qualified firm and otherwise in form and
substance satisfactory to the Purchaser in its sole and absolute discretion.
9.8. TAX-FREE TRANSACTION. The Purchaser shall have satisfied
itself that the transaction contemplated by this Agreement is a tax-free
exchange under the applicable provisions of the Internal Revenue Code of 1986,
as amended.
9.9. UNAUDITED BALANCE SHEETS. The Purchaser shall have
received and approved the Balance Sheets.
9.10. EXECUTIVE EMPLOYMENT AGREEMENT. The execution and delivery
of the Executive Employment Agreement.
9.11. CLOSING OF DVI LOAN. The closing of the proposed loan by
DVI Financial Services, Inc. to PET Wichita, in an amount not to exceed One
Million Six Hundred Twenty Thousand ($1,620,000) Dollars, pursuant to the DVI
Commitment Letter.
9.12. LEASE WITH S&D HOLDING LLC. The execution and delivery of
a lease, in form and substance reasonably satisfactory to the Purchaser, between
Premier, as tenant, and S&D Holding LLC, as landlord, with respect to a site for
the first Pet Center to be located in Wichita, Kansas, said lease to include
provisions relating to the construction of the facility for the Pet Center on
the site by the landlord (the "S&D LEASE").
-17-
9.13. MEDICAL ADVISORY BOARD. Formation of a Medical Advisory
Board by and for Premier, the members of which will be subject to the approval
of the Purchaser.
9.14. DELIVERY. The Selling Stockholders shall deliver all of
the documents required by Section 11 hereof.
10. CONDITIONS TO THE SELLING STOCKHOLDERS' OBLIGATIONS. The
obligations of the Selling Stockholders to consummate the transactions provided
for under this Agreement are subject to and conditioned upon the fulfillment or
waiver on and as of the Closing Date, of each of the following conditions. If
any of such conditions are not satisfied by the Purchaser or waived by the
Selling Stockholders on or before the Closing Date, the Selling Stockholders may
terminate this Agreement upon notice to the Purchaser.
10.1. REPRESENTATIONS AND WARRANTIES. The representations,
warranties, covenants and agreements of the Purchaser in this Agreement shall be
true, accurate and complete both on the date of this Agreement and on the
Closing Date and the Purchaser shall have performed and complied with all
agreements, covenants and conditions required by this Agreement to be performed
or complied with by it prior to or on the Closing Date and the Selling
Stockholders shall have been furnished with a Certificate of the President and
Chief Executive Officer of the Purchaser, dated as of the Closing Date,
certifying to the fulfillment of the foregoing conditions.
10.2. DELIVERY OF INITIAL SAGEMARK SHARES. The Purchaser shall
have delivered to the Selling Stockholders the Initial Sagemark Shares.
10.3. ABSENCE OF LITIGATION. No order, stay, injunction or
decree of any court of competent jurisdiction shall be in effect that prevents
or delays the consummation of any of the transactions contemplated hereby. No
action, suit or proceeding before any court or any governmental or regulatory
entity shall be pending (or threatened by any governmental or regulatory
entity), and no investigation by any governmental or regulatory entity shall
have been commenced (and be pending), seeking to restrain or prohibit (or
questioning the validity or legality of) the consummation of the transactions
contemplated by this Agreement or seeking damages in connection therewith which
the Selling Stockholders, in good faith and upon the advice of counsel, believe
makes it undesirable to proceed with the consummation of the transactions
contemplated hereby.
10.4. COMPLIANCE. The Purchaser shall have performed and
complied in all material respects with the agreements contained in this
Agreement which are required to be performed and complied with by it prior to or
on the Closing Date.
10.5. TAX-FREE TRANSACTION. The Selling Stockholders shall have
satisfied themselves that the transaction contemplated by this Agreement is a
tax-free exchange under the applicable provisions of the Internal Revenue Code
of 1986, as amended.
-18-
10.6. EXECUTIVE EMPLOYMENT AGREEMENT. The execution and delivery
of the Executive Employment Agreement.
