FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): June 29, 1999 (June 14, 1999)
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MEDICONSULT.COM, INC.
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(Exact name of registrant as specified in its charter)
Delaware 333-73059 84-1341886
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Jardine House, 33 Reid St., 4th Floor, Hamilton, Bermuda HM 12
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (441) 296-0736
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Not Applicable
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(Former name or former address, if changed since last report.)
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Item 2. Acquisition or Disposition of Assets.
On June 14, 1999, the Registrant acquired all of the capital stock of
Cyber-Tech, Inc. ("Cyber-Tech") pursuant to a Merger Agreement and Plan of
Reorganization ("Agreement") effective as of June 1, 1999 among the Registrant,
Cyber-Tech and the shareholders of Cyber-Tech (the "Cyber-Tech Transaction").
The merger consideration paid in the Cyber-Tech Transaction consisted of
$3,315,000 in cash and 257,000 shares of Registrant's Common Stock (subject to a
final purchase price adjustment pursuant to Section 2.3 (c) of the Agreement).
The amount of merger consideration was determined by arms-length negotiations
among the parties. In addition, in connection with the merger, Mediconsult.com
(US), Ltd., a wholly-owned subsidiary of the Registrant, entered into
employment, consulting, and non-competition agreements with the two former
shareholders of Cyber-Tech, and one key employee of Cyber-Tech. The Registrant
and the shareholders of Cyber-Tech also entered into an Escrow Agreement with
respect to certain of the shares of the Registrant's Common Stock issued to the
former Cyber-Tech shareholders.
Cyber-Tech has developed and provides high quality content and tools
focused on heart disease and related areas that have attracted a large and
growing number of visitors to the www.heartinfo.com Web site.
The Registrant funded the cash portion of the merger consideration, other
cash payments and the fees and expenses associated with the Cyber-Tech
Transaction through cash on hand.
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Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
The required financial information will be filed by amendment to
this Report as soon as practicable, but in no event later 60 days
after of the filing of this Form 8-K.
(b) Pro Forma Financial Information.
The required pro forma financial information will be filed by
amendment to this Report as soon as practicable, but in no event
later 60 days after of the filing of this Form 8-K.
(c) Exhibits.
99.1 Merger Agreement and Plan of Reorganization, dated June
14, 1999, among Mediconsult.com, Inc., Cyber-Tech, Inc.,
Andre Pilevsky and Daniel Rader, M.D.
99.2 Escrow Agreement, dated June 14, 1999, among
Mediconsult.com, Inc., Cyber-Tech, Inc., Andre Pilevsky,
Daniel Rader, M.D and SunTrust Bank.
99.3 Employment Agreement, dated June 14, 1999, among
Mediconsult.com (US), Ltd. and Andre Pilevsky.
99.4 Employment Agreement, dated June 14, 1999, among
Mediconsult.com (US), Ltd. and Sharon Weinberg.
99.5 Consulting Agreement, dated June 14, 1999, among
Mediconsult.com (US), Ltd. and Daniel Rader, M.D.
99.6 Noncompetition Agreement, dated June 14, 1999, among
Mediconsult.com (US), Ltd. and Andre Pilevsky.
99.7 Noncompetition Agreement, dated June 14, 1999, among
Mediconsult.com (US), Ltd. and Sharon Weinberg.
99.8 Noncompetition Agreement, dated June 14, 1999, among
Mediconsult.com (US), Ltd. and Daniel Rader, M.D.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MEDICONSULT.COM, INC.
By: /s/ E. Michael Ingram
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E. Michael Ingram
Chief Financial Officer
Dated: June 29, 1999
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EXHIBIT INDEX
Exhibit
Number Description
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99.1 Merger Agreement and Plan of Reorganization, dated June 14, 1999,
among Mediconsult.com, Inc., Cyber-tech, Inc., Andre Pilevsky and
Daniel Rader, M.D.
99.2 Escrow Agreement, dated June 14, 1999, among Mediconsult.com, Inc.,
Cyber-Tech, Inc., Andre Pilevsky, Daniel Rader, M.D and SunTrust
Bank.
99.3 Employment Agreement, dated June 14, 1999, among Mediconsult.com
(US), Ltd. and Andre Pilevsky.
99.4 Employment Agreement, dated June 14, 1999, among Mediconsult.com
(US), Ltd. and Sharon Weinberg.
99.5 Consulting Agreement, dated June 14, 1999, among Mediconsult.com
(US), Ltd. and Daniel Rader, M.D.
99.6 Noncompetition Agreement, dated June 14, 1999, among Mediconsult.com
(US), Ltd. and Andre Pilevsky.
99.7 Noncompetition Agreement, dated June 14, 1999, among Mediconsult.com
(US), Ltd. and Sharon Weinberg.
99.8 Noncompetition Agreement, dated June 14, 1999, among Mediconsult.com
(US), Ltd. and Daniel Rader, M.D.
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MERGER AGREEMENT AND PLAN OF REORGANIZATION
AMONG
MEDICONSULT.COM, INC.,
MCNS MERGER SUBSIDIARY II, INC.,
CYBER-TECH, INC.
AND
SHAREHOLDERS OF CYBER-TECH, INC.
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TABLE OF CONTENTS
Page
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ARTICLE 1 DEFINITIONS........................................................1
ARTICLE 2 MERGER AND PLAN OF REORGANIZATION..................................3
2.1 Performance of Agreement of Merger...............................3
2.2 Designation of Shares............................................3
2.3 Conversion of Company Shares.....................................3
2.4 Sub Shares.......................................................4
2.5 Surviving Corporation Documents..................................5
2.6 Directors and Officers of the Surviving Corporation..............5
2.7 Federal Income Tax Status of the Merger..........................5
2.8 Rights of Surviving Corporation..................................5
2.9 Agreement of Merger..............................................5
2.10 Further Assurances...............................................6
2.11 Closing..........................................................6
ARTICLE 3 PAYMENT OF MERGER CONSIDERATION AND ESCROW ARRANGEMENTS............6
3.1 Payment of Merger Consideration..................................6
ARTICLE 4 SCHEDULES..........................................................7
4.1 Schedule of Financial Information................................7
4.2 Schedule of Real and Personal Property (Tangible and Intangible).7
4.3 Schedule of Trade Names, Patents and Copyrights..................7
4.4 Schedule of Insurance Claims and Losses..........................7
4.5 Schedule of Subsidiaries, Joint Ventures and Partnerships........7
4.6 Schedule of Obligations and Guarantees...........................8
4.7 Schedule of Transactions or Arrangements With Affiliates and
Shareholders.....................................................8
4.8 Schedule of Debt, Mortgages and Security Interests...............8
4.9 Schedule of Capitalization and Qualification.....................8
4.10 Schedule of Contracts or Commitments.............................9
4.11 Schedule of Litigation..........................................10
4.12 Schedule of Transactions Occurring Since January 1, 1999........10
4.13 Schedule of Banks...............................................12
4.14 Schedule of Corporate Documents.................................12
4.15 Schedule of Employee Benefit Plan Matters.......................12
4.16 Schedule of Employees...........................................12
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS AND THE
COMPANY ..............................................................12
5.1 Organization and Standing.......................................12
5.2 Capital Structure of Company....................................13
5.3 Financial Statements, etc.......................................13
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5.4 Properties......................................................13
5.5 Patents, Trademarks and other Intellectual Property.............13
5.6 Intangible Properties...........................................14
5.7 Schedules.......................................................14
5.8 Corporate Records...............................................14
5.9 Litigation......................................................15
5.10 Absence of Changes..............................................15
5.11 Correctness of Representations..................................16
5.12 Brokers and Finders.............................................16
5.13 Labor Matters...................................................16
5.14 Contractual Obligations.........................................17
5.15 Power of Attorney...............................................17
5.16 Condition of Equipment..........................................17
5.17 No Default or Waiver of Rights.................................17
5.18 Indebtedness to Officers, Directors and the Shareholders........18
5.19 ERISA...........................................................18
5.20 Employee Benefit Plans..........................................18
5.21 Governmental Approval...........................................18
5.22 Authority; Noncontravention.....................................18
5.23 Taxes...........................................................19
5.24 Environmental Matters...........................................19
5.25 Y2K Compliance..................................................20
5.26 Public Information..............................................20
ARTICLE 6 CONDITIONS TO OBLIGATIONS OF PARENT...............................20
6.1 Compliance by the Shareholders and the Company..................20
6.2 Certificate Regarding Representations and Warranties............21
6.3 Approval of Legal Matters.......................................21
6.4 Escrow Agreement................................................21
6.5 Accuracy of Schedules...........................................21
6.6 Litigation......................................................21
6.7 Resignations of Directors and Officers of the Company...........21
6.8 Employment and Consulting Agreements............................21
6.9 Noncompetition Agreements.......................................22
ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF PARENT..........................22
7.1 Organization and Good Standing..................................22
7.2 Correctness of Representations..................................22
7.3 Authority; Noncontravention.....................................22
7.4 Brokers and Finders.............................................22
7.5 Capitalization and Parent Shares................................23
7.6 Financial Capacity..............................................23
ARTICLE 8 CONDITIONS TO OBLIGATIONS OF THE COMPANY AND SHAREHOLDERS.........23
8.1 Compliance by Parent............................................23
8.2 Certificate Regarding Representations and Warranties............23
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8.3 Escrow Agreement................................................23
8.4 Litigation......................................................23
8.5 Employment Agreements...........................................24
8.6 Noncompetition Agreements.......................................24
8.7 Advisory Board..................................................24
ARTICLE 9 INDEMNIFICATION BY SHAREHOLDERS...................................24
9.1 Indemnification by Shareholders.................................24
9.2 Limitations - Time..............................................24
9.3 Limitations on Amount - Shareholders............................25
9.4 Procedure for Indemnification - Third Party Claims..............25
9.5 Procedure for Indemnification of Other Claims...................26
9.6 Tax Indemnity...................................................26
9.7 Escrow; Remedies Not Exclusive..................................26
ARTICLE 10 MISCELLANEOUS....................................................26
10.1 Actions Pending Closing.........................................26
10.2 Failure of Conditions to Obligations of Parent..................27
10.3 Survival of Representations.....................................28
10.4 Resale of Parent Shares; Securities Act.........................28
10.5 Access and Information..........................................29
10.6 Assignment......................................................29
10.7 Confidentiality of Information..................................29
10.8 Construction....................................................30
10.9 Amendment.......................................................30
10.10 Expenses........................................................30
10.11 Notices.........................................................30
10.12 Counterparts....................................................31
10.13 Entire Agreement................................................31
10.14 Captions and Section Headings...................................31
10.15 Income Tax Filings..............................................32
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MERGER AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT is made and effective as of the __ day of June, 1999 at
12:01 PM, by and among Mediconsult.com, Inc., a Delaware corporation ("Parent"),
MCNS Merger Subsidiary II, Inc., a New Jersey corporation (the "Sub") (Parent
and Sub shall be referred to collectively as "Parent"), Cyber-Tech, Inc., a New
Jersey corporation (the "Company"), and Andre Pilevsky and Daniel J. Rader, M.D.
(individually, a "Shareholder" and collectively, the "Shareholders") who
together are the owners of all of the issued and outstanding shares of capital
stock of the Company.
WHEREAS, the Board of Directors of each of the Sub and the Company believe
that it is in the best interests of each corporation and its shareholders that
the Company combine into a single corporation, with the Sub as the Surviving
Corporation, through the statutory merger of the Company with the Sub (the
"Merger"), and, in furtherance thereof, have approved the merger;
WHEREAS, the Shareholders of the Company and the Sub, upon recommendation
of their respective boards of directors, also have approved the Merger;
WHEREAS, pursuant to the Merger, the issued and outstanding stock of the
Company (the "Shares") shall be exchanged for a combination of cash and shares
of the Common Stock of Parent (the "Parent Shares");
WHEREAS, it is intended that the Merger shall qualify as a tax free
reorganization within the meaning of Section 368(a)(1)(A) and Section
368(a)(2)(D) of the Internal Revenue Code of 1986, as amended (the "Code"), and
all terms and conditions set forth herein shall be interpreted to effectuate
such intent; and
WHEREAS, the parties intend, by executing this agreement, to adopt a plan
of reorganization within the meaning of Section 368(a) of the Code;
NOW, THEREFORE, the parties hereto, intending to be legally bound, for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, hereby agree as follows:
ARTICLE 1
DEFINITIONS
The following terms used in this Agreement shall have the meanings set
forth below:
1.1 Affiliate - Any person, firm, corporation, partnership or association
controlling, controlled by or under common control with a person.
1.2 Agreement - This Merger Agreement and Plan of Reorganization,
including the Schedules delivered pursuant hereto.
1.3 Allocation Percentage - The allocation of Merger Consideration between
the Shareholders as described in Section 2.3(c) hereof.
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1.4 Closing - The closing referred to in Section 2.11 hereof.
1.5 Closing Date - The date referred to in Section 2.11 hereof.
1.6 Code - The Internal Revenue Code of 1986, as amended.
1.7 Company Shares - The shares of voting and non-voting common stock, no
par value, of the Company.
1.8 Effective Date - The date on which the Merger becomes effective under
applicable law pursuant to this Agreement, which subject to the conditions set
forth herein, shall occur no later than July 2, 1999, unless extended by mutual
agreement of the parties.
1.9 Employee Benefit Plan - Any employee benefit plan or plans and any
trust created thereunder that is established or maintained for employees of the
Company whether or not covered by ERISA.
1.10 Environmental Laws - Any and all federal, state, local municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or of
any governmental authority regulating, relating to or imposing liability or
standards conduct concerning environmental protection matters, including,
without limitation, materials, as now or may at any time hereafter be in effect.
1.11 ERISA - The Employee Retirement Income Security Act of 1974, as
amended.
1.12 Financial Statements - (a) The unaudited balance sheets of the
Company as of December 31, 1997 and 1998, and the related statements of income,
retained earnings and cash flows for each of the years then ended, and (b) the
unaudited, internally prepared balance sheet of the Company as of May 31, 1999,
and the related statements of income, retained earnings and cash flows for the
period then ended.
1.13 GAAP - Generally accepted accounting principles in the United States
as in effect on the date of this Agreement.
1.14 Hazardous Materials - Any hazardous materials, hazardous wastes,
hazardous constituents, hazardous or toxic substances and petroleum products
(including crude oil or any fraction thereof) defined or regulated as such in
any law.
1.15 material or materially - What is material for purposes of this
Agreement shall be determined in light of the facts and circumstances of the
matter in question. No particular monetary amount cited in this Agreement shall
be deemed to determine materiality.
1.16 Merger - The merger described in Section 2.1 hereof.
1.17 Merger Consideration - The combination of cash and Parent Shares as
described in Section 2.3(c) of this Agreement.
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1.18 Parent Shares - The shares of voting common stock of Parent, $0.001
par value per share.
1.19 Schedules - Those Schedules referred to in Article 4 and Article 5
hereof.
1.20 Securities Act - The Securities Act of 1933, as amended, and the
rules and regulations of the Securities and Exchange Commission thereunder, as
may be in effect from time to time.
1.21 Sub Shares - The shares of common stock, $0.001 par value per share,
of the Sub.
1.22 Surviving Corporation - From and after the Effective Date, the Sub,
as the surviving corporation in the Merger.
ARTICLE 2
MERGER AND PLAN OF REORGANIZATION
2.1 Performance of Agreement of Merger.
Upon the terms and subject to the conditions hereof, the Company shall be
merged with and into the Sub in accordance with applicable law. The Sub shall be
the Surviving Corporation and continue its corporate existence under the laws of
the State of New Jersey as a wholly-owned subsidiary of Parent, and the separate
corporate existence of the Company shall cease. The Merger shall be effective on
the Effective Date. Prior to the Effective Date, each of the parties hereto
shall take all actions necessary in accordance with applicable law and their
respective Articles of Incorporation and Bylaws to cause the Merger to be
consummated on the Effective Date, including, without limitation, obtaining the
approval of the stockholders of the Sub and the Company as may be required under
applicable law.
2.2 Designation of Shares.
The designation and number of outstanding shares of each class and series
of stock for each of the Sub and the Company are as follows: (i) the Sub has
presently authorized capital stock consisting of one thousand (1,000) Sub Shares
of which one thousand (1,000) Sub Shares are outstanding and are owned by Parent
and (ii) the Company has presently authorized capital stock consisting of 5,000
Company Shares, of which 1960 Company Shares are outstanding and are owned by
the Shareholders.
2.3 Conversion of Company Shares.
(a) Upon the Effective Date, each of the issued and outstanding
Company Shares shall be, by virtue of the Merger and without any action on the
part of the holders thereof, be converted into and represent solely the right to
receive the Merger Consideration. No fractional Parent Shares shall be issued as
a result of the Merger; the number of Parent Shares to be issued to each
Shareholder hereunder shall be rounded up or down, as the case may be, to the
nearest whole number.
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(b) After the Effective Date, each certificate representing Company
Shares shall represent solely the right to receive the Merger Consideration set
forth herein. Until such certificates are surrendered, the Shareholders shall
not be entitled to vote the Parent Shares to which they are entitled pursuant to
this Section 2.3, or to receive distributions or dividends thereon; provided
that upon surrender of such certificates, there shall be paid to the record
holder of the certificates of Parent Shares issued upon such exchange, the
amount (without interest) of any dividends or other distributions which were
declared and paid to shareholders of record subsequent to the Effective Date.
(c) As used herein, "Merger Consideration" shall mean, for each
Company Share outstanding, the result obtained by dividing the aggregate number
of outstanding Company Shares at the Effective Date into the aggregate of (i)
Three Million Three Hundred Thousand Dollars ($3,300,000.00) in cash or
immediately available funds, as adjusted as described below, and (ii) that
number of Parent Shares determined by (A) dividing Three Million Seven Hundred
Fifty Thousand Dollars ($3,750,000.00) by the average of the closing prices of
Parent Shares, as reported in The Wall Street Journal, for each of the twenty
(20) trading days ending on the trading day immediately preceding the Effective
Date (the "Average Closing Price"), (B) less 10,000 Parent Shares. The cash
portion of the Merger Consideration shall be adjusted on a dollar-for-dollar
basis based on the extent to which the "Working Capital" of the Company is
greater or less than zero as of the Effective Date. As used herein, "Working
Capital" shall mean the net amount of working capital assets (cash, cash
equivalents, accounts receivable net of reserves but excluding deferred revenue
less the amount of all liabilities of the Company (accounts payable, taxes due,
liabilities related to deferred revenue, other liabilities, debt), determined in
accordance with GAAP. Immediately prior to the Effective Date, the parties shall
jointly review the balance sheet of the Company, estimate the amount of Working
Capital of the Company as of the Effective Date and adjust the cash
consideration accordingly pursuant to the provisions of this Agreement. After
the Closing, Parent shall cause a review of the books and records of the Company
to be performed as promptly as possible and prepare a balance sheet as of the
Effective Date. The Shareholders or the Parent, as the case may be, shall pay in
cash to the other such amount by which the final Working Capital is less or
greater than the estimated amount used at Closing. If the Shareholders dispute
the balance sheet prepared by Parent, they shall notify Parent in writing of
such fact, indicating the reason or reasons therefor. If the parties are unable
to resolve the dispute within thirty (30) days following the date of notice of
dispute, either party may submit the matter to arbitration by a nationally
recognized accounting firm not having a current business relationship with any
party hereto and the findings of such arbitrator shall be binding on the
parties. The fees and expenses of such arbitrator shall be divided evenly by the
parties unless the arbitrator shall determine that the position of one of the
parties was unsupported by GAAP or this Agreement, in which case the fees and
expenses shall be paid by that party. The aggregate Merger Consideration shall
be allocated 51% to Andre Pilevsky and 49% to Daniel J. Rader, based on the
respective ownership percentages of the Company Stock held by the Shareholders
(the "Allocation Percentage").
2.4 Sub Shares.
Upon the Effective Date, each of the issued and outstanding Sub Shares
shall continue unchanged and shall evidence one share of the common stock of the
Surviving Corporation.
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2.5 Surviving Corporation Documents.
The Certificate of Incorporation of Sub as in effect immediately prior to
the Effective Date shall be the Certificate of Incorporation of the Surviving
Corporation at the Effective Date and shall continue in effect until the same
shall be further altered, amended or repealed as therein provided or as provided
by law. The Bylaws of the Sub as in effect immediately prior to the Effective
Date shall, on the Effective Date, be the Bylaws of the Surviving Corporation
and shall continue in effect until the same shall be further altered, amended or
repealed as therein provided or as provided by law.
2.6 Directors and Officers of the Surviving Corporation.
The directors and officers of the Surviving Corporation at the Effective
Date shall be those of the Sub immediately preceding the Merger. Such directors
and officers will hold office until their successors are duly elected and
qualified or their earlier resignation or removal.
2.7 Federal Income Tax Status of the Merger.
It is the mutual intention of the parties hereto that, subject to the
provisions of this Agreement, the Merger will be consummated in accordance with
the laws of the State of Delaware and the State of New Jersey and that the
Merger shall constitute a reorganization within the meaning of Sections
368(a)(1)(A) and (a)(2)(D) of the Code; provided, however, that neither the Sub
nor Company shall be required to take any action (or be precluded from taking
any action not otherwise prohibited hereunder) which would result in any
significant actual or potential cause for delay in consummating the Merger. It
shall not be a condition to the Merger that any party receive an Internal
Revenue Service ruling as to the federal income tax consequences of the Merger
and each party hereto shall look to their respective advisors for advice
concerning the tax consequences of the Merger.
2.8 Rights of Surviving Corporation.
Upon consummation of the Merger, the Surviving Corporation shall possess
all the rights, privileges, powers and franchises of a public as well as a
private nature, and be subject to all the restrictions, obligations,
disabilities and duties, each of Sub and Company; and all property, real,
personal and mixed, and all debts, choses in action and other interests due or
belonging to Sub and Company shall be vested in the Surviving Corporation; and
all properties, rights, privileges, powers and franchises, and all and every
other interest shall be thereafter the property of the Surviving Corporation as
they were of Sub and Company, and the title to any real estate vested by deed or
otherwise, in either corporation, shall not revert or in any way be impaired by
reason of the Merger; but all rights of creditors and all liens upon any
property of either corporation shall be preserved unimpaired, and all debts,
liabilities and duties of each of the corporations shall thenceforth attach to
the Surviving Corporation, and may be enforced against it to the same extent as
if said debts, liabilities and duties had been incurred by it.
2.9 Agreement of Merger.
All documents required to effect the Merger under the Business Corporation
Law of New Jersey shall be authorized, executed and delivered by and between Sub
and Company and filed,
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together with appropriate officers' certificates of each corporation, to effect
the Merger as of the Effective Date.
2.10 Further Assurances.
Prior to and from and after the Effective Date, Company and the Sub shall
take all such action as shall be necessary or appropriate in order to effectuate
the Merger. If at any time the Surviving Corporation shall consider or be
advised that any further assignments or assurances in law or any other actions
are necessary, appropriate or desirable to vest in said corporation, according
to the terms hereof, the title to any property or rights of Company, the last
acting officers of Company or the corresponding officers of the Surviving
Corporation shall and will execute and make all such proper assignments and
assurances and take all action necessary and proper to vest title in such
property or rights in the Surviving Corporation, and otherwise to carry out the
purposes of this Agreement.
2.11 Closing.
The Closing of the transactions contemplated herein shall occur at the
offices of Brach, Eichler, 101 Eisenhower Parkway, Roseland, New Jersey, at
12:01 p.m. on the Effective Date or at such other time and place as shall be
mutually agreed upon by the parties hereto.
