UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of
1934 (Amendment No. 2)*
MEDICUS SYSTEMS CORPORATION
---------------------------
(Name of Issuer)
Common Stock, $.01 par value
----------------------------
(Title of Class of Securities)
584970107
---------
(CUSIP Number)
J. Craig Walker
Bell, Boyd & Lloyd
70 West Madison Street, Suite 3300
Chicago, Illinois 60602-4207
(312) 372-1121
-------------------------------------
(Name, Address and Telephone Number of
Person Authorized to Receive Notices and
Communications)
January 20, 1997
----------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed
a statement on Schedule 13G to report the
acquisition which is the subject of this
Schedule 13D, and is filing this schedule
because of Rule 13d-1(b)(3) or (4), check
the following box ( ).
Check the following box if a fee is being
paid with the statement ( ). (A fee is
not required only if the reporting person:
(1) has a previous statement on file
reporting beneficial ownership of more
than five percent of the class of
securities described in Item 1; and (2)
has filed no amendment subsequent thereto
reporting beneficial ownership of five
percent or less of such class.) (See Rule
13d-7.)
Note: Six copies of this statement,
including all exhibits, should be filed
with the Commission. See Rule 13-d1(a)
for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be
filled out for a reporting person's
initial filing on this form with respect
to the subject class of securities, and
for any subsequent amendment containing
information which would alter disclosures
provided in a prior cover page.
The information required on the remainder
of this cover shall not be deemed to be
"filed" for the purpose of Section 18 of
the Securities Exchange Act of 1934
("Act") or otherwise subject to the
liabilities of that section of the Act but
shall be subject to all other provisions
of the Act (however, see the Notes).
<PAGE>
CUSIP NO. 584970 10 7
1 NAME OF REPORTING PERSON/S. S. OR
I.R.S. IDENTIFICATION NO. OF
ABOVE PERSON: RICHARD C. JELINEK
2 CHECK THE APPROPRIATE BOX IF A
MEMBER OF A GROUP:
a ( ) b ( )
3 SEC USE ONLY
4 SOURCE OF FUNDS: 00
5 CHECK BOX IF DISCLOSURE OF LEGAL
PROCEEDING IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e): ( )
6 CITIZENSHIP OR PLACE OF
ORGANIZATION: USA
NUMBER OF SHARES BENEFICIALLY OWNED BY
EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER: 1,937,900
8 SHARED VOTING POWER:0
9 SOLE DISPOSITIVE POWER: 1,937,900
10 SHARED DISPOSITIVE POWER: 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON: 1,937,900
12 CHECK BOX IF THE AGGREGATE AMOUNT IN
ROW (11) EXCLUDES CERTAIN SHARES: ( )
13 PERCENT OF CLASS REPRESENTED BY AMOUNT
IN ROW (11): 29.9%
14 TYPE OF REPORTING PERSON: IN
This Amendment No. 2 relates to the
Statement on Schedule 13D (the "Original
Statement") originally filed by Richard C.
Jelinek on March 11, 1996, with respect to
the Common Stock of Medicus Systems
Corporation, as amended by Amendment No. 1
thereto. Pursuant to Rule 101(a)(2)(ii) of
Regulation S/T promulgated by the
Securities and Exchange Commission, this
Amendment No. 2 restates the text of the
Original 13D, as amended by Amendment No.
1 and this Amendment No. 2.
<PAGE>
ITEM 1. Security and Issuer
This statement relates to the
common stock, $.01 par value (the "Common
Stock"), of Medicus Systems Corporation, a
Delaware corporation (the "Company"),
which has its principal executive offices
at One Rotary Center, Evanston, Illinois
60201.
ITEM 2. Identity and Background
(a), (b) and (c): This
statement is being filed by Richard C.
Jelinek ("Mr. Jelinek"). Mr. Jelinek's
address is 0312 Ridge Road, Aspen,
Colorado 81611 and his principal
occupation is as a private investor.
(d) and (e): During the last
five years, Mr. Jelinek has not been
(a) convicted in a criminal proceeding
(excluding traffic violations or similar
misdemeanors) or (b) a party to a civil
proceeding of a judicial or administrative
body of competent jurisdiction resulting
in any judgment, decree or final order
enjoining future violation of, or
prohibiting or mandating activities
subject to federal or state securities
laws or finding any violation with respect
to such laws.
(f): Mr. Jelinek is a citizen
of the United States.
ITEM 3. Source and Amount of Funds or
Other Consideration
The shares of Common Stock
reported in this statement were acquired
by Mr. Jelinek upon the distribution by
MCM Managed Care, Inc. ("MCM") (formerly
known as Medicus Systems Corporation) of
all of the outstanding shares of Common
Stock, on a share-for-share basis, on
March 1, 1996 to stockholders of record of
MCM as of the close of business on
February 29, 1996.
ITEM 4. Purpose of Transaction
The shares of Common Stock
reported in this statement are held for
investment purposes. In addition,
Mr. Jelinek holds an option to purchase
all 500 of the authorized shares of Voting
Preferred Stock of the Company, which
shares are entitled to 44,000 votes per
share through May 31, 1998. Exercise of
such option would ensure Mr. Jelinek's
control of the Company. Such option
expires on May 31, 1998. Mr. Jelinek
reserves the right to exercise such option
prior to its expiration. Mr. Jelinek may
exercise such option pursuant to the
agreements with the Company described
below.
<PAGE>
On January 20, 1997, Richard C.
Jelinek and the Boston Safe Deposit and
Trust Company of California as trustee
under the Richard C. Jelinek Charitable
Remainder Unitrust dated August 3, 1993
(the "Trust") entered into agreements
effective as of January 2, 1997 (the
"Agreements") pursuant to which Mr.
Jelinek agreed to sell to the Company
550,000 (approximately 8.6% of the
outstanding) shares of Common Stock and
275 shares of Voting Preferred Stock of
the Company and the Trust agreed
to sell to the Company 450,000
(approximately 7.0% of the outstanding)
shares of Common Stock and 225 shares of
Voting Preferred Stock of the Company.
Immediately before consummation of these
purchases, Mr. Jelinek will (i) exercise
his stock option (the "Jelinek Option") to
purchase 500 shares of Voting Preferred
Stock of the Company for an aggregate
exercise price of $500,000, and (ii)
transfer 225 of these shares to the Trust.
In consideration for the sale of
Common Stock and Voting Preferred Stock by
Mr. Jelinek and the Trust to the Company,
the Company will pay to Mr. Jelinek and
the Trust an aggregate of $4,500,000 in
cash, $2,000,000 in 8% promissory notes
maturing in two equal installments at the
end of one year and two years from the
date of issuance, and five-year Stock
Exchange and Subscription Warrants (the
"Warrants") to purchase from the Company
400,000 shares of Common Stock at a price
of $8.00 per share, with the Company
having the right to require payment at the
time of exercise in either cash or shares
of Common Stock valued at their then fair
market value.
<PAGE>
The closing of the transactions
contemplated by the agreement described
above are condition upon, among other
things, stockholder approval of such
transactions. The Company intends to seek
such approval at the Company's upcoming
annual meeting, currently scheduled for
March 3, 1997. Mr. Jelinek and the
Company expect that, if such approval is
obtained, the transactions will close
promptly thereafter. In conjunction with
the successful completion of these
transactions, Mr. Jelinek will resign as
Chairman of the Company. Mr. Jelinek will
remain a director of the Company.
The Agreement contains a number
of restrictions on the activities of Mr.
Jelinek and the Trust with respect to the
Company and the Common Stock. Mr. Jelinek
and the Trust have agreed that they will
not sell any shares of Common Stock held
by them without the consent of the
disinterested members of the Board for a
period of five years, provided that such
restrictions lapse as to 20% of such
shares on each anniversary of the
Agreements. Mr. Jelinek and the Trust
have also agreed that they will not take
certain other actions for a period of five
years, including acquiring additional
voting securities of the Company (other
than upon exercise of a Warrant), engaging
in a proxy contest, participating in a
tender offer, becoming part of a "group"
for purposes of Section 13(d) under the
Securities Exchange Act of 1934, or
otherwise attempting to influence or
control the Company other than through the
performance of Mr. Jelinek's duties as a
director in the ordinary course.
<PAGE>
Depending on trading prices of
the Common Stock and upon Mr. Jelinek's
personal financial position and goals from
time to time, Mr. Jelinek may, subject to
any applicable statutory or other
limitations, including those contained in
the Agreements, purchase additional shares
of Common Stock or dispose of shares of
Common Stock in the open market, in
privately negotiated transactions, or
otherwise. Mr. Jelinek retains the right
to evaluate his position in the future and
change his intent with respect to any
future actions.
Other than as described above,
Mr. Jelinek has no plans or proposals
which relate to, or may result in, any of
the matters listed in Items 4(a)-(j) of
Schedule 13D (although he reserves the
right to develop such plans).
<PAGE>
ITEM 5. Interest in Securities of the
Issuer
(a): Mr. Jelinek is the
beneficial owner of 1,937,900 shares of
Common Stock (which amount includes
100,000 shares owned by Mr. Jelinek's
wife), which is equal to approximately
29.9% of the issued and outstanding Common
Stock. Mr. Jelinek also holds an option,
which expires on May 31, 1998, to acquire
up to 500 shares of Voting Preferred Stock
of the Company at an exercise price of
$1,000 per share. Such Voting Preferred
Stock would be entitled to 44,000 votes
per share through May 31, 1998. Mr.
