EXHIBIT 2
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OCCUPATIONAL HEALTH + REHABILITATION INC
Series A Convertible Preferred Stock Purchase Agreement
Dated as of November 6, 1996
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TABLE OF CONTENTS
Page
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ARTICLE I PURCHASE, SALE AND TERMS OF SHARES.......................... 28
1.01 The Initial Preferred Shares................................ 28
1.02 The Additional Preferred Shares............................. 28
1.03 The Converted Shares........................................ 28
1.04 The Shares.................................................. 28
1.05 Purchase Price and Closings................................. 29
1.06 Use of Proceeds............................................. 29
ARTICLE II CONDITIONS TO PURCHASERS' OBLIGATION........................ 30
2.01 Representations and Warranties.............................. 30
2.02 Documentation at Initial Closing............................ 30
2.03 Consents, Waivers, Etc...................................... 34
2.04 Conditions Precedent to Additional Closings................. 34
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY............... 34
3.01 Organization, Qualifications and Corporate Power............ 35
3.02 Authorization of Agreements, Etc............................ 35
3.03 Validity.................................................... 36
3.04 Authorized Capital Stock.................................... 36
3.05 Financial Statements........................................ 37
3.06 Events Subsequent to the Date of the Balance Sheet.......... 37
3.07 Litigation; Compliance with Law............................. 38
3.08 Proprietary Information of Third Parties.................... 38
3.09 Patents, Trademarks, Etc.................................... 39
3.10 Title to Properties......................................... 39
3.11 Leasehold Interests......................................... 39
3.12 Insurance................................................... 40
3.13 Taxes....................................................... 40
3.14 Other Agreements............................................ 40
3.15 Loans and Advances.......................................... 42
3.16 Assumptions, Guaranties, Etc. of Indebtedness of Other
Persons .................................................. 42
3.17 Significant Customers and Suppliers......................... 42
3.18 Governmental Approvals...................................... 42
3.19 Disclosure.................................................. 42
3.20 Offering of the Purchased Shares............................ 43
3.21 Brokers..................................................... 43
3.22 Officers.................................................... 43
3.23 Transactions With Affiliates................................ 43
3.24 Employees................................................... 43
3.25 U.S. Real Property Holding Corporation...................... 44
3.26 Environmental Protection.................................... 44
3.27 ERISA....................................................... 44
3.28 Foreign Corrupt Practices Act............................... 45
3.29 Federal Reserve Regulations................................. 46
3.30 Additional Information...................................... 46
3.31 Securities Act of 1933...................................... 46
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ARTICLE IV COVENANTS OF THE COMPANY.................................... 46
4.01 Financial Statements, Reports, Etc.......................... 46
4.02 Reserve for Conversion Shares............................... 48
4.03 Existence................................................... 48
4.04 Properties, Business, Insurance............................. 48
4.05 Inspection, Consultation and Advice......................... 48
4.06 Restrictive Agreements Prohibited........................... 49
4.07 Transactions with Affiliates................................ 49
4.08 Expenses of Directors....................................... 49
4.09 Board of Directors Meetings................................. 49
4.10 Compensation................................................ 49
4.11 By-laws..................................................... 49
4.12 Reserved Employee Shares.................................... 49
4.13 Employee Confidentiality Agreements......................... 50
4.14 Compliance with Laws........................................ 50
4.15 Keeping of Records and Books of Account..................... 50
4.16 U.S. Real Property Interest Statement....................... 50
4.17 Compensation and Audit Committees........................... 50
4.18 Listing..................................................... 51
4.19 Termination of Covenants.................................... 51
ARTICLE V REPRESENTATIONS, WARRANTIES AND COVENANTS OF
THE PURCHASERS.............................................. 51
ARTICLE VI RIGHT OF FIRST REFUSAL...................................... 52
6.01 Right of First Refusal...................................... 52
6.02 Notice of Acceptance........................................ 52
6.03 Conditions to Acceptances and Purchase...................... 53
6.04 Further Sale................................................ 53
6.05 Exception................................................... 53
ARTICLE VII DEFINITIONS AND ACCOUNTING TERMS............................ 54
7.01 Certain Defined Terms....................................... 54
7.02 Accounting Terms............................................ 56
ARTICLE VIII MISCELLANEOUS.............................................. 56
8.01 No Waiver; Cumulative Remedies.............................. 56
8.02 Amendments, Waivers and Consents............................ 56
8.03 Addresses for Notices....................................... 57
8.04 Costs, Expenses and Taxes................................... 57
8.05 Binding Effect; Assignment.................................. 57
8.06 Survival of Representations and Warranties.................. 57
8.07 Prior Agreements............................................ 57
8.08 Severability................................................ 58
8.09 Governing Law............................................... 58
8.10 Headings.................................................... 58
8.11 Counterparts................................................ 58
8.12 Further Assurances.......................................... 58
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Occupational Health + Rehabilitation Inc
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
As of November 6, 1996
TO: The Persons listed on Schedule I hereto
Re: Series A Convertible Preferred Stock
Ladies and Gentlemen:
Occupational Health + Rehabilitation Inc, a Delaware corporation (the
"Company"), agrees with each of you as follows:
ARTICLE I
PURCHASE, SALE AND TERMS OF SHARES
1.01 The Initial Preferred Shares. The Company has authorized the issuance
and sale of 1,416,667 shares (the "Initial Preferred Shares") of its previously
authorized but unissued shares of Series A Convertible Preferred Stock, $.001
par value (the "Series A Preferred Stock") at a purchase price of $6.00 per
share to the persons (collectively, the "Purchasers" and, individually, a
"Purchaser") and in the respective amounts set forth in Schedule I hereto. The
designation, rights, preferences and other terms and conditions relating to the
Series A Preferred Stock shall be as set forth on Exhibit 1.01A hereto (the
"Certificate of Designations").
1.02 The Additional Preferred Shares. Subject to the terms and conditions
hereof, the Company has authorized the issuance at an Additional Closing (as
hereinafter defined) of up to an additional 250,000 shares of Series A Preferred
Stock (said additional 250,000 shares of Series A Preferred Stock being
sometimes collectively referred to in this Agreement as the "Additional
Preferred Shares;" and the Initial Preferred Shares and the Additional Preferred
Shares being sometimes collectively referred to as the "Purchased Shares").
1.03 The Converted Shares. The Company has authorized and has reserved and
covenants to continue to reserve, free of preemptive rights and other
preferential rights, a suffIcient number of its previously authorized but
unissued shares of Common Stock to satisfy the rights of conversion of the
holders of the Purchased Shares. Any shares of Common Stock issuable upon
conversion of the Purchased Shares, and such shares when issued, are herein
referred to as the "Converted Shares."
1.04 The Shares. The Purchased Shares and the Converted Shares are
sometimes collectively referred to herein as the "Shares."
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1.05 Purchase Price and Closings.
(a) The Company agrees to issue and sell to the Purchasers and,
subject to and in reliance upon the representations, warranties, covenants,
terms and conditions of this Agreement, the Purchasers, severally but not
jointly, agree to purchase that number of the Initial Preferred Shares set forth
opposite their respective names in Schedule I. The aggregate purchase price of
the Initial Preferred Shares being purchased by each Purchaser is set forth
opposite such Purchaser's name in Schedule I. The initial purchase and sale
shall take place at a closing (the "Initial Closing") to be held at the offices
of Messrs. ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, High Street Tower, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on November 6, 1996, at 10:00 A.M., or at such
other location, on such other date and at such time as may be mutually agreed
upon. At the Initial Closing, the Company will issue and deliver certificates
evidencing the Initial Preferred Shares to be sold at such Initial Closing to
each of the Purchasers (or its nominee) against payment of the full purchase
price therefor by wire transfer or check payable to the order of the Company.
(b) The Additional Closing. Provided that the Company is not then in
default under this Agreement and subject to the provisions of Section 2.04, the
Company may, with the written consent of a majority in interest of the
Purchasers, upon not less than 10 days' notice given prior to May 6, 1997, offer
to the Purchasers the option to purchase, and each Purchaser may, at its option,
so purchase, subject to and in reliance upon the representations, warranties,
terms and conditions of this Agreement and upon the terms and conditions
hereinafter set forth, that number of Additional Preferred Shares set forth
opposite the name of such Purchaser on Schedule I attached hereto, under the
heading "Additional Preferred Shares." Any Additional Preferred Shares not
subscribed for by the Purchasers pursuant to the previous sentence (the
"Shortfall Shares") may be purchased by the Purchasers that did subscribe for
Additional Preferred Shares pursuant to the previous sentence (the
"Participating Purchasers"). Each Participating Purchaser shall have the right
to purchase up to that number of Shortfall Shares as shall be determined by
multiplying the total number of Shortfall Shares by a fraction the numerator of
which shall be the sum of the Initial Preferred Shares and the Additional
Preferred Shares subscribed for by such Participating Purchaser, and the
denominator of which shall be the total number of Initial Preferred Shares and
Additional Preferred Shares, in each case subscribed for by all such
Participating Purchasers. Any Shortfall Shares not so subscribed for pursuant to
this Section 1.05(b) shall be subscribed for by ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Strategic
Partners Fund, L.P. and/or Strategic Associates, L.P. in proportions to be
determined in the sole discretion of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Company, LLC. In the
event that the Shortfall Shares to be subscribed for by a Participating
Purchaser is determined to include fractional shares, such Participating
Purchaser shall be permitted to purchase the number of shares determined by
rounding such Participating Purchaser's allocated number of Shortfall Shares to
the nearest whole number. The per share purchase price for each such Additional
Preferred Share (as constituted on the date hereof) to be purchased pursuant to
this Agreement shall be $6.00. Such purchase and sale of Additional Preferred
Shares, if any, shall take place at a closing (the "Additional Closing") at the
offices of ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, High Street Tower, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, on such date or dates as the Company and the
Purchasers may agree, but in all events on or prior to May 6, 1997. At the
Additional Closing the Company will issue and deliver the certificates
evidencing the Additional Preferred Shares sold at such Additional Closing to
each of the Purchasers (or its nominee) against payment of the full purchase
price therefor by wire transfer or check payable to the order of the Company.
1.06 Use of Proceeds. The Company shall use the proceeds from the sale of
the Purchased Shares for working capital and general corporate purposes.
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ARTICLE II
CONDITIONS TO PURCHASERS' OBLIGATION
The obligation of each Purchaser to purchase and pay for the Purchased
Shares to be purchased by it at the Initial Closing is subject to the following
conditions:
2.01 Representations and Warranties. Each of the representations and
warranties of the Company set forth in Article III hereof shall be true and
correct on the date of the Initial Closing.
2.02 Documentation at Initial Closing. The Purchasers shall have received
prior to or at the Initial Closing all of the following documents or
instruments, or evidence of completion thereof, each in form and substance
satisfactory to the Purchasers and their special counsel:
(a) A copy of the Certificate of Incorporation of the Company,
certified by the Secretary of State of the State of Delaware together with
a certified copy of the Certificate of Designations, a copy of the
resolutions of the Board of Directors and, if required, the stockholders
of the Company evidencing the adoption of the Company's Certificate of
Designations, the approval of this Agreement, the issuance of the
Purchased Shares and the other matters contemplated hereby, and a copy of
the By-laws of the Company, all of which shall have been certified by the
Secretary of the Company to be true, complete and correct in every
particular, and certified copies of all documents evidencing other
necessary corporate or other action and governmental approvals, if any,
with respect to this Agreement and the Shares.