ARTICLE 3
PAYMENT OF MERGER CONSIDERATION
AND ESCROW ARRANGEMENTS
3.1 Payment of Merger Consideration.
(a) The parties acknowledge that the sum of $50,000 has been
advanced to the Company as an advance on amounts to be paid to the Shareholders
under this Agreement. Such amount may be retained by the Company in the event
this Agreement is terminated prior to Closing.
(b) At Closing, the cash portion of the Merger Consideration, net of
the deposit described in paragraph (a) above and with such adjustment for
estimated Working Capital contemplated by Section 2.3(c) hereof, shall be paid
by Parent to the Shareholders, by certified or cashiers check, or other check
acceptable to the Shareholders in accordance with the Allocation Percentage.
(c) At Closing, the portion of Merger Consideration consisting of
Parent Shares shall be delivered as follows:
(i) 25% of such amount to be delivered to the Escrow Agent to
be held under the Escrow Agreement; and
(ii) the balance of Parent Shares shall be delivered by Parent
to the Shareholders, in accordance with the Allocation Percentage, to be
held by them pursuant to Section 10.4 below.
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ARTICLE 4
SCHEDULES
Contemporaneously with or prior to the execution of this Agreement, the
Shareholders have caused or will cause the Company to furnish the Schedules set
forth below.
4.1 Schedule of Financial Information.
Containing the Financial Statements of the Company.
4.2 Schedule of Real and Personal Property (Tangible and Intangible).
Containing a list and brief description of all real property owned by or
leased to the Company, including all plants and structures located thereon, and
all material machinery, vehicles and equipment owned by or leased to the Company
and all intellectual property (not otherwise listed in Schedule 4.3), including,
without limitation, software and documentation, owned or licensed by the
Company.
4.3 Schedule of Trade Names, Patents and Copyrights.
Containing a list of all patents, patent applications, copyrights,
copyright applications, trade names, trademarks, trademark registrations,
trademark applications, and trade secrets or processes used or useful in the
business of the Company that are owned by or registered in the name of the
Company or to which the Company has any rights as licensee or otherwise, giving
in each case a brief description thereof including the terms and any such
license or other arrangement, together with true and legible copies of all
applications, registrations and license agreements relating to any item
described or referred to in such Schedule.
4.4 Schedule of Insurance Claims and Losses.
Consisting of a detailed listing and a general description of all claims
asserted and losses incurred by the Company or any of its subsidiaries regarding
general liability, product liability, automobile liability and workers'
compensation coverage for the three most recent calendar or fiscal years
(whichever is available) and any interim period of the Company occurring prior
to the Closing Date.
4.5 Schedule of Subsidiaries, Joint Ventures and Partnerships.
Containing a list of all subsidiaries of the Company indicating the:
(a) capital structure and percentage of ownership by the Company;
(b) state or jurisdiction of incorporation and where authorized to
do business;
(c) officers and directors;
(d) location of principal place of business and nature of business;
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(e) location of the corporate records of each such subsidiary, and
including a list of all joint ventures, partnerships or other associations with
which the Company or any of its subsidiaries is associated or in which it has an
interest, giving in each case the nature of participation, percentage of
interest and location of business and furnishing copies of the governing
instruments.
4.6 Schedule of Obligations and Guarantees.
Listing any agreements, contract, or understanding, formal or informal,
under the terms of which the Company is, directly or indirectly, liable upon or
with respect thereto (by discount, repurchase agreement or otherwise), or is
obligated in any other way to provide funds in respect of, or to guarantee or
assume, any debt or obligation of any other corporation or any other person,
association, partnership, joint venture or other entity, except endorsements
made in the ordinary course of business in connection with the deposit of items
for collection, together with true and legible copies of all agreements or
instruments creating or evidencing any obligation listed or referred to in such
Schedule.
4.7 Schedule of Transactions or Arrangements With Affiliates and
Shareholders.
Listing any officer, director or Shareholder of the Company or any
Affiliate of any such officer, director or Shareholder who is presently,
directly or indirectly, a party to any transaction with the Company and
accounting a brief description of each transaction, including without
limitation:
(a) any contract, agreement or other arrangement providing for the
employment of, the furnishing of services by, the rental or real or personal
property from, or otherwise requiring payments to any such officer, director,
shareholder or Affiliate;
(b) any agreements among the Shareholders regarding voting rights,
transferability or repurchase of any share of capital stock or other securities
of the Company; and
(c) any loans or advances to or from the Company, giving for each
the principal amount outstanding, interest rate, maturity date and security
therefor.
4.8 Schedule of Debt, Mortgages and Security Interests.
Listing and briefly describing the material terms, provisions and
conditions of all mortgages, indentures, notes, liens, encumbrances and other
obligations for or relating to borrowed money to which the Company is a party,
or which have been assumed by the Company or to which any of the properties or
assets of the Company are subject, having attached amortization schedules, if
available, for each of the outstanding balances as of December 31, 1998, and
estimated balances as of the Closing Date, and listing the terms of any line of
credit or other credit facility and attaching a true and legible copy of all
material documents related to any such borrowed money, line of credit or credit
facility.
4.9 Schedule of Capitalization and Qualification.
Listing with respect to the Company and any subsidiary:
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(a) the authorized capital stock, classes and number of shares of
each such class issued and outstanding and whether such shares are fully paid
and nonassessable, the number of shares of each class issued but not outstanding
and description of rights to acquire any capital stock or equity interest;
(b) the number of outstanding shares held by each Shareholder; and
(c) the state or jurisdiction of incorporation of the Company and
any subsidiary and the state or jurisdictions where the Company and any
subsidiary are qualified to do business.
4.10 Schedule of Contracts or Commitments.
Containing a list and brief description of any of the following contracts
or commitments, whether written or oral, formal or informal, to which the
Company is a party or by which the Company benefits:
(a) oral or written contracts or commitments for the employment of
any officer, employee or consultant except for such contracts or commitments
characterized as being "at will" in the ordinary course of business of the
Company;
(b) contract with or commitment to any labor union or any other
agreement, amendment, supplements, letters or memoranda of understanding with
any labor union or other representative of employees;
(c) conditional sale agreement, security agreement, installment
sales contract or chattel mortgage or lease (for other than real property under
which the Company is obligated to make annual payments during any year of the
term thereof in excess of $1,000);
(d) oral or written contracts not made in ordinary course of
business and oral or written contracts made in the ordinary course of business
but under which the Company is or may be obligated during the life of the
contract to make payments in excess of $1,000, for the purchase, sale,
production or supply, whether on a continuing basis or otherwise, of goods or
services of any type;
(e) distributor, sales agency or vendor contracts or subcontracts or
any franchise or license agreements;
(f) advertising contracts or commitments;
(g) lease under which it is lessor;
(h) Employee Benefit Plans, and, to the extent not included, any
other bonus, sales incentive, sales reward, pension, profit sharing, retirement,
stock purchase, stock option, hospitalization, insurance or similar plan or
practice, formal or informal, in effect concerning employees or others;
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(i) material contract or commitment, oral or written, for any
capital expenditures;
(j) contract or commitment, oral or written, affecting ownership of,
title to or use of any interest in real property; and
(k) material contracts or commitments not made in the ordinary
course of business, including any noncompetition covenant restricting the
Company or any subsidiary or any Shareholder or Affiliate.
4.11 Schedule of Litigation.
Listing and furnishing a brief description of the nature of all claims,
actions, suits, investigations, or proceedings, (whether or not purportedly on
behalf of the Company) pending or, to the knowledge of the Company and the
Shareholders, threatened against or by or affecting the Company or a
Shareholder, at law, in equity, in admiralty, or before or by any federal,
state, municipality or their governmental departments, commission, board,
bureau, agency or instrumentality, domestic or foreign; the foregoing to exclude
any claims described under Section 4.4 of this Agreement.
4.12 Schedule of Transactions Occurring Since January 1, 1999.
Specifying any transaction (other than the transactions contemplated by
this Agreement) occurring after January 1, 1999, in which the Company has:
(a) issued or delivered or agreed to issue or deliver any stock or
other securities (whether stock, bonds, debentures or other corporate
securities), granted or agreed to grant any options or rights to purchase any
securities, or borrowed or agreed to borrow any funds;
(b) incurred or become subject to, or agreed to incur or become
subject to, any obligation or liability (absolute or contingent) other than in
the ordinary course of business, except obligations under contracts not in the
ordinary course of business listed in the Schedule of Contracts or Commitments;
(c) discharged or satisfied any lien or encumbrance or paid any
obligation or liability (absolute or contingent) other than current liabilities
shown on the balance sheet of the Company as of January 1, 1999, included in the
Financial Statements, and current liabilities incurred since that date in the
ordinary course of business;
(d) declared, set aside or made, or agreed to declare, set aside or
make any payments of dividends or any distribution to shareholders or purchased,
redeemed or otherwise acquired, directly or indirectly, or agreed to purchase,
redeem or acquire, directly or indirectly, any shares of stock or other
securities;
(e) mortgaged, pledged or subjected to a lien, charge or any other
encumbrance, or agreed so to do, any of its assets, tangible or intangible,
except the lien of current real and personal property taxes not yet due and
payable;
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(f) sold, assigned, licensed, transferred or agreed so to do, any of
its tangible assets, or cancelled or agreed to cancel any debts or claims,
except, in each case, in the ordinary course of business;
(g) sold, assigned or transferred any patents, trademarks, trade
names, copyrights, software, other intellectual property or other similar
assets;
(h) suffered any extraordinary losses or waived any rights of
substantial value, whether or not in the ordinary course of business;
(i) increased the rate of compensation payable or to become payable
by it to any of its officers, directors, employees or agents over the rate being
paid to them at January 1, 1999, except general hourly rate increases and normal
merit increases for employees other than officers;
(j) terminated any material contract, agreement, license or other
instrument to which it is a party;
(k) through negotiation or otherwise, made any commitment or
incurred any liability or obligation, enforceable or not, to any labor
organization evidenced in writing;
(l) made or agreed to make any accrual or arrangement for or payment
of any material bonuses or special compensation of any kind to any officer,
director, employee or agent;
(m) directly or indirectly paid or made a commitment to pay any
severance or pay to any officer, director, employee or agent;
(n) introduced any new method of management, operation or accounting
that would have a material, adverse effect on its business or on any of the
assets, properties or rights applicable thereto;
(o) reclassified its shares of capital stock into a different number
of shares;
(p) made or agreed to make any charitable contributions or incurred
or agreed to incur any non-business expenses;
(q) offered or extended more favorable prices, discounts, allowances
or advertising, whether promotional, display or otherwise, than were offered or
extended regularly on and prior to the date of this Agreement which would
materially adversely affect the business of the Company;
(r) made capital expenditures exceeding the aggregate amounts set
forth on the Schedule of Contracts or Commitments; or
(s) entered into or agreed to enter into any other transactions
other than in the ordinary course of business.
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4.13 Schedule of Banks.
Specifying all banking arrangements for the Company.
4.14 Schedule of Corporate Documents.
(a) Furnishing a copy, certified as true and correct by the
Secretary of State or other appropriate governmental official of the state of
incorporation of the Company, of the Articles of Incorporation and all
amendments thereto of the Company; and
(b) Furnishing a copy, certified as true and correct by the
Secretary of the Company, of the Bylaws and all amendments thereto of the
Company.
4.15 Schedule of Employee Benefit Plan Matters.
Listing, any "reportable event" (as defined in Section 4043 of ERISA) that
has occurred and continues to occur regarding any Employee Benefit Plan of the
Company, if any, and having attached thereto the statement of assets and
liabilities of each Employee Benefit Plan for the most recent Employee Benefit
Plan year ended on or prior to the date of this Agreement, the statements of
changes in fund balance and in financial position, and the statements of changes
in net assets available for the benefit of such Employee Benefit Plan for the
Employee Benefit Plan year then ended, certified by the trustee of each Employee
Benefit Plan.
4.16 Schedule of Employees.
Listing each and every employee of the Company, their respective
employment status, if other than active, and the salary or wage rate and bonus
or other incentive opportunity for each such employee.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
AND THE COMPANY
The Shareholders hereby jointly and severally represent and warrant and,
prior to the Closing, the Company represents and warrants, that:
5.1 Organization and Standing.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of New Jersey. The Company has no
subsidiaries. The Company has all requisite corporate power and authority to
carry on its business, to own, lease or operate its properties in the places
where such business is now conducted and where such properties are now owned,
leased or operated, and to enter into, execute, deliver and perform its
obligations under this Agreement and is duly qualified to do business and is in
good standing in the State of New Jersey and in every other jurisdiction in
which the Company is required to be so qualified to conduct business.
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5.2 Capital Structure of Company.
With respect to the capital structure of the Company:
(a) on the date hereof and at the Closing Date the authorized
capital stock of the Company consists and will consist of 5,000 Company Shares
of which 1,000 voting and 960 non-voting shares are now, and on the Closing Date
will be, duly issued and outstanding and fully paid and nonassessable; no
Company Shares are held in its treasury or have otherwise been reacquired or
have been issued in violation of any preemptive rights;
(b) all of the Company Shares are now and on the Closing Date will
be owned and held of record and beneficially by the Shareholders as set forth on
the Schedule of Capitalization and Qualification, free and clear of all claims,
liens and encumbrances;
(c) except for an oral promise made to the Advisory Board, there are
not now, and on the Closing Date there will not be, any warrants, rights,
options, subscriptions or agreements to issue shares of capital stock,
securities convertible into capital stock or other securities of the Company;
and
(d) there is not now, and there will not be on the Closing Date any
liability for dividends declared or accumulated but unpaid with respect to any
securities of the Company.
5.3 Financial Statements, etc.
(a) The Financial Statements (i) are in accordance with the books
and records of the Company; (ii) present fairly the financial condition of the
Company as of the respective dates indicated and the results of operations for
the respective periods indicated: and (iii) have been prepared in accordance
with GAAP applied on a consistent basis except as noted therein.
(b) The Company does not have outstanding any indebtedness or
liability absolute or contingent, known or unknown, except as set forth on the
balance sheets included in the Financial Statements or as specifically
identified and disclosed on Schedule 4.11 hereto.
5.4 Properties.
The Company, does not own, lease or use any real property other than the
residence of Andre Pilevsky.
5.5 Patents, Trademarks and other Intellectual Property.
(a) The trademarks, trade names, copyrights, trade secrets or
processes, patents or applications for patents listed on the Schedule of Trade
Names, Patents and Copyrights are all either owned by the Company, or the
Company possesses enforceable rights and licenses to use the same (without
payment of any royalties except as specified in such Schedule), and the items
listed on such Schedule constitute all of the trademarks, trade names,
copyrights, patents and patent applications, trade secrets and processes
necessary for the conduct of, or use in, the business of the Company, as the
same is presently being conducted and
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contemplated to be conducted. Such rights and licenses are adequate for the
conduct of the business presently conducted or contemplated to be conducted by
the Company.
(b) Except as set forth on the Schedule of Trade Names, Patents and
Copyrights, no service or product the Company provides or sells, or any
business, or the marketing or use by it or another of any such service or
product, will infringe any trademark, trade name, copyright or patent or other
intellectual property right, or is in conflict with any right of another. There
is no pending or, to the knowledge of the Company or the Shareholders,
threatened claim or litigation against the Company contesting its right to use
any of the trademarks and trade names or the validity of any of the copyrights
and patents or other intellectual property right of the Company, or asserting
its misuse of any thereof, which would deprive the Company of its right to
assert its rights thereunder or which would prevent the sale of any service or
product provided or sold by the Company.
5.6 Intangible Properties.
The Company owns no securities or other intangible property, except as
reflected in the Financial Statements or acquired in the ordinary course of
business since January 1, 1999, or except as set forth in the Schedule of
Financial Information or the Intellectual Property described on the Schedule of
Trade Name, Patents and Copyrights.
5.7 Schedules.
All documents and information contained in the Schedules furnished or
delivered by or on behalf of the Company or the Shareholders pursuant to the
provisions of Article 4 or Article 5 hereof are correct and complete and all
information required to be furnished or delivered pursuant thereto has been
furnished or delivered to Parent. The Company has furnished true and complete
copies of any document that is referred to in any Schedule or that has been
requested by Parent.
5.8 Corporate Records.
The minute books of the Company made available to Parent prior to the
Closing Date accurately reflect all corporate action taken by the directors and
shareholders of the Company or any committee of the Board of Directors of the
Company as described therein and contain true and accurate copies of or
originals of:
(a) the respective minutes of all meetings or consent actions of the
directors and shareholders;
(b) the Articles of Incorporation, as amended, of the Company; and
(c) the Bylaws and all amendments thereto of the Company. Nothing
contained in the Articles of Incorporation or the Bylaws, as each may have been
amended from time to time, or any such minutes prevents or adversely affects the
consummation of the transactions contemplated by this Agreement.
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5.9 Litigation.
Except as set forth on the Schedule of Litigation, there are no actions,
suits or proceedings pending or, to the knowledge of the Company or the
Shareholders, threatened against or affecting the Company, at law or in equity
or admiralty, or before or by any federal, state, municipality or their
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign. The Company is not now and will not be on the Closing Date,
in default concerning any order, writ, injunction or decree of any federal,
state, municipal court or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, and neither the Company
nor the Shareholders have any knowledge of any investigation pending or
threatened against or affecting the Company by any state or federal governmental
agency, department or instrumentality.
5.10 Absence of Changes.
(a) Since January 1, 1999, and except as contemplated by this
Agreement, as set forth in the Schedule of Transactions occurring Since January
1, 1999, there has not been (i) any change in the financial condition, assets,
liabilities, or business of the Company, excluding any change in the ordinary
course of business, but which ordinary course change has not, individually or in
the aggregate, been materially adverse; (ii) any damage, destruction or loss,
whether or not covered by insurance, adversely affecting the properties and
business of the Company; (iii) any increase in the compensation or rate of
compensation payable by the Company to any of its employees or agents, in the
formula for determining any bonus payment or arrangement made to or with any
such employees or agents, or increase in compensation with any such employees or
agents, or increase in compensation payable by formula, bonus or otherwise to
any of its officers and directors; (iv) any declaration or payment by the
Company of dividends or any distribution by the Company of any assets of any
kind whatsoever to its Shareholders, or as the purchase price of any of their
capital stock or in discharge or cancellation, whether in part or in whole, of
any indebtedness (whether in payment of principal, interest or otherwise) owing
to any of the same; (v) any mortgage, pledge or subjection to lien, charge or
encumbrance of any kind of any of the assets, tangible or intangible, of the
Company other than purchase money security interests arising in ordinary course
of business or pursuant to credit agreements disclosed in the Schedule of Debt,
Mortgages and Security Interests; (vi) any sale or transfer of any of the assets
of the Company, or any cancellation, forgiveness or compromise of an
indebtedness owed to or claims held by the Company, except in the ordinary
course of business; (vii) any sale, assignment or transfer by the Company of any
patents, trademarks, trade names, copyrights or other intangible assets; or
(viii) any amendment to or termination of any contract, agreement or license to
which the Company is a party, except in the ordinary course of business.
(b) The Company has complied in all material respects with, and is
not in default in any material respect under, any laws, ordinances,
requirements, regulations or orders applicable to its business; and the Company
is not subject to any judgment, order, writ, injunction or decree.
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5.11 Correctness of Representations.
No representation or warranty the Shareholders in this Agreement or in any
statement, certificate or Schedule furnished by the Company or the Shareholders
pursuant hereto, contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements made therein
not misleading as of the date hereof and the Closing Date. All such statements,
representations, warranties, certificates and Schedules shall be true and
complete on and as of the Closing Date, as though made on that date.
5.12 Brokers and Finders.
Except as set forth on Schedule 5.12, neither the Shareholders, the
Company, nor any of the officers, directors or employees of the Company has
employed or otherwise incurred in any manner any liability for any brokerage
fees, agents commissions or finder's fees concerning the transactions hereby.
All fees and expenses related to the transactions contemplated hereby will be
paid by the Shareholders.
5.13 Labor Matters.
(a) Except as disclosed in the Schedule of Contracts and
Commitments, the Company is not a party to nor does it have any obligations
under any agreement, collective bargaining or otherwise, with any party
regarding the rates of pay or working conditions of any of the employees of the
Company, nor is the Company obligated under any agreement to recognize or
bargain with any labor organization or union on behalf of its employees; and
none of the officers of the Company knows of any organizational activity among
any of its employees.
(b) Except as disclosed in the Schedule of Litigation, there are no
pending or, to the knowledge of the Company and the Shareholders, threatened
claims, investigations, charges, citations, hearings, consents, decrees or
litigation involving the Company with respect to wages, compensation, bonuses,
commissions or awards or payroll deductions; equal employment or human rights
violations regarding race, color, religion, sex, national origin, age, handicap,
veteran's status, marital status, disability or any other recognized attribute
under any applicable equal employment laws of any governmental entity
prohibiting discrimination; representation petitions or unfair labor practices,
grievances or arbitrations pursuant to current or expired collective bargaining
agreements; occupational safety and health; worker's compensation; wrongful
termination, negligent hiring, invasion of privacy or defamation; or
immigration.
(c) The Company is now and has been in material compliance with all
applicable federal and state laws and regulations concerning the
employer/employee relationship; and with all of its agreements relating to the
employment of its employees, including without limitation, provisions thereof
relating to employment discrimination, wages, bonuses, hours of work and the
payment of Social Security, Medicare and unemployment compensation taxes. The
Company has not received any notice that it is liable for any unpaid wages,
bonuses or commissions or any tax, penalty, assessment of forfeiture for failure
to comply with any of the foregoing.
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5.14 Contractual Obligations.
Except as heretofore disclosed in the Schedules the Company is not a party
to, or is bound by, any contract constituting:
(a) any obligation, direct or indirect, to provide funds in respect
of or to guarantee or assume, any debt, obligation or dividend of any other
corporation of any person, association, partnership, joint venture or their
entity, except endorsements made in the ordinary course of business in
connection with the deposit of items for collection;
(b) any continuing contract or commitment for the purchase of
materials, supplies, equipment or services;
(c) any contract, agreement or understanding that adversely affects
its business; or
(d) any pension, profit-sharing, stock option, bonus,
hospitalization, deferred compensation, holiday, vacation, sick leave or similar
employee or officer benefit plan.
5.15 Power of Attorney.
The Company has not given any power of attorney regarding any of its
business, properties and assets, except for powers of attorney given in
connection with tax matters which are listed in the Schedules.
5.16 Condition of Equipment.
All items of personal property owned or leased by the Company shown on the
Schedule of Personal Property or reflected in the interim balance sheet of the
Company, included in the Financial Statements, are in good operating condition
and in a state of reasonable maintenance and repair, and all such machinery and
equipment, furniture and fixtures, leasehold improvements and personal property
are considered adequate and usable for the continued operation for the business
of the Company as the same is presently conducted.
5.17 No Default or Waiver of Rights.
Except as specifically set forth in the Schedules, with respect to any
lease, contract, plan or other instrument or arrangement, there is no default or
claim or to the knowledge of the Company or Shareholders, purported or alleged
default or claim, or no state of facts which, with notice or lapse of time, or
both, would constitute a default in any material obligation on the part of the
Company to be performed under any lease, contract, plan or other arrangement to
which the Company is a party, and the Company has in all respects performed, and
on the Closing Date shall have performed, all the obligations required to be
performed by it as of such date under the leases, contracts, plans, or other
arrangements to which it is a party. The Company has not waived any material
right under any such leases, contracts, plans or other arrangements since
January 1, 1999.
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5.18 Indebtedness to Officers, Directors and the Shareholders.
Except as disclosed in the Schedule of Transactions or Arrangements with
Affiliates and the Shareholders, the Company is not now, nor on the Closing Date
will be, indebted to any of those persons who are on the date hereof or on the
Closing Date will be shareholders, officers, directors or Affiliates of the
Company, or to their respective spouses, children or relatives closer than first
cousins, in any amount whatsoever other than for salaries or for services
rendered.