Jelinek may exercise such option pursuant
to the Agreements with the Company as
described in Item 4.
(b): Mr. Jelinek has the sole
power to vote and dispose of the shares of
Common Stock beneficially owned by him
(other than the shares owned by his wife),
and would have the sole power to vote and
dispose of any shares of Voting Preferred
Stock acquired upon exercise of the option
described above.
(c): The shares of Common Stock
reported in this statement were acquired
in the distribution described in Item 3,
which description is incorporated herein
by reference.
(d): Not applicable.
(e): Not applicable.
ITEM 6. Contracts, Arrangements,
Understandings or Relationships
with Respect to Securities of
the Issuer
Securities of the Issuer
- ------------------------
In connection with the
employment by the Company of Patrick C.
Sommers as the new President and Chief
Executive Officer of the Company, the
Company adopted its 1996 C.E.O.
Replacement Stock Option Plan (the
"Plan") and granted options to Mr.
Sommers under the Plan, all subject to
stockholder approval. In order to assure
Mr. Sommers of such approval, Mr. Jelinek
agreed to take such actions as may be
required to ensure such approval at the
Company's next annual meeting of
stockholders. Mr. Jelinek has the
ability, through the option to purchase
Voting Preferred Stock described in Item
5, to maintain voting control of the
Company. Mr. Jelinek does not know at
this time whether he will be required to
exercise his option, and if so, to what
extent, in order to satisfy his
obligations under his agreement with
Mr. Sommers.
Other than the above mentioned
agreement, the agreements described in
Item 4 and the option to acquire Voting
Preferred Stock described in Item 5(a),
which descriptions are incorporated herein
by reference, Mr. Jelinek does not have
any contracts, arrangements,
understandings or relationships (legal or
otherwise) with any person with respect to
any securities of the Company, including,
but not limited to, transfer or voting of
any such securities, finder's fees, joint
ventures, loan or option arrangements,
puts or calls, guarantees of profits,
division of profits or loss, or the giving
or withholding of proxies.
<PAGE>
ITEM 7. Material to Be Filed as Exhibits
Exh. No. Description Page
- --------- ----------- ----
1 Letter dated April 26, 1996 *
from Richard C. Jelinek
to Patrick C. Sommers
2 Voting Preferred Stock *
Option Certificate
3 Stock Purchase and Warrant
Agreement dated as of
January 2, 1997 between
Richard C. Jelinek and
Medicus Systems Corporation
4 Stock Purchase and Warrant
Agreement dated as of
January 2, 1997 between the
Richard C. Jelinek
Charitable Remainder
Unitrust and Medicus
Systems Corporation
_______________
* Previously filed
<PAGE>
Signatures
After reasonable inquiry and to
the best of my knowledge and belief, I
certify that the information set forth in
this statement is true, complete and
correct.
Dated: January 23, 1997
By /s/ Richard C. Jelinek
-------------------------
Richard C. Jelinek
<PAGE>
EXHIBIT 3
STOCK PURCHASE AND WARRANT AGREEMENT
This Stock Purchase and Warrant
Agreement (the "Agreement") is entered
into as of January 2, 1997 between Medicus
Systems Corporation, a Delaware
corporation (the "Company"), and
Richard C. Jelinek (the "Shareholder").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Shareholder is the
beneficial owner of 1,837,900 shares of
Common Stock, $.01 par value ("Common
Stock"), of the Company, and the
Shareholder wishes to sell 550,000 of such
shares to the Company (such shares of
Common Stock to be sold being referred to
as the "Shares");
WHEREAS, the Shareholder holds
an option (the "Option") to purchase all
500 of the authorized shares of the
Company's Voting Preferred Stock (275
shares of such shares of Voting Preferred
Stock being referred to as the "Voting
Preferred Shares");
WHEREAS, the Shareholder intends
to exercise the Option;
WHEREAS, the Board of Directors
(the "Board") of the Company has
determined that it is in the best interest
of its stockholders for the Company to
acquire the Shares and the Voting
Preferred Stock owned by the Shareholder,
all upon the terms and subject to the
conditions set forth herein;
NOW THEREFORE, in consideration
of the foregoing and the mutual covenants
and agreements herein contained, the
Company and the Shareholder hereby agree
as follows:
1. The Purchase. Subject to
the terms and conditions set forth in this
Agreement, the Company agrees to purchase
from the Shareholder, and the Shareholder
agrees to sell, assign and transfer to the
Company on the Closing Date (as defined
below), all of the Shareholder's right,
title and interest in the Shares and all
of the Shareholder's right, title and
interest in the Voting Preferred Shares.
<PAGE>
2. The Closing. The Closing
of the transactions contemplated by this
Agreement (the "Closing") shall take place
at the offices of Bell, Boyd & Lloyd,
Three First National Plaza, Chicago,
Illinois not later than April 15, 1997,
unless the parties otherwise agree. The
date upon which the Closing occurs is
herein referred to as the Closing Date.
3. Payment. At the Closing,
(a) the Company shall deliver to the
Shareholder (i) cash consideration of
$2,475,000 (the "Cash Consideration"),
(ii) a promissory note, in substantially
the form of Exhibit A hereto, with 50% of
the principal amount maturing in one year
and the balance one year thereafter and
bearing 8% interest, in the aggregate
principal amount of $1,100,000 (the
"Promissory Note"), and (iii) a Warrant to
purchase 220,000 shares of Common Stock at
an exercise price of $8.00 per share which
shall be substantially in the form of
Exhibit B hereto (the "Warrant"), and
(b) the Shareholder shall deliver to the
Company certificates representing all of
the Shares and all of the Voting Preferred
Shares, together with duly executed stock
powers with respect to the Shares and
Voting Preferred Shares in blank in form
satisfactory to the Company. The Company
shall make payment of the Cash
Consideration pursuant to this Section 3
on the Closing Date by wire transfer to an
account designated by the Shareholder in
an amount equal to the Cash Consideration.
<PAGE>
4. Representations and
Warranties of the Shareholder. The
Shareholder hereby represents and warrants
to the Company that:
(a) This Agreement has been
duly executed by the Shareholder and is
the legal, valid and binding obligation of
the Shareholder, enforceable against the
Shareholder in accordance with its terms.
Such execution and delivery do not, and
performance of this Agreement will not,
(i) conflict with, violate or breach any
order, judgment, injunction or decree of
any court, arbitrator, government or
governmental agency or instrumentality
against or binding on the Shareholder or
by which any of his assets or properties
are bound or affected, (ii) constitute a
violation by the Shareholder of any law,
rule, regulation, order, judgment or
decree applicable to the Shareholder or by
which any property or asset of the
Shareholder is bound or affected or
(iii) conflict with, violate, breach or
cause a default (or an event which with
notice or lapse of time or both would
become a default) under, or give to others
any rights of termination, amendment,
acceleration or cancellation of, any
agreement or instrument to which the
Shareholder is party or by which any of
his assets or properties are bound or
affected or result in the creation of a
lien or other encumbrance on any of his
Shares.
(b) The Shareholder has had
access to such information concerning the
Company, its business and its financial
condition as he deemed necessary in
connection with the transactions
contemplated by this Agreement.
<PAGE>
(c) On the Closing Date, the
Shareholder will have valid title to all
of the Shares and the Voting Preferred
Shares, in each case free and clear of any
liens, charges or encumbrances, and such
Shares and Voting Preferred Shares will
not be subject to any claims by virtue of
rights, options, contracts, calls,
agreements or otherwise.
(d) The sale by the Shareholder
pursuant to this Agreement and the
delivery of the certificate(s)
representing the Shares and the Voting
Preferred Shares to the Company will
transfer to the Company good and valid
title to the Shares and the Voting
Preferred Shares free and clear of all
claims, liens, encumbrances, security
interests, proxies, voting and other
restrictions or interests of any nature
whatsoever.
(e) The Shareholder
acknowledges (i) that representatives of
the Company have strongly recommended that
the Shareholder engage separate counsel to
represent the Shareholder in connection
with the negotiation of this Agreement,
and (ii) that the Shareholder has
determined, nevertheless, not to be
represented by counsel in the negotiation
of this Agreement. The Shareholder has
made this decision in part based upon his
own extensive business and investment
experience, as well as the involvement of
William G. Brown, a director and secretary
of the Company, and a partner in the law
firm of Bell, Boyd & Lloyd, counsel to the
Company, in the negotiation and
preparation of the Agreement and related
documents, Mr. Brown having had a long-
standing personal and business
relationship with the Shareholder;
however, the Shareholder acknowledges that
Mr. Brown has been acting solely as a
representative of the Company, and has not
been representing the Shareholder's
interests, in such matters. The
Shareholder represents that he has read
and fully understands this Agreement, the
Warrant and the Promissory Note.
<PAGE>
5. Representations and
Warranties of the Company. The Company
hereby represents and warrants to the
Shareholder that:
(a) The Company is a
corporation duly organized, validly
existing and in good standing under
the laws of the State of Delaware and
has the requisite corporate power and
authority and all necessary
governmental approvals to own, lease
and operate its properties and to
carry on its business as it is now
been conducted.