10.7. CLOSING OF DVI LOAN. The closing of the proposed loan by
DVI Financial Services, Inc. to PET Wichita, in an amount not to exceed One
Million Six Hundred Twenty Thousand ($1,620,000) Dollars, pursuant to the DVI
Commitment Letter.
10.8. LEASE WITH S&D HOLDING LLC. The execution and delivery of
the S&D Lease.
10.9. DELIVERY. The Purchaser shall deliver all of the documents
required by Section 12 hereof.
11. DOCUMENTS TO BE DELIVERED BY THE SELLING STOCKHOLDERS AT THE
CLOSING. The Selling Stockholders will deliver the following documents to the
Purchaser at the Closing:
11.1. CERTIFICATES OF INCORPORATION. Copies of the Certificates
of Incorporation of Premier, PCI and PET Wichita and all amendments thereto, as
certified by the Secretary of State of their respective states of incorporation.
11.2. GOOD STANDING. Original currently dated certificates of
good standing for each of Premier, PCI and PET Wichita issued by the Secretary
of State of their respective states of incorporation.
11.3. BY-LAWS. Copies of the By-Laws of Premier, PCI and PET
Wichita and all amendments thereto, certified by the Secretary each such
company.
11.4. FINANCIALS. The Balance Sheets as required by Section 4
hereof.
11.5. CORPORATE BOOKS AND RECORDS. To the extent requested by
the Purchaser, all original corporate books and records of Premier, PCI and PET
Wichita, including, without limitation, the stock certificates and transfer
books, minute books, checkbooks and bank account statements and registers of
each such entities.
11.6. CERTIFICATE. The Certificate signed by each of the Selling
Stockholders as required under Section 9.1 hereof.
11.7. RESOLUTIONS OF PREMIER AND PCI. Certified copies of
resolutions adopted by the Board of Directors of Premier and PCI and certified
by the Secretary thereof approving the execution of this Agreement and all other
agreements, documents and instruments contemplated to be executed by Premier and
PCI in connection with this Agreement and the consummation of the transactions
contemplated hereby.
-19-
11.8. CONTRACTS. All original agreements, contracts, letters of
intent and proposals to which Premier, PCI and PET Wichita is a party, certified
as true and complete by the Secretary of each such company.
11.9. CONSENTS. Originals of all consents and/or estoppels, if
any, required in connection with transaction contemplated by this Agreement.
11.10. EXECUTIVE EMPLOYMENT AGREEMENT. Original Executive
Employment Agreement executed by Premier and ▇▇▇▇▇▇▇▇.
11.11. LEASE WITH S&D HOLDING LLC. Original executed S&D Lease.
11.12. STOCK CERTIFICATES. The stock certificates representing
each Selling Stockholder's Shares, duly endorsed for transfer to the Purchaser,
or accompanied by duly executed stock powers.
11.13. OTHER DOCUMENTS. Such other certificates, documents,
instruments and information required by this Agreement to be delivered by the
Selling Stockholders, or as the Purchaser or its counsel may otherwise
reasonably request.
12. DOCUMENTS TO BE DELIVERED BY THE PURCHASER AT THE CLOSING. The
Purchaser will deliver the following to the Selling Stockholders at the Closing:
12.1. CERTIFICATE. The Certificate signed by the President and
Chief Executive Officer of the Purchaser required by Section 10.1 hereof.
12.2. PURCHASER RESOLUTIONS. A certified copy of resolutions
adopted by the Board of Directors of the Purchaser approving the execution of
this Agreement and the consummation of the transactions contemplated by this
Agreement, including the issuance of the Sagemark Shares to the Selling
Stockholders in accordance with the applicable provisions of this Agreement.
12.3. STOCK CERTIFICATES. The stock certificates representing
the Initial Sagemark Shares, duly signed by the proper officers of the Purchaser
and registered in the name of each of the Selling Stockholders in accordance
with the terms hereof.
12.4. OTHER DOCUMENTS. Such other certificates, documents,
instruments, and information required by this Agreement to be delivered by the
Purchaser or as the Selling Stockholders or their counsel may otherwise
reasonably request.