5.19 ERISA.
The Company and each Employee Benefit Plan is in compliance with ERISA and
provisions of the Code applicable to employee benefit plans. No Employee Benefit
Plan, if any, which is subject to the minimum funding standards of ERISA or the
Code has incurred any accumulated funding deficiency within the meaning of ERISA
or the Code. The Company has not incurred any liability to the Pension Benefit
Guaranty Corporation in connection with any Employee Benefit Plan, if any, which
is subject to Title IV of ERISA. The assets of each Employee Benefit Plan that
are subject to Title IV of ERISA, if any, are sufficient to provide the benefits
under such Employee Benefit Plan which the Pension Benefit Guaranty Corporation
would guarantee the payment thereof if such Employee Benefit Plan terminated,
and are also sufficient to provide all their benefits due under the Employment
Benefit Plan. No "reportable event" (as defined in Section 4043 of ERISA) has
occurred and is continuing concerning any Employee Benefit Plans, if any, which
is subject to Title IV of ERISA, except for those listed on the Schedule of
Employee Benefit Plans. No Employee Benefit Plan or any trustee or administrator
thereof has engaged in a "prohibited transaction" (as defined in Section 406 of
ERISA or Section 4975 of the Code) that would subject any Employee Benefit Plan,
any trust created therein, any trustee or administrator thereof, any party
dealing with any Employee Benefit Plan, or any such trust to the liability set
forth in Section 409(a) of ERISA or to the tax or penalty on prohibited
transactions imposed by Section 502 of ERISA or Section 4975 of the Code.
5.20 Employee Benefit Plans.
The Company has no employee pension benefit plans other than profit
sharing plans and thrift plans disclosed on the Schedule of Employee Benefit
Plans. The Company has made all contributions due for each of the profit sharing
plans and thrift plans and, to the extent, if any, such contributions have not
been so made but are required to be accrued, has shown such accrual on the
Financial Statements.
5.21 Governmental Approval.
No authorization, consent or approval of any public body, governmental
authority or agency is necessary or required as to the Shareholders or the
Company as a condition to the validity of this Agreement and the consummation of
the transactions contemplated hereby.
5.22 Authority; Noncontravention.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have duly and validly been authorized by the
Board of Directors of the
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Company and by the Shareholders of the Company; no further corporate action of
any nature is required pursuant to the Articles of Incorporation and Bylaws of
the Company. This Agreement constitutes the valid and binding obligation of the
Company and the Shareholders, except as may be limited by bankruptcy, insolvency
or other laws affecting creditors rights generally or as may be modified by a
court of equity in an action for specific performance. Shareholders have the
absolute and unrestricted right, power and authority and capacity to execute and
deliver this Agreement and to perform their obligations as contemplated herein.
This Agreement and the consummation of the transactions contemplated hereby will
not violate any provisions of law, conflict with, result in a breach of any of
the terms, conditions or provisions of, constitute a default under, or result in
the creation of any lien, charge or encumbrance upon any of the Company Shares
or any of the properties or assets of the Shareholders or of the Company,
pursuant to any corporate charter, bylaw, indenture, mortgage, lease, agreement
or other instrument to which the Shareholders or the Company is a party or by
which they are bound, or result in the acceleration of the maturity of any
payment date of any indebtedness of the Company or increase or adversely affect
the obligations of the Company or any of its subsidiaries thereunder.
5.23 Taxes.
All federal, state, and other tax and informational returns of the Company
and each Employee Benefit Plan required by law to be filed have been duly filed,
and all federal, state, and other taxes, assessments, and other governmental
charges or levies upon the Company and any of its properties, income, profits,
and assets that are due and payable have been paid, except for any such taxes,
assessments and other governmental charges or levies the payment of which the
Company is contesting in good faith by appropriate proceedings and for which
adequate reserves have been provided on the books of the Company. The Financial
Statements contain adequate accruals for all taxes not yet due and payable.
5.24 Environmental Matters.
With respect to each of the real properties listed on the Schedule of Real
and Personal Property:
(a) The properties do not contain, in, on or under, including,
without limitation, the soil and groundwater thereunder, any Hazardous Materials
in violation of Environmental Laws or in amounts that have given or are
reasonably expected to give rise to any liability of the Company under
Environmental Laws.
(b) The properties and all of the Company's operations and
facilities at the properties are in compliance in all material respects with all
Environmental Laws, and there is no contamination or violation of any
Environmental Law which has interfered, or is reasonably expected to interfere,
with the continued operation of any of the properties or is reasonably expected
to materially impair the financial condition of the Company.
(c) The Company has not received from any governmental authority any
complaint, notice of violation, alleged violation, investigation or advisory
action or notice of potential liability regarding matters of environmental
protection or permit compliance under
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applicable Environmental Law with regard to the properties, nor does any
Shareholder have knowledge that any governmental authority is contemplating
delivering to the Company any such notice. There has been no pending or
threatened complaint, notice of violation, alleged violation, investigation or
notice of potential liability under Environmental Laws with regard to any of the
properties.
(d) Hazardous Materials have not been generated, treated, stored,
disposed of, at, on or under any of the properties by the Company in violation
of any Environmental Laws or in a manner that has given or could reasonably be
expected to give rise to material liability of the Company under Environmental
Laws, nor have any Hazardous Materials been transported or disposed of from any
of the properties by the Company to any other location in material violation of
any Environmental Laws or in a manner that has given or could reasonably be
expected to give rise to material liability of the Company under Environmental
Laws.
(e) There has been no release or threat of release by the Company of
Hazardous Materials into the environment at or from any of the properties, or
arising from or relating to the operations of the Company, in violation of
Environmental Laws or in amounts that has given or could reasonably be expected
to give rise to material liability of the Company under Environmental Laws.
5.25 Y2K Compliance.
Each system, comprised of software, hardware, databases or embedded
control systems owned by the Company or in which the Company has a proprietary
interest will not be materially adversely affected by the Year 2000 problem.
5.26 Public Information.
Shareholders have received the copies of the prospectus included in the
Parent's Registration Statement on Form S-1 and documents incorporated by
referenced therein as filed with the Securities and Exchange Commission.
ARTICLE 6
CONDITIONS TO OBLIGATIONS OF PARENT
The obligations of Parent to consummate the transactions provided for
herein are at the option of Parent, subject to the satisfaction, in all material
respects, of the following conditions on or prior to the Closing Date:
6.1 Compliance by the Shareholders and the Company.
All the terms, covenants and conditions of this Agreement to be complied
with and performed by the Shareholders or the Company on or before the Closing
Date shall have been fully complied with and performed.
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6.2 Certificate Regarding Representations and Warranties.
The representations and warranties of the Shareholders contained in this
Agreement shall be true and correct on and as of the Closing Date with the same
effect as though all such representations and warranties had been made on and as
of that date and the Shareholders shall deliver a certificate to that effect at
the Closing.
6.3 Approval of Legal Matters.
All actions, proceedings, instruments and documents deemed necessary or
appropriate by Parent or its general counsel to effectuate this Agreement and
the consummation or the transactions contemplated hereby, or incidental thereto,
and all other related legal matters, shall have been approved by such general
counsel. The transactions contemplated herein shall comply with statutes and
laws pertaining thereto, including without limitation laws, rules and
regulations promulgated under the Securities Act, by the Federal Trade
Commission or by the Securities and Exchange Commission.
6.4 Escrow Agreement.
The Shareholders shall have executed and delivered an Escrow Agreement in
the form of Exhibit 6.4 hereto.
6.5 Accuracy of Schedules.
Examination by Parent shall not have disclosed any material inaccuracy in
the representations and warranties of the Shareholders set forth in Article 4
and Article 5 hereof or in the Schedule delivered to Parent pursuant to Article
4 and Article 5 hereof.
6.6 Litigation.
No suit shall, at the Closing Date, be pending or threatened before any
court, governmental agency, bureau, board or other authority in which the
transactions contemplated by this Agreement are sought to be restrained or in
connection with which damages or other relief is sought, or in which any
material claim shall be asserted against the Company which, in the good faith
judgment of Parent, makes consummation of the Merger inadvisable or impossible.
6.7 Resignations of Directors and Officers of the Company.
If requested by Parent, Parent shall have received a written instrument
signed by each of the directors and officers of the Company resigning from all
official positions of the Company to which they have been elected or appointed,
effective the Closing Date.
6.8 Employment and Consulting Agreements.
Each of Mr. Pilevsky and Ms. Sharon Weinberg shall have executed and
delivered Employment Agreements, and Dr. Rader shall have executed and delivered
a Consulting Agreement, each in the form attached hereto as Exhibit 6.8.
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6.9 Noncompetition Agreements.
Each of the Shareholders and Ms. Sharon Weinberg shall have executed and
delivered Noncompetition Agreements, in the forms attached hereto as Exhibit
6.9.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to the Shareholders as follows:
7.1 Organization and Good Standing.
Parent is a corporation duly organized, existing and in good standing
under the laws of the State of Delaware. Sub is a corporation duly organized,
existing and in good standing under the laws of the State of New Jersey. Each of
Parent and Sub has full corporate power to carry on its business, to own and
operate its properties and assets and to consummate the transactions
contemplated by this Agreement.
7.2 Correctness of Representations.
No representations or warranties of Parent in this Agreement contain any
untrue statement of a material fact or omit or a material fact necessary to make
the statements made therein not misleading. The representations and warranties
of Parent set forth in this Agreement shall be true in all material respects on
and as of the Closing Date as though such representations and warranties were
made on and as of such date.
7.3 Authority; Noncontravention.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have duly and validly been authorized by the
Board of Directors of each of Parent and Sub and the shareholders of Sub; no
further corporate action of any nature is required pursuant to the Articles of
Incorporation and Bylaws of each of Parent and Sub; and this Agreement
constitutes the valid and binding obligation of each of Parent and Sub, except
as may be limited by bankruptcy, insolvency or other laws affecting creditors
rights generally or as may be modified by a court of equity in an action for
specific performance. The execution, delivery and performance of this Agreement
will not violate or result in default under any provision of the Articles of
Incorporation or Bylaws of each of Parent and Sub; or any material commitment,
indenture, license or other obligation to which Parent is a party or by which it
is bound and will not, to the best knowledge of Parent, contravene any law, rule
or regulation of any administrative agency or governmental body or any order,
writ, injunction or decree of any court, administrative agency or governmental
agency applicable to of each of Parent and Sub.
7.4 Brokers and Finders.
Neither Parent, Sub nor any of their officers, directors or employees has
employed or otherwise incurred in any manner any liability for any brokerage
fees, agents commissions or finder's fees concerning the transactions hereby.
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7.5 Capitalization and Parent Shares.
The authorized and issued equity securities of Parent are as set forth in
the 10-Q of Parent with respect to the period ended March 31, 1999, a copy of
which, together with the annual report of Parent, has been delivered to
Shareholders. The Parent Shares to be issued to the Shareholders under this
Agreement have been duly authorized, and when issued, will be validly issued and
fully paid and nonassessable.
7.6 Financial Capacity.
Mediconsult.com (US) Ltd. has the financial capacity to perform all of its
obligations under the Employment and Consulting Agreements.
ARTICLE 8
CONDITIONS TO OBLIGATIONS OF THE COMPANY AND SHAREHOLDERS
The obligation of the Company and Shareholders to consummate the
transactions provided for herein is subject to the satisfaction, in all material
respects, of the following conditions on or prior to the Closing Date:
8.1 Compliance by Parent.
All the terms, covenants and conditions of this Agreement to be complied
with and performed by Parent on or before the Closing Date shall have been
complied with and performed in all material respects.
8.2 Certificate Regarding Representations and Warranties.
The representations and warranties of Parent contained herein shall be
true and correct in all material respects on and as of the Closing Date, with
the same force and effect as though such representations and warranties had been
made on and as of the Closing Date and Parent shall have delivered a certificate
of its officers to such effect at Closing.
8.3 Escrow Agreement.
Parent and Sub shall have executed and delivered an Escrow Agreement
substantially in the form of Exhibit 6.4 hereto.
8.4 Litigation.
No suit shall, at the Closing Date, be pending or threatened before any
court, governmental agency, bureau, board or other authority in which the
transactions contemplated by this Agreement are sought to be restrained or in
connection with which damages or other relief is sought, or in which any
material claim shall be asserted against Parent which, in the good faith
judgment of the Shareholders, makes consummation of the Merger inadvisable or
impossible.
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8.5 Employment Agreements.
The Parent and the Company shall have executed and delivered each of the
Employment and Consulting Agreements referenced in Section 6.8 hereof.
8.6 Noncompetition Agreements.
The Parent and the Company shall have executed and delivered each of the
Noncompetition Agreements referenced in Section 6.9 hereof.
8.7 Advisory Board.
Parent shall have issued an aggregate of 20,000 Parent Shares to members
of the Advisory Board, to be delivered at Closing as set forth on Schedule 8.7.
ARTICLE 9
INDEMNIFICATION BY SHAREHOLDERS
9.1 Indemnification by Shareholders.
The Shareholders, jointly and severally, agree to indemnify and to save
and hold harmless Parent of, from, against and in respect of any and all claims,
demands, actions or causes of action asserted against, and all losses, costs,
damages and expenses, including reasonable attorney's fees and the expenses of
all actions, suits, proceedings, demands, and judgments, together with all
costs, fees and expenses (including attorneys' fees and the expenses of all
actions, suits, proceedings, demands and judgments) of enforcing this indemnity
("Attorneys Fees and Expenses") suffered, paid or incurred by Parent by reason
of or resulting from (a) a breach of any representation or warranty by
Shareholders contained in or made pursuant to this Agreement, (b) a breach of
any covenant or agreement of the Shareholders (other than a representation and
warranty) contained in or made pursuant to this Agreement, or (c) any liability
or obligation of the Company arising out of or in connection with the operation
of the business of the Company prior to the Closing Date; (collectively,
"Claims" and individually, a "Claim"), except to the extent such liability or
obligation is (i) adequately accrued or reserved in the determination of Working
Capital under Section 2.3 of this Agreement; (ii) satisfied by delivery of
Parent Shares as contemplated by Sections 5.2(c) and 8.7; or (iii) related to or
arises out of the substance of any content posted on a web-site created or
maintained by the Company prior to Closing.
9.2 Limitations - Time.
The Shareholders' obligation to indemnify Parent as provided in Section
9.1 of this Agreement is subject to the condition that Parent shall have
notified the Shareholders of the Claim for which such indemnity is sought,
specifying in reasonable detail the factual basis of the Claim to the extent
then known by Parent, on or before the second anniversary of the Closing Date;
provided, however, that notwithstanding the foregoing Parent may give notice of
Claim arising from or based on (i) the breach of any representation, warranty or
covenant regarding tax matters at any time prior to the expiration of the
applicable statute of limitations, (ii) matters
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described in Sections 5.1, 5.2, or 5.22, (iii) any covenant or obligation to be
performed after the Closing, or (iv) with respect to Section 9.1(c), at any time
after the Closing Date.
9.3 Limitations on Amount - Shareholders.
(a) To the extent that the aggregate of all Claims made by Parent is
finally determined to be an amount less than $25,000, the Shareholders shall not
be obligated to make any payment with respect to those Claims unless and until
the aggregate amount of such Claims for which the Shareholders have not
previously indemnified Parent is equal to or greater than an aggregate of
$25,000, and in that event, subject to the provisions of Section 9.3(b) hereof,
Shareholders shall be liable hereunder for the full amount of all such Claims.
(b) The Shareholders' obligation to indemnify Parent from Claims
pursuant to Section 9.1 for damages shall be limited to fifty percent (50%) of
the Merger Consideration deliverable to the Shareholders hereunder valued as of
the date of Closing.
9.4 Procedure for Indemnification - Third Party Claims.
(a) Parent shall give notice to the Shareholders of any Claim
arising from the assertion of liability by third parties promptly after Parent
receives notice or becomes aware thereof, but the failure to notify the
Shareholders will not relieve the Shareholders of any liability they may have to
Parent, except to the extent that the Shareholders demonstrate that the defense
of such Claim has been prejudiced by such failure to give notice.
(b) The Shareholders will undertake the defense thereof by
representatives acceptable to Parent unless Parent has given notice that the
Claim is being defended by an insurer of Parent or the Company. All costs and
expenses of such defense (including Attorneys Fees and Expenses), and any
settlement or compromise resulting from the defense of any Claim, shall be paid
for by the Shareholders to the extent not fully paid or reimbursed, as
appropriate, by insurer.
(c) In the event the Shareholders, within a reasonable time after
receipt of notice of any such Claim, but in no event more than thirty (30) days
after the receipt of such notice, fail to defend, Parent will have the right to
undertake the defense, compromise or settlement of such Claim on behalf of and
for the account and risk of the Shareholders.
(d) Any judgment, award, settlement or compromise of any Claim,
whether the contest or defense thereof is undertaken by the Shareholders or
Parent, shall be binding on the parties hereto, and the amount thereof
(including Attorneys Fees and Expenses), shall be prima facie evidence of the
amount which the Shareholders are obligated to indemnify Parent with respect to
that Claim. In the event of payment by Parent of a Claim which neither Parent
nor the Shareholders elect to contest or defend as provided above, the actual
amount of such payment, including Attorneys Fees and Expenses, shall be prima
facie evidence of the amount which the Shareholders are obligated to indemnify
Parent with respect to that Claim.
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9.5 Procedure for Indemnification of Other Claims.
Unless such claim is contested by the Shareholders, the Shareholders,
jointly and severally, shall promptly upon written notice thereof given by
Parent, pay and reimburse Parent on demand the amount of any Claim which is
indemnifiable by the Shareholders pursuant to Section 9.1 hereof not covered by
Section 9.4 above. If the Claim is contested, the parties shall have such
remedies available at law or under the Escrow Agreement. The amount actually
paid, including reasonable Attorneys Fees and Expenses, shall be prima facie
evidence of the amount which the Shareholders are obligated to indemnify Parent
hereunder with respect to such Claim.
9.6 Tax Indemnity.
In the event that a determination is made by the Internal Revenue Service,
which is no longer being disputed by the Parent or the Shareholders, that the
Merger described herein fails to qualify as a reorganization within the meaning
of IRC Section 368(a), then Parent shall pay to the Shareholders, pro rata in
accordance with their respective ownership of Company Stock, an amount equal to
fifty percent (50%) of the "Additional Tax Liability" as hereinafter defined.
Additional Tax Liability shall mean an amount equal to the federal and state tax
due based on the fair market value of the stock consideration received pursuant
to the merger, increased by any related interest and penalties.
9.7 Escrow; Remedies Not Exclusive.
In addition to other remedies available at law or in equity, Parent shall
be entitled to make a Claim against any Parent Shares or other property held
under the Escrow Agreement to satisfy the payment of any Claim hereunder. The
remedies provided in this Article 9 shall not be exclusive or limit any
equitable remedies (including, without limitation, specific performance or
injunctive relief) that may be available to the parties hereunder.
ARTICLE 10
MISCELLANEOUS
10.1 Actions Pending Closing.
(a) The parties hereto shall use their best efforts to comply with,
perform and satisfy all the terms, covenants and conditions of this Agreement to
be complied with, performed and satisfied by them on or before the Closing Date.
In addition, the Company and the Shareholders will use their best efforts to
ensure there are no material or adverse changes to employee relations at the
Company.
(b) The Shareholders shall cause the Company to close its permanent
books and records as of the Closing Date in order to permit the Company's
taxable income for the tax periods ending on the date immediately preceding the
Closing Date to be reported on that date. The Shareholders shall prepare and
file all federal and state income tax returns for the Company for all tax
periods ending on or before the Closing Date, in a timely manner.
(c) From the date hereof to the Closing Date, except to the extent
Parent shall otherwise consent in writing, the Company and the Shareholders
shall:
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(i) operate the Company's business as presently operated and
only in the ordinary course and use their best efforts to preserve intact
its good will, reputation and present business organization and to
preserve relationships with persons having business dealings with it;
(ii) maintain all of the Company's properties in good order
and condition, reasonable wear and use excepted;
(iii) take all steps necessary to maintain the Company's
intangible assets;
(iv) pay all liabilities and other obligations of the Company
and collect all accounts receivable in accordance with past business
practices;
(v) comply with all laws applicable to the conduct of the
business of the Company;
(vi) not take any action which would constitute a breach of
the representations and warranties contained in Article 4 of this
Agreement;
(vii) not enter into any settlement regarding any claim,
dispute or other cause of action except for settlements of customer
disputes made by the Company in the ordinary course of business;
(viii) not sell or otherwise dispose of any assets of the
Company; and
(ix) submit all contracts which are outside the normal course
of business or which involve a capital expenditure in excess of $5,000 to
Parent for its approval.
10.2 Failure of Conditions to Obligations of Parent.
In the event any condition precedent of Article 6 of this Agreement is not
met at the time of Closing, then Parent, at its option, may (i) by notice
written at the Closing terminate this Agreement; or (ii) waive the condition
precedent and consummate the Closing, in which case the Shareholders shall be
relieved of all further liability to Parent arising only out of such waived
condition precedent. In the event this Agreement is terminated or the
transaction does not close pursuant to this Section 10.2, all further
obligations of the parties will terminate other than the obligations in Sections
10.7 and 10.10, which survive; provided, however, that if this Agreement is
terminated because of the Shareholders or the Company's material failure to
comply with their respective obligations under this Agreement, Parent's right to
pursue all legal remedies will survive such termination unimpaired, and if this
Agreement is terminated because of Parent's or Sub's material failure to comply
with their respective obligations under this Agreement, the Shareholders' and
the Company's right to pursue all legal remedies will survive such termination
unimpaired.
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10.3 Survival of Representations.
(a) All statements contained in any document, certificate or other
instrument delivered by or on behalf of Parent, the Shareholders or the Company
pursuant hereto, shall be deemed representations and warranties hereunder by
Parent, the Shareholders or the Company, as the case may be. All
representations, warranties and agreements made by Parent, the Shareholders or
the Company shall survive the Closing for the periods specified in Section 9.2
hereof for the assertion of claims. Any inspection or audit of the inventories,
properties, financial condition or other matters relating to the Company and its
business conducted pursuant to this Agreement shall in no way limit, affect or
impair the ability of Parent to rely upon the representations, warranties,
covenants and agreements of the Shareholders set forth herein.
(b) Nothing contained in the foregoing shall relieve any officer or
director of Parent, the Shareholders or the Company of any liability or limit
any liability that he may have on account of common law fraud or purposeful
misrepresentation in connection with the delivery of any certificate required to
be delivered under the terms hereof, which certificate is untrue in any material
respect.
10.4 Resale of Parent Shares; Securities Act.
(a) Each of the Shareholders acknowledges that he, she or it may be
deemed an "affiliate" of the Company within the meaning of Rule 145 ("Rule 145")
promulgated under the Securities Act (although nothing contained herein should
be construed as an admission of such fact) and that, if in fact such Shareholder
were an affiliate of the Company under the Securities Act, his, her or its
ability to sell, assign or transfer the Parent Shares received in exchange for
any Company Shares pursuant to the Merger hereof may be restricted unless such
transaction is registered under the Securities Act or an exemption from such
registration, such as that provided by Rules 144 and 145(d) promulgated under
the Securities Act, is available.
(b) Each of the Shareholders hereby covenants that he or she will
not sell, assign or transfer any of the Parent Shares received in exchange for
Company Shares pursuant to the Merger hereof except (x) pursuant to an effective
Registration Statement under the Securities Act, or (y) in a transaction which,
in the opinion of independent counsel reasonably satisfactory to Parent, is not
required to be registered under the Securities Act. Parent agrees that the
counsel identified on Schedule 10.4(b) is acceptable.