(b) The Company has all
necessary corporate power and
authority to execute and deliver this
Agreement, to perform its obligations
hereunder and to consummate the
transactions contemplated hereby.
The execution and delivery of this
Agreement by the Company and the
consummation by the Company of the
purchase of the Shares pursuant
hereto have been duly and validly
authorized by all necessary corporate
action and no other corporate
proceedings on the part of the
Company are necessary to authorize
this Agreement or to consummate the
purchase of the Shares hereunder,
other than the stockholder approval
contemplated in Sections 6(f) and
7(c) below. This Agreement has been
duly and validly executed and
delivered by the Company and is the
legal, valid and binding obligation
of the Company, enforceable against
the Company in accordance with its
terms.
<PAGE>
(c) The execution and delivery
of this Agreement by the Company do
not, and performance of this
Agreement by the Company will not,
(i) conflict with, violate or breach
the Certificate of Incorporation or
By-laws of the Company, (ii) conflict
with, violate or breach any order,
judgment, injunction or decree of any
court, arbitrator, government or
governmental agency or
instrumentality against or binding on
the Company or by which any of its
assets or properties are bound or
affected, (iii) constitute a
violation by the Company of any law,
rule, regulation, order, judgment or
decree applicable to the Company or
by which any property or asset of the
Company is bound or affected or
(iv) conflict with, violate, breach
or cause a default (or an event which
with notice or lapse of time or both
would become a default) under, or
give to others any rights of
termination, amendment, acceleration
or cancellation of, any agreement or
instrument to which the Company is a
party or by which any of the
Company's assets or properties are
bound or affected or result in the
creation of a lien or other
encumbrance on any of its assets or
properties.
<PAGE>
6. Conditions Precedent to the
Company's Obligations. The obligations of
the Company to purchase the Shares and the
Voting Preferred Shares and issue the
Warrant pursuant to this Agreement are
subject to the fulfillment of the
following conditions:
<PAGE>
(a) The representations and
warranties of the Shareholder contained in
this Agreement shall be true and correct
in all material respects on and as of the
Closing Date, with the same force and
effect as if made as of the Closing Date;
(b) The performance of this
Agreement by the Company shall not
conflict with or violate any order,
judgment or decree applicable to the
Company or by which any of its assets or
properties are bound or affected;
(c) The Shareholder shall have
delivered to the Company certificate(s)
evidencing all of the Shares, together
with stock powers in form satisfactory to
the Company executed in blank;
(d) The Shareholder shall have
delivered to the Company certificate(s)
evidencing all of the Voting Preferred
Shares, together with stock powers in form
satisfactory to the Company executed in
blank;
(e) The Shareholder shall have
delivered to the Company his resignation
as Chairman of the Company, it being
understood that the Shareholder will
remain a director of the Company;
(f) The stockholders of the
Company shall have approved the
transactions contemplated by this
Agreement; and
(g) All conditions to the
closing of the transactions contemplated
by the Stock Purchase and Warrant
Agreement dated the date hereof between
Boston Safe Deposit and Trust Company of
California, or its successors, as trustee
of the Richard C. Jelinek Charitable
Remainder Unitrust dated August 3, 1993
(the "Trust") and the Company (the "Trust
Agreement") shall have been satisfied.
<PAGE>
7. Conditions Precedent to the
Shareholder's Obligations. The
obligations of the Shareholder to sell the
Shares and Voting Preferred Shares
pursuant to this Agreement are subject to
the fulfillment of the following
conditions:
(a) The representations and
warranties of the Company contained in
this Agreement shall be true and correct
in all material respects on and as of the
Closing Date, with the same force and
effect as if made as of the Closing Date;
(b) The Company shall have
delivered to the Shareholder (i) by wire
transfer an amount equal to the Cash
Consideration, (ii) the Promissory Note,
and (iii) the Warrant;
(c) The stockholders of the
Company shall have approved the
transactions contemplated by this
Agreement;
(d) All conditions to the
closing of the transactions contemplated
by the Trust Agreement shall have been
satisfied.
<PAGE>
8. Additional Agreements of
the Shareholder. (a) The Shareholder
agrees that, for a period of five years
from the date of this Agreement, the
Shareholder will not, without the prior
consent of the disinterested members of
the Board, transfer any shares of Common
Stock held by the Shareholder immediately
after the Closing (the "Remaining
Shares"), or any shares of Common Stock
issuable upon exercise of the Warrant
("Warrant Shares"), except as provided in
the following sentence. The restriction
set forth above shall lapse as to 20% of
the Remaining Shares and as to 20% of any
outstanding Warrant Shares on each
anniversary of the date of this Agreement,
provided that any transfer of Remaining
Shares or Warrant Shares as to which such
restriction has lapsed may only be made
(i) to a member of the immediate family of
the Shareholder or any trust, partnership,
or corporation beneficially owned in its
entirety by members of the immediate
family of the Shareholder, (ii) as a gift
to any tax-exempt organization, or
(iii) in a transaction satisfying the
requirements of Rule 144 promulgated under
the Securities Act of 1933.
(b) The Shareholder further
agrees that, from the date hereof through
and including the fifth anniversary of the
date hereof, without the Company's prior
written consent, the Shareholder will not:
(i) acquire, announce an
intention to acquire, offer or
propose to acquire, or agree to
acquire, directly or indirectly, by
purchase or otherwise beneficial
ownership of any Common Stock or
other voting securities of the
Company (collectively the "Voting
Securities") or direct or indirect
rights or options to acquire (through
purchase, exchange, conversion or
otherwise) any Voting Securities;
<PAGE>
(ii) make, or in any way
participate, directly or indirectly
(other than solely as a member of the
Company's Board of Directors in
connection with solicitations by the
entire Board of Directors), in any
"solicitation" of proxies (as such
terms are defined in Rule 14a-1 under
the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) to
vote any Voting Securities, seek to
advise, encourage or influence any
person or entity with respect to the
voting of any Voting Securities,
initiate or propose any shareholder
proposal or induce or attempt to
induce any other person to initiate
any shareholder proposal;
(iii) make any
statement or proposal, whether
written or oral, to the Board of
Directors of the Company, or to any
director, officer or agent of the
Company, or make any public
announcement or proposal whatsoever
with respect to a merger or other
business combination, sale or
transfer of assets, recapitalization,
dividend, share repurchase,
liquidation or other extraordinary
corporate transaction with the
Company or other transaction which
could result in a change of control,
or solicit or encourage any other
person to make such statement or
proposal;
(iv) after consummation of
the Closing, form, join or in any way
participate in a "group" (within the
meaning of Section 13(d)(3) of the
Exchange Act) with respect to any
securities of the Company;
<PAGE>
(v) otherwise act, alone
or in concert with others, to seek to
exercise any control over the
management, Board of Directors or
policies of the Company, other than
in the performance in the normal
course of his duties as a director of
the Company;
(vi) make a public request
to the Company (or its directors,
officers, shareholders, employees or
agents) to amend or waive any
provisions of this Agreement, the
Certificate of Incorporation or By-
Laws of the Company;
(vii) take any action
which might require the Company to
make a public announcement regarding
the possibility of any transaction
referred to in paragraph (ii) above
or similar transaction or, advise,
assist or encourage any other persons
in connection with the foregoing; or
(viii) disclose any
intention, plan or arrangement
inconsistent with the foregoing.
<PAGE>
(c) The Shareholder agrees that
he will vote in favor of approval of the
transactions contemplated by this
Agreement at least that number of shares
of Common Stock as represents the same
percentage of the Shareholder's holdings
of Common Stock as the number of shares of
Common Stock voted in favor of such
approval by holders other than the
Shareholder represents of all shares voted
on such proposal (excluding shares which
are not present, are not voted or abstain)
by holders other than the Shareholder.
(d) The Shareholder agrees that
he will resign as Chairman of the Board
(while remaining a director) concurrently
with the closing of the purchase and sale
contemplated herein.
9. Additional Agreements of
the Company. The Company agrees that it
will use its reasonable best efforts to
cause its upcoming Annual Meeting of
Stockholders (the "Annual Meeting") to be
held on March 3, 1997 or as soon
thereafter as practicable, that it will
seek approval of the transactions
contemplated in this Agreement at the
Annual Meeting, and that it will promptly
prepare and file with the Securities and
Exchange Commission ("SEC") preliminary
proxy materials, and as promptly as
practicable following SEC review, mail
definitive proxy materials to
stockholders, in connection with the
Annual Meeting.
<PAGE>
10. Registration Rights. The
Shareholder shall have the following
rights with respect to the Warrant Shares.
10.1 Demand Registrations.
(a) Upon the written request of the
Shareholder that the Company register all
or part of the Warrant Shares then owned
by the Shareholder or which the
Shareholder has a right to acquire upon
exercise of the Warrant (which request
shall satisfy the requirements of
paragraph (c) of this Section 10.1), the
Company shall, subject in all cases to the
provisions of paragraph (b) of this
Section 10.1, thereupon, use its
reasonable best efforts to cause the
Warrant Shares specified in such request
to be so registered as soon as
practicable, but not later than 90 days
after the date of the Shareholder's
written request to register.