-20-
13. TERMINATION OF AGREEMENT PRIOR TO THE CLOSING.
13.1. PURCHASER'S TERMINATION RIGHT. The Purchaser shall be
entitled to terminate this Agreement at any time prior to or on the Closing Date
pursuant to Section 2, 3 or 4 hereof and/or as a result of any breach or default
of any of the Selling Stockholders' representations, warranties, covenants or
obligations under this Agreement, or the failure of any condition to the
Purchaser's obligations provided for in Section 9 of this Agreement.
13.2. SELLING STOCKHOLDERS' TERMINATION RIGHT. The Selling
Stockholders shall be entitled to terminate this Agreement prior to or on the
Closing Date as a result of the failure of any condition to the Selling
Stockholders' obligations provided for in Section 10 of this Agreement.
13.3. REMEDIES. The termination of this Agreement by the
Purchaser or the Selling Stockholders under this Section 13 shall be the
Purchaser's or the Selling Stockholders', as the case may be, sole and exclusive
remedy for any termination of this Agreement and thereafter, the Purchaser and
the Selling Stockholders shall have no further rights or obligations under this
Agreement (except that the parties will continue to be bound by the provisions
of Section 15 hereof and Premier will pay to the Purchaser, on demand, Sixteen
Thousand Two Hundred ($16,200) Dollars as and for liquidated damages in respect
of the payment by the Purchaser of the commitment fee pursuant to the DVI
Commitment Letter, if any such termination results from a willful refusal of the
Selling Stockholders to consummate this Agreement).
14. INDEMNIFICATION.
14.1. INDEMNIFICATION OF THE PURCHASER. The Selling
Stockholders, severally and not jointly, hereby agree to indemnify and hold the
Purchaser harmless from, against and in respect of:
(a) any and all claims, causes of action, losses,
liabilities, obligations and damages (the "LOSSES") resulting from any breach by
the Selling Stockholders of any of their material representations and warranties
contained in this Agreement or the non-fulfillment of any material covenant or
obligation of the Selling Stockholders contained in this Agreement or in any
certificate, document or instrument delivered to the Purchaser hereunder; and
(b) all costs and expenses including, without limitation,
all legal fees and expenses, incident to the foregoing or incurred in enforcing
this indemnity.
14.2. INDEMNIFICATION OF THE SELLING STOCKHOLDERS. The Purchaser
agrees to indemnify and hold the Selling Stockholders harmless from, against and
in respect of:
-21-
(a) any and all Losses (as defined in Section 14.1(a)
hereof), resulting from any breach by the Purchaser of any of its
representations and warranties contained herein or the non-fulfillment of any
covenant or obligation of the Purchaser contained in this Agreement or in any
certificate, document or instrument delivered to the Selling Stockholders;
(b) any and all Losses resulting from any act or omission
by Purchaser, Premier or PCI with respect to their respective activities and
operations after the Closing Date; and
(c) all costs and expenses including, without limitation,
all legal fees and expenses, incident to any of the foregoing or incurred in
enforcing this indemnity.
14.3. PROCEDURE FOR INDEMNIFICATION. Promptly after receipt by
an indemnified party under subsections 14.1 or 14.2 above, of notice of the
commencement of any action, suit or proceeding or of any claim or other event or
occurrence (an "INDEMNIFICATION CLAIM"), such indemnified party shall, if a
claim in respect thereof is to be made against an indemnifying party under this
Section, give notice to the indemnifying party thereof, however, the failure so
to notify the indemnifying party shall not relieve it of any liability that it
may have to any indemnified party except to the extent the indemnifying party
demonstrates that the defense of such Indemnification Claim is materially
prejudiced thereby. In case any such Indemnification Claim shall be brought
against an indemnified party and it shall give notice to the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, to assume the defense
thereof with counsel satisfactory to such indemnified party and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party hereunder for any fees of other counsel or any other expenses,
in each case subsequently incurred by such indemnified party in connection with
the defense thereof, other than reasonable costs of investigation. If an
indemnifying party assumes the defense of such an action, (i) no compromise or
settlement thereof may be effected by the indemnifying party without the
indemnified party's consent (which shall not be unreasonably held) unless (A)
there is no finding or admission of any violation of law or any violation of the
rights of any person and no effect on any other claims that may be made against
the indemnified party and (B) the sole relief provided is monetary damages that
are paid in full by the indemnifying party and (ii) the indemnifying party shall
have no liability with respect to any compromise or settlement thereof effected
without its consent (which shall not be unreasonably withheld). If notice is
given to an indemnifying party of the commencement of any action, suit or
proceeding comprising an Indemnification Claim, and it does not, within ten days
after the indemnified party's notice is given, give notice to the indemnified
party of its election to assume the defense thereof, the indemnifying party
shall be bound by any determination made in such action, suit or proceeding, or
any compromise or settlement thereof effected by the indemnified party.