(c) Each of the Shareholders understands that Parent may instruct
its transfer agent to withhold the transfer of any Parent Shares, but that upon
receipt of such opinion, the transfer agent will effect the transfer of the
shares indicated as disposed of in such opinion. Each of the Shareholders
acknowledges that appropriate legends will be placed on certificates
representing Parent Shares received pursuant to the Merger, which legends will
be removed by delivery of substitute certificates upon receipt of an opinion in
form and substance reasonably satisfactory to Parent from independent counsel
reasonably satisfactory to Parent to the effect that such legends are no longer
required for purposes of the Securities Act. Parent agrees that the counsel
identified on Schedule 10.4(b) is acceptable.
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(d) Notwithstanding anything herein to the contrary, the
shareholders agree that they shall not sell, assign or transfer at any time the
Parent Shares in any manner so that such disposition causes the transactions
contemplated by this Agreement to fail to qualify as a reorganization under
Section 368 of the Code.
(e) The restrictions on transferability set forth herein shall be in
addition to those restrictions and limitations set forth in the Escrow
Agreement.
10.5 Access and Information.
For as long as reasonably may be necessary, Parent shall afford or cause
to be afforded to the Shareholders, or any Affiliate of the Shareholders,
reasonable access to all the books and records of the Company relating to the
business of the Company prior to the Closing Date as they reasonably may request
and for a legitimate business purpose. All originals of such books and records
of the Company shall remain in the possession and control of Parent from and
after the Closing Date. Should the Shareholders request copies of any such
material, Parent shall furnish or cause to be furnished to the Shareholders all
such copies so requested for which the Shareholders agree to pay Parent all
reasonable costs and expenses incurred in the production of such documents.
10.6 Assignment.
Except as set forth above, this Agreement shall not be assignable by any
of the parties hereto without the written consent of the others; and nothing
contained in this Agreement, express or implied, is intended to confer upon any
person or entity, other than the parties hereto and their successors in interest
and permitted assignees, any rights or remedies under or by reason of this
Agreement unless so stated to the contrary.
10.7 Confidentiality of Information.
(a) All parties agree to strictly limit disclosure of the proposed
acquisition to those persons who have a need to know. Those persons include key
employees, attorneys, accountants, officers, directors, investment advisors,
stockholders and others similarly situated with a need to know.
(b) Parent understands and agrees that it will be receiving and
reviewing confidential and proprietary information of the Company. Prior to the
Closing and, if the Closing shall not occur: (i) Parent agrees to strictly limit
access to such information to those individuals having a need to know and to use
its best efforts to prevent any other disclosure of such information, and (ii)
Parent also agrees not to utilize in any manner, other than as allowed herein,
any confidential or proprietary information obtained from the Company.
Confidential and proprietary information shall not include information that (i)
was known to Parent prior to disclosure by the Company, (ii) is or becomes
generally available to the public other than by breach of this Agreement, (iii)
otherwise becomes lawfully available on a non-confidential basis from a third
party who is not under an obligation of confidence to the Company, or (iv) is
independently developed by Parent.
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(c) If Parent discloses confidential information of Parent to the
Company, the Company and the Shareholders agree that such information will be
held confidential and protected in the same manner as described above for the
Company confidential information.
(d) Except for filings required by law, prior to the Closing, the
parties agree that all information contained in any press releases and other
announcements concerning any aspect of the acquisition shall be mutually agreed
upon in writing prior to any such release or announcement being made.
(e) Neither the Company nor the Shareholders, nor any officer,
agent, director or employee of the Company shall furnish, either directly or
indirectly, any information including, but not limited to, any term of this
Agreement not otherwise publicly announced, to any current or prospective
acquirer of the Company. Further, neither the Company nor the Shareholders shall
seek other offers or negotiate with others with respect to any other proposed
sale of the Company or of any significant Company assets.
10.8 Construction.
This Agreement shall be construed and enforced in accordance with the laws
of the State of New Jersey, without giving effect to conflicts of laws
provisions.
10.9 Amendment.
This Agreement may be amended, supplemented or interpreted at any time by
a written instrument executed by the parties hereto.
10.10 Expenses.
Each party hereto shall pay its own expenses incident to this Agreement
and the transactions contemplated hereby, including all fees and expenses of
their counsel, provided that the Shareholders shall pay the legal and accounting
expenses of the Company incurred in connection with this Agreement and the
transactions contemplated hereby.
10.11 Notices.
All notices, requests, demands and other communications hereunder shall be
in writing and shall be deemed to have duly been given if delivered or if
mailed, by United States certified or registered mail, prepaid to the parties or
their assignees at the following addresses (or at such other addresses as shall
be given in writing by the parties to one another) with a copy to:
Parent: Mediconsult.com, Ltd.
33 Reid Street, 4th Floor
Hamilton HM 12
Bermuda
Attn: Robert A. Jennings, CEO
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Copy: Mediconsult.com, Inc.
3278 Timberloch Drive
Marietta, GA 30068
Attn: E. Michael Ingram, General Counsel
Company: Cyber-Tech, Inc.
25 Seven Oaks Drive
Summit, New Jersey 07901
Attn: Andre Pilevsky
Shareholders: Andre Pilevsky
25 Seven Oaks Drive
Summit, New Jersey 07901
Daniel J. Rader
101 Acoma Lane
Collegeville, Pennsylvania 19426
Copy: Stuart L. Pachman
Brach, Eichler
101 Eisenhower Parkway
Roseland, New Jersey 07068
Notices delivered in person shall be effective on the date of delivery.
Notices delivered by mail as aforesaid shall be effective upon the third
calendar day subsequent to the postmark date thereof.
10.12 Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
10.13 Entire Agreement.
This Agreement and the certificates, schedules and other documents
delivered pursuant hereto or incorporated by reference herein contain the entire
agreement between the parties hereto concerning to the transaction contemplated
herein and supersede all prior agreements or understandings between the parties
hereto relating to the subject matter hereof. No oral representation, agreement
or understanding made by any party hereto shall be valid or binding upon such
party or any other party hereto.
10.14 Captions and Section Headings.
Captions and section headings used herein are for convenience only and are
not a part of this Agreement and shall not be used in construing it.
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10.15 Income Tax Filings.
Each party hereto agrees to file, and cooperate in the preparation and
filing of, all statements of fact and other matters required to be filed
pursuant to this reorganization, including without limitation filings required
pursuant to Internal Revenue Service Regulation 1.368-3(a).
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have duly executed and sealed this
Agreement as of the day and year first written.
MEDICONSULT.COM, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
CYBER-TECH, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
SHAREHOLDERS
-------------------------------------
Andre Pilevsky
-------------------------------------
Daniel J. Rader, M.D.
MCNS MERGER SUBSIDIARY II, INC.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
33
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Agreement") is made and entered into as of
this ____ day of June, 1999, by and among Mediconsult.com, Inc., a Delaware
corporation ("Parent"), Cyber-Tech, Inc., a New Jersey corporation (the
"Company"), Andre Pilevsky, Daniel J. Rader (each a "Shareholder" and together
the "Shareholders") and SunTrust Bank, Atlanta, a Georgia banking corporation
("Escrow Agent").
Background
A. Pursuant to a Merger Agreement and Plan of Reorganization, dated as of
the date hereof, by and among Parent, MCNS Merger Subsidiary II, Inc., a New
Jersey corporation and wholly owned subsidiary of Parent ("Sub"), the Company
and the Shareholders (the "Merger Agreement"), the Company is being merged with
and into Sub, with the Sub as the surviving entity. Capitalized terms used
herein and not otherwise defined shall have the meanings assigned to such terms
in the Merger Agreement.
B. Pursuant to the Merger Agreement, the Shareholders are entitled to
receive Parent Shares as merger consideration.
C. The Merger Agreement contemplates the establishment of a fund to
satisfy the obligations of the Shareholders for any breaches of the Company's
and Shareholders' representations, warranties, covenants, agreements and
indemnities contained in the Merger Agreement.
D. Escrow Agent is willing to accept the Escrow Fund (as defined herein)
and to hold and distribute the Escrow Fund in accordance with the terms and
conditions set forth herein.
Agreement
For and in consideration of the premises, mutual covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Appointment of Escrow Agent. Parent, the Company and the Shareholders
hereby designate and appoint Escrow Agent to serve as escrow agent and Escrow
Agent hereby agrees to act as escrow agent upon the terms, conditions and
provisions of this Agreement.
2. Creation of Escrow Fund.
(a) Parent herewith deposits with Escrow Agent one stock certificate
for each of the Messrs. Pilevsky and Rader representing 31,586 and 30,347 Parent
Shares respectively issued in the name of the Escrow Agent (the "Escrow
Shares"). Other than cash dividends or distributions paid by Parent with respect
to the Escrow Shares (which shall be delivered by Parent to the Shareholders),
in the event of distribution during the term of this Agreement on or with
respect to the Escrow Shares, whether in cash, property, evidences of
indebtedness, securities, rights or options, and whether by way of a dividend,
stock split, reclassification, recapitalization, redemption or other
distribution, or in connection with any merger, share
<PAGE>
exchange, consolidation or other transaction in which the Escrow Shares are
exchanged for or converted into the cash, property, evidences of indebtedness,
securities, rights or options of Parent or any other person or entity, such
cash, property, evidences of indebtedness, securities, rights or option shall be
delivered to Escrow Agent and shall be held and administered along with the
Escrow Shares as herein provided. The Escrow Shares, together with all cash,
property, evidences of indebtedness, securities, rights or options distributed
on or with respect to the Escrow Shares and delivered to the Escrow Agent as
herein provided, are herein referred to as the "Escrow Fund."
(b) The Escrow Agent shall invest any cash delivered to it as part
of the Escrow Fund in the Federated Treasury Obligations Money Market Fund or
such other account or fund as directed by the other parties hereto jointly.
(c) Any income earned on such investments shall be added to and
shall become part of the Escrow Fund. The Escrow Fund is to be held,
administered and disbursed by the Escrow Agent as provided herein. Escrow Agent
acknowledges receipt of the Escrow Fund and agrees to hold, administer and
disburse the same in accordance with the terms of this Agreement. No withdrawal
thereof shall be made by anyone except pursuant to the terms hereof.
(d) The Shareholders shall have the right to vote or direct the
voting of the Escrow Shares. Any proxy statements received by the Escrow Agent
shall be forwarded to the Shareholders, and the Escrow Agent shall vote the
Escrow Shares in accordance with the written instructions of the Shareholders.
3. Purpose of Escrow. The Escrow Fund is being established for the purpose
of providing a non-exclusive procedure for recovery by Parent (subject to the
terms and conditions of the Merger Agreement) for any liability, loss, damage or
other expense incurred by Parent or the Company due to a breach of any
representation, warranty, covenant or indemnity of the Shareholders contained in
the Merger Agreement.
4. Valuation of Escrow Shares. The number of Escrow Shares to be retained
by the Escrow Agent in connection with a claim against the Escrow Fund or
released to Parent, as sole shareholder of the Company, in payment of a claim
against the Escrow Fund shall be determined by dividing the dollar amount of
such claim by the Stock Value (as defined below) and rounding the number so
obtained to the nearest whole number. "Stock Value" shall mean the average
closing price per Parent Share as reported in The Wall Street Journal for each
twenty (20) consecutive trading days ending on the first trading day prior to
the day the claim is asserted pursuant to Section 9.4 of the Merger Agreement.
Such valuation shall be made by Parent.
5. Retention of Escrow Shares. Until this Agreement is terminated pursuant
to Section 7 below, the Escrow Agent shall hold all Escrow Shares deposited with
it pending the receipt by the Escrow Agent from time to time of:
(a) one or more written notices of a claim against the Escrow Fund
in the form specified in Section 13(b) of this Agreement (individually, a
"Notice of Claim") for which no Notice of Dispute (as defined herein) is filed
pursuant to the terms hereof;
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<PAGE>
(b) one or more written notices of the settlement of a disputed
claim against the Escrow Fund in the form specified in Section 13(c) of this
Agreement (individually, a "Notice of Settlement"); or
(c) a court order directing the release of some or all of the Escrow
Fund from a court having jurisdiction over Parent, the Company or either
Shareholder (a "Court Order").
6. Claim Procedure.
(a) In the event that the Escrow Agent receives a Notice of Claim
from Parent, the Escrow Agent shall notify the Shareholders of the receipt of
such Notice of Claim within five (5) business days by sending a copy of the
Notice of Claim, marked to show the date of receipt by the Escrow Agent, to the
Shareholders with a copy of such transmittal to Parent. If the Shareholders wish
to dispute the claim against the Escrow Fund contained in the Notice of Claim,
they shall send a notice to the Escrow Agent with a copy of such transmittal to
Parent that it disputes the claim against the Escrow Fund in the form specified
in Section 13(d) of this Agreement (a "Notice of Dispute"). Such Notice of
Dispute must be received by the Escrow Agent within fifteen (15) business days
after the receipt by the Escrow Agent of the Notice of Claim (the "Notice
Period").
(b) If the Escrow Agent receives a Notice of Dispute from the
Shareholders, within the Notice Period the Escrow Agent shall not release any
portion of the Escrow Fund subject to such Notice of Claim and Notice of Dispute
until the Escrow Agent receives a Notice of Settlement or a Court Order
directing the Escrow Agent to cause the delivery of all or a specified portion
of the Escrow Fund to the appropriate party or parties. Upon receipt of such
Notice of Settlement or Court Order, the Escrow Agent shall deliver the stock
certificate to Parent's transfer agent and instruct the agent to issue new stock
certificates in accordance with the directions contained in the Notice of
Settlement or Court Order and the provisions of this Agreement and to issue to
the Escrow Agent a new certificate for the balance of the Escrow Shares
remaining in the Escrow Fund. The Escrow Agent shall distribute any shares
issued to any party hereof pursuant to the terms of this Section 6(b) within
fifteen (15) business days following receipt of the Notice of Settlement or
Court Order.
(c) If the Escrow Agent does not receive a Notice of Dispute within
the Notice Period, Escrow Agent shall, within fifteen (15) business days
following the expiration of the Notice Period, distribute the number of Escrow
Shares specified in the Notice of Claim in accordance with the directions
contained therein and the provisions of this Agreement.
(d) Notwithstanding the receipt of one or more Notices of Dispute,
the Escrow Agent shall release the appropriate number of Escrow Shares specified
in a Notice of Claim for which no Notice of Dispute has been timely received
regardless of whether such release would cause the remaining number of Escrow
Shares to be less than the number of Escrow Shares subject to other Notices of
Claim or Notices of Dispute which have been timely received by the Escrow Agent.
(e) At the discretion of the Shareholders, the Shareholders may
elect to substitute cash for any Escrow Shares subject to a Claim. Upon written
notice of such election,
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<PAGE>
signed by Parent and the Shareholders and indicating the number of Escrow shares
to be released and receipt of the cash substitution, the Escrow Agent shall
deliver the Escrow Shares so substituted to the Shareholders.
7. Termination and Periodic Release of Escrow Shares.
(a) This Agreement, except for the provisions in Sections 9 and 11
relating to the performance and liability of the Escrow Agent, shall terminate
upon the earlier of:
(i) the three hundred sixty-fourth (364th) day after the
Closing Date (the "Termination Date") unless the Escrow Agent shall have
received:
(A) any Notice of Claim for which the fifteen (15)
business day period for filing a Notice of Dispute shall not
have expired (an "Outstanding Notice of Claim"); or
(B) any Notice of Claim for which a timely Notice of
Dispute shall have been received by the Escrow Agent for which
the Escrow Agent shall not have received a Notice of
Settlement or a Court Order (an "Outstanding Notice of
Dispute"); or
(ii) at such earlier time as the Escrow Agent shall have
released all of the Escrow Fund in accordance with the terms of this Agreement.
(b) On the Termination Date or any time thereafter, either party may
deliver written instructions to the Escrow Agent, and notice thereof to the
other party, instructing the Escrow Agent to release to the Shareholders the
Escrow Shares then held by the Escrow Agent. Escrow Agent shall release such
Escrow Shares as provided in the instructions five (5) days following receipt
thereof, provided, however that in the event that on such date the Escrow Agent
shall be in possession of an Outstanding Notice of Claim or an Outstanding
Notice of Dispute no release shall be made. However, upon receipt of written
instructions from Parent, which may not be unreasonably withheld or delayed, the
Escrow Agent shall release as soon as practicable to the Shareholders the Escrow
Shares then held by the Escrow Agent in excess of the number of Escrow Shares
then subject to any Outstanding Notice of Claim and any Outstanding Notice of
Dispute.
8. Release of Escrow Shares. Whenever the Escrow Agent determines that it
is required to release some or all of the Escrow Shares to the Shareholders the
Escrow Agent shall deliver to the transfer agent and registrar for the Parent
Share (the "Transfer Agent"):
(a) stock certificates representing the Escrow Shares;
(b) appropriate stock powers signed by the Escrow Agent; and
(c) written instructions from the Escrow Agent to the Transfer Agent
to reissue stock certificates representing the number of Escrow Shares to be
released to the Shareholders, to be registered in the name of the Shareholders
and to deliver such stock certificates to the Shareholders; and in the event of
a partial release of Escrow Shares to Shareholders, to
4
<PAGE>
reissue a stock certificate representing the balance of the Escrow Shares,
registered in the name of the Escrow Agent to the Escrow Agent.
9. Escrow Agent's Duties. The Escrow Agent shall be obligated to perform
only such duties as expressly set forth in this Agreement, and shall not be
required, in carrying out its duties under this Agreement to refer to the Merger
Agreement, except as expressly set forth herein.
10. Escrow Agent's Fees and Expenses. The compensation payable to the
Escrow Agent for services provided hereunder shall be Two Thousand Dollars
($2,000.00) which shall be paid one-half by Parent and one-half by the
Shareholders.
11. Provisions Relating to the Escrow Agent.
(a) The parties hereto acknowledge and agree that the Escrow Agent
(i) shall not be responsible for any of the agreements referred to herein but
shall be obligated only for performance of such duties as are specifically set
forth in this Agreement; (ii) shall not be obligated to take any legal or other
action hereunder which might involve any expense or liability unless it shall
have been furnished with indemnification as set forth herein; (iii) may rely on
and shall be protected in acting or refraining from acting upon any written
notice, instruction, instrument, statement, request or document furnished to it
hereunder and believed by it to be genuine and to have been signed or presented
by the proper person, and shall have no responsibility for determining the
accuracy thereof, and (iv) may consult with counsel satisfactory to it,
including in-house counsel, and the opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with the opinion of
such counsel.
(b) Neither the Escrow Agent nor any of its directors, officers or
employees shall be liable to anyone for any action taken or omitted to be taken
by it or any of its directors, officers or employees hereunder except in the
case of its own gross negligence or willful misconduct. Parent, the Company and
the Shareholders, jointly and severally, covenant and agree to indemnify the
Escrow Agent and hold it harmless without limitation from and against any loss,
liability or expense of any nature incurred by the Escrow Agent arising out of
or in connection with this Agreement or with the administration of its duties
hereunder, including but not limited to reasonable legal fees and other costs
and expenses of defending or preparing to defend against any claim or liability
relating to this Agreement, unless such loss, liability or expense shall be
caused by the Escrow Agent's willful misconduct or gross negligence. In no event
shall the Escrow Agent be liable for direct, special or consequential damages.
(c) Parent, the Company and the Shareholders, jointly and severally,
agree to assume any and all obligations imposed now or hereafter by any
applicable tax law with respect to the payment of funds under this Agreement,
and to indemnify and hold the Escrow Agent harmless from and against any taxes,
additions for late payment, interest, penalties and other expenses, that may be
assessed against the Escrow Agent on any such payment or other activities under
this Agreement. Parent, the Company and the Shareholders shall instruct the
Escrow Agent in writing with respect to the Escrow Agent's responsibility for
withholding and other taxes, assessments or other governmental charges,
certifications and governmental reporting in connection with its acting as
Escrow Agent under this Agreement. Parent, the Company and the
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<PAGE>
Shareholders, jointly and severally, agree to indemnify and hold the Escrow
Agent harmless from any liability on account of taxes, assessments or other
governmental charges, including without limitation the withholding or deduction
or the failure to withhold or deduct the same, and any liability for failure to
obtain proper certifications or to properly report to governmental authorities
to which the Escrow Agent may be or become subject in connection with or which
arises out of this Agreement, including costs and expenses (including reasonable
attorneys' fees), interest and penalties. The provisions of paragraphs (b) and
(c) shall survive the termination of this Agreement or pursuant to the terms
hereof, the resignation or removal of the Escrow Agent or the tender by the
Escrow Agent into the registry or custody of any court of competent jurisdiction
of the Escrow Funds.
(d) In the event that the Escrow Agent shall be uncertain as to its
duties or rights hereunder or shall receive instructions with respect to the
Escrow Shares which are in conflict either with other instructions received by
it or with any provision of this Agreement, the Escrow Agent shall have the
absolute right to suspend all further performance under this Agreement (except
for the safe keeping of the Escrow Shares) until the resolution of such
uncertainty or conflicting instructions by a final judgment of a court of
competent jurisdiction, joint written instructions from all other parties
hereto, or otherwise.
12. Resignation/Removal of Escrow Agent. The Escrow Agent may at any time
resign as Escrow Agent hereunder by giving thirty (30) days' prior written
notice of resignation to Parent, the Company and the Shareholders. Prior to the
effective date of the resignation as specified in such notice, Parent will issue
to the Escrow Agent a written instruction authorizing redelivery of the Escrow
Fund to a bank or trust company that Parent selects. Such bank or trust company
shall have capital, surplus and undivided profits in excess of $50,000,000. If,
however, Parent shall fail to name such a successor escrow agent within twenty
(20) days after receipt of the notice of resignation from the Escrow Agent, the
Shareholders shall be entitled to name such successor escrow agent. If no
successor escrow agent is named by Parent or the Shareholders within the Escrow
Agent's thirty (30) day notice period, the Escrow Agent may apply to a court of
competent jurisdiction for appointment of a successor escrow agent to serve
under the terms of this Agreement. Escrow Agent shall also have the right to
tender into the registry or custody of any court of competent jurisdiction any
part or all of the Escrow Fund, whereupon its obligations hereunder shall be
discharged.
13. Instructions and Notices.
(a) In executing and performing its duties hereunder, the Escrow
Agent shall be entitled to rely upon instructions of Parent and the
Shareholders. Any notice, payment, demand, instruction or communication required
or permitted to be given by this Agreement shall be in writing and shall be
deemed to have been sufficiently given or served for all purposes on the date on
which the same was delivered if: (i) delivered via facsimile with confirmation
receipt with a follow-up copy thereof mailed by United States mail, postage and
charges prepaid, (ii) delivered by hand with a copy thereof mailed by United
States mail, postage and charges prepaid or (iii) delivered by United States
certified or registered mail with a return receipt, in each case postage and
charges prepaid, to the appropriate party at the address stated below:
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<PAGE>
If to the Shareholders:
Andre Pilevsky
25 Seven Oaks Drive
Summit, New Jersey 07901
Telephone:_______________
Facsimile:_______________
Tax ID No. :_____________
Daniel J. Rader, M.D.
101 Acoma Lane
Collegeville, Pennsylvania 19426
Telephone:_______________
Facsimile:_______________
Tax ID No. :_____________
With a copy (which shall not constitute notice) to:
Brach Eichler
101 Eisenhower Parkway
Roseland, New Jersey 07068
Stuart L. Pachman, Esq.
If to Parent or Sub:
Mediconsult.com, Inc.