(b) The Company's obligation to
register all or part of the Warrant Shares
pursuant to paragraph (a) of this Section
10.1 shall in all cases be subject to the
following limitations and qualifications:
(i) The Company shall
(x) be required to effect only one
such registration if such
registration is ordered or declared
effective and (y) not be obligated to
file a registration statement at any
time if a special audit of the
Company would be required by the
rules and regulations of the
Securities and Exchange Commission
(the "Commission") in connection
therewith; and
<PAGE>
(ii) The Company shall be
entitled to postpone for a reasonable
period of time not to exceed 90 days
the filing of any registration
statement otherwise required to be
prepared and filed by it if, at the
time it receives a request for
registration, the Company determines,
in its reasonable judgment, that such
registration would materially
interfere with any financing,
acquisition, corporate reorganization
or other material transaction then
being contemplated by its Board of
Directors, involving the Company, and
promptly gives the Shareholder
written notice of such determination
and the reasons therefor, provided
that the Company shall not defer its
obligations in this manner more than
twice in any twelve month period and
the Company shall not defer its
obligations until 90 days have
expired after any prior deferral. In
such event, the Shareholder shall
have the right to withdraw the
request for registration by giving
written notice to the Company within
30 days after receipt of the notice
of postponement (and, in the event of
such withdrawal, such request shall
be ignored for purposes of counting
the demand registration to which the
Shareholder is entitled pursuant to
this paragraph (b)).
For purposes of this paragraph
(b), "special audit" shall mean an audit
other than a year-end audit, requiring an
opinion of the Company's independent
public accountants.
<PAGE>
(c) Any written request of the
Shareholder made pursuant to paragraph (a)
of this Section 10.1 shall:
(i) specify the number of
the Warrant Shares which the
Shareholder intends to offer and
intends to sell;
(ii) state the firm
intention of the Shareholder to offer
such shares for sale;
(iii) describe the
intended method of distribution of
such shares; and
(iv) contain an undertaking
on the part of the Shareholder to
provide all such information and
materials concerning the Shareholder
and take all such action as may be
required to permit the Company to
comply with all applicable
requirements of the Commission and to
obtain acceleration of the effective
date of the registration statement.
10.2 Participation
Registrations. (a) If, at any time from
the date hereof, the Company shall propose
to register under the Securities Act an
offering of Common Stock to be offered and
sold by it or any stockholder, it shall
give written notice of such proposed
registration to the Shareholder as
promptly as possible and shall, subject in
all cases to paragraph (b) of this Section
10.2, use its reasonable best efforts to
include in the offering such number of the
Warrant Shares then owned by the
Shareholder as the Shareholder shall
request, within 10 days after the giving
of such notice, to be included, such
offering to be upon the same terms
(including the method of distribution) as
the Common Stock being sold by the Company
pursuant to any such offering.
<PAGE>
(b) The Company's obligation to
include the Warrant Shares owned by the
Shareholder in any offering pursuant to
paragraph (a) of this Section 10.2 shall
in all cases be subject to the following
limitation and qualifications:
(i) The Company shall not
be required to give notice to the
Shareholder or include such shares in
any such registration if the proposed
registration is (x) a registration of
stock option or compensation plan or
of the Company Common Stock issued or
issuable pursuant to any such plan,
or (y) a registration of the Company
Common Stock proposed to be issued in
exchange for securities or assets of,
or in connection with a merger or
consolidation with, another
corporation;
(ii) The Company may
require that the number of such
shares requested to be included in
such registration be reduced, or that
all such shares be excluded from any
such registration, if it is advised
in writing by its managing
underwriter that such reduction or
exclusion, as the case may be, is
necessary to permit the orderly sale
and distribution of the securities
being offered by the Company. Any
reduction shall be made pro rata
among all Selling Shareholders in
proportion to the relative number of
shares sought by each to be
registered. If the Company shall
require such a reduction, the
Shareholder shall have the right to
withdraw from the offering;
(iii) The Company may,
in its sole discretion and without
the consent of the Shareholder,
withdraw such registration statement
and abandon the proposed offering in
which the Shareholder had requested
to participate; and
<PAGE>
(iv) The Company shall be
required to effect only one such
registration; provided that the
Shareholder's right to registration
under this Section 10.2 shall not
expire unless all shares the
Shareholder has requested under
Section 10.2(a) to be registered have
been so registered.
10.3 Certain Covenants of the
Company. (a) In connection with any
registration of the Warrant Shares
undertaken by the Company pursuant to
Section 10.1 and, if and to the extent
appropriate, Section 10.2, the Company
shall:
(i) prepare and file with
the Commission a registration
statement with respect to such shares
and use its best efforts to cause
such registration statement to become
effective;
(ii) prepare and file with
the Commission such amendments and
supplements to such registration
statement and the prospectus used in
connection therewith as may be
necessary to keep such registration
statement current for such period not
to exceed 270 days as the Shareholder
shall request and to comply with the
provisions of the Securities Act with
respect to the sale of all the
Warrant Shares covered by such
registration statement during such
period;
(iii) provide the
Shareholder a reasonable opportunity
to review and, in the case of
registrations effected pursuant to
Section 10.1, approve prior to filing
(x) any registration statement filed
by the Company in connection with a
registration effected pursuant to
Section 10.1 or Section 10.2 and (y)
any amendments or supplements to such
registration statement and any
prospectus used in connection
therewith;
<PAGE>
(iv) furnish to the
Shareholder such number of conformed
copies of such registration statement
and of each such amendment and
supplement thereto (in each case
including all exhibits), such number
of copies of the prospectus included
in such registration statement
(including each preliminary
prospectus and prospectus
supplement), copies of which are in
conformity with the requirements of
the Securities Act, and such other
documents as the Shareholder may
reasonably request in order to
facilitate the sale of the Warrant
Shares covered by such registration
statement;
(v) use its best efforts
to register or qualify the Warrant
Shares covered by such registration
statement under such other securities
or blue sky laws of such
jurisdictions as the Shareholder
shall reasonably request, and do any
and all other acts and things which
may be reasonably necessary or
advisable to enable the Shareholder
to consummate the sale in such
jurisdictions of such shares;
provided that the Company shall not
for any such purpose be required to
qualify generally to do business as a
foreign corporation in any
jurisdiction wherein it would not but
for the requirements of this
paragraph (v) be obligated to be so
qualified, to subject itself to
taxation in any such jurisdiction or
to consent to general service of
process in any such jurisdiction;
<PAGE>
(vi) notify the
Shareholder, at any time when a
prospectus relating to the Warrant
Shares covered by such registration
statement is required to be delivered
under the Securities Act, of the
Company's becoming aware that the
prospectus included in such
registration statement, as then in
effect, includes an untrue statement
of a material fact or omits to state
any material fact required to be
stated therein or necessary to make
the statements therein not misleading
in light of the circumstances then
existing, and at the request of the
Shareholder promptly prepare and
furnish to the Shareholder a
reasonable number of copies of a
prospectus supplemented or amended so
that, as thereafter delivered to the
purchasers of such shares, such
prospectus shall not include an
untrue statement of a material fact
or omit to state a material fact
required to be stated therein or
necessary to make the statements
therein not misleading in light of
the circumstances then existing;
(vii) use its best
efforts to cause all the Warrant
Shares covered by such registration
statement to be listed on each
securities exchange on which
securities of the same class issued
by the Company are then listed or, if
there shall then be no such listing,
to be accepted for quotation on
NASDAQ;
<PAGE>
(viii) provide a
transfer agent and registrar for the
Warrant Shares covered by such
registration statement not later than
the effective date of such
registration statement; and
(ix) enter into such
agreements (including an underwriting
agreement in customary form) and take
such other actions as the Shareholder
reasonably requests in order to
expedite or facilitate the
disposition of such shares.
(b) The Company shall take all
reasonable actions necessary so as to
enable the Shareholder to make sales of
the Warrant Shares under Rule 144 (or any
successor rule) under the Securities Act
and in accordance with applicable laws,
rules and regulations, the requirements of
the Company's transfer agent(s), and the
reasonable requirements of the broker
through which the sales are proposed to be
executed.
(c) From and after the date of
this Agreement, the Company shall not,
without the written consent of the
Shareholder, enter into any agreement
granting to any person or entity any
registration rights that are more
favorable than the registration rights
granted to the Shareholder under this
Note, unless the same rights are granted
to the Shareholder.
<PAGE>
10.4 Standstill. In the event
of a registered public offering, the
Shareholder will agree with the
underwriters not to sell any Shares for up
to 180 days following commencement of the
offering if and only if the Shareholder
has been offered the opportunity to
participate in the offering and the
underwriters have not reduced the number
of shares that the Shareholder may sell.
10.5 Expenses. (a) The
Shareholder shall pay all out-of-pocket
expenses incurred by the Company in
connection with any registration of the
Warrant Shares pursuant to Section 10.1
including, without limitation, all
registration and filing fees, printing
expenses, underwriting discounts,
commissions and expenses, fees and
disbursements of the Company's legal
counsel and accountants, transfer agents
and registrars, and expenses incidental to
any post-effective amendment to any such
registration statement. For purposes of
this Section 10.5, "out-of-pocket
expenses" shall not include salaries of
the Company employees or expenses
attributable to the Company's corporate
overhead.