Notwithstanding the foregoing, if an indemnified party determines in good faith
that there is a reasonable probability that an action may adversely affect it or
its affiliates other than as a result of monetary damages, such indemnified
party may, by notice to the indemnifying party, assume the exclusive right to
-22-
defend, compromise or settle such action, but the indemnifying party shall not
be bound by any determination of an action so defended or any compromise or
settlement thereof effected without its consent (which shall not be unreasonably
withheld).
15. PUBLIC ANNOUNCEMENTS. Except as provided below, neither the
Selling Stockholders nor Premier nor PCI shall make or disseminate any public
filing or announcement concerning this Agreement or any of the transactions
herein contemplated without the Purchaser's written consent. The Selling
Stockholders acknowledge that the Purchaser is subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended, and the
Purchaser may make or disseminate public filings and/or announcements concerning
this Agreement or any of the transactions herein contemplated as determined by
the Purchaser. The Selling Stockholders shall keep confidential and not disclose
to any person (other than their attorneys, accountants, and advisers) or use any
non-public information with respect to the Purchaser obtained by the Selling
Stockholders in connection herewith unless and until such information shall be
publicly disclosed or disseminated by the Purchaser.
16. MISCELLANEOUS.
16.1. SOLE AGREEMENT. This Agreement constitutes the sole and
entire agreement among the parties hereto in respect of the transactions
contemplated hereby and supersedes all prior agreements, arrangements, and
understandings relating to the subject matter hereof including the Letter of
Intent dated March 28, 2001 between Purchaser and Premier. No change in or
modification to this Agreement shall be binding unless in writing and signed by
the party to be bound thereby.
16.2. NOTICES. All notices, consents, demands, requests, and
other communications required or permitted to be given hereunder (the "Notices")
shall be in writing and shall be deemed to have been duly given on the same day
if delivered personally, receipt acknowledged, or five (5) days after mailing if
mailed by certified mail, return receipt requested, or by facsimile transmission
(with original to follow by mail),or by nationally recognized overnight courier
service for next business day delivery, addressed to the parties as follows (or
to such other address as a party may designate as to itself by Notice to the
other parties):
(a) If to the Purchaser, to it at its address set forth
at the beginning of this Agreement, to the attention of its President and Chief
Executive Officer, with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(b) If to the Selling Stockholders, to them at the
addresses set forth at the beginning of this Agreement.
-23-
(c) If to Premier or PCI, to them at their addresses set
forth at the beginning of this Agreement, with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
c/o Gusrae ▇▇▇▇▇▇ & ▇▇▇▇▇, PLLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
16.3. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York with respect to
contracts made and to be fully performed therein, without regard to the
conflicts of laws principles thereof, except as to applicable Federal and state
securities laws.