3278 Timberloch Drive
Marietta, Georgia 07901
Attn: General Counsel
If to the Escrow Agent, to:
SunTrust Bank, Atlanta
Corporate Trust Department
25 Park Place
24th Floor
Atlanta, Georgia 30303
Attention: Rebecca Fischer
Telephone: (404) 588-7262
Facsimile: (404) 588-7335
Any party hereto may change its address for purposes of notice by notice of such
change given to the other parties hereto in the manner specified herein.
(b) A Notice of Claim shall specify the amount of the claim against
the Escrow Fund, expressed in dollars, the number of Escrow Shares required to
pay the claim determined in accordance with Section 4 of this Agreement, and a
statement regarding the basis
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<PAGE>
upon which the Notice of Claim is made. Any Notice of Claim shall be prepared,
executed, and delivered to the Escrow Agent by Parent with a copy to the
Shareholders.
(c) A Notice of Settlement shall specify the Notice of Claim to
which it relates by indicating the date of such Notice of Claim and the amount
of the claim against the Escrow Fund, and shall specify the Notice of Dispute to
which it relates by indicating the date of such Notice of Dispute. The Notice of
Settlement shall contain a brief description of the resolution of the claim and
dispute and shall include instructions to the Escrow Agent specifying the number
of Escrow Shares to be released and to which party the shares are to be
released. Each Notice of Settlement must be signed by an authorized officer of
Parent and the Shareholders.
(d) A Notice of Dispute shall specify the Notice of Claim to which
it relates by indicating the date of such Notice of Claim and the amount of the
claim against the Escrow Fund and shall also state in reasonable detail the
basis for the dispute of the Notice of Claim. The Notice of Dispute shall be
executed by the Shareholders and delivered to the Escrow Agent with a copy to
Parent.
14. General Provisions.
(a) Merger of Escrow Agent. In the event that the bank acting as
Escrow Agent merges or consolidates with another, the successor or resulting
bank shall be the Escrow Agent hereunder without the necessity of further
action, so long as such successor or resulting bank meets the requirements of a
successor escrow agent hereunder.
(b) Assignment. The rights and obligations of the parties under this
Agreement shall inure to the benefit of and shall be binding upon the heirs,
legal representatives, successors and assigns of such parties. Parent and the
Company may assign their rights under this Agreement to any Affiliate of Parent.
Except as set forth above, neither this Agreement nor any right or benefit
hereunder may be assigned or transferred by any party without the written
consent of the other parties hereto.
(c) Severability. Each section of this Agreement, and any and every
provision herein, shall be severable from every other section of this Agreement,
and any and every provision hereof, and the invalidity or unenforceability of
any section or provision shall not affect the validity or enforceability of any
other section or provision of this Agreement.
(d) Construction. This Agreement shall be governed by and construed
in accordance with the laws of the State of Georgia.
(e) Amendment. This Agreement may only be amended in writing which
is signed by all parties hereto.
(f) Entire Agreement. Except as otherwise specified herein relative
to the Merger Agreement, this Agreement embodies the entire agreement of the
parties hereto relating to the subject matter hereof, and all prior agreements,
understandings, and negotiations are merged herein and superseded hereby.
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<PAGE>
(g) Multiple Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, and it shall
not be necessary for the same counterpart of this Agreement to be signed by all
of the undersigned in order for the agreements set forth herein to be binding
upon all of the undersigned in accordance with the terms hereof. A facsimile
signature shall be as effective and treated as the equivalent of an original
signature for all purposes hereunder.
(h) Captions. Captions and Section headings used herein are for
convenience only and are not a part of this Agreement and shall not be used in
construing it.
(i) Further Assurances. Each of the parties shall cooperate with the
Escrow Agent and deliver to the Escrow Agent such additional information and
documents as the Escrow Agent shall reasonably request in the performance of its
obligations under this Agreement, including such documents as it shall
reasonably request to evidence termination of this Agreement and to evidence
their consent to the final distribution of the Escrow Fund in accordance with
the terms of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have each executed and delivered
this Agreement as of the date first above written.
MEDICONSULT.COM, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
CYBER-TECH, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
-------------------------------------------
Andre Pilevsky
-------------------------------------------
Daniel J. Rader, M.D.
SUNTRUST BANK, ATLANTA
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
10
EMPLOYMENT AGREEMENT
Employment Agreement, dated as of the ____ day of June, 1999, by and
between Mediconsult.com (US) Ltd., a Delaware corporation (the "Corporation"),
and Andre Pilevsky, an individual residing in the State of New Jersey (the
"Employee").
W I T N E S S E T H:
The parent corporation of the Corporation is a party to that certain
Merger Agreement and Plan of Reorganization, dated June __, 1999, among
Cyber-Tech, Inc., a New Jersey corporation ("Cyber-Tech"), its shareholders,
MCNS Merger Subsidiary II, Inc. (the "Subsidiary") and Mediconsult.com, Inc., a
Delaware corporation ("Parent") (the "Merger Agreement"). As a condition to the
Closing of the Merger Agreement, the Corporation and Employee are to enter into
an agreement upon the terms outlined herein under which Employee will provide
employment services in connection with the operation of its business and that of
Subsidiary as the surviving corporation to Cyber-Tech. In consideration of the
mutual covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by the parties hereto,
the parties hereto hereby agree as follows:
1. Employment. The Corporation hereby agrees to employ the Employee in an
employee capacity, and the Employee hereby accepts and agrees to such
employment, commencing as of the date hereof, upon the terms and conditions
hereinafter set forth.
2. Term. The term of the Employee's employment under this Agreement shall
commence as of the date hereof and shall continue until the close of business on
June 30, 2002, unless sooner terminated pursuant to the terms hereof. This
Agreement shall be renewable by the mutual written consent of the parties, which
consent shall specify the renewal period and any additional or different terms
of employment.
3. Duties and Services.
(a) The Employee agrees to initially serve in the position of and
holding the title "Director, Cardiovascular", and shall also serve the
Subsidiary and such other of its subsidiaries and affiliated companies as may be
designated by the Corporation, faithfully, diligently and to the best of his
ability, subject to and under the direction and control of his appointed
manager, who shall initially be David Austin, or any successor, devoting his
entire business time, energy and skill to such employment, and to perform from
time to time such employee services, advisory or otherwise, as shall be
requested, and to act in such capacities or other offices for the Corporation
and for any of its subsidiary or affiliated companies as the Board of Directors
shall request without further compensation other than that for which provision
is made in this Agreement. The Employee acknowledges that while there are no
strict guidelines pertaining to work hours, he shall be expected to work a
longer than average week, and spend the necessary time and effort to
consistently deliver high quality results in a time sensitive manner.
(b) The principal place of employment of the Employee shall be in
New Providence, New Jersey, or Parsippany, New Jersey, or such other offices of
the Corporation as shall
<PAGE>
be determined by the Board of Directors, which shall be located within a
one-hour drive of New Providence, New Jersey. Employee shall not be required to
relocate from New Providence, New Jersey , nor to spend substantial periods of
time away from the principal place of employment as defined above.
4. Compensation.
(a) Salary. From the date hereof to June 30, 2000, the Corporation
agrees to pay to the Employee, and the Employee agrees to accept a basic salary
for all his services (the Salary") at the rate of $100,000 per annum, payable in
accordance with the Corporation's standard payroll policies and subject to
normal deductions and withholdings. Thereafter, the Employee's Salary shall be
subject to annual review by the Board of Directors, and may be adjusted upward
or downward at the Board's discretion, but will not be subject to downward
revision unless a substantially lesser workload or responsibility is mutually
agreed in writing by the parties.
(b) Bonus Plan. The Employee shall also be eligible to receive a
bonus equal to:
(i) 25% of Sales (as defined below) through July 31, 2000;
(ii) 15% of Sales from August 1, 2000, to July 31, 2001; and
(iii) 10% of Sales from August 1, 2001, to June 30, 2002.
Employee shall be entitled to receive a bonus of ten percent (10%) of Sales
occurring on or before June 30, 2002, but which close after such date or for
which payment is received after such date.
(c) Bonus Payment. Bonus amounts will be calculated at the rate
during the year in which the Sale was made, but will not be paid to the Employee
until the Corporation actually receives payment by the client with respect to
such Sale. Payment shall be made to Employee on the 15th day of the month
following the month in which the Corporation receives payment from the client.
The bonus will be paid 50% in cash and 50% in the dollar equivalent of common
shares of Parent ("Parent Shares"), calculated by dividing such dollar amount by
the average of the closing prices for the Parent Shares as reported in The Wall
Street Journal for each of the twenty (20) trading days ending on the trading
day prior to the date of receipt of payment by the client.
(d) Sales. For the purposes of this Section 4, "Sales" shall mean
the dollar value of gross sales under contracts or grants with respect to client
services introduced and sold by the Employee either on his own or jointly with
support staff which relate to cardiology or co-morbid conditions. Support staff
shall mean any other person or persons provided to Employee by the Corporation
to work with Employee on any account. The parties acknowledge that from time to
time the parties may agree on additional bonus payments with respect to sales
regarding other medical conditions.
The Corporation shall have the right to review and approve all Sales in
order to establish commercial viability of such Sale, but will not unreasonably
withhold such approval. The Corporation agrees to maintain during the period any
bonus may be earned hereunder, reasonable
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<PAGE>
financial records to permit tracking and determination of Sales. In addition,
the Corporation may, in its discretion, credit Employee for sales in which he
materially participated other than Sales. One-half of all Parent Shares received
by Employee under this Agreement shall be subject to the Management Voluntary
Pooling Agreement entered into between the Corporation and Employee as of the
date of this Agreement. All Parent Shares shall be subject to the limitations
and restrictions placed generally on Corporation employees under policies
adopted by the Corporation from time to time, such as restrictions with respect
to trading windows and material non-public information. If Employee's employment
by the Corporation is terminated (other than by the Corporation for "cause," as
defined herein) prior to the last day of the relevant bonus period, Employee
shall be entitled to receive any bonus payment earned as of the date of
termination.
5. Employee Benefits.
(a) Business. The Corporation shall reimburse the Employee for the
reasonable business expenses incurred by him for or on behalf of the Corporation
in furtherance of the performance of his duties hereunder. Such reimbursement
shall be subject to receipt by the Corporation from the Employee of such an
expense statements and such vouchers and other reasonable verifications as the
Corporation shall require to satisfactorily evidence such expenses, and shall
also be subject to such policies as the Corporation shall establish from time to
time. Reasonable business expenses include, but are not limited to, telephone
charges, business travel and entertainment, home office expenses, internet
connectivity charges and costs for computer hardware and software used in
connection with the Corporation's business, in each case consistent with Company
policy generally applied.
(b) Benefit Programs. The Employee shall be entitled to participate,
in accordance with the terms thereof, in employee benefit plans and programs
maintained for the Employees of the Corporation, including, without limitation,
any health, hospitalization and medical insurance programs and in any pension or
retirement or other similar plans or programs. Benefits available to Employee
shall not be less than those provided generally to other employees of the
Corporation holding the title of "Director". The foregoing shall not be
construed to require the Corporation to establish any such plans or programs, or
to prevent the Corporation from modifying or terminating any such plans or
programs once established, except that in no case shall the Corporation
terminate any plan or program providing health, hospitalization and medical
benefits to Employee unless such termination is part of a general termination of
such benefits.
(c) Vacation. The Employee shall be entitled to four (4) weeks of
vacation each employment year during the term of this Agreement, taken
consecutively or in segments. Vacation not taken during any such year cannot be
rolled over to the following or any subsequent year.
6. Termination of Benefits.
(a) Termination. Notwithstanding anything to the contrary contained
herein, the Employee's employment with the Corporation, as well as the
Employee's right to any compensation which thereafter otherwise would accrue to
him hereunder or in connection therewith, shall terminate upon the earliest to
occur of the following events:
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<PAGE>
(i) the death or disability (as defined below) of the
Employee,
(ii) the expiration of the term of this Agreement,
(iii) the Employee's voluntary termination of such employment,
or
(iv) upon delivery of written notice, with or without "cause"
(as defined below), to the Employee from the Corporation of such
termination. Notice of termination without cause may not be
delivered during the initial six-month period of this Agreement.
(b) Certain Definitions. For the purpose of this Section 6, (i) the
term "cause" is defined as (A) the commission by the Employee of a felony or an
offense involving moral turpitude, the Employee's engaging in theft,
embezzlement, fraud, obtaining funds or property under false pretenses, or
similar acts of misconduct with respect to the property of the Corporation or
its employees, stockholders, affiliates, customers, licensees, licensers or
suppliers, (B) the repeated failure by the Employee to (i) perform his material
duties hereunder, or (ii) to comply with the reasonable written policies or
directives of the Board of Directors of the Corporation, (C) material
misfeasance or malfeasance, or (D) the breach of this Agreement by the Employee
in any material respect, which breach is not cured within thirty (30) days after
Employee's receipt of written notice of the breach (or if a breach is a
repetition of a previous breach occurring within the previous twelve (12)
months, no cure right shall be given), and (ii) the Employee shall be deemed
"disabled" if, at the Corporation's option, it gives notice to the Employee or
his representative that due to a disabling mental or physical condition, he has
been prevented, for a continuous period of 90 days during the term hereof or for
an aggregate of 120 days during any six month period during the term hereof,
from substantially performing those duties which he was required to perform
pursuant to the provisions of this Agreement prior to incurring such disability.
Any notice of termination shall outline the reasons for such termination.
(c) Severance; Release. In the event of and upon the termination by
the Corporation of the employment of the Employee under this Agreement without
"cause", in addition to the Salary and other compensation (including accrued
vacation, cash bonuses, incentive and performance compensation) earned hereunder
and unpaid or not delivered through the date of termination and any benefits
referred to in Section 5(b) hereof in which the Employee has a vested right
under the terms and conditions of the plan or program pursuant to which such
benefits were granted (without regard to such termination), the Corporation
shall pay the Employee a cash payment (the "Severance Payment") equal in the
aggregate to the sum of twelve months salary and bonus (which shall be
determined based on the previous twelve months or portion thereof) preceding
such termination. In the event of termination of this Agreement by the
Corporation by reason of the death or disability of the Employee or for "cause",
or in the event of voluntary termination of this Agreement by Employee, the
Corporation shall not be obligated to make the Severance Payment to the
Employee. The Severance Payment shall be paid to the Employee in consecutive,
equal monthly installments, on the fifteenth day of each calendar month
commencing during the month next following the first to occur of (1) the month
in which the Employee is no longer employed by the Corporation and (2) the
effective date of a general release from the Employee in customary form for
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<PAGE>
such circumstances. The Severance Payment shall be in lieu of any other claim
for compensation under this Agreement, any wage continuation law or at common
law, or any claim to severance or similar payments or benefits which the
Employee may otherwise have or make. Without limiting any other rights or
remedies which the Corporation may have, it is understood that the Corporation
shall be under no further obligation to make any such severance payments and
shall be entitled to be reimbursed therefor by the Employee or his estate if the
Employee violates any of the covenants set forth in this Agreement. In the event
that the Severance Payment shall become payable to the Employee, the Employee
shall not be required, either in mitigation of damages or by the terms of any
provisions of this Agreement or otherwise, to seek or accept other employment,
and if the Employee does accept other employment, any benefits or payments under
this Agreement shall not be reduced by any compensation earned or other benefits
received as a result of such employment. Further, in the event that the
Severance Payment shall become payable to the Employee, the Corporation shall
continue to provide during such period coverage to Employee under the
Corporation's health, hospitalization and medical programs, to the same extent
and at the same cost to the Employee as provided during the term of Employee's
employment with the Corporation so long as its programs permit such coverage
and, in addition, shall use its best efforts to maximize the length of time that
COBRA benefits otherwise available to Employee shall remain available to the
maximum extent permitted under applicable laws.
7. Confidentiality.
(a) The Employee agrees to the following to and for the benefit of
the Corporation:
(i) Confidential Information. As used in this Agreement,
"Confidential Information" means information belonging to the
Corporation which is of value to the Corporation in the course of
conducting its business and the disclosure of which is reasonably
likely to result in a competitive or other disadvantage to the
Corporation. Confidential Information includes, without limitation,
financial information, reports, and forecasts; inventions,
improvements and other intellectual property; trade secrets;
know-how; designs, processes or formulae, software; market or sales
information or plans; customer lists; and business plans, prospects
and opportunities (such as possible acquisitions or dispositions of
businesses or facilities) which have been discussed or considered by
the management of the Corporation. Confidential Information includes
information developed by the Employee in the course of the
Employee's employment by the Corporation or Cyber-Tech in the three
(3) previous years, as well as other information to which the
Employee may have access in connection with the Employee's
employment pertaining to the same or similar lines of business as
may be engaged in, or proposed to be engaged in, by the Corporation
during the term of this Agreement. Confidential Information also
includes the confidential information of others with which the
Corporation has a business relationship. Notwithstanding the
foregoing, Confidential Information does not include information in
the public domain, unless due to breach of the Employee's duties
under Section 7(a)(vi) or information known to the Employee prior to
his employment by the Corporation or Cyber-Tech in the three (3)
previous years.
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(ii) Confidentiality. The Employee understands and agrees that
the Employee's employment creates a relationship of confidence and
trust between the Employee and the Corporation with respect to all
Confidential Information. At all times, both during the Employee's
employment with the Corporation and after his termination, the
Employee will keep in confidence and trust all such Confidential
Information, and will not use or disclose any such Confidential
Information without the written consent of the Corporation, except
as may be necessary in the ordinary course of performing the
Employee's duties to the Corporation.
(iii) Inventions. The Employee recognizes that the Corporation
possesses a proprietary interest in all of the Confidential
Information and has the exclusive right and privilege to use,
protect by copyright, patent or trademark, or otherwise exploit the
processes, ideas and concepts described therein to the exclusion of
the Employee, except as otherwise agreed between the Corporation and
the Employee in writing. The Employee expressly agrees that any
products, inventions, discoveries or improvements made by the
Employee or his agents in the course of the Employee's employment or
during any period that the Employee has heretofore been a consultant
to the Corporation or Cyber-Tech, including any of the foregoing
which is based on or arises out of the Confidential Information,
shall be the property of and inure to the exclusive benefit of the
Corporation. The Employee further agrees that any and all products,
inventions, discoveries or improvements developed by the Employee
(whether or not able to be protected by copyright, patent or
trademark) during the course of his employment or during any period
that the Employee has heretofore been a consultant to the
Corporation or Cyber-Tech, or involving the use of the time,
materials or other resources of the Corporation or any of its
subsidiaries or affiliates or Cyber-Tech, shall be promptly
disclosed to the Corporation and shall become the exclusive property
of the Corporation and the Employee shall execute and deliver any
and all documents necessary or appropriate to implement the
foregoing.
(iv) Business Opportunities. The Employee agrees, while he is
employed by the Corporation, to offer or otherwise make known or
available to it, as directed by the Board of Directors of the
Corporation and without additional compensation or consideration,
any business prospects, contracts or other business opportunities
that he may discover, find, develop or otherwise have available to
him in the same or substantially similar lines of business as may be
engaged in by the Corporation during the term of this Agreement, and
further agrees that any such prospects, contacts or other business
opportunities shall be the property of the Corporation.
(v) Documents, Records, etc. All documents, records, data,
apparatus, equipment and other physical property, whether or not
pertaining to Confidential Information, which are furnished to the
Employee by the Corporation or Cyber-Tech or are produced by the
Employee in connection with the Employee's employment will be and
remain the sole property of the Corporation. The Employee will
return to the Corporation all such materials and property as and
when requested by the
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Corporation. In any event, the Employee will return all such
materials and property immediately upon termination of the
Employee's employment for any reason. The Employee will not retain
with the Employee any such material property or any copies thereof
after such termination.
(vi) Third-Party Agreements and Rights. The Employee hereby
confirms that the Employee is not bound by the terms of any
agreement with any previous employer (other than Cyber-Tech) or
other party which restricts in any way the Employee's use or
disclosure of information reasonably likely to be useful or
necessary to the performance by the Employee of his services
hereunder, or the Employee's engagement in any business. The
Employee represents to the Corporation that the Employee's execution
of this Agreement, the Employee's employment with the Corporation
and the performance of the Employee's proposed duties for the
Corporation will not violate any obligations the Employee may have
to any such previous employer or other party. In the Employee's work
for the Corporation, the Employee will not disclose or make use of
any information in violation of any agreements with or right of any
such previous employer or other party, and the Employee will not
bring to the premises of the Corporation any copies or other
tangible embodiments of non-public information belonging to or
obtained from any such previous employment or other party.
(vii) Litigation and Regulatory Cooperation. During and after
the Employee's employment, the Employee shall cooperate fully with
the Corporation in the defense or prosecution of any claims or
actions now in existence or which may be brought in the future
against or on behalf of the Corporation or its subsidiaries or
affiliates which relate to events or occurrences that transpired
while the Employee was employed by the Corporation or Cyber-Tech.
The Employee's full cooperation in connection with such claims or
actions shall include, but not be limited to, being available to
meet with counsel to prepare for discovery or trial and to act as a
witness on behalf of the Corporation at mutually convenient times.
During and after the Employee's employment, the Employee also shall
cooperate fully with the Corporation in connection with any such
investigation or review of any federal, state or local regulatory
authority as any such investigation or review relates to events or
occurrences that transpired while the Employee was employed by the
Corporation or Cyber-Tech. The Corporation shall reimburse the
Employee for any reasonable out-of-pocket expenses incurred in
connection with the Employee's performance of obligations pursuant
to this subsection (vii). The performance by the Employee under this
subsection (vii) after the termination of the Employee's employment
with the Corporation shall be subject to his other confidentiality
obligations hereunder.
(b) The provisions of this Section 7 shall survive the termination
or expiration of this Agreement, irrespective of the reason therefor, including
under circumstances in which the Employee continues thereafter in the employ of
the Corporation.
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8. Insurance. The Employee agrees that the Corporation may from time to
time and for the Corporation's own benefit apply for and take out life insurance
covering the Employee, either independently or together with others, in any
amount and form which the Corporation may deem to be in its best interests. The
Corporation shall own all rights in such insurance and in the cash values and
proceeds thereof and the Employee shall not have any right, title or interest
therein. The Employee agrees to assist the Corporation, at the Corporation's
expense, in obtaining any such insurance by, among things, submitting to
customary examinations and correctly preparing, signing and delivering such
applications and other documents as reasonably may be required. Nothing
contained in this Section 8 shall be construed as a limitation on the Employee's
right to procure any life insurance for his own personal needs.
9. Notices. All notices shall be in writing and shall be deemed to have
been duly given to a party hereto on the date of such delivery, if delivered
personally, or on the third day after being deposited in the mail if mailed via
registered or certified mail, return receipt requested, postage prepaid, or on
the next business day after being sent by recognized national overnight courier
service, in the case of the Employee at his current address as set forth in the
Corporation's records, and in the case of the Corporation, at it address set
forth above.
10. Assignability and Binding Effect. This Agreement shall inure to the
benefit of and shall be binding upon the heirs, executors, administrators,
successors and legal representatives of the Employee, and shall inure to the
benefit of and be binding upon the Corporation and its successors and assigns.
This Agreement may be assigned by the Corporation to any subsidiary, affiliate
or successor to its business, provided such entity has the financial capability
to carry out the Corporation's obligations to Employee hereunder. The Employee
may not assign, transfer, pledge, encumber, hypothecate or otherwise dispose of
this Agreement, or any of his rights or obligations hereunder, and any such
attempted delegation or disposition shall be null and void and without effect.