(b) In connection with any
registration pursuant to Section 10.2, the
Company shall pay all registration and
filing fees, underwriting discounts,
commissions and expenses (other than those
attributable to the Warrant Shares being
sold by the Shareholder), printing
expenses, fees and disbursements of the
Company's legal counsel and accountants,
transfer agents and registrars fees, and
expenses incidental to any post-effective
amendment to any such registration
statement. The Shareholder shall pay all
other out-of-pocket expenses attributable
to the inclusion in the offering of the
Warrant Shares being sold by it including,
without limitation, registration and
filing fees and underwriting discounts,
commissions and expenses attributable
thereto and fees and disbursements of the
Shareholder's legal counsel and
accountants.
<PAGE>
10.6 Indemnification. (a) In
the case of each registration effected by
the Company pursuant to Section 10.1 or
Section 10.2, the Company agrees to
indemnify and hold harmless the
Shareholder, each underwriter of the
Warrant Shares so registered and each
person who controls any such underwriter
within the meaning of Section 15 of the
Securities Act, against any and all
losses, claims, damages or liabilities to
which they or any of them may become
subject under the Securities Act or any
other statute or common law, including any
amount paid in settlement of any
litigation, commenced or threatened, if
such settlement is effected with the
written consent of the Company, which
consent is not unreasonably withheld in
light of all factors which are important
to such indemnified party, and to
reimburse them for any legal or other
expenses incurred by them in connection
with investigating any claims and
defending any actions, insofar as any such
losses, claims, damages, liabilities or
actions arise out of or are based upon
(i) any untrue statement or alleged untrue
statement of a material fact contained in
the registration statement relating to the
sale of the Warrant Shares, or any post-
effective amendment thereto, or the
omission or alleged omission to state
therein a material fact required to be
stated therein or necessary to make the
statements therein not misleading or
(ii) any untrue statement or alleged
untrue statement of a material fact
contained in any preliminary prospectus,
if used prior to the effective date of
such registration statement, or contained
in the final prospectus (as amended or
supplemented if the Company shall have
filed with the Commission any amendment
thereof or supplement thereto) if used
within the period during which the Company
is required to keep the registration
statement to which such prospectus relates
current, or the omission or alleged
omission to state therein (if so used) a
material fact necessary in order to make
the statements therein, in light of the
circumstances under which they were made,
not misleading; provided, however, that
the indemnification agreement contained in
this paragraph (a) shall not (x) apply to
such losses, claims, damages, liabilities
or actions arising out of, or based upon,
any such untrue statement or alleged
untrue statement, or any such omission or
alleged omission, if such statement or
omission was made in reliance upon and in
conformity with information furnished in
writing to the Company by the Shareholder
or such underwriter for use in connection
with the preparation of the registration
statement, any preliminary prospectus or
final prospectus contained in the
registration statement, or any amendment
or supplement thereto, or (y) inure to the
benefit of any underwriter or any person
controlling such underwriter, if such
underwriter failed to send or give a copy
of the final prospectus to the person
asserting the claim at or prior to the
written confirmation of the sale of the
Warrant Shares to such person and if the
untrue statement or omission concerned had
been corrected in such final prospectus.
Notwithstanding the foregoing, the Company
agrees to be subject to such
indemnification and contribution
provisions as the underwriters may
reasonably request in connection with any
underwritten offering and that to the
extent that the provisions on
indemnification and contribution contained
in the underwriting agreement entered into
in connection with such offerings are in
conflict with the foregoing provisions,
the provisions in the underwriting
agreement shall control.
<PAGE>
(b) In the case of each
registration effected by the Company
pursuant to Section 10.1 or 10.2, the
Shareholder and each underwriter of the
Warrant Shares to be registered (each such
party and such underwriters being referred
to severally in this paragraph (b) as the
"indemnifying party") shall agree in the
same manner and to the same extent as set
forth in paragraph (a) of this Section
10.6 to indemnify and hold harmless the
Company, each person who controls the
Company, the directors of the Company and
those of its officers who shall have
signed any such registration statement,
with respect to any untrue statement or
alleged untrue statement in, or omission
or alleged omission from, such
registration statement or any post-
effective amendment thereto or any
preliminary prospectus or final prospectus
(as amended or as supplemented, if amended
or supplemented as aforesaid) contained in
such registration statement, if such
statement or omission was made in reliance
upon and in conformity with information
furnished in writing to the Company by
such indemnifying party specifically for
use in connection with the preparation of
such registration statement or any
preliminary prospectus or final prospectus
contained in such registration statement
or any such amendment or supplement
thereto.
(c) Each indemnified party
shall, with reasonable promptness after
its receipt of written notice of the
commencement of any action against such
indemnified party in respect of which
indemnity may be sought from an
indemnifying party on account of an
indemnity agreement contained in this
Section 10.6, notify the indemnifying
party in writing of the commencement
thereof. In case any such action shall be
brought against any indemnified party and
it shall so notify an indemnifying party
of the commencement thereof, the
indemnifying party shall be entitled to
participate therein and, to the extent it
may wish, jointly with any other
indemnifying party similarly notified, to
assume the defense thereof with counsel
reasonably satisfactory to such
indemnified party, and after notice from
the indemnifying party to such indemnified
party of its election so to assume the
defense thereof, the indemnifying party
shall not be liable to such indemnified
party under this Section 10.6 for any
legal or other expenses subsequently
incurred by such indemnified party in
connection with the defense thereof other
than reasonable costs of investigation.
Notwithstanding the foregoing, the
indemnifying party shall promptly pay as
incurred the reasonable fees and expenses
of the counsel retained by the indemnified
party in the event (i) the indemnifying
party and the indemnified party shall have
mutually agreed to the retention of such
counsel or (ii) the named parties to any
such proceeding (including any impleaded
parties) include both the indemnifying
party and the indemnified party and the
indemnified party shall have reasonably
concluded that there may be a conflict
between the positions of the indemnifying
party and the indemnified party in
conducting the defense of any such action
or that there may be legal defenses
available to it or other indemnified
parties that are different from or in
addition to those available to the
indemnifying party. The indemnity
agreements in this Section 10.5 shall be
in addition to any liabilities which the
indemnifying parties may have pursuant to
law.
<PAGE>
11. Cooperation, Etc. The
Company and the Shareholder shall
cooperate and use all efforts to take all
action, and to do all things necessary,
proper or advisable to consummate the sale
of the Shares to the Company and to
otherwise consummate and make effective
the transactions contemplated by this
Agreement, and shall refrain from taking
any action that shall be inconsistent
with, or contrary to, this Agreement.
Each of the parties hereto shall cooperate
and use all reasonable efforts to resist
any attempts to impose any legal
prohibition or restraint on the purchase
and sale of the Shares in accordance
herewith and, in the event thereof, to
remove, vacate and/or reverse any such
prohibition or restraint.
12. Expenses. The Shareholder
shall be responsible for any legal fees or
other expenses incurred by the Shareholder
in connection with the transactions
contemplated by this Agreement. The
Company shall be responsible for any legal
fees or other expenses incurred by it in
connection with the transactions
contemplated by this Agreement including
the fees due to the investment banking
firm of Punk, Ziegel & Knoell ("Punk
Ziegel") and the expenses of preparation,
printing and mailing of the Company's
proxy statement.
13. Non-Disclosure. The
Company and the Shareholder acknowledge
that disclosure concerning this Agreement
is required by law, and agree that each
party will have the opportunity to review
the Company's proxy materials, the
Company's 8-K (if any) and the
Shareholder's Amendment to Schedule 13D
with respect to this Agreement prior to
the filing thereof. Except for such
filings and except to the extent otherwise
required by law, neither the Company nor
the Shareholder shall make any disclosure
of the terms hereof or the negotiations
with respect hereto (other than to the
parties hereto and their representatives
and advisors) except pursuant to a press
release which shall be approved by all of
the parties hereto prior to the release
thereof. The Shareholder (and their
agents and advisors) shall not make any
disparaging public statements with respect
to the Company or any of its employees,
and the Company (and its employees, agents
and advisors) shall make no disparaging
public statements concerning the
Shareholder.
<PAGE>
14. Amendments; Waivers. This
Agreement shall not be modified, amended,
altered or supplemented, nor shall any
provision of this Agreement be waived,
except upon the execution and delivery of
a written agreement executed by each of
the parties hereto.
15. Assignments; Successors.
(a) Neither the Company nor
the Shareholder shall assign any of their
rights or delegate any of their duties
under this Agreement.
(b) This Agreement shall be
binding upon, inure to the benefit of, and
be enforceable by, the parties hereto.
Nothing expressed or referred to in this
Agreement is intended or shall be
construed to give any person other than
the parties to this Agreement any legal or
equitable right, remedy or claim under or
in respect of this Agreement or any
provision contained herein.
16. Specific Performance and
Injunctive Relief. The parties hereto
agree that irreparable damage would occur
in the event of the breach of any
provision of this Agreement and that the
parties shall be entitled to specific
performance of the terms hereof, in
addition to any other remedy at law or
equity.
17. Notices. All notices and
other communications provided for
hereunder shall be in writing (including
telex and telecopy communication) and
shall be sent by mail, telex, telecopier
or hand delivery: (i) if to the Company,
at its address at One Rotary Center, Suite
1111, Evanston, IL 60201,
Attention: Patrick C. Sommers, or (ii) if
to the Shareholder, at 0312 Ridge Road,
Aspen, Colorado 81611.
<PAGE>
18. Governing Law. This
Agreement shall be governed by, and
construed in accordance with, the laws of
the State of Illinois applicable to
contracts executed in and to be performed
in that State.