16.4. ARBITRATION. In the event of any dispute or disagreement
between the parties hereto hereunder which cannot be resolved within thirty (30)
days following the delivery of notice of such dispute or disagreement from the
party seeking to resolve such matters, or in the event of any action to enforce
the provisions of this Agreement (other than an action at law seeking an
equitable remedy), such dispute, disagreement or action shall be submitted to
binding arbitration before a single arbitrator of the American Arbitration
Association in New York County, New York, which will apply the then prevailing
commercial rules of arbitration of the American Arbitration Association. The
determination of any such arbitrator shall be binding and conclusive and may be
enforced in any court of competent jurisdiction. By their execution hereof, the
parties hereto consent and irrevocably submit to the IN PERSONAM jurisdiction of
the American Arbitration Association located in New York County, New York and
agree that any process in any such action or proceeding commenced under this
Agreement may be served upon them personally or by certified or registered mail,
return receipt requested, or by a nationally recognized overnight courier
service, with the same force and effect as if personally served upon them in
such County and State. The parties hereto each waive any claim that any such
venue is not a convenient forum for any such action or proceeding and any
defense of lack of IN PERSONAM jurisdiction with respect thereto.
16.5. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
executors, successors, and permitted assigns. Nothing in this Agreement, whether
expressed or implied, is intended to confer any rights or remedies upon or by
reason of this Agreement on any persons other than the parties hereto and their
respective successors, legal representatives, and permitted assigns, nor is this
Agreement, or any of the parties' rights or obligations hereunder, assignable
absent the written consent of the non-assigning party. Each of the Selling
Stockholders and other signatories to this Agreement hereby acknowledges that
they have been represented by separate counsel (or had an opportunity to do so).
16.6. SEVERABILITY. Any provision of this Agreement which is
determined to be invalid or unenforceable shall be ineffective to the extent of
such invalidity or unenforceability without affecting in any way the remaining
provisions hereof.
-24-
16.7. SCHEDULES AND EXHIBITS. It is acknowledged and agreed by
the parties hereto that all Schedules and Exhibits to this Agreement are an
integral part hereof and are incorporated as part of this Agreement in all
respects.
16.8. HEADINGS. The Section headings contained herein are for
the purpose of convenience only and are not intended to define or limit the
contents of said Sections.
16.9. FURTHER ASSURANCES. Each party hereto shall take such
further action and shall execute and deliver such further documents as may be
reasonably requested by any of the other parties in order to carry out the
provisions and purposes of this Agreement.
16.10. EXPENSES. Except as provided below in this Section, the
parties hereto shall bear all of their own costs and expenses in connection with
the negotiation, preparation, execution and performance of this Agreement;
PROVIDED, HOWEVER, that Purchaser will pay the reasonable legal fees of Premier
and PCI at and subject to the Closing hereunder. In any action or proceeding
brought by any party to enforce any provision of this Agreement, the prevailing
party shall be entitled to recover all costs and expenses incurred by it in
connection with such action or proceeding, including, but not limited to, all
attorneys' fees and disbursements.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first written.
PURCHASER:
ATTEST: THE SAGEMARK COMPANIES LTD.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------- --------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman of the Board
----------------------
Print Name and Title
SELLING STOCKHOLDERS:
ATTEST: PAMELS CORP.
By: /s/ ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------- --------------------------------------
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
----------------------
Print Name
[SIGNATURES CONTINUE]
-25-
WITNESS: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ REVOCABLE
TRUST
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------- --------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Trustee
---------------------
Print Name
ATTEST: ▇▇▇▇ CAPITAL, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------- --------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
---------------------
Print Name and Title
ATTEST: BOCARA CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------- --------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
---------------------
Print Name
ATTEST: MERCURY CAPITAL CORP.
By: /s/ DR. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------- --------------------------------------
Dr. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
----------------------
Print Name
AGREED TO SOLELY AS TO SECTIONS 7.5(A)
AND 16 HEREOF:
WITNESS:
/s/ ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------- -------------------------------------------
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------
Print Name
WITNESS:
/s/ DR. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------- -------------------------------------------
Dr. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------
Print Name
-26-
WITNESS:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------- -------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------
Print Name
WITNESS:
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------- -------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Print Name
WITNESS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------- -------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Print Name
WITNESS:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------- -------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------
Print Name
WITNESS:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------- -------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------
Print Name
-27-
TABLE OF EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A . . . . . . . . . . . . . . Ownership of Premier P.E.T. Imaging
International, Inc. and Premier Cyclotron
International Corp.