11. Severability. In the event that any provisions of this Agreement would
be held to be invalid, prohibited or unenforceable in any jurisdiction for any
reason (including, but not limited to, any provisions which would be held to be
unenforceable because of the scope, duration or area of its applicability),
unless narrowed by construction, this Agreement shall, as to such jurisdiction
only, be construed as if such invalid, prohibited or unenforceable provision had
been more narrowly drawn so as not to be invalid, prohibited or unenforceable
(or if such language cannot be drawn narrowly enough, the court making any such
determination shall have the power to modify such scope, duration or area or all
of them, but only to the extent necessary to make such provision or provisions
enforceable in such jurisdiction, and such provision shall then be applicable in
such modified form). If, notwithstanding the foregoing, any provision of this
Agreement would be held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision shall be ineffective to the extent of such
invalidity, prohibition or unenforceability, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New Jersey, without regard to
principles of conflict of laws and regardless of where actually executed,
delivered or performed.
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13. Complete Understanding; Counterparts. This Agreement constitutes the
complete understanding and supersedes any and all prior agreements and
understandings between the parties with respect to its subject matter, and no
statement, representation, warranty or covenant has been made by either party
with respect thereto except as expressly set forth herein. This Agreement shall
not be altered, modified, amended or terminated except by written instrument
signed by each of the parties hereto. The Section and paragraph headings
contained herein are for convenience only, and are not part of and are not
intended to define or limit the contents of said Sections and paragraphs. This
Agreement may be executed in counterparts, each of which shall be deemed an
original and all of which, when taken together, shall constitute one and the
same agreement.
14. Arbitration. All disputes under Agreement shall be settled by
arbitration in the metropolitan New York/New Jersey area before a single
arbitrator pursuant to the rules of the American Arbitration Association (the
"AAA"). Arbitration may be commenced at any time by any party hereto by giving
written notice to each other party to a dispute that such dispute has been
referred to arbitration under this Section 14. The arbitrator shall be selected
by the joint agreement of the parties, but if they do not so agree within twenty
(20) days after the date of the notice referred to in the preceding sentence,
the selection shall be made pursuant to the rules of the AAA from the panels of
arbitrators maintained by the AAA. Any award rendered by the arbitrator shall be
conclusive and binding upon the parties hereto; provided, however, that any such
award shall be accompanied by a written opinion of the arbitrator giving the
reasons for the award. This provision for arbitration shall be specifically
enforceable by the parties, and the decision of the arbitrator in accordance
herewith shall be final and binding and there shall be no right of appeal
therefrom. Each party shall pay its own expenses of arbitration and the expenses
of the arbitrator shall be equally shared.
(Remainder of page intentionally left blank)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
MEDICONSULT.COM (US) LTD.
By:_________________________________
Name:_______________________________
Title:______________________________
____________________________________
Andre Pilevsky
EMPLOYMENT AGREEMENT
Employment Agreement, dated as of the ___ day of June, 1999, by and
between Mediconsult.com (US) Ltd., a Delaware corporation (the "Corporation"),
and Sharon Weinberg, an individual residing in New Providence, New Jersey (the
"Employee").
W I T N E S S E T H:
The parent corporation of the Corporation is a party to that certain
Merger Agreement and Plan of Reorganization, dated June __, 1999, among
Cyber-Tech, Inc., a New Jersey corporation ("Cyber-Tech"), its shareholders,
MCNS Merger Subsidiary II, Inc., and Mediconsult.com, Inc., a Delaware
corporation ("Parent") (the "Merger Agreement"). As a condition to the Closing
of the Merger Agreement, the Corporation and Employee are to enter in to an
agreement upon the terms outlined herein under which Employee will provide
employment services in connection with the operation of its business and that of
Subsidiary as the surviving corporation to Cyber-Tech. In consideration of the
mutual covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by the parties hereto,
the parties hereto hereby agree as follows:
1. Employment. The Corporation hereby agrees to employ the Employee in an
employee capacity, and the Employee hereby accepts and agrees to such
employment, commencing as of the date hereof, upon the terms and conditions
hereinafter set forth.
2. Term. The term of the Employee's employment under this Agreement shall
commence as of the date hereof and shall continue until the close of business on
June 30, 2000, unless sooner terminated pursuant to the terms hereof. This
Agreement shall be renewable by the mutual written consent of the parties, which
consent shall specify the renewal period and any additional or different terms
of employment.
3. Duties and Services.
(a) The Employee agrees to initially serve the Corporation in the
position and holding the title "Manager Cardiovascular", and shall also serve
Cyber-Tech and such other of its subsidiaries and affiliated companies as may be
designated by the Corporation, faithfully, diligently and to the best of her
ability, subject to and under the direction and control of the appointed manager
of the Corporation, devoting her entire business time, energy and skill to such
employment. The Corporation and the Employee acknowledge that Employee's
employment hereunder is intended to be a "half-time" employment relationship.
Employee shall, during the course of her employment by the Corporation, not
engage in business employment for any other employer. Employee's duties shall be
to oversee the lay person cardiovascular articles posted on the Cyber-Tech (or
any successor entity) web-site and to edit lay person cardiovascular articles
prior to submitting them to professional advisors for comment, and such other
duties as are reasonably necessary to fulfill the position of Manager,
Cardiovascular.
(b) The principal place of employment of the Employee shall be in
New Providence, New Jersey, or Parsippany, New Jersey, or such other offices of
the Corporation as shall
<PAGE>
be determined by the Board of Directors which shall be located within a one-hour
drive of New Providence, New Jersey. Employee shall not be required to relocate
from New Providence, New Jersey.
4. Compensation. From the Closing Date until June 30, 2000, the
Corporation agrees to pay to the Employee, and the Employee agrees to accept a
basic salary for all Employee's services hereunder (the Salary") at the rate of
$ 45,000 per annum, payable in accordance with the Corporation's standard
payroll policies and subject to normal deductions and withholdings.
5. Employee Benefits.
(a) Business. The Corporation shall reimburse the Employee for the
reasonable business expenses incurred by her for or on behalf of the Corporation
in furtherance of the performance of her duties hereunder. Such reimbursement
shall be subject to receipt by the Corporation from the Employee of such an
expense statements and such vouchers and other reasonable verifications as the
Corporation shall require to satisfactorily evidence such expenses, and shall
also be subject to such policies as the Corporation shall establish from time to
time.
(b) Benefit Programs. The Employee shall be entitled to participate,
in accordance with the terms thereof, in employee benefit plans and programs
maintained for similarly situated half-time employees of the Corporation,
including, without limitation, any health, hospitalization and medical insurance
programs and in any pension or retirement or other similar plans or programs.
The foregoing shall not be construed to require the Corporation to establish any
such plans or programs, or to prevent the Corporation from modifying or
terminating any such plans or programs once established, provided that in no
case shall the Corporation terminate any such plan or benefit unless such
termination is part of a general termination of such benefits.
(c) Vacation. The Employee shall be entitled to four (4) weeks of
vacation each employment year during the term of this Agreement, taken
consecutively or in segments. Vacation not taken during any such year cannot be
rolled over to the following or any subsequent year.
(d) Leave of Absence. Employee shall be entitled to a six (6) week
leave of absence, without pay, to be taken from approximately August 1, 1999,
through September 15, 1999. During such period, Employee shall take such steps
as may be necessary to see that the Corporation receives the services she would
otherwise have provided at no additional cost to the Corporation other than the
Salary she would otherwise have received.
6. Termination of Benefits.
(a) Termination. Notwithstanding anything to the contrary contained
herein, the Employee's employment with the Corporation, as well as the
Employee's right to any compensation which thereafter otherwise would accrue to
her hereunder or in connection therewith, shall terminate upon the earliest to
occur of the following events:
(i) the death or disability (as defined below) of the
Employee,
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(ii) the expiration of the term of this Agreement,
(iii) the Employee's voluntary termination of such employment,
or
(iv) upon delivery of written notice, with or without "cause"
(as defined below), to the Employee from the Corporation of such
termination.
(b) Certain Definitions. For the purpose of this Section 6, (i) the
term "cause" is defined as (A) the commission by the Employee of a felony or an
offense involving moral turpitude, the Employee's engaging in theft,
embezzlement, fraud, obtaining funds or property under false pretenses, or
similar acts of misconduct with respect to the property of the Corporation or
its employees, stockholders, affiliates, customers, licensees, licensers or
suppliers, (B) the repeated failure by the Employee to (i) perform her material
duties hereunder, or (ii) to comply with reasonable written policies or
directives of the Board of Directors of the Corporation, (C) material
misfeasance or malfeasance, or (D) the breach of this Agreement by the Employee
in any material respect, which breach is not cured within thirty (30) days after
Employee's receipt of written notice of the breach (or if a breach is a
repetition of a previous breach occurring within the previous twelve (12)
months, no cure right shall be given), and (ii) the Employee shall be deemed
"disabled" if, at the Corporation's option, it gives notice to the Employee or
her representative that due to a disabling mental or physical condition, she has
been prevented, for a continuous period of 90 days during the term hereof or for
an aggregate of 120 days during any six month period during the term hereof,
from substantially performing those duties which she was required to perform
pursuant to the provisions of this Agreement prior to incurring such disability,
subject to any applicable requirements of federal or state law under a family
and medical leave act. Any notice of termination shall outline the reason or
reasons for such termination.
(c) Severance; Release. In the event of and upon the termination by
the Corporation of the employment of the Employee under this Agreement without
"cause", in addition to the Salary and other compensation (including accrued
vacation, cash bonuses, incentive and performance compensation) earned hereunder
and unpaid or not delivered through the date of termination and any benefits
referred to in Section 5(b) hereof in which the Employee has a vested right
under the terms and conditions of the plan or program pursuant to which such
benefits were granted (without regard to such termination), the Corporation
shall pay the Employee a cash payment (the "Severance Payment") equal in the
aggregate to the sum of six (6) weeks salary. In the event of termination of
this Agreement by the Corporation by reason of the death or disability of the
Employee or for "cause", or in the event of the voluntary termination of this
Agreement by Employee, the Corporation shall not be obligated to make the
Severance Payment to the Employee. The Severance Payment shall be paid to the
Employee in consecutive, equal monthly installments, on the fifteenth day of
each calendar month commencing during the month next following the first to
occur of (1) the month in which the Employee is no longer employed by the
Corporation and (2) the effective date of a general release from the Employee in
customary form for such circumstances. The Severance Payment shall be in lieu of
any other claim for compensation under this Agreement, any wage continuation law
or at common law, or any claim to severance or similar payments or benefits
which the Employee may otherwise have or make. Without limiting any other rights
or remedies which the Corporation may have, it is understood that the
Corporation shall be under no
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<PAGE>
further obligation to make any such severance payments and shall be entitled to
be reimbursed therefor by the Employee or her estate if the Employee violates
any of the covenants set forth in this Agreement. In the event that the
Severance Payment shall become payable to the Employee, the Employee shall not
be required, either in mitigation of damages or by the terms of any provisions
of this Agreement or otherwise, to seek or accept other employment, and if the
Employee does accept other employment, any benefits or payments under this
Agreement shall not be reduced by any compensation earned or other benefits
received as a result of such employment. Further, in the event that the
Severance Payment shall become payable to the Employee, the Corporation shall
continue to provide during such period coverage to Employee under the
Corporation's health, hospitalization and medical programs, to the same extent
and at the same cost to the Employee as provided during the term of Employee's
employment with the Corporation, so long as its programs permit such coverage.
7. Confidentiality.
(a) The Employee agrees to the following to and for the benefit of
the Corporation:
(i) Confidentiality. The Employee understands and agrees that
the Employee's employment creates a relationship of confidence and
trust between the Employee and the Corporation with respect to all
Confidential Information. At all times, both during the Employee's
employment with the Corporation and after her termination, the
Employee will keep in confidence and trust all such Confidential
Information, and will not use or disclose any such Confidential
Information without the written consent of the Corporation, except
as may be necessary in the ordinary course of performing the
Employee's duties to the Corporation.
(ii) Confidential Information. As used in this Agreement,
"Confidential Information" means information belonging to the
Corporation which is of value to the Corporation in the course of
conducting its business and the disclosure of which is reasonably
likely to result in a competitive or other disadvantage to the
Corporation. Confidential Information includes, without limitation,
financial information, reports, and forecasts; inventions,
improvements and other intellectual property; trade secrets;
know-how; designs, processes or formulae, software; market or sales
information or plans; customer lists; and business plans, prospects
and opportunities (such as possible acquisitions or dispositions of
businesses or facilities) which have been discussed or considered by
the management of the Corporation. Confidential Information includes
information developed by the Employee in the course of the
Employee's employment by the Corporation or Cyber-Tech in the three
(3) previous years, as well as other information to which the
Employee may have access in connection with the Employee's
employment pertaining to the same or similar lines of business as
may be engaged in, or proposed to be engaged in, by the Corporation
during the term of this Agreement. Confidential Information also
includes the confidential information of others with which the
Corporation has a business relationship. Notwithstanding the
foregoing, Confidential Information does
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<PAGE>
not include information in the public domain, unless due to breach
of the Employee's duties under this Section 7 or information known
to the Employee prior to her employment by the Corporation or
Cyber-Tech in the three (3) previous years.
(iii) Inventions. The Employee recognizes that the Corporation
possesses a proprietary interest in all of the Confidential
Information and has the exclusive right and privilege to use,
protect by copyright, patent or trademark, or otherwise exploit the
processes, ideas and concepts described therein to the exclusion of
the Employee, except as otherwise agreed between the Corporation and
the Employee in writing. The Employee expressly agrees that any
products, inventions, discoveries or improvements made by the
Employee or her agents in the course of the Employee's employment or
during any period that the Employee has heretofore been a consultant
to the Corporation or Cyber-Tech, including any of the foregoing
which is based on or arises out of the Confidential Information,
shall be the property of and inure to the exclusive benefit of the
Corporation. The Employee further agrees that any and all products,
inventions, discoveries or improvements developed by the Employee
(whether or not able to be protected by copyright, patent or
trademark) during the course of her employment or during any period
that the Employee has heretofore been a consultant to the
Corporation or Cyber-Tech, or involving the use of the time,
materials or other resources of the Corporation or any of its
subsidiaries or affiliates or Cyber-Tech, shall be promptly
disclosed to the Corporation and shall become the exclusive property
of the Corporation and the Employee shall execute and deliver any
and all documents necessary or appropriate to implement the
foregoing.
(iv) Business Opportunities. The Employee agrees, while she is
employed by the Corporation, to offer or otherwise make known or
available to it, as directed by the Board of Directors of the
Corporation and without additional compensation or consideration,
any business prospects, contracts or other business opportunities
that she may discover, find, develop or otherwise have available to
her in the same or similar lines of business as the Corporation's,
and further agrees that any such prospects, contacts or other
business opportunities shall be the property of the Corporation.
(v) Documents, Records, etc. All documents, records, data,
apparatus, equipment and other physical property, whether or not
pertaining to Confidential Information, which are furnished to the
Employee by the Corporation or Cyber-Tech or are produced by the
Employee in connection with the Employee's employment will be and
remain the sole property of the Corporation. The Employee will
return to the Corporation all such materials and property as and
when requested by the Corporation. In any event, the Employee will
return all such materials and property immediately upon termination
of the Employee's employment for any reason. The Employee will not
retain with the Employee any such material property or any copies
thereof after such termination.
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<PAGE>
(vi) Third-Party Agreements and Rights. The Employee hereby
confirms that the Employee is not bound by the terms of any
agreement with any previous employer (other than Cyber-Tech) or
other party which restricts in any way the Employee's use or
disclosure of information reasonably likely to be useful or
necessary to the performance by the Employee of her services
hereunder, or the Employee's engagement in any business. The
Employee represents to the Corporation that the Employee's execution
of this Agreement, the Employee's employment with the Corporation
and the performance of the Employee's proposed duties for the
Corporation will not violate any obligations the Employee may have
to any such previous employer or other party. In the Employee's work
for the Corporation, the Employee will not disclose or make use of
any information in violation of any agreements with or right of any
such previous employer or other party, and the Employee will not
bring to the premises of the Corporation any copies or other
tangible embodiments of non-public information belonging to or
obtained from any such previous employment or other party.
(vii) Litigation and Regulatory Cooperation. During and after
the Employee's employment, the Employee shall cooperate fully with
the Corporation in the defense or prosecution of any claims or
actions now in existence or which may be brought in the future
against or on behalf of the Corporation or its subsidiaries or
affiliates which relate to events or occurrences that transpired
while the Employee was employed by the Corporation or Cyber-Tech.
The Employee's full cooperation in connection with such claims or
actions shall include, but not be limited to, being available to
meet with counsel to prepare for discovery or trial and to act as a
witness on behalf of the Corporation at mutually convenient times.
During and after the Employee's employment, the Employee also shall
cooperate fully with the Corporation in connection with any such
investigation or review of any federal, state or local regulatory
authority as any such investigation or review relates to events or
occurrences that transpired while the Employee was employed by the
Corporation or Cyber-Tech. The Corporation shall reimburse the
Employee for any reasonable out-of-pocket expenses incurred in
connection with the Employee's performance of obligations pursuant
to this subsection (vii). The performance by the Employee under this
subsection (vii) after the termination of the Employee's employment
with the Corporation shall be subject to her other confidentiality
obligations hereunder.
(b) The provisions of this Section 7 shall survive the termination
or expiration of this Agreement, irrespective of the reason therefor, including
under circumstances in which the Employee continues thereafter in the employ of
the Corporation.
8. Insurance. The Employee agrees that the Corporation may from time to
time and for the Corporation's own benefit apply for and take out life insurance
covering the Employee, either independently or together with others, in any
amount and form which the Corporation may deem to be in its best interests. The
Corporation shall own all rights in such insurance and in the cash values and
proceeds thereof and the Employee shall not have any right, title or interest
therein. The Employee agrees to assist the Corporation, at the Corporation's
expense, in obtaining any such
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<PAGE>
insurance by, among things, submitting to customary examinations and correctly
preparing, signing and delivering such applications and other documents as
reasonably may be required. Nothing contained in this Section 8 shall be
construed as a limitation on the Employee's right to procure any life insurance
for her own personal needs.
9. Notices. All notices shall be in writing and shall be deemed to have
been duly given to a party hereto on the date of such delivery, if delivered
personally, or on the third day after being deposited in the mail if mailed via
registered or certified mail, return receipt requested, postage prepaid, or on
the next business day after being sent by recognized national overnight courier
service, in the case of the Employee at her current address as set forth in the
Corporation's records, and in the case of the Corporation, at it address set
forth above.
10. Assignability and Binding Effect. This Agreement shall inure to the
benefit of and shall be binding upon the heirs, executors, administrators,
successors and legal representatives of the Employee, and shall inure to the
benefit of and be binding upon the Corporation and its successors and assigns,
provided that such entity has the financial capability to carry out the
Corporation's obligations to Employee hereunder. This Agreement may be assigned
by the Corporation to any subsidiary, affiliate or successor to its business.
The Employee may not assign, transfer, pledge, encumber, hypothecate or
otherwise dispose of this Agreement, or any of her rights or obligations
hereunder, and any such attempted delegation or disposition shall be null and
void and without effect.
11. Severability. In the event that any provisions of this Agreement would
be held to be invalid, prohibited or unenforceable in any jurisdiction for any
reason (including, but not limited to, any provisions which would be held to be
unenforceable because of the scope, duration or area of its applicability),
unless narrowed by construction, this Agreement shall, as to such jurisdiction
only, be construed as if such invalid, prohibited or unenforceable provision had
been more narrowly drawn so as not to be invalid, prohibited or unenforceable
(or if such language cannot be drawn narrowly enough, the court making any such
determination shall have the power to modify such scope, duration or area or all
of them, but only to the extent necessary to make such provision or provisions
enforceable in such jurisdiction, and such provision shall then be applicable in
such modified form). If, notwithstanding the foregoing, any provision of this
Agreement would be held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision shall be ineffective to the extent of such
invalidity, prohibition or unenforceability, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New Jersey, without regard to
principles of conflict of laws and regardless of where actually executed,
delivered or performed.
13. Complete Understanding; Counterparts. This Agreement constitutes the
complete understanding and supersedes any and all prior agreements and
understandings between the parties with respect to its subject matter, and no
statement, representation, warranty or covenant has been made by either party
with respect thereto except as expressly set forth herein. This Agreement shall
not be altered, modified, amended or terminated except by written instrument
signed by each of the
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parties hereto. The Section and paragraph headings contained herein are for
convenience only, and are not part of and are not intended to define or limit
the contents of said Sections and paragraphs. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which, when
taken together, shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
MEDICONSULT.COM (US) LTD.
By:_________________________________
Name:_______________________________
Title:______________________________
____________________________________
Sharon Weinberg
CONSULTING AGREEMENT
Consulting Agreement, dated as of the ___ day of June, 1999, by and
between Mediconsult.com (US) Ltd., a Delaware corporation (the "Corporation"),
and Daniel J. Rader, M.D., an individual residing in Collegeville, Pennsylvania
(the "Consultant").
W I T N E S S E T H:
The parent corporation of the Corporation is a party to that certain
Merger Agreement and Plan of Reorganization, dated June __, 1999, among
Cyber-Tech, Inc., a New Jersey corporation ("Cyber-Tech"), its shareholders,
MCNS Merger Subsidiary II, Inc. ("Subsidiary"), and Mediconsult.com, Inc., a
Delaware corporation ("Parent") (the "Merger Agreement"). As a condition to the
Closing of the Merger Agreement, the Corporation and Consultant are to enter in
to an agreement upon the terms outlined herein under which Consultant will
provide consulting services in connection with the operation of its business and
that of Subsidiary as the surviving corporation to Cyber-Tech. In consideration
of the mutual covenants herein contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
the parties hereto, the parties hereto hereby agree as follows:
1. Consulting. The Corporation hereby retains the Consultant in an
independent contractor capacity, and the Consultant hereby accepts and agrees to
such capacity, commencing as of the date hereof, upon the terms and conditions
hereinafter set forth.
2. Term. The term of the Consultant's service under this Agreement shall
commence as of the date hereof and shall continue until the close of business on
June 30, 2002, unless sooner terminated pursuant to the terms hereof. This
Agreement shall be renewable by the mutual written consent of the parties.
3. Duties and Services. During the term, Consultant agrees to provide to
the Corporation the services set forth on Exhibit A attached hereto and made
part hereof (the "Services"), subject to the terms and conditions of this
Agreement. Consultant will initially hold the title of "Medical Director,
Cardiovascular." Consultant shall commit to as much time as is necessary to
ensure successful performance of the Services, and shall respond to all requests
by the Company for information on a timely basis. The Company shall provide
Consultant with sufficient access to the Company's facilities, staff and
resources as may be necessary for Consultant to perform the Services.
4. Fee for Services. As compensation for the Services, the Corporation
shall pay Consultant the fees set forth on Exhibit B attached hereto and made a
part hereof. Consultant shall in no way be eligible for any fringe benefits or
other benefits normally afforded to employees of the Corporation, and Consultant
shall be obligated to pay any and all applicable taxes and other governmental
and licensing requirements arising from the compensation to be paid to the
Consultant hereunder. The fees provided for herein shall continue to be paid to
Consultant unless his services are terminated pursuant to Section 6 hereof.
<PAGE>
5. Expenses. During the term, the Corporation shall reimburse Consultant
for necessary and reasonable out-of-pocket travel expenses incurred in
performing the Services hereunder, provided that Consultant submits to the
Corporation adequate records and other documentation evidence as may be required
by Federal and State statutes and regulations for the substantiation of each
such expenditure as an income tax deduction to the Corporation.
6. Termination.
(a) Termination. Notwithstanding anything to the contrary contained
herein, the Consultant's service to the Corporation, as well as the Consultant's
right to any compensation which thereafter otherwise would accrue to his
hereunder or in connection therewith, shall terminate upon the earliest to occur
of the following events:
(i) the death or disability (as defined below) of the
Consultant,
(ii) the expiration of the term of this Agreement,
(iii) the Consultant's voluntary termination of services, or
(iv) upon delivery of written notice, with or without "cause"
(as defined below), to the Consultant from the Corporation of such
termination.