19. Headings. The descriptive
headings contained in this Agreement are
included for convenience of reference only
and shall not affect in any way the
meaning or interpretation of this
Agreement.
20. Counterparts. This
Agreement may be executed in one or more
counterparts, and by the different parties
hereto in separate counterparts, each of
which when executed shall be deemed to be
an original but all of which taken
together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be
executed as of the date first written
above.
MEDICUS SYSTEMS
CORPORATION
By /s/ Patrick C. Sommers
--------------------------
Patrick C. Sommers,
President and Chief
Executive Officer
THE SHAREHOLDER
By /s/ Richard C. Jelinek
-------------------------
Richard C. Jelinek
<PAGE>
DRAFT EXHIBIT A
$1,100,000[$900,000] Evanston,Illinois
[_______, 1997]
MEDICUS SYSTEMS CORPORATION
PROMISSORY NOTE
The undersigned Medicus Systems
Corporation, a Delaware corporation (the
"Company"), hereby promises to pay to the
order of Richard C. Jelinek[Boston Safe
Deposit and Trust Company of California,
or its successors, as trustee of the
Richard C. Jelinek Charitable Remainder
Unitrust dated August 3, 1993] (the
"Payee"), at the offices of the Company,
located at One Rotary Center, Suite 1111,
Evanston, Illinois 60201-4802, the
aggregate principal sum of One Million One
Hundred Thousand Dollars ($1,100,000)[Nine
Hundred Thousand Dollars ($900,000)], in
the amounts and on the maturity dates
specified below, with interest from the
date hereof, payable monthly and on the
final maturity date, at the rate of 8% per
annum in lawful money of the United States
of America.
Fifty percent of the principal
amount of this Note shall be payable on
[__________], 1998. The remaining
principal amount of this Note and all
accrued, unpaid interest shall be payable
on [___________], 1999. Interest on the
outstanding principal amount of this Note
shall be payable monthly on the last day
of each month and at maturity.
<PAGE>
The Company, at its option, may
prepay, at any time or from time to time,
all or any part of the principal sum then
remaining due on this Note without
penalty.
Any interest not paid within
five days after notice of nonpayment given
to the Company shall bear interest from
the due date at a rate per annum equal to
five percentage points greater than the
interest rate provided above, compounded
monthly until paid. Interest on any
unpaid principal following maturity
(whether by acceleration or by its terms)
shall likewise be payable from the date of
maturity at a rate per annum equal to five
percentage points greater than the
interest rate provided above, compounded
monthly until paid. In no event shall the
aggregate interest rate payable under this
Note exceed the maximum rate permitted by
law. The interest rate otherwise payable
hereunder shall be reduced to the extent
necessary to comply with the preceding
sentence.
At the option of the holder
hereof, exercised by written notice to the
Company, this Note and all accrued
interest thereon forthwith shall become
due and payable when any one or more
of the following events of default shall
have occurred and be continuing:
1. The Company shall fail to
pay when due any principal or interest
under this Note if such failure to pay
shall continue uncured for a period of
five days;
<PAGE>
2. The maturity date of any
other debt of the Company is accelerated;
3. The Company shall (i) have
an order for relief entered with respect
to it under the Federal Bankruptcy Code,
(ii) not pay, or admit in writing its
inability to pay, its debts generally as
they become due, (iii) make an assignment
for the benefit of creditors, (iv) apply
for, seek, consent to, or acquiesce in the
appointment of a receiver, custodian,
trustee, examiner, liquidator or similar
official for it or any substantial part of
its property, (v) institute any proceeding
seeking an order for relief under the
Federal Bankruptcy Code or any similar
state statute or seeking to adjudicate it
a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation,
reorganization or relief of debtors or
fail to file an answer or other pleading
denying the material allegations of any
such proceeding filed against it, (vi)
take any corporate action to authorize or
effect any of the foregoing actions set
forth in this paragraph 2 or (vii) fail to
contest in good faith any appointment or
proceeding described in paragraph 3; or
4. Without the application,
approval or consent of the Company, a
receiver, trustee, examiner, liquidator or
similar official shall be appointed for
the Company or any substantial part of its
property, or a proceeding described in
subparagraph (v) of paragraph 2 above
shall be instituted against the Company
and such appointment continues
undischarged or such proceeding continues
undismissed or unstayed for a period of 30
consecutive days.
<PAGE>
Any notice or other document to
be delivered to a party hereto pursuant to
this agreement shall be delivered in
person or by Federal Express, Overnight
Delivery, or United States General Post
Office Express Mail Next Day Service,
addressed if to the Company to Medicus
Systems Corporation, One Rotary Center,
Suite 1111, Evanston, Illinois 60201-4802,
attention Patrick C. Sommers, with a copy
to William G. Brown, Bell, Boyd & Lloyd,
Three First National Plaza, 70 West
Madison Street, Chicago, Illinois
60602-4207 and if to the Payee to
Richard C. Jelinek, 0312 Ridge Road,
Aspen, Colorado 81611[Mellon Private Asset
Management, Boston Safe Deposit and Trust
Company of California, 400 South Hope
Street, Suite 400, Los Angeles,
California 90071, attention Ms.
M. Patricia Whiteley]. Any such notice or
other document so delivered by Federal
Express or the United States Mail shall be
deemed delivered on the second business
day following the day on which the same is
deposited with Federal Express or at any
appropriate United States Post Office so
addressed.
This Note is made under and
pursuant to the laws of the State of
Illinois and is to be construed pursuant
to such laws.
MEDICUS SYSTEMS CORPORATION
Patrick C. Sommers
-------------------
Patrick C. Sommers,
President And Chief
Executive Officer
<PAGE>
EXHIBIT B
Warrant to Subscribe for 220,000 Shares
MEDICUS SYSTEMS CORPORATION
STOCK EXCHANGE AND SUBSCRIPTION WARRANT
To Subscribe for and Purchase Common Stock
of Medicus Systems Corporation
THIS CERTIFIES that for value
received, Richard C. Jelinek [Boston Safe
Deposit and Trust Company of California,
or its successors, as trustee of the
Richard C. Jelinek Charitable Remainder
Unitrust dated August 3, 1993](the
"Shareholder") is entitled to subscribe
for and purchase from Medicus Systems
Corporation, a Delaware corporation (the
"Company"), at the price of $8.00 per
share (as adjusted as provided herein, the
"Warrant Purchase Price") at any time
after the date hereof to and including
[____________], 2007, 220,000[180,000]
fully paid and non-assessable shares of
the Company's Common Stock, par value $.01
per share.
This Warrant is subject to the
following provisions, terms and
conditions:
1. Exercise.
1.1 Exercise; Issuance of
Certificates; Cash Payment. The rights
represented by this Warrant may be
exercised by the holder hereof, in whole
or in part (but not as to a fractional
share of Common Stock), by the surrender
of this Warrant at the principal office of
the Company (or such other office or
agency of the Company as it may designate
by notice in writing to the holder hereof)
and upon payment to it by certified check
or bank draft of the purchase price for
such shares; provided that the Company may
require, in the Company's sole discretion,
that the Purchase Price be paid in whole
or in part by delivery of certificates
representing Common Stock with duly
executed stock powers in blank. The
Company agrees that the shares so
purchased shall be and are deemed to be
issued to the holder hereof as the record
owner of such shares as of the close of
business on the date on which this Warrant
shall have been surrendered and payment
made of such shares as aforesaid. Subject
to the provisions of the next succeeding
paragraph, certificates for the shares of
stock so purchased shall be delivered to
the holder hereof within a reasonable
time, not exceeding ten days, after the
rights represented by this Warrant shall
have been so exercised, and, unless this
Warrant has expired, a new Warrant
representing the number of shares, if any,
with respect to which this Warrant shall
not then have been exercised shall also be
delivered to the holder hereof within such
time.
1.2 Payment. If the Company
requires payment of the Purchase Price in
whole or in part by delivery of
certificates representing Common Stock
with duly executed stock powers in blank,
in all cases other than those special
cases described below in this paragraph,
the shares of Common Stock delivered (the
"Delivered Shares") in payment of the
Purchase Price shall be valued at the
average of the closing sales prices per
share of the Common Stock for the 30
consecutive calendar days immediately
preceding the closing of the exercise. In
the event of a registered underwritten
public offering of Common Stock of the
Company at substantially the same time as,
and coordinated with, the exercise of the
Warrant, the Delivered Shares will be
valued at the net sales price of the
shares offered to the public. In the
event of a merger, reorganization, sale of
assets, or sale of substantially all of
the stock of the Company which closes at
substantially the same time as, and is
coordinated with, the exercise of the
Warrant, the Delivered Shares will be
valued at their fair market value at the
time of closing of such transaction.
1.3 Notification of Requirement to
Deliver Common Stock. The Company agrees
that it will notify the holder of this
Warrant, at the request of the holder, of
whether it will require payment upon
exercise in cash or Delivered Shares
within the 30 day period following the
date of such request.
1.4 Adjustment to Delivered Shares.
In the event of any transaction resulting
in an adjustment to the exercise price of
this Warrant, a similar adjustment will be
made to the Delivered Shares to the extent
necessary or appropriate.