Exhibit B . . . . . . . . . . . . . . Certified copies of the Certificates of
Incorporation of Premier P.E.T. Imaging
International, Inc., Premier Cyclotron
International Corp. and Premier P.E.T.
Imaging of Wichita, Inc.
Exhibit C . . . . . . . . . . . . . . Form of Executive Employment Agreement
SCHEDULES
Schedule 5.1 . . . . . . . . . . . . Directors and Officers of Premier P.E.T.
Imaging International, Inc. ("PREMIER")
and Premier Cyclotron International Corp.
("PCI").
Schedule 5.2 . . . . . . . . . . . . Directors and Officers of Premier P.E.T.
Imaging of Wichita, Inc.
Schedule 5.8(c) . . . . . . . . . . . Material Adverse
Changes.
Schedule 5.9 . . . . . . . . . . . . Real and Personal Property of Premier and
PCI.
Schedule 5.10 . . . . . . . . . . . . Leases of Real and Personal Property by
Premier and PCI.
Schedule 5.12 . . . . . . . . . . . . Contracts and Commitments of Premier and
PCI.
Schedule 5.17 . . . . . . . . . . . . Material Liabilities and Obligations of
Premier and PCI.
-28-
EXHIBIT A
STOCK OWNERSHIP
The following individuals and entities own the number of shares of Common Stock
of Premier P.E.T. Imaging International, Inc. and Premier Cyclotron
International Corp. as set forth below opposite each of their names:
Name Number of Shares of Common Stock
---- --------------------------------
Pamels Corp. 48,225
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Revocable Trust 12,225
▇▇▇▇ Capital, Inc. 16,275
Bocara Corporation 16,275
Mercury Capital Corp. 7,000
EXHIBIT B
CERTIFIED COPIES OF CERTIFICATES OF INCORPORATION OF PREMIER PET
IMAGING INTERNATIONAL, INC., PREMIER CYCLOTRON INTERNATIONAL CORP. AND PREMIER
P.E.T. IMAGING OF WICHITA, INC.
See Attached
EXHIBIT C
EXECUTIVE EMPLOYMENT AGREEMENT
[TO BE APPROVED BY THE PARTIES AT CLOSING]
SCHEDULE 5.1
DIRECTORS AND OFFICERS OF PREMIER P.E.T IMAGING
INTERNATIONAL, INC. AND PREMIER CYCLOTRON INTERNATIONAL CORP.
NAME TITLE
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Chief Executive Officer and Chairman of
the Board
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Secretary/Treasurer and a Director
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Director
SCHEDULE 5.2
DIRECTORS AND OFFICERS OF
PREMIER PET IMAGING OF WICHITA, INC.
NAME TITLE
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Chief Executive Officer and Chairman of
the Board
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Secretary/Treasurer and a Director
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Director
SCHEDULE 5.8(C)
MATERIAL ADVERSE CHANGES
None
SCHEDULE 5.9
REAL AND PERSONAL PROPERTY OF PREMIER AND PCI
None
SCHEDULE 5.10
LEASES OF REAL AND PERSONAL
PROPERTY BY PREMIER AND PCI
None
SCHEDULE 5.12
CONTRACTS AND COMMITMENTS
OF PREMIER AND PCI
Agreement dated October 8, 2000, as amended, between Premier P.E.T. Imaging
International, Inc. and Dr. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
Letter Agreement dated ▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ Financial Services, Inc. and
Premier P.E.T. Imaging of Wichita, Inc.
Quotation dated April 13, 2001 between Premier Cyclotron International
Corporation and CTI, Inc.
Executive Employment Agreement between Premier P.E.T. International Imaging,
Inc. and ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (to be executed on the Closing Date).
SCHEDULE 5.17
MATERIAL LIABILITIES AND
OBLIGATIONS OF PREMIER AND PCI
None, other than in connection with the contracts and commitments referred to in
Schedule 5.12.