(b) Certain Definitions. For the purpose of this Section 6, (i) the
term "cause" is defined as (A) the commission by the Consultant of a felony or
an offense involving moral turpitude, the Consultant's engaging in theft,
embezzlement, fraud, obtaining funds or property under false pretenses, or
similar acts of misconduct with respect to the property of the Corporation or
its Consultants, stockholders, affiliates, customers, licensees, licensers or
suppliers, (B) the repeated failure by the Consultant to perform his material
duties hereunder or comply with reasonable written policies or directives of the
Board of Directors of the Corporation, (C) material misfeasance or malfeasance,
or (D) the breach of this Agreement by the Consultant in any material respect,
which breach is not cured within thirty (30) days after Consultant's receipt of
written notice of the breach (or if a breach is a repetition of a previous
breach occurring within the previous twelve (12) months, no cure right shall be
given), and (ii) the Consultant shall be deemed "disabled" if, at the
Corporation's option, it gives notice to the Consultant or his representative
that due to a disabling mental or physical condition, he has been prevented, for
a continuous period of 90 days during the term hereof or for an aggregate of 120
days during any six month period during the term hereof, from substantially
performing those duties which he was required to perform pursuant to the
provisions of this Agreement prior to incurring such disability.
(c) Severance; Release. In the event of and upon the termination by
the Corporation of the Consultant under this Agreement without "cause", in
addition to the Fees earned hereunder and unpaid or not delivered through the
date of termination and any expenses referred to in Section 5 hereof, the
Corporation shall pay the Consultant a cash payment (the "Severance Payment")
equal in the aggregate to the sum of three (3) months fees. In the event of
termination of this Agreement by the Corporation by reason of the death or
disability of the Consultant or for "cause", or in the event of the voluntary
termination of this Agreement by Consultant, the
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Corporation shall not be obligated to make the Severance Payment to the
Consultant. The Severance Payment shall be paid to the Consultant in
consecutive, equal monthly installments, on the fifteenth day of each calendar
month commencing during the month next following the first to occur of (1) the
month in which the Consultant is no longer providing services to the Corporation
and (2) the effective date of a general release from the Consultant in customary
form for such circumstances. The Severance Payment shall be in lieu of any other
claim for compensation under this Agreement, any wage continuation law or at
common law, or any claim to severance or similar payments or benefits which the
Consultant may otherwise have or make. Without limiting any other rights or
remedies which the Corporation may have, it is understood that the Corporation
shall be under no further obligation to make any such severance payments and
shall be entitled to be reimbursed therefor by the Consultant or his estate if
the Consultant violates any of the covenants set forth in this Agreement. In the
event that the Severance Payment shall become payable to the Consultant, the
Consultant shall not be required, either in mitigation of damages or by the
terms of any provisions of this Agreement or otherwise, to seek or accept
employment, and if the Consultant does accept employment, any benefits or
payments under this Agreement shall not be reduced by any compensation earned or
other benefits received as a result of such employment.
7. Confidentiality.
(a) Subject to the Consultant's obligations to his primary employer,
the Consultant agrees to the following to and for the benefit of the
Corporation:
(i) Confidentiality. The Consultant understands and agrees
that the Consultant's service creates a relationship of confidence
and trust between the Consultant and the Corporation with respect to
all Confidential Information. At all times, both during the
Consultant's service with the Corporation and after his termination,
the Consultant will keep in confidence and trust all such
Confidential Information, and will not use or disclose any such
Confidential Information without the written consent of the
Corporation, except as may be necessary in the ordinary course of
performing the Consultant's duties to the Corporation.
(ii) Confidential Information. As used in this Agreement,
"Confidential Information" means information belonging to the
Corporation which is of value to the Corporation in the course of
conducting its business and the disclosure of which is reasonably
likely to result in a competitive or other disadvantage to the
Corporation. Confidential Information includes, without limitation,
financial information, reports, and forecasts; inventions,
improvements and other intellectual property; trade secrets;
know-how; designs, processes or formulae, software; market or sales
information or plans; customer lists; and business plans, prospects
and opportunities (such as possible acquisitions or dispositions of
businesses or facilities) which have been discussed or considered by
the management of the Corporation or Cyber-Tech in the three (3)
previous years. Confidential Information includes information
developed by the Consultant in the course of the Consultant's
service to the Corporation or Cyber-Tech in the three (3) previous
years, as well as other information to which the Consultant may have
access in connection with the
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<PAGE>
Consultant's engagement hereunder pertaining to the same or similar
lines of business as may be engaged in, or proposed to be engaged
in, by the Corporation or Cyber-Tech during the term of this
Agreement. Confidential Information also includes the confidential
information of others with which the Corporation has a business
relationship. Notwithstanding the foregoing, Confidential
Information does not include information in the public domain,
unless due to breach of the Consultant's duties under this Section 7
or information known to the Consultant prior to his engagement by
the Corporation or Cyber-Tech.
(iii) Inventions. The Consultant recognizes that the
Corporation possesses a proprietary interest in all of the
Confidential Information and has the exclusive right and privilege
to use, protect by copyright, patent or trademark, or otherwise
exploit the processes, ideas and concepts described therein to the
exclusion of the Consultant, except as otherwise agreed between the
Corporation and the Consultant in writing. The Consultant expressly
agrees that any products, inventions, discoveries or improvements
made by the Consultant or his agents in the course of the
Consultant's service or during any period that the Consultant has
heretofore been a consultant to the Corporation or Cyber-Tech,
including any of the foregoing which is based on or arises out of
the Confidential Information, shall be the property of and inure to
the exclusive benefit of the Corporation. The Consultant further
agrees that any and all products, inventions, discoveries or
improvements developed by the Consultant (whether or not able to be
protected by copyright, patent or trademark) during the course of
his service or during any period that the Consultant has heretofore
been a consultant to the Corporation or Cyber-Tech, or involving the
use of the time, materials or other resources of the Corporation or
any of its subsidiaries or affiliates or Cyber-Tech, shall be
promptly disclosed to the Corporation and shall become the exclusive
property of the Corporation and the Consultant shall execute and
deliver any and all documents necessary or appropriate to implement
the foregoing.
(iv) Business Opportunities. The Consultant agrees, during the
term, to offer or otherwise make known or available to it, as
directed by the Board of Directors of the Corporation and without
additional compensation or consideration, any business prospects,
contracts or other business opportunities that he may discover,
find, develop or otherwise have available to his in the same or
similar lines of business as the Corporation's, and further agrees
that any such prospects, contacts or other business opportunities
shall be the property of the Corporation.
(v) Documents, Records, etc. All documents, records, data,
apparatus, equipment and other physical property, whether or not
pertaining to Confidential Information, which are furnished to the
Consultant by the Corporation or Cyber-Tech or are produced by the
Consultant in connection with the Consultant's service will be and
remain the sole property of the Corporation. The Consultant will
return to the Corporation all such materials and property as and
when requested by the Corporation. In any event, the Consultant will
return all such materials and property
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<PAGE>
immediately upon termination of the Consultant's service for any
reason. The Consultant will not retain with the Consultant any such
material property or any copies thereof after such termination.
(vi) Third-Party Agreements and Rights. The Consultant hereby
confirms that the Consultant is not bound by the terms of any
agreement with any previous employer (other than Cyber-Tech) or
other party which restricts in any way the Consultant's use or
disclosure of information reasonably likely to be useful or
necessary to the performance by the Consultant of his services
hereunder, or the Consultant's engagement in any business. The
Consultant represents to the Corporation that the Consultant's
execution of this Agreement, the Consultant's engagement by the
Corporation and the performance of the Consultant's proposed duties
for the Corporation will not violate any obligations the Consultant
may have to any such previous employer or other party. In the
Consultant's work for the Corporation, the Consultant will not
disclose or make use of any information in violation of any
agreements with or right of any such previous employer or other
party, and the Consultant will not bring to the premises of the
Corporation any copies or other tangible embodiments of non-public
information belonging to or obtained from any such previous
employment or other party.
(vii) Litigation and Regulatory Cooperation. During and after
the Consultant's service, the Consultant shall cooperate fully with
the Corporation in the defense or prosecution of any claims or
actions now in existence or which may be brought in the future
against or on behalf of the Corporation or its subsidiaries or
affiliates which relate to events or occurrences that transpired
while the Consultant was performing services for the Corporation or
Cyber-Tech. The Consultant's full cooperation in connection with
such claims or actions shall include, but not be limited to, being
available to meet with counsel to prepare for discovery or trial and
to act as a witness on behalf of the Corporation at mutually
convenient times. During and after the Consultant's engagement, the
Consultant also shall cooperate fully with the Corporation in
connection with any such investigation or review of any federal,
state or local regulatory authority as any such investigation or
review relates to events or occurrences that transpired while the
Consultant was performing services for the Corporation or
Cyber-Tech. The Corporation shall reimburse the Consultant for any
reasonable out-of-pocket expenses incurred in connection with the
Consultant's performance of obligations pursuant to this subsection
(vii). The performance by the Consultant under this subsection (vii)
after the termination of the Consultant's services to the
Corporation shall be subject to his other confidentiality
obligations hereunder.
(viii) Obligation to Primary Employer. The Consultant's
obligations to his primary employer shall not materially interfere
with the Consultant's performance of the covenants and obligations
set forth herein, and Consultant shall not disclose any material
Confidential Information to his primary employer without the consent
of the Corporation.
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(ix) Use of Name. The Corporation will not use the name of the
Consultant in advertising, press releases or other public
documentation without the Consultant's consent, which will not be
unreasonably withheld or delayed.
(b) The provisions of this Section 7 shall survive the termination
or expiration of this Agreement, irrespective of the reason therefor.
8. Notices. All notices shall be in writing and shall be deemed to have
been duly given to a party hereto on the date of such delivery, if delivered
personally, or on the third day after being deposited in the mail if mailed via
registered or certified mail, return receipt requested, postage prepaid, or on
the next business day after being sent by recognized national overnight courier
service, in the case of the Consultant at his current address as set forth in
the Corporation's records, and in the case of the Corporation, at it address set
forth above.
9. Assignability and Binding Effect. This Agreement shall inure to the
benefit of and shall be binding upon the heirs, executors, administrators,
successors and legal representatives of the Consultant, and shall inure to the
benefit of and be binding upon the Corporation and its successors and assigns.
This Agreement may be assigned by the Corporation to any subsidiary, affiliate
or successor to its business, provided such entity has the financial capability
to carry out the Corporation's obligations to the Consultant hereunder. The
Consultant may not assign, transfer, pledge, encumber, hypothecate or otherwise
dispose of this Agreement, or any of his rights or obligations hereunder, and
any such attempted delegation or disposition shall be null and void and without
effect.
10. Severability. In the event that any provisions of this Agreement would
be held to be invalid, prohibited or unenforceable in any jurisdiction for any
reason (including, but not limited to, any provisions which would be held to be
unenforceable because of the scope, duration or area of its applicability),
unless narrowed by construction, this Agreement shall, as to such jurisdiction
only, be construed as if such invalid, prohibited or unenforceable provision had
been more narrowly drawn so as not to be invalid, prohibited or unenforceable
(or if such language cannot be drawn narrowly enough, the court making any such
determination shall have the power to modify such scope, duration or area or all
of them, but only to the extent necessary to make such provision or provisions
enforceable in such jurisdiction, and such provision shall then be applicable in
such modified form). If, notwithstanding the foregoing, any provision of this
Agreement would be held to be invalid, prohibited or unenforceable in any
jurisdiction, such provision shall be ineffective to the extent of such
invalidity, prohibition or unenforceability, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New Jersey, without regard to
principles of conflict of laws and regardless of where actually executed,
delivered or performed.
12. Complete Understanding; Counterparts. This Agreement constitutes the
complete understanding and supersedes any and all prior agreements and
understandings between the parties with respect to its subject matter, and no
statement, representation, warranty or covenant has been made by either party
with respect thereto except as expressly set forth herein. This Agreement shall
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<PAGE>
not be altered, modified, amended or terminated except by written instrument
signed by each of the parties hereto. The Section and paragraph headings
contained herein are for convenience only, and are not part of and are not
intended to define or limit the contents of said Sections and paragraphs. This
Agreement may be executed in counterparts, each of which shall be deemed an
original and all of which, when taken together, shall constitute one and the
same agreement.
13. Indemnification. Consultant shall be indemnified with respect to
Services provided under this Agreement as an agent of the Corporation to the
fullest extent provided under Delaware law and the Certificate of Incorporation
and Bylaws of the Corporation.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
MEDICONSULT.COM (US) LTD.
By:_________________________________
Name:_______________________________
Title:______________________________
____________________________________
Daniel J. Rader, M.D.
<PAGE>
EXHIBIT A
SERVICES
Consultant agrees to provide to the Company the following services:
1. Continue responsibilities as Editor-in-chief of HeartInfo.
2. Recruit new editorial board members for HeartInfo.
3. Develop new initiatives related to content and services directed toward
physicians and lay persons.
4. Identify new business opportunities.
5. Participate in key medical and sales meetings.
6. Utilize public relations opportunities to promote HeartInfo.
7. Identify opportunities for cooperation and synergy with academic and other
non-profit institutions related to content development.
8. Cultivate the relationships between the physicians on the HeartInfo
medical board and help keep them active and participatory.
<PAGE>
EXHIBIT B
COMPENSATION
1. Base Consulting Fees: During the term, Consultant shall be entitled to
receive annual consulting fees of $50,000 per year, payable in accordance with
the Company's general policies.
2. Additional Compensation: During the term, and subject to the conditions
set forth herein, Consultant shall also be entitled to receive as additional
compensation the following:
(a) Provided that Consultant has not been terminated by the Corporation
for cause, on June 30, 2000, Consultant shall receive, as a restricted stock
grant, the number of shares of Company common stock ("Parent Shares") equal to
$40,000 divided by the average of the closing prices for the Parent Shares as
reported in The Wall Street Journal for each of the twenty (20) trading days
ending on June 29, 2000. These Parent Shares shall vest and be released to
Consultant as follows: (i) one-third on June 30, 2000; and (ii) one-third on
each of the first and second anniversaries thereafter, provided that this
Agreement remains in effect on each of such anniversary dates.
(b) Provided that Consultant has not been terminated by the Corporation
for cause, on June 30, 2001, Consultant will receive, as a restricted stock
grant, the number of Parent Shares equal to $40,000 divided by the average of
the closing prices for the Parent Shares as reported in The Wall Street Journal
for each of the twenty (20) trading days ending on June 29, 2001. These shares
shall vest and be released to Consultant as follows: (i) one-third on the date
of the grant; and (ii) one-third on each of the first and second anniversaries
thereafter, provided that the Consulting Agreement has been renewed and is in
effect on each of such anniversary dates.
(c) Provided that Consultant has not been terminated by the Corporation
for cause, on June 30, 2002, Consultant will receive, as a restricted stock
grant, the number of Parent Shares equal to $40,000 divided by the average of
the closing prices for the Parent Shares as reported in The Wall Street Journal
for each of the twenty (20) trading days ending on June 28, 2002. These shares
shall vest and be released to Consultant as follows: (i) one-third on the date
of the grant; and (ii) one-third on each of the first and second anniversaries
thereafter, provided that the Consulting Agreement has been renewed and is in
effect on each of such anniversary dates.
(d) In the event this Agreement expired during or at the end of the
previous period, no compensation shall be payable and no shares shall vest in
respect of any subsequent period. In the event this Agreement is terminated by
the Corporation without "cause," the compensation owed for the period in which
termination occurs shall be paid and the shares vesting during that period shall
vest, but no compensation shall be payable for any subsequent period and no
vesting shall occur in any subsequent period.
(e) Expiration of this Agreement on June 30, 2002, does not mean that
Consultant loses rights vested on or prior to such expiration.
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (this "Agreement") is made as of
_____________, 1999, by and between Mediconsult.com, Inc., a Delaware
corporation, ("Parent"), and Andre Pilevsky, an individual resident of New
Jersey ("Covenantee").
RECITALS
Concurrently with the execution and delivery of this Agreement, Parent is
acquiring Cyber-Tech, Inc., a New Jersey corporation (the "Company") pursuant to
the merger of the Company with and into MCNS Merger Subsidiary, II, Inc., a
wholly-owned Subsidiary of Parent ("Subsidiary") pursuant to the terms and
conditions of that certain Merger Agreement and Plan of Reorganization (the
"Merger Agreement") dated __________, 1999, by and among Parent, Subsidiary, the
Company, and the shareholders of the Company. Section 6.10 of the Merger
Agreement requires that noncompetition agreements be executed and delivered by
each of Andre Pilevsky, Daniel J. Rader, M.D. and Sharon Weinberg as a condition
to the consummation of the transactions contemplated by the Merger Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
Capitalized terms not expressly defined in this Agreement shall have the
meanings ascribed to them in the Merger Agreement.
2. NON-COMPETITION, NON-SOLICITATION.
(a) Non-Competition. In connection with the acquisition of the Company by
Parent pursuant to the terms of the Merger Agreement, the Covenantee hereby
agrees that during the period commencing on the date hereof and ending on the
second anniversary of the date on which the Covenantee's employment with the
Parent and its subsidiaries and affiliates terminates for any reason (the
"Non-Compete Period"), he will not, without the express written consent of the
Parent, directly or indirectly, anywhere in the United States or Canada, engage
in any activity which is, or participate or invest in, or provide or facilitate
the provision of financing to, or assist (whether as owner, part-owner,
shareholder, member, partner, director, officer, trustee, employee, agent or
consultant, or in any other capacity), any business, organization or person
other than the Parent (or any subsidiary or affiliate of the Parent), whose
business, activities, products or services are directly competitive with any of
the business, activities, products or services conducted by the Parent on the
date the Covenantee's employment with the Parent terminates and over which the
Covenantee has had responsibility and which are in the Parent's Field of
Interest (each a "Competitive Business"); provided that the Covenantee shall be
permitted to be employed by an entity which operates an ancillary business in
the Parent's Field of Interest so long as the Covenantee is not involved in such
ancillary business. For purposes of this Section 2(a), the Parent's "Field of
Interest" shall consist of the development, implementation or sale of on-line or
Internet marketing or advertising programs to pharmaceutical and other
healthcare organizations and any other on-line or Internet health care
<PAGE>
related business activity engaged in, or conducted by the Parent or its
subsidiaries or affiliates on the date the Covenantee's employment with the
Parent terminates, but only to the extent the Covenantee has had responsibility
over such business activity. Notwithstanding anything in this Section 2(a) to
the contrary, the Covenantee shall not be prohibited from participating,
directly or indirectly, in any activity or business (i) with Internet operations
outside the health care fields, including but not limited to companies providing
non-health care goods or services through the Internet or providing e-commerce
services or content that is not a Competitive Business; or (ii) related to
health care services, other than on-line or Internet-based or related
businesses.
Notwithstanding anything herein to the contrary, the Covenantee may make
passive investments in any enterprise the shares of which are publicly traded if
such investment constitutes less than five percent (5%) of the equity of such
enterprise.
(b) Non-Solicitation. In addition to the restrictions in Section 2(a)
above, the Covenantee also agrees that he will not during the Non-Compete
Period: (i) solicit or encourage any officer or employee of the Parent or its
direct or indirect subsidiaries or affiliates to terminate his or her
relationship or employment with such entity; or (ii) on behalf of himself or any
persons or entity, other than the Parent or any of its direct or indirect
subsidiaries and affiliates, solicit business from any client of the Parent or
its direct or indirect subsidiaries in the Parent's Field of Interest; provided,
however, that the foregoing provision will not prevent the Covenantee from
employing or offering to employ any such person who has been terminated by the
Parent or a subsidiary or affiliate prior to the commencement of employment
discussions between the Covenantee and such employee, and the Covenantee will be
permitted to hire and offer to hire non-shareholder employees of the Parent who
are contacted as a result of the use of general newspaper or electronic
advertisement and other general non-targeted recruitment techniques in the
ordinary course of business and consistent with past practices as opposed to
targeted solicitations of any one or more of the Parent's employees.
For purposes of this Agreement, any reference to the subsidiaries of the
Parent shall be deemed to include all entities directly or indirectly controlled
by it through an ownership of more than fifty percent (50%) of the voting
interests, the term "affiliate" shall mean, with respect to any person or
entity, any person or entity which directly or indirectly controls, is
controlled by or is under common control with such person or entity, and the
term "person" shall mean an individual, a parent, an association, a partnership,
a limited liability company, an estate, a trust, and any other entity or
organization.
(c) Scope of Agreement. The parties acknowledge that the time, scope,
geographic area and other provisions of this Section 2 have been specifically
negotiated by sophisticated commercial parties and agree that (i) all such
provisions are reasonable under the circumstances of this Agreement, (ii) are
given as an integral and essential part of this Agreement and (iii) but for the
covenants of the Covenantee contained in this Section 2, the Parent would not
have entered into this Agreement. The Covenantee has independently consulted
with his counsel and has been advised in all respects concerning the
reasonableness and propriety of the covenants contained herein, with specific
regard to the business to be conducted by the Parent and its subsidiaries and
affiliates, and represents that this Agreement is intended to be, and shall be,
fully enforceable and effective in accordance with its terms.
2
<PAGE>
(d) Severability. In the event that any covenant contained in this
Agreement shall be determined by any court of competent jurisdiction to be
unenforceable by reason of its extending for too great a period of time or over
too great a geographical area or by reason of its being too extensive in any
other respect, it shall be interpreted to extend only over the maximum period of
time for which it may be enforceable and/or over the maximum geographical area
as to which it may be enforceable and/or to the maximum extent in all other
respects as to which it may be enforceable, all as determined by such court in
such action.
3. CONSIDERATION
As consideration for Covenantee's performance of the covenants and
obligations set forth herein, Parent is this day delivering to Covenantee by
certified check or other check acceptable to Covenantee, the sum of $250,000.
4. REMEDIES
If Covenantee breaches the covenants set forth in Section 2 of this
Agreement, Parent and the Company will be entitled to the following remedies:
(a) damages from Covenantee;
(b) In addition to its right to damages and any other rights it may have,
to obtain injunctive or other equitable relief to restrain any breach or
threatened breach or otherwise to specifically enforce the provisions of Section
2 of this Agreement, it being agreed that money damages alone would be
inadequate to compensate the Parent and the Company and would be an inadequate
remedy for such breach.
The rights and remedies of the parties to this Agreement are cumulative
and not alternative.
5. SUCCESSORS AND ASSIGNS
This Agreement will be binding upon Parent, the Company and Covenantee and
will inure to the benefit of Parent and the Company and their affiliates,
successors and assigns and Covenantee and Covenantee's assigns, heirs and legal
representatives.
6. WAIVER
Neither the failure nor any delay by any party in exercising any right,
power, or privilege under this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement can be discharged by one party, in whole or in part, by a waiver
or renunciation of the claim or right unless in writing signed by the other
party; (b) no waiver that may be given by a party will be applicable except in
the specific instance for which it is given; and (c) no notice to or demand on
one party will be deemed to be a waiver of any obligation of such party or of
the right of the
3
<PAGE>
party giving such notice or demand to take further action without notice or
demand as provided in this Agreement.
7. GOVERNING LAW
This Agreement will be governed by the laws of the State of New Jersey
without regard to conflicts of law principles.
8. JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based on
any right arising out of, this Agreement may be brought against any of the
parties in the United States District Court for the District of New Jersey, or
if jurisdiction and venue is not proper in federal courts, then the Superior
Court of New Jersey, and each of the parties consents to the jurisdiction of
such courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.