2. Legend. Each stock certificate
shall bear a legend in substantially the
following form:
"The shares represented by this
certificate (the "Shares") have not
been registered under the Securities
Act of 1933 (the "Act"), and the
holder hereof, by his acceptance
hereof, acknowledges and agrees that
the Shares must be held indefinitely
unless (i) a registration statement
relating to the Shares and describing
the proposed transfer has become
effective under the Act or (ii) the
Corporation has received an opinion
of its counsel, or of counsel
satisfactory to it, that the proposed
transfer will not violate the
registration requirements of the Act.
The Corporation will furnish without
charge to each stockholder who so
requests a description of the powers,
designations, preferences and
relative, participating, optional or
other special rights of each class of
stock of the Corporation or series
thereof and the qualifications,
limitations or restrictions of such
preferences and/or rights, as well as
a description of restrictions agreed
to by the original holder of the
Shares. The Shares represented by
this certificate have been acquired
for investment and have been issued
on the condition that they will be
held for investment purposes only and
not for distribution."
3. Shares to be Fully Paid;
Reservation of Shares. The Company
covenants and agrees that all shares which
may be issued upon the exercise of the
rights represented by this Warrant will,
upon issuance, be fully paid and
nonassessable and free from all taxes,
liens and charges with respect to the
issue thereof and the Company will at all
times keep in reserve such number of
shares of Common Stock as may be required
for issuance to the holder hereof upon
exercise of this Warrant. The Company
covenants to use reasonable efforts to
amend its certificate of incorporation to
increase the number of authorized shares
if necessary to reserve sufficient shares
as required by the preceding sentence.
4. Adjustment of Warrant Purchase
Price. The above provisions are, however,
subject to the following:
4.1 Stock Dividends, Subdivisions,
Combinations, Rights, Warrants, and Other
Events. The Warrant Purchase Price shall
be adjusted from time to time as follows:
(a) In case the Company shall
(i) pay a dividend on Common Stock in
Common Stock, (ii) subdivide its
outstanding Common Stock, or (iii) combine
its outstanding Common Stock into a
smaller number of shares, the Warrant
Purchase Price in effect immediately prior
thereto shall be adjusted so that the
Shareholder shall be entitled to receive
the number of shares of Common Stock of
the Company which he would have owned or
have been entitled to receive upon
exercise of this Warrant after the
happening of any of the events described
above had such exercise been effected
immediately prior to the happening of such
event.
(b) In case the Company shall issue
Common Stock or any Common Stock
Equivalent (as defined below) to any
Person or entity, or in case the Company
shall issue any securities, rights or
warrants to all holders of its Common
Stock entitling them to subscribe for or
purchase Common Stock, in either case, at
a price per share less than the current
market price per share of Common Stock (as
defined in Subdivision (d) below) at the
date of issuance of such Common Stock or
Common Stock Equivalents or the record
date for the determination of stockholders
entitled to receive such rights or
warrants, as the case may be, the Warrant
Purchase Price and the number of shares
which the holder of this Warrant shall be
entitled to purchase in effect immediately
prior thereto shall be adjusted as
follows:
(i) the Warrant Purchase Price
shall be multiplied by a fraction, of
which the denominator shall be the
number of shares of Common Stock
outstanding on such date of issuance
or record date, as the case may be,
plus the number of additional shares
of Common Stock issued or issuable
pursuant to such Common Stock
Equivalent or offered for
subscription or purchase, and of
which the numerator shall be the
number of shares of Common Stock
outstanding on such date of issuance
or record date plus the number of
shares of Common Stock which the
aggregate issue, purchase or offering
price of the total number of shares
of Common Stock so issued or offered
would purchase at such current market
price per share of Common Stock; and
(ii) the number of shares of
Common Stock of the Company which the
holder shall be entitled to receive
shall be adjusted to equal the
quotient obtained by dividing the
existing aggregate exercise price by
the Warrant Purchase Price determined
above in this sentence.
Such adjustment shall be made successively
whenever any such Common Stock, Common
Stock Equivalent, rights or warrants are
issued. In determining whether any Common
Stock or Common Stock Equivalent has been
issued at less than such current market
price or whether any Common Stock
Equivalents, rights or warrants entitle
holders to subscribe for or purchase
shares of Common Stock at less than such
current market price, and in determining
the aggregate offering price of such
shares, there shall be taken into account
any consideration received by the Company
for such Common Stock Equivalents, rights
or warrants and the value to be received
upon exercise or conversion of such Common
Stock Equivalents, rights or warrants, the
value of such consideration, if other than
cash, to be determined by the Board of
Directors of the Company (the "Board of
Directors") in its reasonable judgment.
For purposes of this paragraph (b),
"Common Stock Equivalent" shall mean any
option, warrant, convertible security, or
other right to purchase or receive Common
Stock. Since an adjustment will be made
at the time of issuance of a Common Stock
Equivalent at less than the current market
price per share of Common Stock, no
adjustment will be made at the time of the
subsequent issuance of Common Stock in
accordance with the terms of the Common
Stock Equivalent.
(c) In case the Company shall
distribute to all holders of its Common
Stock shares of its capital stock (other
than Common Stock), evidences of its
indebtedness or securities or assets
(excluding cash dividends or cash
distributions out of retained earnings) or
rights or warrants to subscribe or
purchase (excluding those referred to in
Subdivision (b) above), then in each such
case the Board of Directors shall cause to
be made such adjustment, if any, of the
Warrant Purchase Price as in the
reasonable judgment of the Board of
Directors is required to compensate
equitably for the effect of such
distribution upon the exercise rights of
the holder of this Warrant.
(d) For the purpose of any
computation under Subdivision (b) above,
the current market price per share of
Common Stock at any date shall be deemed
to be the average of the daily closing bid
and asked prices or closing sales prices
per share, as applicable, for the 30
consecutive business days commencing 45
business days before the day in question,
except that (i) the current market price
per share of Common Stock on the date of
issuance of any employee or director stock
option which is granted at not less than
the fair market value of the Common Stock
on the date of grant as determined by the
Board of Directors in its reasonable
judgment or in accordance with applicable
rules adopted by the Internal Revenue
Service shall be deemed to be the price at
which such options are granted; and (ii)
the current market price per share of
Common Stock on the date of issuance of
any shares pursuant to a registered public
offering in customary form to the general
public shall be deemed to be the price at
which the Common Stock is sold by the
Company. If the closing bid and asked
prices or closing sale prices are not
available during the relevant period, the
current market price per share of Common
Stock shall be determined by the Board of
Directors in its reasonable judgment as of
the date of the adjustment of the exercise
price.
(e) No adjustment in the Warrant
Purchase Price shall be required unless
such adjustment would require an increase
or decrease of at least 1% in such Price;
provided, however, that any adjustments
which by reason of this Subdivision (e)
are not required to be made shall be
carried forward and taken into account in
any subsequent adjustment.
4.2 Effect of Reorganization,
Reclassification, Consolidation, Merger or
Sale. In case of any capital
reorganization, or of any reclassification
of the Common Stock or in case of the
consolidation of the Company with or the
merger of the Company with or into any
other corporation (other than a
consolidation or merger in which the
Company is the continuing corporation and
which does not result in any
reclassification of outstanding shares of
Common Stock) or of the sale of the
properties and assets of the Company as,
or substantially as, an entirety to any
other corporation, the Company, or the
corporation resulting from such
consolidation or surviving such merger or
to which such sale shall be made, as the
case may be, shall give notice to the
holder of this Warrant providing that upon
exercise of this Warrant after such
capital reorganization, reclassification,
consolidation, merger or sale there shall
be issuable upon exercise of this Warrant
a kind and amount of shares of stock or
other securities or property to which the
Common Stock issuable (immediately prior
to the time of such capital
reorganization, reclassification,
consolidation, merger or sale) upon
exercise as in the reasonable judgment of
the Board of Directors is required to
compensate equitably for the effect of
such event upon the exercise of the rights
of the holder of this Warrant. The above
provisions of this Section shall similarly
apply to successive reorganizations,
reclassifications, consolidations, mergers
and sales.
4.3 Notice of Change in Warrant
Purchase Price. Whenever the Warrant
Purchase Price is adjusted, pursuant to
this Section 4, the Company shall promptly
cause a notice to be given to the
Shareholder at his address set forth in
the Stock Purchase and Warrant Agreement
dated January 2, 1997 (the "Stock Purchase
Agreement") between the Company and the
Shareholder which will state the adjusted
Warrant Purchase Price and set forth in
detail how the adjustment was determined.
4.4 Fractional Shares. No
fractional shares or scrip representing
fractional shares shall be issued upon the
exercise of this Warrant and thus if the
exercise of this Warrant results in a
fraction, in lieu of any such fractional
share the Company shall pay cash within
five business days equal to such fraction
multiplied by the current market price for
a share of Common Stock as determined in
accordance with Section 4.1(d).
5. Registration Rights. All of the
shares of Common Stock acquired, or which
the Shareholder has the right to acquire,
upon exercise of this Warrant shall be
subject to the registration rights
provided in the Stock Purchase Agreement.
6. Survival. The provisions of
Section 5 shall survive any exercise of
this Warrant.