(b) The opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel to the Company,
substantially to the effect that:
(i) The Company and its corporate subsidiary are corporations
duly incorporated, validly existing and in good standing under the
laws of their respective jurisdictions of incorporation. The
Company's limited liability company subsidiary is a limited
liability company duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and is
not licensed or qualified as a foreign limited liability company in
any jurisdiction. To the knowledge of such counsel, Schedule III to
this Agreement contains a complete list of all subsidiaries of the
Company and the Company's equity interest therein. The Company is
duly licensed or qualified to transact business as a foreign
corporation and is in good standing in Massachusetts, Rhode Island,
Vermont, Maine, New Jersey, New York, Pennsylvania and each other
jurisdiction in which it owns or leases real property. Each of the
Company and its subsidiaries has the corporate power or entity
power, as the case may be, and authority to own and hold its
properties and to carry on its business as currently conducted. The
Company has the corporate power and authority to execute, deliver
and perform this Agreement, the Registration Rights Agreement and
the Stockholders' Agreement, to issue, sell and deliver the
Purchased Shares and, upon conversion thereof, to issue and deliver
the Converted Shares.
(ii) This Agreement, the Registration Rights Agreement and the
Stockholders' Agreement have been duly authorized, executed and
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delivered by the Company and constitute the legal, valid and binding
obligations of the Company, enforceable in accordance with their
respective terms (subject, as to enforcement of remedies, to the
discretion of courts in awarding equitable relief and to applicable
bankruptcy, reorganization, insolvency, moratorium and similar laws
affecting the rights of creditors generally), except that such
counsel need not express any opinion as to the validity or
enforceability of the indemnification and contribution provisions of
the Registration Rights Agreement.
(iii) The execution and delivery by the Company of this
Agreement, the Registration Rights Agreement and the Stockholders'
Agreement, the performance by the Company of its obligations
hereunder and thereunder, the issuance, sale and delivery of the
Purchased Shares and, upon conversion thereof, the issuance and
delivery of the Converted Shares, will not violate any provision of
law, the Charter or By-laws, as amended, of the Company, any order
of any court or other agency of government or any indenture,
agreement or other instrument known to such counsel to which the
Company, its subsidiaries or any of their respective properties or
assets is bound, 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, restriction,
claim or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company or its subsidiaries. In
rendering the foregoing opinion, such counsel may assume full
disclosure to the Purchasers of all material facts and, with respect
to performance by the Company of its obligations under the
Registration Rights Agreement, may assume compliance by the Company
at such time with the registration requirements of the Securities
Act and with applicable state securities laws and may disclaim any
opinion as to the validity or enforceability of the indemnification
and contribution provisions of the Registration Rights Agreement.
(iv) The authorized capital stock of the Company consists of
(i) 5,000,000 shares of Preferred Stock, of which 1,666,667 shares
have been designated Series A Convertible Preferred Stock, and (ii)
10,000,000 shares of Common Stock. Immediately prior to the Closing,
1,471,480 shares of Common Stock will be duly authorized, validly
issued, fully paid and nonassessable with no personal liability
attaching to the ownership thereof and no shares of Preferred Stock
will have been issued. The designations, powers, preferences,
rights, qualifications, limitations and restrictions in respect of
each class or series of authorized capital stock of the Company are
as set forth in the Charter, and all such designations, powers,
preferences, rights, qualifications, limitations and restrictions
are valid, binding and enforceable and in accordance with all
applicable laws (subject, as to enforcement, to the discretion of
courts in awarding equitable relief and to applicable bankruptcy,
reorganization, insolvency, moratorium and similar laws affecting
the rights of creditors generally). Except as set forth in Schedule
IV, to the knowledge of such counsel, immediately prior to the
Closing no subscription, warrant, option, convertible security, or
other right (contingent or other) to purchase or acquire equity
securities of the Company will be authorized or outstanding and
there will be no commitment by the Company to issue shares,
subscriptions, warrants, options, convertible securities, or other
such rights
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or to distribute to holders of any of its equity securities any
evidence of indebtedness or asset. Except as set forth in Schedule
IV or as provided for in the Charter, to the knowledge of such
counsel the Company has no obligation (contingent or other) to
purchase, redeem or otherwise acquire any of its equity securities
or any interest therein or to pay any dividend or make any other
distribution in respect thereof.
(v) The issuance, sale and delivery of the Purchased Shares
and the issuance and delivery of the Converted Shares upon
conversion of the Purchased Shares have been duly authorized by all
required corporate action. Upon payment therefore in accordance with
this Agreement, the Purchased Shares will have been validly issued,
are fully paid and nonassessable with no personal liability
attaching to the ownership thereof and, to the knowledge of such
counsel, are free and clear of all liens, charges, restrictions,
claims and encumbrances imposed by or through the Company except as
set forth in the Registration Rights Agreement and the Stockholders'
Agreement and as imposed by applicable federal and state securities
laws; and the Converted Shares have been duly reserved for issuance
upon conversion of the Purchased Shares and, when so issued, will be
validly issued, fully paid and nonassessable with no personal
liability attaching to the ownership thereof and, to the knowledge
of such counsel, will be free and clear of all liens, charges,
restrictions, claims and encumbrances imposed by or through the
Company except as set forth in the Registration Rights Agreement and
the Stockholders' Agreement and as imposed by applicable federal and
state securities laws. Neither the issuance, sale or delivery of the
Purchased Shares nor the issuance or delivery of the Converted
Shares is subject to any preemptive right of stockholders of the
Company arising under law or the Charter or By-laws of the Company,
each as amended, or, to the knowledge of such counsel, to any
contractual right of first refusal or other right in favor of any
person.
(vi) Except as described in Schedule II, to the knowledge of
such counsel there is no (A) action, suit, claim, proceeding or
investigation pending or threatened against or affecting the Company
or any of its subsidiaries, at law or in equity, or before or by any
federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, (B) arbitration proceeding relating to the Company or any
of its subsidiaries pending under collective bargaining agreements
or (C) governmental inquiry pending or threatened against or
affecting the Company or any of its subsidiaries (including, without
limitation, any inquiry as to the qualification of the Company or
any of its subsidiaries to hold or receive any license or permit).
To the knowledge of such counsel, neither the Company nor any of its
subsidiaries is in default with respect to any order, writ,
injunction or decree known to such counsel of any court or of any
federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign.
(vii) Assuming the accuracy of the representations and
warranties of the Purchasers set forth in Article III, no
registration or filing with, and no consent or approval of, or other
action by any federal, state or other governmental agency or
instrumentality is or will be necessary for the
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valid execution, delivery and performance by the Company of this
Agreement, the Registration Rights Agreement and the Stockholders'
Agreement, the issuance, sale and delivery of the Purchased Shares
or, upon conversion thereof, the issuance and delivery of the
Converted Shares, other than filings pursuant to state securities
laws (all of which filings, other than those which are required to
be made after the Closing, have been made by the Company). In
rendering the foregoing opinion with respect to performance by the
Company of its obligations under the Registration Rights Agreement,
such counsel may assume compliance by the Company at such time with
the registration requirements of the Securities Act and with
applicable state securities laws and may disclaim any opinion as to
the validity or enforceability of the indemnification and
contribution provisions of the Registration Rights Agreement.
(c) A certificate of the Secretary or an Assistant Secretary of the
Company which shall certify the names of the officers of the Company
authorized to sign this Agreement, the certificates for the Purchased
Shares and the other documents, instruments or certificates to be
delivered pursuant to this Agreement by the Company or any of its
officers, together with the true signatures of such officers. The
Purchasers may conclusively rely on such certificate until they shall
receive a further certificate of the Secretary or an Assistant Secretary
of the Company cancelling or amending the prior certificate and submitting
the signatures of the officers named in such further certificate.
(d) A certificate of the President of the Company stating that the
representations and warranties of the Company contained in Article III
hereof and otherwise made by the Company in writing in connection with the
transactions contemplated hereby are true and correct and that all
conditions required to be performed prior to or at the Initial Closing
have been performed as of the Initial Closing.
(e) The Restated Certificate of Incorporation of the Company (the
"Charter") shall provide for the designation of the rights and preferences
of the Series A Preferred Stock in the form set forth in Exhibit 1.01A
attached hereto.
(f) A Stockholders' Agreement in the form set forth in Exhibit 2.02F
(the "Stockholders' Agreement") shall have been executed by the parties
named therein.
(g) Certificates of Good Standing for the Company from the
Secretaries of State of Delaware, Massachusetts, Rhode Island, Vermont,
Maine, New Jersey, New York, Pennsylvania and all other jurisdictions in
which the Company is qualified to do business as a foreign corporation
shall have been provided to the Purchasers and their special counsel.
(h) Payment for the costs, expenses, taxes and filing fees
identified in Section 8.04.
(i) The Board of Directors of the Company following the Initial
Closing shall consist of seven (7) members, of which the current members
shall be: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, with the remaining members to be
designated in accordance with the Stockholders' Agreement.
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(j) The Company and the Purchasers shall have entered into a
Registration Rights Agreement in the form set forth in Exhibit 2.02J (the
"Registration Rights Agreement").
(k) The Company's By-laws shall be in form and substance reasonably
satisfactory to the Purchasers and their special counsel.
(l) Participation of all Purchasers specified on Schedule I hereto
in the transactions.
2.03 Consents, Waivers, Etc. Prior to the Initial Closing, the Company
shall have obtained all consents or waivers, if any, necessary to execute and
deliver this Agreement, issue the Initial Preferred Shares and to carry out the
transactions contemplated hereby and thereby, and all such consents and waivers
shall be in full force and effect. All corporate and other action and
governmental filings necessary to effectuate the terms of this Agreement, the
Initial Preferred Shares and other agreements and instruments executed and
delivered by the Company in connection herewith shall have been made or taken,
except for any post-sale filing that may be required under federal or state
securities laws. In addition to the documents set forth above, the Company shall
have provided to the Purchasers any other information or copies of documents
that they may reasonably request.
2.04 Conditions Precedent to Additional Closings. The respective several
obligations of the Purchasers to purchase and pay for the Additional Preferred
Shares to be purchased at the Additional Closing are subject to (i) the written
consent of a majority in interest of the Purchasers, (ii) the continuing
performance in all material respects of all agreements by the Company contained
in this Agreement and the Stockholders' Agreement, and (iii) the delivery to
each Purchaser of a certificate, dated the date of such Additional Closing,
signed by the President of the Company, to the effect that (A) other than as
disclosed in a schedule, which shall be reasonably satisfactory to a majority in
interest of the Purchasers, attached to such certificate or as contemplated by
this Agreement, the representations and warranties of the Company contained in
Article III hereof were true and correct when made and are true and correct in
all material respects on and as of the date of such Additional Closing (it being
understood that, in the latter case, any reference to the Closing contained in
said Article III shall be deemed to be a reference to such Additional Closing),
(B) the Company has performed and complied in all material respects with all
covenants, agreements and conditions contained in this Agreement, the
Stockholders' Agreement and the Registration Rights Agreement required to be
performed or complied with by it on or prior to the date of the Additional
Closing, and (C) since the date of the Initial Closing, there has not occurred
(or is likely to occur) any material adverse event with respect to the Company
or its operations.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company, together with its subsidiaries, represents and warrants to
the Purchasers that, except as set forth in the Disclosure Schedule attached as
Schedule II (which Disclosure Schedule makes explicit reference to the
particular representation or warranty as to which exception is taken, which in
each case shall constitute the sole representation and warranty as to which such
exception shall apply):
Page 33 of 70
3.01 Organization, Qualifications and Corporate Power.
(a) 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 to transact business as a foreign corporation and is in
good standing in each jurisdiction in which the nature of the business
transacted by it or the character of the properties owned or leased by it
requires such licensing or qualification and where the failure to be so
qualified would have a material adverse effect on the Company. The Company has
the corporate power and authority to own and hold its properties and to carry on
its business as now conducted and as proposed to be conducted, to execute,
deliver and perform this Agreement, the Registration Rights Agreement and the
Stockholders' Agreement to issue, sell and deliver the Preferred Shares and to
issue and deliver the Converted Shares.