9. SEVERABILITY
Whenever possible each provision and term of this Agreement will be
interpreted in a manner to be effective and valid but if any provision or term
of this Agreement is held to be prohibited by or invalid, then such provision or
term will be ineffective only to the extent of such prohibition or invalidity,
without invalidating or affecting in any manner whatsoever the remainder of such
provision or term or the remaining provisions or terms of this Agreement. If any
of the covenants set forth in Section 2 of this Agreement are held to be
unreasonable, arbitrary, or against public policy, such covenants will be
considered divisible with respect to scope, time, and geographic area, and in
such lesser scope, time and geographic area, will be effective, binding and
enforceable against Covenantee.
10. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Agreement and all of which, when
taken together, will be deemed to constitute one and the same agreement.
11. SECTION HEADINGS; CONSTRUCTION
The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Agreement unless otherwise specified. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require. Unless
otherwise expressly provided, the word "including" does not limit the preceding
words or terms.
4
<PAGE>
12. NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (effective upon written confirmation of receipt), (b) sent by
facsimile (effective upon written confirmation of receipt), provided that a copy
is mailed by registered mail, return receipt requested, or (c) received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and facsimile
numbers set forth below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):
Covenantee:
_____________
_____________
_____________
Facsimile No.:___________________
with a copy to (which shall not constitute notice):
Brach Eichler
101 Eisenhower Parkway
Roseland, New Jersey 07068
Attention: Stuart L. Pachman, Esq.
Facsimile No.: (973) 228-7852
Parent or Company:
Mediconsult.com, Inc.
33 Reid Street, 4th Floor
Hamilton HMIZ
Bermuda
Attention: Robert A. Jennings, CEO
with a copy to:
Mediconsult.com, Inc.
3278 Timberloch Drive
Marietta, GA 30068
Attention: E. Michael Ingram, General Counsel
13. ENTIRE AGREEMENT
This Agreement, the Merger Agreement (together will exhibits and schedules
attached thereto), and the documents executed in connection with the Merger
Agreement constitute the entire agreement between the parties with respect to
the subject matter of this Agreement and supersede all prior written and oral
agreements and understandings between Parent and
5
<PAGE>
Covenantee with respect to the subject matter of this Agreement. This Agreement
may not be amended except by a written agreement executed by the party to be
charged with the amendment.
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6
<PAGE>
IN WITNESS WHEREOF, the corporate party hereto has caused this Agreement
to be executed and delivered by its duly authorized representative, and the
individual party hereto has executed and delivered this Agreement, as of the
date first above written.
PARENT:
Mediconsult.com, Inc.
By:____________________________
Name:__________________________
Title:_________________________
COVENANTEE:
_______________________________
Andre Pilevsky
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (this "Agreement") is made as of
_____________, 1999, by and between Mediconsult.com, Inc., a Delaware
corporation, ("Parent"), and Sharon Weinberg, an individual resident of New
Jersey ("Covenantee").
RECITALS
Concurrently with the execution and delivery of this Agreement, Parent is
acquiring Cyber-Tech, Inc., a New Jersey corporation (the "Company") pursuant to
the merger of the Company with and into MCNS Merger Subsidiary, II, Inc., a
wholly-owned Subsidiary of Parent ("Subsidiary") pursuant to the terms and
conditions of that certain Merger Agreement and Plan of Reorganization (the
"Merger Agreement") dated __________, 1999, by and among Parent, Subsidiary, the
Company, and the shareholders of the Company. Section 6.10 of the Merger
Agreement requires that noncompetition agreements be executed and delivered by
each of Andre Pilevsky, Daniel J. Rader, M.D. and Sharon Weinberg as a condition
to the consummation of the transactions contemplated by the Merger Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
Capitalized terms not expressly defined in this Agreement shall have the
meanings ascribed to them in the Merger Agreement.
2. NON-COMPETITION, NON-SOLICITATION.
(a) Non-Competition. In connection with the acquisition of the Company by
Parent pursuant to the terms of the Merger Agreement, the Covenantee hereby
agrees that during the period commencing on the date hereof and ending on the
second anniversary of the date on which the Covenantee's employment with the
Parent and its subsidiaries and affiliates terminates for any reason (the
"Non-Compete Period"), he will not, without the express written consent of the
Parent, directly or indirectly, anywhere in the United States or Canada, engage
in any activity which is, or participate or invest in, or provide or facilitate
the provision of financing to, or assist (whether as owner, part-owner,
shareholder, member, partner, director, officer, trustee, employee, agent or
consultant, or in any other capacity), any business, organization or person
other than the Parent (or any subsidiary or affiliate of the Parent), whose
business, activities, products or services are directly competitive with any of
the business, activities, products or services conducted by the Parent on the
date the Covenantee's employment with the Parent terminates and over which the
Covenantee has had responsibility and which are in the Parent's Field of
Interest (each a "Competitive Business"); provided that the Covenantee shall be
permitted to be employed by an entity which operates an ancillary business in
the Parent's Field of Interest so long as the Covenantee is not involved in such
ancillary business. For purposes of this Section 2(a), the Parent's "Field of
Interest" shall consist of the development, implementation or sale of on-line or
Internet marketing or advertising programs to pharmaceutical and other
healthcare organizations and any other on-line or Internet health care
<PAGE>
related business activity engaged in, or conducted by the Parent or its
subsidiaries or affiliates on the date the Covenantee's employment with the
Parent terminates, but only to the extent the Covenantee has had responsibility
over such business activity. Notwithstanding anything in this Section 2(a) to
the contrary, the Covenantee shall not be prohibited from participating,
directly or indirectly, in any activity or business (i) with Internet operations
outside the health care fields, including but not limited to companies providing
non-health care goods or services through the Internet or providing e-commerce
services or content that is not a Competitive Business; or (ii) related to
health care services, other than on-line or Internet-based or related
businesses.
Notwithstanding anything herein to the contrary, the Covenantee may make
passive investments in any enterprise the shares of which are publicly traded if
such investment constitutes less than five percent (5%) of the equity of such
enterprise.
(b) Non-Solicitation. In addition to the restrictions in Section 2(a)
above, the Covenantee also agrees that he will not during the Non-Compete
Period: (i) solicit or encourage any officer or employee of the Parent or its
direct or indirect subsidiaries or affiliates to terminate his or her
relationship or employment with such entity; or (ii) on behalf of himself or any
persons or entity, other than the Parent or any of its direct or indirect
subsidiaries and affiliates, solicit business from any client of the Parent or
its direct or indirect subsidiaries in the Parent's Field of Interest; provided,
however, that the foregoing provision will not prevent the Covenantee from
employing or offering to employ any such person who has been terminated by the
Parent or a subsidiary or affiliate prior to the commencement of employment
discussions between the Covenantee and such employee, and the Covenantee will be
permitted to hire and offer to hire non-shareholder employees of the Parent who
are contacted as a result of the use of general newspaper or electronic
advertisement and other general non-targeted recruitment techniques in the
ordinary course of business and consistent with past practices as opposed to
targeted solicitations of any one or more of the Parent's employees.
For purposes of this Agreement, any reference to the subsidiaries of the
Parent shall be deemed to include all entities directly or indirectly controlled
by it through an ownership of more than fifty percent (50%) of the voting
interests, the term "affiliate" shall mean, with respect to any person or
entity, any person or entity which directly or indirectly controls, is
controlled by or is under common control with such person or entity, and the
term "person" shall mean an individual, a parent, an association, a partnership,
a limited liability company, an estate, a trust, and any other entity or
organization.
(c) Scope of Agreement. The parties acknowledge that the time, scope,
geographic area and other provisions of this Section 2 have been specifically
negotiated by sophisticated commercial parties and agree that (i) all such
provisions are reasonable under the circumstances of this Agreement, (ii) are
given as an integral and essential part of this Agreement and (iii) but for the
covenants of the Covenantee contained in this Section 2, the Parent would not
have entered into this Agreement. The Covenantee has independently consulted
with his counsel and has been advised in all respects concerning the
reasonableness and propriety of the covenants contained herein, with specific
regard to the business to be conducted by the Parent and its subsidiaries and
affiliates, and represents that this Agreement is intended to be, and shall be,
fully enforceable and effective in accordance with its terms.
2
<PAGE>
(d) Severability. In the event that any covenant contained in this
Agreement shall be determined by any court of competent jurisdiction to be
unenforceable by reason of its extending for too great a period of time or over
too great a geographical area or by reason of its being too extensive in any
other respect, it shall be interpreted to extend only over the maximum period of
time for which it may be enforceable and/or over the maximum geographical area
as to which it may be enforceable and/or to the maximum extent in all other
respects as to which it may be enforceable, all as determined by such court in
such action.
3. CONSIDERATION
As consideration for Covenantee's performance of the covenants and
obligations set forth herein, Parent is this day delivering to Covenantee by
certified check or other check acceptable to Covenantee, the sum of $50,000.
4. REMEDIES
If Covenantee breaches the covenants set forth in Section 2 of this
Agreement, Parent and the Company will be entitled to the following remedies:
(a) damages from Covenantee;
(b) In addition to its right to damages and any other rights it may have,
to obtain injunctive or other equitable relief to restrain any breach or
threatened breach or otherwise to specifically enforce the provisions of Section
2 of this Agreement, it being agreed that money damages alone would be
inadequate to compensate the Parent and the Company and would be an inadequate
remedy for such breach.
The rights and remedies of the parties to this Agreement are cumulative
and not alternative.
5. SUCCESSORS AND ASSIGNS
This Agreement will be binding upon Parent, the Company and Covenantee and
will inure to the benefit of Parent and the Company and their affiliates,
successors and assigns and Covenantee and Covenantee's assigns, heirs and legal
representatives.
6. WAIVER
Neither the failure nor any delay by any party in exercising any right,
power, or privilege under this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement can be discharged by one party, in whole or in part, by a waiver
or renunciation of the claim or right unless in writing signed by the other
party; (b) no waiver that may be given by a party will be applicable except in
the specific instance for which it is given; and (c) no notice to or demand on
one party will be deemed to be a waiver of any obligation of such party or of
the right of
3
<PAGE>
the party giving such notice or demand to take further action without notice or
demand as provided in this Agreement.
7. GOVERNING LAW
This Agreement will be governed by the laws of the State of New Jersey
without regard to conflicts of law principles.
8. JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based on
any right arising out of, this Agreement may be brought against any of the
parties in the United States District Court for the District of New Jersey, or
if jurisdiction and venue is not proper in federal courts, then the Superior
Court of New Jersey, and each of the parties consents to the jurisdiction of
such courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.
9. SEVERABILITY
Whenever possible each provision and term of this Agreement will be
interpreted in a manner to be effective and valid but if any provision or term
of this Agreement is held to be prohibited by or invalid, then such provision or
term will be ineffective only to the extent of such prohibition or invalidity,
without invalidating or affecting in any manner whatsoever the remainder of such
provision or term or the remaining provisions or terms of this Agreement. If any
of the covenants set forth in Section 2 of this Agreement are held to be
unreasonable, arbitrary, or against public policy, such covenants will be
considered divisible with respect to scope, time, and geographic area, and in
such lesser scope, time and geographic area, will be effective, binding and
enforceable against Covenantee.
10. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Agreement and all of which, when
taken together, will be deemed to constitute one and the same agreement.
11. SECTION HEADINGS; CONSTRUCTION
The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Agreement unless otherwise specified. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require. Unless
otherwise expressly provided, the word "including" does not limit the preceding
words or terms.
4
<PAGE>
12. NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (effective upon written confirmation of receipt), (b) sent by
facsimile (effective upon written confirmation of receipt), provided that a copy
is mailed by registered mail, return receipt requested, or (c) received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and facsimile
numbers set forth below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):
Covenantee:
_____________
_____________
_____________
Facsimile No.:___________________
with a copy to (which shall not constitute notice):
Brach Eichler
101 Eisenhower Parkway
Roseland, New Jersey 07068
Attention: Stuart L. Pachman, Esq.
Facsimile No.: (973) 228-7852
Parent or Company:
Mediconsult.com, Inc.
33 Reid Street, 4th Floor
Hamilton HMIZ
Bermuda
Attention: Robert A. Jennings, CEO
with a copy to:
Mediconsult.com, Inc.
3278 Timberloch Drive
Marietta, GA 30068
Attention: E. Michael Ingram, General Counsel
13. ENTIRE AGREEMENT
This Agreement, the Merger Agreement (together will exhibits and schedules
attached thereto), and the documents executed in connection with the Merger
Agreement constitute the entire agreement between the parties with respect to
the subject matter of this Agreement and supersede all prior written and oral
agreements and understandings between Parent and
5
<PAGE>
Covenantee with respect to the subject matter of this Agreement. This Agreement
may not be amended except by a written agreement executed by the party to be
charged with the amendment.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURES CONTAINED ON NEXT PAGE]
6
<PAGE>
IN WITNESS WHEREOF, the corporate party hereto has caused this Agreement
to be executed and delivered by its duly authorized representative, and the
individual party hereto has executed and delivered this Agreement, as of the
date first above written.
PARENT:
Mediconsult.com, Inc.
By:____________________________
Name:__________________________
Title:_________________________
COVENANTEE:
_______________________________
Sharon Weinberg
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (this "Agreement") is made as of
_____________, 1999, by and between Mediconsult.com, Inc., a Delaware
corporation, ("Parent"), and Daniel J. Rader, M.D., an individual resident of
Pennsylvania ("Covenantee").
RECITALS
Concurrently with the execution and delivery of this Agreement, Parent is
acquiring Cyber-Tech, Inc., a New Jersey corporation (the "Company") pursuant to
the merger of the Company with and into MCNS Merger Subsidiary, II, Inc., a
wholly-owned Subsidiary of Parent ("Subsidiary") pursuant to the terms and
conditions of that certain Merger Agreement and Plan of Reorganization (the
"Merger Agreement") dated __________, 1999, by and among Parent, Subsidiary, the
Company, and the shareholders of the Company. Section 6.10 of the Merger
Agreement requires that noncompetition agreements be executed and delivered by
each of Andre Pilevsky, Daniel J. Rader, M.D. and Sharon Weinberg as a condition
to the consummation of the transactions contemplated by the Merger Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
1. DEFINITIONS
Capitalized terms not expressly defined in this Agreement shall have the
meanings ascribed to them in the Merger Agreement.
2. NON-COMPETITION, NON-SOLICITATION.
(a) Non-Competition. In connection with the acquisition of the Company by
Parent pursuant to the terms of the Merger Agreement, the Covenantee hereby
agrees that during the period commencing on the date hereof and ending on the
second anniversary of the date on which the Covenantee's employment with the
Parent and its subsidiaries and affiliates terminates for any reason (the
"Non-Compete Period"), he will not, without the express written consent of the
Parent, directly or indirectly, anywhere in the United States or Canada, engage
in any activity which is, or participate or invest in, or provide or facilitate
the provision of financing to, or assist (whether as owner, part-owner,
shareholder, member, partner, director, officer, trustee, employee, agent or
consultant, or in any other capacity), any business, organization or person
other than the Parent (or any subsidiary or affiliate of the Parent), whose
business, activities, products or services are directly competitive with any of
the business, activities, products or services conducted by the Parent on the
date the Covenantee's employment with the Parent terminates and over which the
Covenantee has had responsibility and which are in the Parent's Field of
Interest (each a "Competitive Business"); provided that the Covenantee shall be
permitted to be employed by an entity which operates an ancillary business in
the Parent's Field of Interest so long as the Covenantee is not involved in such
ancillary business. For purposes of this Section 2(a), the Parent's "Field of
Interest" shall consist of the development, implementation or sale of on-line or
Internet marketing or advertising programs to pharmaceutical and other
healthcare organizations and any other on-line or Internet health care
<PAGE>
related business activity engaged in, or conducted by the Parent or its
subsidiaries or affiliates on the date the Covenantee's employment with the
Parent terminates, but only to the extent the Covenantee has had responsibility
over such business activity. Notwithstanding anything in this Section 2(a) to
the contrary, the Covenantee shall not be prohibited from participating,
directly or indirectly, in any activity or business (i) with Internet operations
outside the health care fields, including but not limited to companies providing
non-health care goods or services through the Internet or providing e-commerce
services or content that is not a Competitive Business; or (ii) related to
health care services, other than on-line or Internet-based or related
businesses.
Notwithstanding anything herein to the contrary, the Covenantee may make
passive investments in any enterprise the shares of which are publicly traded if
such investment constitutes less than five percent (5%) of the equity of such
enterprise.
(b) Non-Solicitation. In addition to the restrictions in Section 2(a)
above, the Covenantee also agrees that he will not during the Non-Compete
Period: (i) solicit or encourage any officer or employee of the Parent or its
direct or indirect subsidiaries or affiliates to terminate his or her
relationship or employment with such entity; or (ii) on behalf of himself or any
persons or entity, other than the Parent or any of its direct or indirect
subsidiaries and affiliates, solicit business from any client of the Parent or
its direct or indirect subsidiaries in the Parent's Field of Interest; provided,
however, that the foregoing provision will not prevent the Covenantee from
employing or offering to employ any such person who has been terminated by the
Parent or a subsidiary or affiliate prior to the commencement of employment
discussions between the Covenantee and such employee, and the Covenantee will be
permitted to hire and offer to hire non-shareholder employees of the Parent who
are contacted as a result of the use of general newspaper or electronic
advertisement and other general non-targeted recruitment techniques in the
ordinary course of business and consistent with past practices as opposed to
targeted solicitations of any one or more of the Parent's employees.
For purposes of this Agreement, any reference to the subsidiaries of the
Parent shall be deemed to include all entities directly or indirectly controlled
by it through an ownership of more than fifty percent (50%) of the voting
interests, the term "affiliate" shall mean, with respect to any person or
entity, any person or entity which directly or indirectly controls, is
controlled by or is under common control with such person or entity, and the
term "person" shall mean an individual, a parent, an association, a partnership,
a limited liability company, an estate, a trust, and any other entity or
organization.
(c) Scope of Agreement. The parties acknowledge that the time, scope,
geographic area and other provisions of this Section 2 have been specifically
negotiated by sophisticated commercial parties and agree that (i) all such
provisions are reasonable under the circumstances of this Agreement, (ii) are
given as an integral and essential part of this Agreement and (iii) but for the
covenants of the Covenantee contained in this Section 2, the Parent would not
have entered into this Agreement. The Covenantee has independently consulted
with his counsel and has been advised in all respects concerning the
reasonableness and propriety of the covenants contained herein, with specific
regard to the business to be conducted by the Parent and its subsidiaries and
affiliates, and represents that this Agreement is intended to be, and shall be,
fully enforceable and effective in accordance with its terms.
2
<PAGE>
(d) Severability. In the event that any covenant contained in this
Agreement shall be determined by any court of competent jurisdiction to be
unenforceable by reason of its extending for too great a period of time or over
too great a geographical area or by reason of its being too extensive in any
other respect, it shall be interpreted to extend only over the maximum period of
time for which it may be enforceable and/or over the maximum geographical area
as to which it may be enforceable and/or to the maximum extent in all other
respects as to which it may be enforceable, all as determined by such court in
such action.
3. CONSIDERATION
As consideration for Covenantee's performance of the covenants and
obligations set forth herein, Parent is this day delivering to Covenantee by
certified check or other check acceptable to Covenantee, the sum of $200,000.
4. REMEDIES
If Covenantee breaches the covenants set forth in Section 2 of this
Agreement, Parent and the Company will be entitled to the following remedies:
(a) damages from Covenantee;
(b) In addition to its right to damages and any other rights it may have,
to obtain injunctive or other equitable relief to restrain any breach or
threatened breach or otherwise to specifically enforce the provisions of Section
2 of this Agreement, it being agreed that money damages alone would be
inadequate to compensate the Parent and the Company and would be an inadequate
remedy for such breach.
The rights and remedies of the parties to this Agreement are cumulative
and not alternative.
5. SUCCESSORS AND ASSIGNS
This Agreement will be binding upon Parent, the Company and Covenantee and
will inure to the benefit of Parent and the Company and their affiliates,
successors and assigns and Covenantee and Covenantee's assigns, heirs and legal
representatives.
6. WAIVER
Neither the failure nor any delay by any party in exercising any right,
power, or privilege under this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement can be discharged by one party, in whole or in part, by a waiver
or renunciation of the claim or right unless in writing signed by the other
party; (b) no waiver that may be given by a party will be applicable except in
the specific instance for which it is given; and (c) no notice to or demand on
one party will be deemed to be a waiver of any obligation of such party or of
the right of the
3
<PAGE>
party giving such notice or demand to take further action without notice or
demand as provided in this Agreement.
7. GOVERNING LAW
This Agreement will be governed by the laws of the State of New Jersey
without regard to conflicts of law principles.
8. JURISDICTION; SERVICE OF PROCESS
Any action or proceeding seeking to enforce any provision of, or based on
any right arising out of, this Agreement may be brought against any of the
parties in the United States District Court for the District of New Jersey, or
if jurisdiction and venue is not proper in federal courts, then the Superior
Court of New Jersey, and each of the parties consents to the jurisdiction of
such courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.
9. SEVERABILITY
Whenever possible each provision and term of this Agreement will be
interpreted in a manner to be effective and valid but if any provision or term
of this Agreement is held to be prohibited by or invalid, then such provision or
term will be ineffective only to the extent of such prohibition or invalidity,
without invalidating or affecting in any manner whatsoever the remainder of such
provision or term or the remaining provisions or terms of this Agreement. If any
of the covenants set forth in Section 2 of this Agreement are held to be
unreasonable, arbitrary, or against public policy, such covenants will be
considered divisible with respect to scope, time, and geographic area, and in
such lesser scope, time and geographic area, will be effective, binding and
enforceable against Covenantee.
10. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Agreement and all of which, when
taken together, will be deemed to constitute one and the same agreement.
11. SECTION HEADINGS; CONSTRUCTION
The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Agreement unless otherwise specified. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require. Unless
otherwise expressly provided, the word "including" does not limit the preceding
words or terms.
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12. NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (effective upon written confirmation of receipt), (b) sent by
facsimile (effective upon written confirmation of receipt), provided that a copy
is mailed by registered mail, return receipt requested, or (c) received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and facsimile
numbers set forth below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):
Covenantee:
_____________
_____________
_____________
Facsimile No.:___________________
with a copy to (which shall not constitute notice):
Brach Eichler
101 Eisenhower Parkway
Roseland, New Jersey 07068
Attention: Stuart L. Pachman, Esq.
Facsimile No.: (973) 228-7852
Parent or Company:
Mediconsult.com, Inc.
33 Reid Street, 4th Floor
Hamilton HMIZ
Bermuda
Attention: Robert A. Jennings, CEO
with a copy to:
Mediconsult.com, Inc.
3278 Timberloch Drive
Marietta, GA 30068
Attention: E. Michael Ingram, General Counsel
13. ENTIRE AGREEMENT
This Agreement, the Merger Agreement (together will exhibits and schedules
attached thereto), and the documents executed in connection with the Merger
Agreement constitute the entire agreement between the parties with respect to
the subject matter of this Agreement and supersede all prior written and oral
agreements and understandings between Parent and
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Covenantee with respect to the subject matter of this Agreement. This Agreement
may not be amended except by a written agreement executed by the party to be
charged with the amendment.
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IN WITNESS WHEREOF, the corporate party hereto has caused this Agreement
to be executed and delivered by its duly authorized representative, and the
individual party hereto has executed and delivered this Agreement, as of the
date first above written.
PARENT:
Mediconsult.com, Inc.
By:____________________________
Name:__________________________
Title:_________________________
COVENANTEE:
_______________________________
Daniel J. Rader, M.D.