(b) The attached Schedule III contains a list of all subsidiaries of
the Company and its equity interest therein. Except for such subsidiaries, the
Company does not (i) own of record or beneficially, directly or indirectly, (A)
any shares of capital stock or securities convertible into capital stock of any
other corporation or (B) any participating interest in any partnership, joint
venture or other non-corporate business enterprise or (ii) control, directly or
indirectly, any other entity. Each of the Company's corporate subsidiary and
limited liability company subsidiary is a corporation or limited liability
company duly incorporated or organized, as the case may be, validly existing and
in good standing under the laws of its respective jurisdiction of incorporation
or organization, as the case may be, and is duly licensed or qualified to
transact business as a foreign corporation or limited liability company, as the
case may be, and is in good standing in each jurisdiction in which the nature of
the business transacted by it or the character of the properties owned or leased
by it requires such licensing or qualification and where the failure to be so
qualified would have a material adverse effect on the Company. Each of the
subsidiaries referenced above has the corporate power or entity power, as the
case may be, and authority to own and hold its properties and to carry on its
business as now conducted and as proposed to be conducted. All of the
outstanding shares of capital stock or equity interests, as the case may be, of
each of the subsidiaries are owned beneficially and of record by the Company,
one of its other subsidiaries, or any combination of the Company and/or one or
more of its other subsidiaries, in each case free and clear of any liens,
charges, restrictions, claims or encumbrances of any nature whatsoever; and
there are no outstanding subscriptions, warrants, options, convertible
securities, or other rights (contingent or other) pursuant to which any of the
subsidiaries is or may become obligated to issue any shares of its capital stock
or equity interests, as the case may be, to any person other than the Company or
one of the other subsidiaries.
3.02 Authorization of Agreements, Etc.
(a) The execution and delivery by the Company of this Agreement, the
Registration Rights Agreement and the Stockholders' Agreement, the performance
by the Company of its obligations hereunder and thereunder, the issuance, sale
and delivery of the Purchased Shares and the issuance and delivery of the
Converted Shares have been duly 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 Charter or the By-laws of the Company, as amended, or any
provision of any indenture, agreement or other instrument to which the Company,
any of its subsidiaries or any of their respective properties or assets is
bound, 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,
restriction, claim or encumbrance of any nature whatsoever upon any of the
properties or assets of the Company or any of its subsidiaries.
Page 34 of 70
To the best of the Company's knowledge, no provision of the Stockholders'
Agreement violates, conflicts with, results in a breach of or constitutes (with
due notice or lapse of time or both) a default by any other party under any
other indenture, agreement or instrument.
(b) The Purchased Shares have been duly authorized and, when issued
in accordance with this Agreement, will be validly issued, fully paid and
nonassessable shares of Series A Preferred Stock with no personal liability
attaching to the ownership thereof and will be free and clear of all liens,
charges, restrictions, claims and encumbrances imposed by or through the Company
except as set forth in the Registration Rights Agreement and the Stockholders'
Agreement and as imposed by applicable federal and state securities laws. The
Converted Shares have been duly reserved for issuance upon conversion of the
Purchased Shares and, when so issued, will be duly authorized, validly issued,
fully paid and nonassessable shares of Common Stock with no personal liability
attaching to the ownership thereof and will be free and clear of all liens,
charges, restrictions, claims and encumbrances imposed by or through the Company
except as set forth in the Registration Rights Agreement and the Stockholders'
Agreement and as imposed by applicable federal and state securities laws.
Neither the issuance, sale or delivery of the Purchased Shares nor the issuance
or delivery of the Converted Shares is subject to any preemptive right of
stockholders of the Company or to any right of first refusal or other right in
favor of any person.
3.03 Validity. This Agreement 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, moratorium and
similar laws affecting the rights of creditors generally). The Registration
Rights Agreement and the Stockholders' Agreement, when executed and delivered in
accordance with this Agreement, will constitute the legal, valid and binding
obligations of the Company, enforceable in accordance with their respective
terms (subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and similar laws affecting the rights of
creditors generally).
3.04 Authorized Capital Stock. The authorized capital stock of the Company
consists of (i) 5,000,000 shares of Preferred Stock, $.001 par value (the
"Preferred Stock"), of which 1,666,667 shares have been designated Series A
Preferred Stock, and (ii) 10,000,000 shares of Common Stock. Immediately prior
to the Closing, 1,471,480 shares of Common Stock will be validly issued and
outstanding, fully paid and nonassessable with no personal liability attaching
to the ownership thereof and no shares of Preferred Stock will have been issued.
The stockholders of record owning more than 5% of the outstanding shares of the
Common Stock of the Company and holders of subscriptions, warrants, options,
convertible securities, and other rights (contingent or other) to purchase or
otherwise acquire equity securities of the Company, and the number of shares of
Common Stock and the number of such subscriptions, warrants, options,
convertible securities, and other such rights held by each, are as set forth in
the attached Schedule IV. The designations, powers, preferences, rights,
qualifications, limitations and restrictions in respect of each class and series
of authorized capital stock of the Company are as set forth in the Charter and
Certificate of Designations, a copy of which is attached as Exhibit 1.01A, and
all such designations, powers, preferences, rights, qualifications, limitations
and restrictions are valid, binding and enforceable and in accordance with all
applicable laws. Except as set forth in the attached Schedule IV, (i) no
subscription, warrant, option, convertible security, or other right (contingent
or other) to purchase or otherwise acquire equity securities of the Company is
authorized or outstanding and (ii) there is no commitment by the Company to
issue shares, subscriptions, warrants, options, convertible securities, or other
such rights or to distribute to holders of any of its equity securities any
evidence of indebtedness or asset. Except as provided for in the Charter or as
set forth in the attached Schedule IV, the Company has no
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obligation (contingent or other) to purchase, redeem or otherwise acquire any of
its equity securities or any interest therein or to pay any dividend or make any
other distribution in respect thereof. Except for the Stockholders' Agreement,
to the best of the Company's knowledge there are no voting trusts or agreements,
stockholders' agreements, pledge agreements, buy-sell agreements, rights of
first refusal, preemptive rights or proxies relating to any securities of the
Company or any of its subsidiaries (whether or not the Company or any of its
subsidiaries is a party thereto). All of the outstanding securities of the
Company were issued in compliance with all applicable federal and state
securities laws.
3.05 Financial Statements. The Company has furnished to the Purchasers the
audited consolidated balance sheet of Telor Ophthalmic Pharmaceuticals, Inc.,
Occupational Health + Rehabilitation Inc and their subsidiaries (collectively,
the "Predecessor Companies") as of December 31, 1995 and the related audited
consolidated statements of income, stockholders' equity and cash flows of the
Predecessor Companies for the year ended December 31, 1995, the Unaudited Pro
Forma Combined Financial Information as of December 31, 1995 as disclosed in the
Offering Memorandum and Proxy Statement dated May 15, 1996 (the "Proxy
Statement"), the unaudited consolidated balance sheet of the Company and its
subsidiaries as of June 30, 1996 (the "Balance Sheet") and the related unaudited
consolidated statements of income, stockholders' equity and cash flows of the
Company and its subsidiaries for the 6 months ended June 30, 1996. All such
financial statements have been prepared in accordance with generally accepted
accounting principles consistently applied (except that such unaudited financial
statements do not contain all of the required footnotes and interim statements
do not contain year-end adjustments), or where different from generally accepted
accounting principles, SEC requirements, and fairly present the consolidated
financial position of the Predecessor Companies, the Company and its
subsidiaries as of December 31, 1995 and June 30, 1996, respectively, and the
consolidated results of their operations and cash flows of the Predecessor
Companies, the Company and its subsidiaries for the year ended December 31, 1995
and the 6 months ended June 30, 1996, respectively. Since the date of the
Balance Sheet, (i) there has been no change in the assets, liabilities or
financial condition of the Company and its subsidiaries (on a consolidated
basis) from that reflected in the Balance Sheet except for changes in the
ordinary course of business which in the aggregate have not been materially
adverse and (ii) none of the business, prospects, financial condition,
operations, property or affairs of the Company and its subsidiaries (on a
consolidated basis) has been materially adversely affected by any occurrence or
development, individually or in the aggregate, whether or not insured against.
3.06 Events Subsequent to the Date of the Balance Sheet. Since the date of
the Balance Sheet, the Company has not (i) issued any stock, bond or other
corporate security, (ii) borrowed any amount or incurred or become subject to
any liability (absolute, accrued or contingent), except current liabilities
incurred and liabilities under contracts entered into in the ordinary course of
business, (iii) discharged or satisfied any lien or encumbrance or incurred or
paid any obligation or liability (absolute, accrued or contingent) other than
current liabilities shown on the Balance Sheet and current liabilities incurred
since the date of the Balance Sheet in the ordinary course of business, (iv)
declared or made any payment or distribution to stockholders or purchased or
redeemed any share of its capital stock or other security, (v) mortgaged,
pledged, encumbered or subjected to lien any of its assets, tangible or
intangible, other than liens of current real property taxes not yet due and
payable, (vi) sold, assigned or transferred any of its tangible assets except in
the ordinary course of business, or cancelled any debt or claim, (vii) sold,
assigned, transferred or granted any exclusive license with respect to any
patent, trademark, trade name, service ▇▇▇▇, copyright, trade secret or other
intangible asset, (viii) suffered any loss of property or waived any right of
substantial value whether or not in the ordinary course of business, (ix) made
any change in officer compensation except in the ordinary course of business and
consistent with past
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practice, (x) made any material change in the manner of business or operations
of the Company, (xi) entered into any transaction except in the ordinary course
of business or as otherwise contemplated hereby or (xii) entered into any
commitment (contingent or otherwise) to do any of the foregoing.
3.07 Litigation; Compliance with Law. There is no (i) action, suit, claim,
proceeding or investigation pending or, to the best of the Company's knowledge,
threatened against or affecting the Company, at law or in equity, or before or
by any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, (ii) arbitration
proceeding relating to the Company pending under collective bargaining
agreements or otherwise or (iii) governmental inquiry pending or, to the best of
the Company's knowledge, threatened against or affecting the Company (including,
without limitation, any inquiry as to the qualification of the Company to hold
or receive any license or permit), and, to the best of the Company's knowledge,
there is no basis for any of the foregoing. The Company has not received any
opinion or memorandum or legal advice from legal counsel to the effect that it
is exposed, from a legal standpoint, to any liability or disadvantage which may
be material to its business, prospects, financial condition, operations,
property or affairs. The Company is not in default with respect to any order,
writ, injunction or decree known to or served upon the Company of any court or
of any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign. There is no
action or suit by the Company pending, or threatened or contemplated against
others. The Company has complied in all material respects with all laws, rules,
regulations and orders applicable to its business, operations, properties,
assets, products and services, the Company has all necessary permits, licenses
and other authorizations required to conduct its business as conducted and as
proposed to be conducted, and the Company has been operating its business
pursuant to and in compliance with the terms of all such permits, licenses and
other authorizations. There is no existing law, rule, regulation or order, and
the Company after due inquiry is not aware of any proposed law, rule, regulation
or order, whether federal, state, county or local, which would prohibit or
restrict the Company from, or otherwise materially adversely affect the Company
in, conducting its business in any jurisdiction in which it is now conducting
business or in which it proposes to conduct business.
3.08 Proprietary Information of Third Parties. To the best of the
Company's knowledge, no third party has claimed or has reason to claim that any
person employed by or affiliated with the Company has (a) violated or may be
violating any of the terms or conditions of his or her employment,
non-competition or non-disclosure agreement with such third party, (b) disclosed
or may be disclosing or utilized or may be utilizing any trade secret or
proprietary information or documentation of such third party or (c) interfered
or may be interfering in the employment relationship between such third party
and any of its present or former employees. No third party has requested
information from the Company which suggests that such a claim might be
contemplated. To the best of the Company's knowledge, no person employed by or
affiliated with the Company has employed or proposes to employ any trade secret
or any information or documentation proprietary to any former employer, and to
the best of the Company's knowledge, no person employed by or 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
or sale of any product or proposed product or the development or sale of any
service or proposed service of the Company, and the Company has no reason to
believe there will be any such employment or violation. To the best of the
Company's knowledge, none of the execution or delivery of this Agreement, or the
carrying on of the business of the Company as officers, employees or agents by
any officer, director or key employee of the Company, or the conduct or proposed
conduct of the business of the Company, will conflict with or result in a breach
of the terms,
Page 37 of 70
conditions or provisions of or constitute a default under any contract, covenant
or instrument under which any such person is obligated.
3.09 Patents, Trademarks, Etc. Set forth in Schedule II is a list and
brief description of all domestic and foreign patents, patent rights, patent
applications, trademarks, trademark applications, service marks, service ▇▇▇▇
applications, trade names and registered copyrights, and all applications for
such which are in the process of being prepared, owned by or registered in the
name of the Company, or of which the Company is a licensor or licensee or in
which the Company has any right, and in each case a brief description of the
nature of such right. The Company owns or possesses adequate licenses or other
rights to use all patents, patent applications, trademarks, trademark
applications, service marks, service ▇▇▇▇ applications, trade names, copyrights,
manufacturing processes, formulae, trade secrets, customer lists and know how
(collectively, "Intellectual Property") necessary or desirable to the conduct of
its business as conducted and as proposed to be conducted, and no claim is
pending or, to the best of the Company's knowledge, threatened to the effect
that the operations of the Company infringe upon or conflict with the asserted
rights of any other person under any Intellectual Property, and, to the best of
the Company's knowledge, there is no basis for any such claim (whether or not
pending or threatened). No claim is pending or, to the best of the Company's
knowledge, threatened to the effect that any such Intellectual Property owned or
licensed by the Company, or which the Company otherwise has the right to use, is
invalid or unenforceable by the Company, and, to the best of the Company's
knowledge, there is no basis for any such claim (whether or not pending or
threatened). To the best of the Company's knowledge, all technical information
developed by and belonging to the Company which has not been patented has been
kept confidential. The Company has not granted or assigned to any other person
or entity any right to manufacture, have manufactured, assemble or sell the
products or proposed products or to provide the services or proposed services of
the Company.
3.10 Title to Properties. The Company and its subsidiaries have good,
clear and marketable title to their respective properties and assets reflected
on the Balance Sheet or acquired by them since the date of the Balance Sheet
(other than properties and assets disposed of in the ordinary course of business
since the date of the Balance Sheet), and all such properties and assets are
free and clear of mortgages, pledges, security interests, liens, charges,
claims, restrictions and other encumbrances (including, without limitation,
easements and licenses), except for liens for or current taxes not yet due and
payable and minor imperfections of title, if any, not material in nature or
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 and its subsidiaries, including, without limitation, the ability of
the Company and its subsidiaries to secure financing using such properties and
assets as collateral. To the best of the Company's knowledge after due inquiry,
there are no condemnation, environmental, zoning or other land use regulation
proceedings, either instituted or planned to be instituted, which would
adversely affect the use or operation of the Company's and its subsidiaries'
properties and assets for their respective intended uses and purposes, or the
value of such properties, and neither the Company nor any subsidiary has
received notice of any special assessment proceedings which would affect such
properties and assets.
3.11 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, is a valid
and subsisting agreement, duly authorized and entered into, without any default
of the Company thereunder and, to the best of the Company's knowledge, without
any default thereunder of any other party thereto. No event has occurred and is
continuing which, with due notice or lapse of time or both, would constitute a
default or event of default by the Company under any such
Page 38 of 70
lease or agreement or, to the best of the Company's knowledge, by any other
party thereto. The Company's possession of such property has not been disturbed
and, to the best of the Company's knowledge after due inquiry, no claim has been
asserted against the Company adverse to its rights in such leasehold interests.
3.12 Insurance. The Company holds valid policies covering all of the
insurance required to be maintained by it under Section 4.04.
3.13 Taxes. The Company has filed all tax returns, federal, state, county
and local, required to be filed by it, and the Company has paid all taxes shown
to be due by such returns as well as all other taxes, assessments and
governmental charges which have become due or payable (and are not the subject
of a valid extension of time), including, without limitation, all taxes which
the Company is obligated to withhold from amounts owing to employees, creditors
and third parties. The Company has established adequate reserves for all taxes
accrued but not yet payable. The Company has not received notice that its
federal income tax returns have been audited by the Internal Revenue Service. No
deficiency assessment with respect to or proposed adjustment of the Company's
federal, state, county or local taxes is pending or, to the best of the
Company's knowledge, threatened. There is no tax lien (other than for current
taxes not yet due and payable), whether imposed by any federal, state, county or
local taxing authority, outstanding against the assets, properties or business
of the Company.
3.14 Other Agreements. Except as set forth in the attached Schedule V(A),
the Company is not a party to or otherwise bound by any written or oral
agreement, instrument, commitment or restriction which individually or in the
aggregate has, or which the Company believes is likely to, materially adversely
affect the business, prospects, financial condition, operations, property or
affairs of the Company. Except as set forth in the attached Schedule V(B), the
Company is not a party to or otherwise bound by any written or oral:
(a) sales agency or similar agreement which is not terminable on
less than ninety (90) days' notice without cost or other liability to the
Company (except for agreements which, in the aggregate, are not material
to the business of the Company);
(b) agreement which entitles any customer to a rebate or right of
set-off, or which varies in any material respect from the Company's
standard form agreements;
(c) agreement with any labor union (and, to the knowledge of the
Company, no organizational effort is being made with respect to any of its
employees);
(d) agreement with any supplier or customer containing any provision
permitting any party other than the Company to renegotiate the price or
other terms, or containing any payback or other similar provision;
(e) agreement for the future purchase of fixed assets or for the
future purchase of materials, supplies or equipment in excess of its
normal operating requirements;
(f) agreement for the employment of any officer, employee or other
person (whether of a legally binding nature or in the nature of informal
understandings) on a full-time or consulting basis which is not terminable
on notice
Page 39 of 70
without cost or other liability to the Company, except normal severance
arrangements and accrued vacation pay,
(g) bonus, pension, profit-sharing, retirement, hospitalization,
insurance, stock purchase, stock option or other plan, agreement or
understanding pursuant to which benefits are provided to any employee of
the Company (other than group insurance plans which are not self-insured
and are applicable to employees generally);
(h) agreement relating to the borrowing of money or to the
mortgaging or pledging of, or otherwise placing a lien or security
interest on, any asset of the Company;
(i) voting trust or agreement, stockholders' agreement, pledge
agreement, buy-sell agreement or first refusal or preemptive rights
agreement relating to any securities of the Company;
(j) agreement or obligation (contingent or otherwise) to issue, sell
or otherwise distribute or to repurchase or otherwise acquire or retire
any share of its capital stock or any of its other equity securities;
(k) assignment, license or other agreement with respect to any form
of intangible property;
(l) agreement under which it has granted any person any registration
rights, other than the Registration Rights Agreement;
(m) agreement under which it has limited or restricted its right to
compete with any person in any respect;
(n) other agreement or group of related agreements with the same
party involving more than $10,000 or continuing over a period of more than
six months from the date or dates thereof (including renewals or
extensions optional with another party), which agreement or group of
agreements is not terminable by the Company without penalty upon notice of
thirty (30) days or less, but excluding any agreement or group of
agreements with a customer of the Company for the Company's products or
services if such agreement or group of agreements was entered into by the
Company in the ordinary course of business; or
(o) other agreement, instrument, commitment, plan or arrangement, a
copy of which would be required to be filed with the Securities and
Exchange Commission (the "Commission") as an exhibit to a registration
statement on Form S-1 if the Company were registering securities under the
Securities Act of 1933, as amended (the "Securities Act") which has not
yet been filed with the Commission and a copy delivered to counsel for the
Purchasers.
The Company, and to the best of the Company's knowledge after due inquiry, each
other party thereto have in all material respects performed all the obligations
required to be performed by them to date (or each non-performing party has
received a valid, enforceable and irrevocable written waiver with respect to its
non-performance), have received no notice of default and are not in default
(with due notice or lapse of time or both) under any agreement, instrument,
commitment, plan or arrangement to which the Company is a party or by which it
or its property may be bound. The Company has no present expectation or
intention of not fully performing all its obligations under each such agreement,
instrument,
Page 40 of 70
commitment, plan or arrangement, and the Company has no knowledge of any breach
or anticipated breach by the other party to any agreement, instrument,
commitment, plan or arrangement to which the Company is a party. The Company is
in full compliance with all of the terms and provisions of its Charter and
By-laws, as amended.
3.15 Loans and Advances. The Company does not have any outstanding loans
or advances to any person and is not obligated to make any such loans or
advances, except, in each case, for advances to employees of the Company in
respect of reimbursable business expenses anticipated to be incurred by them in
connection with their performance of services for the Company.
3.16 Assumptions, Guaranties, Etc. of Indebtedness of Other Persons. The
Company has not assumed, guaranteed, endorsed or otherwise become directly or
contingently liable on any indebtedness of any other person (including, without
limitation, liability by way of agreement, contingent or otherwise, to purchase,
to provide funds for payment, to supply funds to or otherwise invest in the
debtor, or otherwise to assure the creditor against loss), except for guaranties
by endorsement of negotiable instruments for deposit or collection in the
ordinary course of business.
3.17 Significant Customers and Suppliers. No customer or supplier which
was significant to the Company during the period covered by the financial
statements referred to in Section 3.05 or which has been significant to the
Company thereafter, has terminated, materially reduced or threatened to
terminate or materially reduce its purchases from or provision of products or
services to the Company, as the case may be.
3.18 Governmental Approvals. Subject to the accuracy of the
representations and warranties of the Purchasers set forth in Article V, 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 by the Company of
this Agreement, the Registration Rights Agreement or the Stockholders'
Agreement, the issuance, sale and delivery of the Purchased Shares or, upon
conversion thereof, the issuance and delivery of the Converted Shares, other
than (i) filings pursuant to state securities laws (all of which filings have
been made by the Company, other than those which are required to be made after
the Closing and which will be duly made on a timely basis) in connection with
the sale of the Purchased Shares and (ii) with respect to the Registration
Rights Agreement. The registration of the shares covered thereby with the
Commission and filings pursuant to state securities laws.
3.19 Disclosure. Neither this Agreement, nor any Schedule or Exhibit to
this Agreement, nor the Proxy Statement, nor the income summaries by center and
summaries regarding patient visits and revenue by center through August 31,
1996, nor the consolidated balance sheet of the Company as of August 31, 1996
contains an untrue statement of a material fact or omits a material fact
necessary to make the statements contained herein or therein not misleading as
of the date hereof. None of the statements, documents, certificates or other
items prepared or supplied by the Company with respect to the transactions
contemplated hereby contains an untrue statement of a material fact or omits a
material fact necessary to make the statements contained therein not misleading.
There is no fact which the Company has not disclosed to the Purchasers and their
counsel in writing and of which the Company is aware which materially and
adversely affects or could materially and adversely affect the business,
prospects, financial condition, operations, property or affairs of the Company
or any of its subsidiaries. The financial projections and other estimates
provided to the Purchasers were prepared by the Company based on the Company's
experience in the industry and on assumptions of fact and opinion as to future
events which the Company
Page 41 of 70
believes to be reasonable, but which the Company cannot and does not assure or
guarantee the attainment of in any manner. As of the date hereof, no facts have
come to the attention of the Company which would, in its opinion, require the
Company to revise or amplify the assumptions underlying such projections and
other estimates or the conclusions derived therefrom.
3.20 Offering of the Purchased 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 Purchased Shares or any security of
the Company similar to the Purchased Shares has offered the Purchased Shares or
any such similar security for sale to, or solicited any offer to buy the
Purchased Shares or any such similar security from, or otherwise approached or
negotiated with respect thereto with, any person or persons, and neither the
Company nor any person acting on its behalf has taken or will take any other
action (including, without limitation, any offer, issuance or sale of any
security of the Company under circumstances which might require the integration
of such security with Purchased Shares under the Securities Act or the rules and
regulations of the Commission thereunder), in either case so as to subject the
offering, issuance or sale of the Purchased Shares to the registration
provisions of the Securities Act.
3.21 Brokers. The Company has no contract, arrangement or understanding
with any broker, finder or similar agent with respect to the transactions
contemplated by this Agreement.
3.22 Officers. Set forth in Schedule II is a list of the names of the
officers of the Company, together with the title or job classification of each
such person and the total compensation anticipated to be paid to each such
person by the Company and its subsidiaries in 1996. None of such persons has an
employment agreement or understanding, whether oral or written, with the Company
or any of its subsidiaries, which is not terminable on notice by the Company or
such subsidiary without cost or other liability to the Company or such
subsidiary.
3.23 Transactions With Affiliates. No director, officer, employee or
stockholder of the Company, or member of the family of any such person, or any
corporation, partnership, trust or other entity in which any such person, or any
member of the family of any such person, has a substantial interest or is an
officer, director, trustee, partner or holder of more than 5% of the outstanding
capital stock thereof, is a party to any transaction with the Company, including
any contract, agreement or other arrangement providing for the employment of,
furnishing of services by, rental of real or personal property from or otherwise
requiring payments to any such person or firm, other than employment-at-will
arrangements in the ordinary course of business.
3.24 Employees. Each of the officers of the Company, each key employee and
each other employee now employed by the Company who has access to confidential
information of the Company has executed a Confidentiality Agreement
(collectively, the "Confidentiality Agreements"), and such agreements are in
full force and effect. No officer or key employee of the Company has advised the
Company (orally or in writing) that he or she intends to terminate employment
with the Company. The Company has complied in all material respects with all
applicable laws relating to the employment of labor, including provisions
relating to wages, hours, equal opportunity, collective bargaining and the
payment of Social Security and other taxes, and with the Employee Retirement
Income Security Act of 1974, as amended ("ERISA").
Page 42 of 70
3.25 U.S. Real Property Holding Corporation. The Company is not now and
has never been a "United States real property holding corporation," as defined
in Section 897(c)(2) of the Code and Section 1.897-2(b) of the Treasury
Regulations and the Company has filed with the Internal Revenue Service all
statements, if any, with its United States income tax returns which are required
under Section 1.897-2(h) of such Regulations.
3.26 Environmental Protection. The Company has not caused or allowed, or
contracted with any party for, the generation, use, transportation, treatment,
storage or disposal of any Hazardous Substances (as defined below) in connection
with the operation of its business or otherwise which could reasonably be
expected to result in a claim or liability of a material adverse nature. The
Company, the operation of its business, and any real property that the Company
owns, leases or otherwise occupies or uses (the "Premises") are in compliance in
all material respects with all applicable Environmental Laws (as defined below)
and orders or directives of any governmental authorities having jurisdiction
under such Environmental Laws, including, without limitation, any Environmental
Laws or orders or directives with respect to any cleanup or remediation of any
release or threat of release of Hazardous Substances. The Company has not
received any citation, directive, letter or other communication, written or
oral, or any notice of any proceeding, claim or lawsuit, from any person arising
out of the ownership or occupation of the Premises, or the conduct of its
operations, and the Company is not aware of any basis therefor. The Company has
obtained and is maintaining in full force and effect all material permits,
licenses and approvals required by all Environmental Laws applicable to the
Premises and the business operations conducted thereon, and is in material
compliance with all such permits, licenses and approvals. The Company has not
caused or allowed a release, or a threat of release, of any Hazardous Substance
unto, at or near the Premises, and, to the best of the Company's knowledge, the
Premises has never been subject to a release, or a threat of release, of any
Hazardous Substance. For the purposes of this Agreement, the term "Environmental
Laws" shall mean any Federal, state or local law or ordinance or regulation
pertaining to the protection of human health or the environment, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Sections 9601, et seq., the Emergency Planning and
Community Right-to-Know Act, 42 U.S.C. Sections 11001, et seq., and the Resource
Conservation and Recovery Act, 42 U.S.C. Sections 6901, et seq. For purposes of
this Agreement, the term "Hazardous Substances" shall include oil and petroleum
products, asbestos, polychlorinated biphenyls, urea formaldehyde and any other
materials classified as hazardous or toxic under any Environmental Laws.
3.27 ERISA.
(a) Schedule II lists each Employee Plan that covers any employee of
the Company, copies or descriptions of all of which have previously been made
available or furnished to the Purchasers. With respect to each Employee Plan,
the Company has provided the most recently filed Form 5500 and an accurate
summary description of such plan.
(b) Schedule II also includes a list of each Benefit Arrangement of
the Company, copies or descriptions of all of which have been made available or
furnished previously to the Purchasers.
(c) No Employee Plan is a Multiemployer Plan and no Employee Plan is
subject to Title IV of ERISA. The Company and its Affiliates have not incurred
any liability under Title IV of ERISA arising in connection with the termination
of any plan covered or previously covered by Title IV of ERISA.
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(d) None of the Employee Plans or other arrangements listed on
Schedule II covers any non-United States employee or former non-United States
employee of the Company.
(e) No "prohibited transaction," as defined in Section 406 of ERISA
or Section 4975 of the Code, has occurred with respect to any Employee Plan.
(f) Each Employee Plan which is intended to be qualified under
Section 401(a) of the Code is so qualified and has been so qualified during the
period from its adoption to date, and each trust forming a part thereof is
exempt from tax pursuant to Section 501 (a) of the Code. The Company has
furnished to the Purchasers copies of the most recent Internal Revenue Service
determination letters with respect to each such plan, including a letter with
respect to amendments required by the Tax Reform Act of 1986. Each Employee Plan
has been maintained in compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations, including,
but not limited to, ERISA and the Code, which are applicable to such plan.
(g) Each Employee Plan and each Benefit Arrangement has been
maintained in substantial compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations which are
applicable to such Employee Plan and Benefit Arrangement.
(h) Except as disclosed in writing to the Purchasers prior to the
date hereof, there has been no amendment to, written interpretation of or
announcement (whether or not written) by the Company or any of its ERISA
Affiliates relating to, or change in employee participation or coverage under,
any Employee Plan or Benefit Arrangement that would increase materially the
expense of maintaining such Employee Plan or Benefit Arrangement above the level
of the expense incurred in respect thereof for the fiscal year ended prior to
the date hereof.
(i) There is no contract, agreement, plan or arrangement covering
any employee or former employee of the Company that, individually or
collectively, could give rise to the payment of any amount that would not be
deductible pursuant to the terms of Section 280G of the Code.
(j) No tax under Section 4980B of the Code has been incurred in
respect of any Employee Plan that is a group health plan, as defined in Section
5000(b)(1) of the Code.
(k) With respect to the employees and former employees of the
Company, there are no employee post-retirement medical or health plans in
effect, except as required by Section 4980B of the Code.
(l) No employee of the Company will become entitled to any bonus,
retirement, severance or similar benefit or enhanced benefit solely as a result
of the transactions contemplated hereby.
(m) The Company does not have, nor is it reasonably expected to
have, any liability under Title IV of ERISA.
3.28 Foreign Corrupt Practices Act. The Company has not taken any action
which would cause it to be in violation of the Foreign Corrupt Practices Act of
1977, as amended, or any rules and regulations thereunder. To the best of the
Company's knowledge
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after due inquiry, there is not now, and there has never been, any employment by
the Company of, or beneficial ownership in the Company by, any governmental or
political official in any country in the world.
3.29 Federal Reserve Regulations. The Company is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
securities (within the meaning of Regulation G of the Board of Governors of the
Federal Reserve System), and no part of the proceeds of the Preferred Shares
will be used to purchase or carry any margin security or to extend credit to
others for the purpose of purchasing or carrying any margin security or in any
other manner which would involve a violation of any of the regulations of the
Board of Governors of the Federal Reserve System.
3.30 Additional Information. The Company has filed in a timely manner all
documents that the Company was required to file under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") during the 12 months preceding the
date of this Agreement. The following documents complied in all material
respects with the requirements of the Exchange Act as of their respective filing
dates, and the information contained therein was true and correct in all
material respects as of the date of such documents, and each of the following
documents as of the date thereof did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading:
(a) The Company's Quarterly Report on Form 10-Q for the quarter year
ended June 30, 1996; and
(b) all other documents, if any, filed by the Company with the
Securities and Exchange Commission (the "Commission") since the filing of
the Quarterly Report on Form 10-Q for the fiscal quarter ended June 30,
1996 pursuant to the reporting requirements of the Exchange Act.
3.31 Securities Act of 1933. The Company has complied and will comply with
all applicable federal and state securities laws in connection with the offer,
issuance and sale of the Shares. Neither the Company nor anyone acting on its
behalf has or will sell, offer to sell or solicit offers to buy the Shares or
similar securities to, or solicit offers with respect thereto from, or enter
into any preliminary conversations or negotiations relating thereto with, any
Person, so as to bring the issuance and sale of the Shares under the
registration provisions of the Securities Act and applicable state securities
laws.
ARTICLE IV
COVENANTS OF THE COMPANY
The Company, together with its subsidiaries, covenants and agrees
with each of the Purchasers that:
4.01 Financial Statements, Reports, Etc. The Company shall furnish to each
Purchaser:
(a) within the time periods required for the furnishing thereof,
copies of the Company's reports filed on Form 10-K, Form 10-Q and any
successor form or forms;
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(b) within thirty (30) days after the end of each month in each
fiscal year (other than the last month in each fiscal year) a consolidated
balance sheet of the Company and its subsidiaries, if any, the related
consolidated statements of income, stockholders' equity and cash flows,
income summaries by center, receivable aging tables by center and monthly
center operating data unaudited but prepared in accordance with generally
accepted accounting principles (except for notes and year-end adjustments)
and certified by the Chief Financial Officer of the Company, such
consolidated balance sheet to be as of the end of such month and such
consolidated statements of income, stockholders' equity and cash flows to
be for such month and for the period from the beginning of the fiscal year
to the end of such month, in each case with comparative statements for the
prior fiscal year, provided that the Company's obligations under this
Section 4.01(b) shall terminate upon the completion of a firm commitment
underwritten public offering of the Company's securities;
(c) at the time of delivery of each annual financial statement
pursuant to Section 4.01(a), a certificate executed by the Chief Financial
Officer of the Company stating that such officer has caused this Agreement
and the Series A Convertible Preferred Stock to be reviewed and has no
knowledge of any default by the Company in the performance or observance
of any of the provisions of this Agreement or the Series A Convertible
Preferred Stock or, if such officer has such knowledge, specifying such
default and the nature thereof;
(d) at the time of delivery of each monthly statement pursuant to
Section 4.01(b), a management narrative report explaining all significant
variances from forecasts and all significant current developments in
staffing, marketing, sales and operations;
(e) no later than thirty (30) days prior to the start of each fiscal
year, consolidated capital and operating expense budgets, cash flow
projections and income and loss projections for the Company and its
subsidiaries in respect of such fiscal year, all itemized in reasonable
detail, by center (other than cash flow projections and prepared on a
monthly basis, and, promptly after preparation, any revisions to any of
the foregoing;
(f) promptly following receipt by the Company, each audit response
letter, accountant's management letter and other written report submitted
to the Company by its independent public accountants in connection with an
annual or interim audit of the books of the Company or any of its
subsidiaries;
(g) promptly after the commencement thereof, notice of all actions,
suits, claims, proceedings, investigations and inquiries of the type
described in Section 3.07 that could materially adversely affect the
Company or any of its subsidiaries;
(h) promptly upon sending, making available or filing the same, all
press releases, reports and financial statements that the Company sends or
makes available to its stockholders or directors or files with the
Commission;
(i) at the time of delivery to the Company's Board of Directors,
reports, minutes, consents, waivers or such other information
substantially similar to such reports, minutes, consents, waivers or other
information delivered to the members of the Company's Board of Directors
provided that each Purchaser understands that it could be subject to
fines, penalties and other liabilities under applicable securities laws
Page 46 of 70
in the event of trading in the Company's securities while in the
possession of any material, non-public information concerning the Company
and agrees to abide by these legal prohibitions on tipping and trading;
and
(j) promptly, from time to time, such other information regarding
the business, prospects, financial condition, operations, property or
affairs of the Company and its subsidiaries as such Purchaser reasonably
may request.
4.02 Reserve for Conversion Shares. The Company shall at all times reserve
and keep available out of its authorized but unissued shares of Common Stock,
for the purpose of effecting the conversion of the Purchased Shares and
otherwise complying with the terms of this Agreement, such number of its duly
authorized shares of Common Stock as shall be sufficient to effect the
conversion of the Purchased Shares from time to time outstanding or otherwise to
comply with the terms of this Agreement. If at any time the number of authorized
but unissued shares of Common Stock shall not be sufficient to effect the
conversion of the Purchased Shares or otherwise to comply with the terms of this
Agreement, the Company will forthwith take such corporate action as may be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purposes. The Company will
obtain any authorization, consent, approval or other action by or make any
filing with any court or administrative body that may be required under
applicable state securities laws in connection with the issuance of shares of
Common Stock upon conversion of the Purchased Shares.
4.03 Existence. The Company shall maintain and cause each of its
subsidiaries (if any) to maintain, their respective corporate or legal
existence, rights and franchises in full force and effect.
4.04 Properties, Business, Insurance. The Company shall maintain and cause
each of its subsidiaries (if any) to maintain as to their respective properties
and business, with financially sound and reputable insurers, insurance against
such casualties and contingencies and of such types and in such amounts as is
customary for companies similarly situated, which insurance shall be deemed by
the Company to be sufficient. The Company shall also use its best efforts to
obtain within 45 days of the Initial Closing Date and thereafter maintain in
effect a "key person" life insurance policy, payable to the Company, on the life
of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (so long as he remains an employee of the Company), in the
amount of $1,000,000. The Company shall not cause or permit any assignment or
change in beneficiary and shall not borrow against any such policy. If requested
by Purchasers holding at least a majority of the outstanding Purchased Shares,
the Company will add one designee of such Purchasers as a notice party for each
such policy and shall request that the issuer of each policy provide such
designee with ten (10) days' notice before such policy is terminated (for
failure to pay premiums or otherwise) or assigned or before any change is made
in the beneficiary thereof.
4.05 Inspection, Consultation and Advice. The Company shall permit and
cause each of its subsidiaries (if any) to permit each Purchaser and such
persons as it may designate, at such Purchaser's expense, to visit and inspect
any of the properties of the Company and its subsidiaries, examine their books
and take copies and extracts therefrom, discuss the affairs, finances and
accounts of the Company and its subsidiaries with their officers, employees and
public accountants (and the Company hereby authorizes said accountants to
discuss with such Purchaser and such designees such affairs, finances and
accounts), and consult with and advise the management of the Company and its
subsidiaries as to their affairs, finances and accounts, all at reasonable times
and upon reasonable notice.
Page 47 of 70
4.06 Restrictive Agreements Prohibited. Neither the Company nor any of its
subsidiaries shall become a party to any agreement which by its terms restricts
the Company's performance of this Agreement, the Registration Rights Agreement,
the Stockholders' Agreement or the Charter.
4.07 Transactions with Affiliates. Except for transactions contemplated by
this Agreement or as otherwise approved by the Board of Directors, neither the
Company nor any of its subsidiaries shall enter into any transaction with any
director, officer, employee or holder of more than 5% of the outstanding capital
stock of any class or series of capital stock of the Company or any of its
subsidiaries, member of the family of any such person, or any corporation,
partnership, trust or other entity in which any such person, or member of the
family of any such person, is a director, officer, trustee, partner or holder of
more than 5% of the outstanding capital stock thereof, except for transactions
on customary terms related to such person's employment.
4.08 Expenses of Directors. The Company shall promptly reimburse in full,
each director of the Company who is not an employee of the Company and who was
elected as a director solely or in part by the holders of Series A Convertible
Preferred Stock, for all of his or her reasonable out-of-pocket expenses
incurred in attending each meeting of the Board of Directors of the Company or
any Committee thereof.
4.09 Board of Directors Meetings. The Company shall use its best efforts
to ensure that meetings of its Board of Directors are held at least four times
each year and at least once each quarter.
4.10 Compensation. The Company shall not pay to its management
compensation in excess of that compensation customarily paid to management in
companies of similar size, of similar maturity, and in similar businesses
without the unanimous written consent of those members of the Company's Board of
Directors elected solely by the holders of Series A Convertible Preferred Stock.
4.11 By-laws. The Company shall use its best efforts, as promptly as
reasonably practicable after the Initial Closing Date, to cause its By-laws to
provide that, unless otherwise required by the laws of the State of Delaware,
any two directors shall have the right to call a meeting of the Board of
Directors. The Company shall at all times maintain provisions in its By-laws
and/or Charter indemnifying all directors against liability and absolving all
directors from liability to the Company and its stockholders to the maximum
extent permitted under the laws of the State of Delaware.
4.12 Reserved Employee Shares. From and after the Closing Dates
contemplated by this Agreement, the Company shall cause to be reserved for
issuance to directors, officers, employees and consultants of the Company on the
date hereof at least the same percentage of the fully diluted capital stock of
the Company as existed immediately prior to the Initial Closing Date, and the
Company shall also cause to be reserved for issuance to directors, officers,
employees and consultants of the Company commencing such relationship with the
Company after the date hereof an additional 5% of the fully diluted capital
stock of the Company (collectively, the "Reserved Employee Shares"), such
Reserved Employee Shares to be issued at a price equal to or greater than the
Series A Conversion Price (as defined in paragraph 6 of the Company's
Certificate of Designations filed with the Secretary of State of the State of
Delaware on the date hereof), pursuant to stock purchase, stock grant or stock
option arrangements pursuant to which such Reserved Employee Shares will not
become fully exercisable less than three years nor more than five years from the
date of such
Page 48 of 70
grant without the unanimous written consent of those members of the Company's
Board of Directors elected solely by the holders of Series A Convertible
Preferred Stock.
4.13 Employee Confidentiality Agreements. The Company shall use its best
efforts to obtain, and shall cause its subsidiaries (if any) to use their best
efforts to obtain, Confidentiality Agreement from all future officers, key
employees and other employees who will have access to confidential information
of the Company or any of its subsidiaries, upon their employment by the Company
or any of its subsidiaries.
4.14 Compliance with Laws. The Company shall comply, and cause each
subsidiary to comply, with all applicable laws, rules, regulations and orders,
noncompliance with which could materially adversely affect its business or
condition, financial or otherwise.
4.15 Keeping of Records and Books of Account. The Company shall keep, and
cause each subsidiary to keep, adequate records and books of account, in which
complete entries will be made in accordance with generally accepted accounting
principles consistently applied, reflecting all financial transactions of the
Company and such subsidiary, and in which, for each fiscal year, all proper
reserves for depreciation, depletion, obsolescence, amortization, taxes, bad
debts and other purposes in connection with its business shall be made.
4.16 U.S. Real Property Interest Statement. The Company shall provide
prompt written notice to each Purchaser following any "determination date" (as
defined in Treasury Regulation Section 1.897-2(c)(i)) on which the Company
becomes a United States real property holding corporation. In addition, upon a
written request by any Purchaser, the Company shall provide such Purchaser with
a written statement informing the Purchaser whether such Purchaser's interest in
the Company constitutes a U.S. real property interest. The Company's
determination shall comply with the requirements of Treasury Regulation Section
1.897-2(h)(1) or any successor regulation, and the Company shall provide timely
notice to the Internal Revenue Service, in accordance with and to the extent
required by Treasury Regulation Section 1.8972(h)(2) or any successor
regulation, that such statement has been made. The Company's written statement
to any Purchaser shall be delivered to such Purchaser as soon as practicable but
in any event within thirty (30) days of such Purchaser's written request
therefor. The Company's obligation to furnish a written statement pursuant to
this Section 4.16 shall continue notwithstanding the fact that a class of the
Company's stock may be regularly traded on an established securities market.
4.17 Compensation and Audit Committees. The Company shall, by amending its
By-laws or otherwise, establish and maintain a Compensation Committee and an
Audit Committee of the Board of Directors, each of which shall consist of at
least three directors. The three directors serving on the Compensation Committee
of the Company shall initially be ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and one
other director of the Company unaffiliated with management of the Company who
shall be appointed after the Initial Closing Date. Except for arrangements
existing on the date hereof, no compensation or other remuneration at an annual
rate in excess of $100,000 shall be paid to, and no capital stock of the Company
shall be issued or granted to, any director, officer or employee of, or any
consultant or adviser to, the Company or any of its subsidiaries, without the
approval of the Compensation Committee. No employee stock option plan, employee
stock purchase plan, employee restricted stock plan or other employee stock plan
shall be established without the approval of the Compensation Committee. The
Audit Committee shall select (subject to the approval of the Board of Directors)
and provide instructions to the Company's auditors.
Page 49 of 70
4.18 Listing. The Company shall use its best efforts to comply with all
requirements of the National Association of Securities Dealers, Inc. (the
"NASD") and the Nasdaq SmallCap Market with respect to the issuance of the
Shares and the listing of the Company's Common Stock on the Nasdaq SmallCap
Market.
4.19 Termination of Covenants. The covenants set forth herein shall
terminate and be of no further force or effect as to each of the Purchasers when
such Purchaser no longer holds any shares of Series A Convertible Preferred
Stock.
ARTICLE V
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE PURCHASERS
(a) Each of the Purchasers, severally and not jointly, represents
and warrants to, and covenants with, the Company, as of the date hereof, the
Initial Closing Date and as of the Additional Closing Date, that: (i) it will
acquire the Purchased Shares to be acquired by it for its own account and that
the Purchased Shares are being and will be acquired by it for the purpose of
investment and not with a view to distribution or resale thereof; (ii) the
execution of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary action on the
part of the Purchaser, and this Agreement has been duly executed and delivered,
and constitutes a valid, legal, binding and enforceable agreement of the
Purchaser; (iii) it is an "accredited investor" within the meaning of Rule 501
of Regulation D promulgated under the Securities Act and was not organized for
the specific purpose of acquiring the Purchased Shares; (iv) it has taken no
action which would give rise to any claim by any other person for any brokerage
commissions, finders' fees or the like relating to this Agreement or the
transactions contemplated hereby, (v) it has sufficient knowledge and experience
in investing in companies similar to the Company in terms of the Company's stage
of development so as to be able to evaluate the risks and merits of its
investment in the Company and it is able financially to bear the risks thereof;
(vi) without limiting the representations or warranties of the Company in
Article III hereof, it has had an opportunity to discuss the Company's business,
management and financial affairs with the Company's management, and it has been
furnished with copies of documents which it has requested; and (vii) it is not
an "Interested Stockholder" of the Company as that term is defined in the
Company's Charter and Section 203 of the Delaware General Corporation law.
(b) Each of the Purchasers, severally and not jointly, further
represents and warrants to, and covenants with, the Company that (i) the
Purchaser has full right, power, authority and capacity to enter into this
Agreement and to consummate the transactions contemplated hereby and has taken
all necessary action to authorize the execution, delivery and performance of
this Agreement, and (ii) upon the execution and delivery of this Agreement, this
Agreement shall constitute a valid and binding obligation of the Purchaser
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and except as the indemnification agreements of the Purchaser
herein may be legally unenforceable.
(c) Each of the Purchasers further represents that it understands
and agrees that, until registered under the Securities Act or transferred
pursuant to the provisions
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of Rule 144 as promulgated by the Commission, all certificates evidencing any of
the Shares, whether upon initial issuance or upon any transfer thereof, shall
bear a legend, prominently stamped or printed thereon, reading substantially as
follows, together with any legends that may be required under applicable state
securities laws:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933 or applicable state securities laws. These
securities have been acquired for investment and not with a view to distribution
or resale, and may not be sold, mortgaged, pledged, hypothecated or otherwise
transferred [for non U.S. persons add: in the United States or to U.S. persons]
without an effective registration statement for such securities under the
Securities Act of 1933 and applicable state securities laws, or the availability
of an exemption from the registration provisions of the Securities Act of 1933
and applicable state securities laws."
ARTICLE VI
RIGHT OF FIRST REFUSAL
6.01 Right of First Refusal. The Company shall not issue, sell or
exchange, agree or obligate itself to issue, sell or exchange, or reserve or set
aside for issuance, sale or exchange, for a price equal to or less than the then
applicable "Series A Conversion Price" (as defined in paragraph 6 of the
Company's Certificate of Designations filed with the Secretary of State of the
State of Delaware on the date hereof) any (i) shares of Common Stock, (ii) any
other equity security of the Company, including, without limitation, shares of
Series A Preferred Stock, (iii) any debt security which by its terms is
convertible into or exchangeable for any equity security of the Company, (iv)
any security of the Company that is a combination of debt and equity, or (v) any
option, warrant or other right to subscribe for, purchase or otherwise acquire
any such equity security or any such debt security of the Company, unless in
each case the Company shall have first offered to sell such securities (the
"Offered Securities") to the Purchasers as follows: The Company shall offer to
sell to each Purchaser (a) that portion of the Offered Securities as the number
of shares of Purchased Shares and Converted Shares then held by such Purchaser,
as the case may be, bears to the total number of shares of Common Stock,
Purchased Shares and Converted Shares outstanding on such date (the "Basic
Amount"), and (b) such additional portion of the Offered Securities as such
Purchaser shall indicate it will purchase should the other Purchasers subscribe
for less than their Basic Amounts (the "Undersubscription Amount"), at a price
and on such other terms as shall have been specified by the Company in writing
delivered to such Purchaser (the "Offer"), which Offer by its terms shall remain
open and irrevocable for a period of twenty (20) days from receipt of the Offer.
6.02 Notice of Acceptance. Notice of each Purchaser's intention to accept,
in whole or in part, any Offer made pursuant to Section 6.01 shall be evidenced
by a writing signed by such Purchaser and delivered to the Company prior to the
end of the 20-day period of such Offer, setting forth such of the Purchaser's
Basic Amount as such Purchaser elects to purchase and, if such Purchaser shall
elect to purchase all of its Basic Amount, such Undersubscription Amount as such
Purchaser shall elect to purchase (the "Notice of Acceptance"). If the Basic
Amounts subscribed for by all Purchasers are less than the total Offered
Securities, then each Purchaser who has set forth Undersubscription Amounts in
its Notice of Acceptance shall be entitled to purchase, in addition to the Basic
Amounts subscribed for, all Undersubscription Amounts it has subscribed for;
provided, however, that should the Undersubscription Amounts subscribed for
exceed the difference between the Offered Securities and the Basic Amounts
subscribed for (the "Available Undersubscription
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Amount"), each Purchaser who has subscribed for any Undersubscription Amount
shall be entitled to purchase only that portion of the Available
Undersubscription Amount as the Undersubscription Amount subscribed for by such
Purchaser bears to the total Undersubscription Amounts subscribed for by all
Purchasers, subject to rounding by the Board of Directors to the extent it
reasonably deems necessary.
6.03 Conditions to Acceptances and Purchase.
(a) Permitted Sales of Refused Securities. In the event that Notices
of Acceptance are not given by the Purchasers in respect of all the Offered
Securities, the Company shall have seventy-five (75) days from the expiration of
the period set forth in Section 6.01 to close the sale of all or any part of
such Offered Securities as to which a Notice of Acceptance has not been given by
the Purchasers (the "Refused Securities") to the Person or Persons specified in
the Offer, but only for cash and/or debt securities and otherwise in all
respects upon terms and conditions, including, without limitation, unit price
and interest rates, which are no more favorable, in the aggregate, to such other
Person or Persons or less favorable to the Company than those set forth in the
Offer.
(b) Reduction in Amount of Offered Securities. In the event the
Company shall propose to sell less than all the Refused Securities (any such
sale to be in the manner and on the terms specified in Section 6.03(a) above),
then each Purchaser may, at its sole option and in its sole discretion, reduce
the number, or other units, of the Offered Securities specified in its
respective Notices of Acceptance to an amount which shall be not less than the
amount of the Offered Securities which the Purchaser elected to purchase
pursuant to Section 6.02 multiplied by a fraction, (i) the numerator of which
shall be the amount of Offered Securities which the Company actually proposes to
sell, and (ii) the denominator of which shall be the amount of all Offered
Securities. In the event that any Purchaser so elects to reduce the number or
amount of Offered Securities specified in its respective Notices of Acceptance,
the Company may not sell or otherwise dispose of more than the reduced amount of
the Offered Securities until such securities have again been offered to the
Purchasers in accordance with Section 6.01.
(c) Closing. Upon the closing, which shall include full payment to
the Company, of the sale to such other Person or Persons of all or less than all
the Refused Securities, the Purchasers shall purchase from the Company, and the
Company shall sell to the Purchasers, the number of Offered Securities specified
in the Notices of Acceptance, as reduced pursuant to Section 6.03(b) if the
Purchasers have so elected, upon the terms and conditions specified in the
Offer. The purchase by the Purchasers of any Offered Securities is subject in
all cases to the preparation, execution and delivery by the Company and the
Purchasers of a purchase agreement relating to such Offered Securities
reasonably satisfactory in form and substance to the Purchasers and their
respective counsel.
6.04 Further Sale. In each case, any Offered Securities not purchased by
the Purchasers or other Person or Persons in accordance with Section 6.03 may
not be sold or otherwise disposed of until they are again offered to the
Purchasers under the procedures specified in Sections 6.01, 6.02 and 6.03.
6.05 Exception. The rights of the Purchasers under this Article VI shall
not apply to:
(a) Common Stock issued as a stock dividend to holders of Common
Stock or upon any subdivision or combination of shares of Common Stock,
Page 52 of 70
(b) Series A Preferred Stock issued as a dividend to holders of
Series A Preferred Stock upon any subdivision or combination of shares of
Series A Preferred Stock,
(c) the Converted Shares,
(d) the Additional Preferred Shares,
(e) any Reserved Employee Shares,
(f) Common Stock issued pursuant to the exercise or conversion of
options, warrants and convertible securities outstanding on the Initial
Closing Date,
(g) Common Stock issued pursuant to the acquisition of another
entity by the Company by merger (whereby the Company or its shareholders
immediately prior to such merger own no less than 51% of the voting power
of the acquired entity or the surviving corporation after such merger) or
purchase of substantially all of its stock or assets (including the Common
Stock to be issued to Argosy Health, L.P.), and
(h) any securities issued pursuant to a firm commitment underwritten
public offering.
ARTICLE VII
DEFINITIONS AND ACCOUNTING TERMS
7.01 Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Additional Preferred Shares" shall have the meaning attributable to
it in Section 1.02 of the Agreement.
"Agreement" means this Series A Convertible Preferred Stock Purchase
Agreement as from time to time amended and in effect between the parties,
including all Exhibits and Schedules hereto.
"Benefit Arrangement" means each employment, severance or other
similar contract, arrangement or policy (written or oral) and each plan or
arrangement (written or oral) providing for severance benefits, insurance
coverage (including any self-insured arrangements), workers' compensation,
disability benefits, supplemental unemployment benefits, vacation
benefits, retirement benefits or for deferred compensation,
profit-sharing, bonuses, stock options, stock appreciation rights or other
forms of incentive compensation or post-retirement insurance, compensation
or benefits which (i) is not an Employee Plan and (ii) covers any employee
or former employee of the Company.
"Board of Directors" means the board of directors of the Company as
constituted from time to time.
Page 53 of 70
"Common Stock" includes (a) the Company's Common Stock, $.001 par
value, as authorized on the date of this Agreement, (b) any other capital
stock of any class or classes (however designated) of the Company,
authorized on or after the date hereof, the holders of which shall have
the right, without limitation as to amount, either to all or to a share of
the balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to
preference, and the holders of which shall ordinarily, in the absence of
contingencies or in the absence of any provision to the contrary in the
Company's Charter be entitled to vote for the election of a majority of
directors of the Company (even though the right so to vote has been
suspended by the happening of such a contingency or provision), and (c)
any other securities into which or for which any of the securities
described in (a) or (b) may be converted or exchanged pursuant to a plan
of recapitalization, reorganization, merger, sale of assets or otherwise.
"Company" means and shall include Occupational Health +
Rehabilitation Inc, a Delaware corporation and its predecessors,
successors and assigns.
"Consolidated" and "consolidating" when used with reference to any
term defined herein mean that term as applied to the accounts of the
Company and its Subsidiaries consolidated in accordance with generally
accepted accounting principles.
"Converted Shares" shall have that meaning attributable to it in
Section 1.03 of this Agreement.
"Employee Plan" means each "employee benefit plan," as such term is
defined in Section 3(3) of ERISA, that (A)(i) is subject to any provision
of ERISA and (ii) is maintained or contributed to by the Company, or
(B)(i) is subject to any provision of Title IV of ERISA and (ii) is
maintained or contributed to by any of the Company's ERISA Affiliates.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"ERISA Affiliate" of any entity means any other entity that,
together with such entity, would be treated as a single employer under
Section 414 of the Code.
"Initial Closing" and "Initial Closing Date" shall have the
respective meanings attributable to them in Section 1.05 of this
Agreement.
"Initial Preferred Shares" shall have the meaning attributable to it
in Section 1.01 of this Agreement.
"Multiemployer Plan" means each Employee Plan that is a
multiemployer plan, as defined in Section 3(37) of ERISA.
"Person" means an individual, corporation, partnership, joint
venture, trust, limited liability company or unincorporated organization,
or a government or any agency or political subdivision thereof.
"Purchased Shares" shall have that meaning attributable to it in
Section 1.02 of this Agreement.
Page 54 of 70
"Purchaser" and "Purchasers" shall have that meaning attributable to
it in Section 1.01 of this Agreement and shall include the original
Purchasers and also any other holder of any of the Shares.
"Reserved Employee Shares" shall have the meaning attributable to it
in Section 4.12 of this Agreement.
"Securities Act" means the Securities Act of 1933, or any similar
Federal statute, and the rules and regulations of the Securities and
Exchange Commission (or of any other Federal agency then administering the
Securities Act) thereunder, all as the same shall be in effect at the
time.
"Series A Preferred Stock" means the Series A Convertible Preferred
Stock of the Company, $.001 par value, having the rights, powers,
privileges and preferences set forth in Exhibit 1.01A hereto.
"Shares" shall have that meaning attributable to it in Section 1.04
of this Agreement.
"Subsidiary" or "Subsidiaries" means any Person of which the Company
and/or any of its other subsidiaries (as herein defined) directly or
indirectly owns at the time at least fifty percent (50%) of the
outstanding equity interest of such Person other than directors'
qualifying shares.
7.02 Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles consistently applied, and all financial data submitted pursuant to
this Agreement shall be prepared in accordance with such principles.
ARTICLE VIII
MISCELLANEOUS
8.01 No Waiver; Cumulative Remedies. No failure or delay on the part of
any party to this Agreement in exercising any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy hereunder. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
8.02 Amendments, Waivers and Consents. Any provision in this Agreement to
the contrary notwithstanding, and except as hereinafter provided, changes in or
additions to this Agreement may be made, and compliance with any covenant or
provision set forth herein may be omitted or waived, if the Company (i) shall
obtain consent thereto in writing from the holder or holders of at least a
majority in interest of the Shares, and (ii) shall deliver copies of such
consent in writing to any holders who did not execute such consent. Any waiver
or consent may be given subject to satisfaction of conditions stated therein and
any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given. Notwithstanding anything to the contrary
contained herein, any amendment which (x) increases any Purchaser's obligations
hereunder or increases the purchase price or number of Additional Preferred
Shares, or (y) grants to any one or more Purchasers any rights more
Page 55 of 70
favorable than any rights granted to all other Purchasers hereunder, must be
approved by each Purchaser so as to be effective against such Purchaser.
8.03 Addresses for Notices. All notices, requests, demands and other
communications provided for hereunder shall be in writing (including electronic
communication) and delivered personally, or by overnight courier, or by
facsimile or other electronic means or sent by certified or registered United
States mail, postage prepaid, return receipt requested and addressed as follows:
If to any holder of the Shares: at such holder's address for notice as set
forth in the register maintained by the Company, or, as to each of the
foregoing, at the addresses set forth on Schedule I hereto or at such other
address as shall be designated by such Person in a written notice to the other
parties complying as to delivery with the terms of this Section, with a copy to
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, High Street Tower, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
If to the Company: at the address set forth on page 1 hereof, or at such
other address as shall be designated by the Company in a written notice to the
other parties complying as to delivery with the terms of this Section, with a
copy to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
All such notices, requests, demands and other communications shall be
effective three days after deposited in the mails or upon receipt when delivered
electronically, by facsimile, by hand or by overnight courier, respectively,
addressed as aforesaid, unless otherwise provided herein.
8.04 Costs, Expenses and Taxes. The Company agrees to pay in connection
with the preparation, execution and delivery of this Agreement and the issuance
of the Purchased Shares, the reasonable fees and out-of-pocket expenses
collectively (not to exceed $25,000) of ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, special
counsel for the Purchasers, and other consultants. In addition, the Company
shall pay any and all stamp and other taxes payable or determined to be payable
in connection with the execution and delivery of this Agreement, the issuance of
the Purchased Shares and the other instruments and documents to be delivered
hereunder or thereunder, and agrees to save the Purchasers harmless from and
against any and all liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes.
8.05 Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the Company and the Purchasers and their respective
heirs, successors and assigns, except that the Company shall not have the right
to delegate any of its respective obligations hereunder or to assign its
respective rights hereunder or any interest herein without the prior written
consent of the holders of at least a majority in interest of the Shares.
8.06 Survival of Representations and Warranties. All representations and
warranties made in this Agreement, the Shares, or any other instrument or
document delivered in connection herewith or therewith, shall survive the
execution and delivery hereof or thereof.
8.07 Prior Agreements. This Agreement constitutes the entire agreement
between the parties and supersedes any prior understandings or agreements
concerning the purchase and sale of the Shares.
Page 56 of 70
8.08 Severability. The provisions of this Agreement and the terms of the
Series A Preferred Stock are severable and, in the event that any court of
competent jurisdiction shall determine that any one or more of the provisions or
part of a provision contained in this Agreement or the Series A Preferred Stock
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision or part of a provision of this Agreement or the terms of the
Series A Preferred Stock; but this Agreement and the terms of the Series A
Preferred Stock shall be reformed and construed as if such invalid or illegal or
unenforceable provision, or part of a provision, had never been contained
herein, and such provisions or part reformed so that it would be valid, legal
and enforceable to the maximum extent possible.
8.09 Governing Law. This Agreement shall be construed and enforced in
accordance with and governed by the General Corporation Law of the State of
Delaware as to matters within the scope thereof, and as to all other matters
shall be governed by and construed in accordance with the internal laws of the
Commonwealth of Massachusetts.
8.10 Headings. Article, Section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
8.11 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.12 Further Assurances. From and after the date of this Agreement, upon
the request of any Purchaser or the Company, the Company and the Purchasers
shall execute and deliver such instruments, documents and other writings as may
be reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement and all ancillary documents,
instruments or certificates delivered therewith and the Shares.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
Page 57 of 70
IN WITNESS WHEREOF, the parties hereto have caused this Series A Preferred
Stock Purchase Agreement to be executed as of the date first above written.
THE COMPANY: PURCHASERS:
OCCUPATIONAL HEALTH + ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ STRATEGIC
REHABILITATION INC PARTNERS FUND, L.P.
By: ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Strategic Partners, L.P.
By:_____________________________ By:_________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Title: General Partner
President and Chief Executive
Officer
STRATEGIC ASSOCIATES, L.P.
By: ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Company, LLC
By:_________________________________________
Title: Managing Member
AXA U. S. GROWTH FUND, LLC
By:_________________________________________
Title: Managing Member
U.S. GROWTH FUND PARTNERS, C.V.
By:_________________________________________
Title: General Partner
DOUBLE BLACK DIAMOND II, LLC
By:_________________________________________
Title: General Partner
Page 58 of 70
ALMANORI LIMITED
By:_________________________________________
Title: Attorney-in-Fact
THE VENTURE CAPITAL FUND OF
NEW ENGLAND III, L.P.
By: FH & Co. III, L.P., Its General Partner
By:_________________________________________
BANCBOSTON VENTURES, INC.
By:_________________________________________
VENROCK ASSOCIATES II, L.P.
By:_________________________________________
ASSET MANAGEMENT ASSOCIATES,
1989, L.P.
By: AMC Partners 89, L.P., General Partner
By:_________________________________________
Page 59 of 70
OCCUPATIONAL HEALTH + REHABILITATION INC.
SCHEDULE I
Initial Additional
Name and Preferred Purchase Preferred Purchase
Address of Purchasers Shares Price Shares Price
--------------------- ------ ----- ------ -----
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Strategic 679,042 $4,074,252 119,750 $718,500
Partners Fund, L.P.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Strategic Associates, L.P. 37,625 225,750 6,750 40,500
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Axa U.S. Growth Fund, LLC 86,667 520,002 15,250 91,500
c/o Partech International
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
U.S. Growth Fund, C.V. 173,334 1,040,004 30,500 183,000
c/o Partech International
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Double Black Diamond, LLC 16,667 100,002 3,000 18,000
c/o Partech International
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Almanori Limited 6,665 39,990 1,250 7,500
c/o Partech International
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Asset Management Associates, 83,333 499,998 14,500 87,000
1989, L.P.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Page 60 of 70
Initial Additional
Name and Preferred Purchase Preferred Purchase
Address of Purchasers Shares Price Shares Price
--------------------- ------ ----- ------ -----
Venrock Associates 66,667 400,002 11,800 70,800
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Venrock Associates II, L.P. 100,000 600,000 17,700 106,200
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
The Venture Capital Fund of 66,667 400,002 11,750 70,500
New England, III, L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
BancBoston Ventures, Inc. 100,000 600,000 17,750 106,500
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
TOTAL 1,416,667 $8,500,002 250,000 $1,500,000
Page 61 of 70