7. Exchange, Assignment or Loss of
Warrant; Successors and Assigns. This
Warrant is exchangeable, without expense,
at the option of the holder hereof, upon
presentation and surrender hereof to the
Company at its principal office, for other
Warrants of different denominations
entitling the holder thereof to purchase
in the aggregate the same number of shares
of the Company's common stock at the same
exercise price. This Warrant may be sold,
transferred or assigned by the holder
subject, however, to the provisions of
Section 8 hereof and provided that any
shares of Common Stock acquired upon
exercise of this Warrant shall be subject
to the restrictions on sale contained in
Section 8 of the Stock Purchase Agreement.
Upon receipt by the Company of evidence
satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant,
and (in the case of loss, theft or
destruction) of reasonably satisfactory
indemnification, and upon surrender and
cancellation of this Warrant, if
mutilated, the Company will execute and
deliver a new Warrant of like tenor and
new date. All covenants and provisions of
this Warrant by or for the benefit of the
Company shall inure to the benefit of its
successors and assigns. All covenants and
provisions of this Warrant by or for the
benefit of the holder hereof shall inure
to the benefit of his successors, and, to
the extent assignment is permitted
hereunder, to his assigns.
8. Compliance with the Securities
Act. This Warrant and any shares or other
securities issued or issuable upon
exercise hereof may not be offered, sold
or otherwise transferred except in
conformity with the Securities Act.
IN WITNESS WHEREOF, Medicus Systems
Corporation has caused this Warrant to be
signed by its duly authorized officer and
this Warrant to be dated [____________],
1997.
MEDICUS SYSTEMS CORPORATION
By /s/ Patrick C. Sommers
--------------------------
Patrick C. Sommers,
President and Chief
Executive Officer
<PAGE>
EXHIBIT 4
STOCK PURCHASE AND WARRANT AGREEMENT
This Stock Purchase and Warrant
Agreement (the "Agreement") is entered
into as of January 2, 1997 between Medicus
Systems Corporation, a Delaware
corporation (the "Company"), and the
Boston Safe Deposit and Trust Company of
California, or its successors, as trustee
of the Richard C. Jelinek Charitable
Remainder Unitrust dated August 3, 1993
(the "Shareholder").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Shareholder is the
beneficial owner of 450,000 shares of
Common Stock, $.01 par value ("Common
Stock"), of the Company, and the
Shareholder wishes to sell 450,000 of such
shares to the Company (such shares of
Common Stock to be sold being referred to
as the "Shares");
WHEREAS, the Shareholder will
own 225 shares of the Company's Voting
Preferred Stock ("Voting Preferred
Shares") immediately prior to the closing
of the transactions contemplated in this
Agreement;
WHEREAS, the Board of Directors
(the "Board") of the Company has
determined that it is in the best interest
of its stockholders for the Company to
acquire the Shares and the Voting
Preferred Stock owned by the Stockholder,
all upon the terms and subject to the
conditions set forth herein;
NOW THEREFORE, in consideration
of the foregoing and the mutual covenants
and agreements herein contained, the
Company and the Shareholder hereby agree
as follows:
1. The Purchase. Subject to
the terms and conditions set forth in this
Agreement, the Company agrees to purchase
from the Shareholder, and the Shareholder
agrees to sell, assign and transfer to the
Company on the Closing Date (as defined
below), all of the Shareholder's right,
title and interest in the Shares and all
of the Shareholder's right, title and
interest in the Voting Preferred Shares.
2. The Closing. The Closing
of the transactions contemplated by this
Agreement (the "Closing") shall take place
at the offices of Bell, Boyd & Lloyd,
Three First National Plaza, Chicago,
Illinois not later than April 15, 1997,
unless the parties otherwise agree. The
date upon which the Closing occurs is
herein referred to as the Closing Date.
<PAGE>
3. Payment. At the Closing,
(a) the Company shall deliver to the
Shareholder (i) cash consideration of
$2,025,000 (the "Cash Consideration"),
(ii) a promissory note, in substantially
the form of Exhibit A hereto, with 50% of
the principal amount maturing in one year
and the balance one year thereafter and
bearing 8% interest, in the aggregate
principal amount of $900,000 (the
"Promissory Note"), and (iii) a Warrant to
purchase 180,000 shares of Common Stock at
an exercise price of $8.00 per share,
which shall be substantially in the form
of Exhibit B hereto (the "Warrant"), and
(b) the Shareholder shall deliver to the
Company certificates representing all of
the Shares and all of the Voting Preferred
Shares, together with duly executed stock
powers with respect to the Shares and
Voting Preferred Shares in blank in form
satisfactory to the Company. The Company
shall make payment of the Cash
Consideration pursuant to this Section 3
on the Closing Date by wire transfer to an
account designated by the Shareholder in
an amount equal to the Cash Consideration.
4. Representations and
Warranties of the Shareholder. The
Shareholder hereby represents and warrants
to the Company that:
(a) This Agreement has been
duly executed by the Shareholder and is
the legal, valid and binding obligation of
the Shareholder, enforceable against the
Shareholder in accordance with its terms.
Such execution and delivery do not, and
performance of this Agreement will not,
(i) conflict with, violate or breach any
order, judgment, injunction or decree of
any court, arbitrator, government or
governmental agency or instrumentality
against or binding on the Shareholder or
by which any of his assets or properties
are bound or affected, (ii) constitute a
violation by the Shareholder of any law,
rule, regulation, order, judgment or
decree applicable to the Shareholder or by
which any property or asset of the
Shareholder is bound or affected or
(iii) conflict with, violate, breach or
cause a default (or an event which with
notice or lapse of time or both would
become a default) under, or give to others
any rights of termination, amendment,
acceleration or cancellation of, any
agreement or instrument to which the
Shareholder is party or by which any of
his assets or properties are bound or
affected or result in the creation of a
lien or other encumbrance on any of his
Shares.
<PAGE>
(b) The Shareholder has had
access to such information concerning the
Company, its business and its financial
condition as the Shareholder deemed
necessary in connection with the
transactions contemplated by this
Agreement.
(c) On the Closing Date, the
Shareholder will have valid title to all
of the Shares and the Voting Preferred
Shares, in each case free and clear of any
liens, charges or encumbrances, and such
Shares and Voting Preferred Shares will
not be subject to any claims by virtue of
rights, options, contracts, calls,
agreements or otherwise.
(d) The sale by the Shareholder
pursuant to this Agreement and the
delivery of the certificate(s)
representing the Shares and the Voting
Preferred Shares to the Company will
transfer to the Company good and valid
title to the Shares and the Voting
Preferred Shares free and clear of all
claims, liens, encumbrances, security
interests, proxies, voting and other
restrictions or interests of any nature
whatsoever.
(e) The Shareholder
acknowledges (i) that representatives of
the Company have strongly recommended that
the Shareholder engage separate counsel to
represent the Shareholder in connection
with the negotiation of this Agreement,
and (ii) that the Shareholder has
determined, nevertheless, not to be
represented by counsel in the negotiation
of this Agreement. The Shareholder has
made this decision in part based upon the
extensive business and investment
experience of Richard C. Jelinek, as well
as the involvement of William G. Brown, a
director and secretary of the Company, and
a partner in the law firm of Bell, Boyd &
Lloyd, counsel to the Company, in the
negotiation and preparation of the
Agreement and related documents, Mr. Brown
having had a long-standing personal and
business relationship with Mr. Jelinek;
however, the Shareholder acknowledges that
Mr. Brown has been acting solely as a
representative of the Company, and has not
been representing the Shareholder's
interests, in such matters. The
Shareholder represents that the
Shareholder has read and fully understands
this Agreement, the Warrant and the
Promissory Note.
<PAGE>
5. Representations and
Warranties of the Company. The Company
hereby represents and warrants to the
Shareholder that:
(a) The Company is a
corporation duly organized, validly
existing and in good standing under
the laws of the State of Delaware and
has the requisite corporate power and
authority and all necessary
governmental approvals to own, lease
and operate its properties and to
carry on its business as it is now
been conducted.
(b) The Company has all
necessary corporate power and
authority to execute and deliver this
Agreement, to perform its obligations
hereunder and to consummate the
transactions contemplated hereby.
The execution and delivery of this
Agreement by the Company and the
consummation by the Company of the
purchase of the Shares pursuant
hereto have been duly and validly
authorized by all necessary corporate
action and no other corporate
proceedings on the part of the
Company are necessary to authorize
this Agreement or to consummate the
purchase of the Shares hereunder,
other than the stockholder approval
contemplated in Sections 6(e) and
7(c) below. This Agreement has been
duly and validly executed and
delivered by the Company and is the
legal, valid and binding obligation
of the Company, enforceable against
the Company in accordance with its
terms.
<PAGE>
(c) The execution and delivery
of this Agreement by the Company do
not, and performance of this
Agreement by the Company will not,
(i) conflict with, violate or breach
the Certificate of Incorporation or
By-laws of the Company, (ii) conflict
with, violate or breach any order,
judgment, injunction or decree of any
court, arbitrator, government or
governmental agency or
instrumentality against or binding on
the Company or by which any of its
assets or properties are bound or
affected, (iii) constitute a
violation by the Company of any law,
rule, regulation, order, judgment or
decree applicable to the Company or
by which any property or asset of the
Company is bound or affected or
(iv) conflict with, violate, breach
or cause a default (or an event which
with notice or lapse of time or both
would become a default) under, or
give to others any rights of
termination, amendment, acceleration
or cancellation of, any agreement or
instrument to which the Company is a
party or by which any of the
Company's assets or properties are
bound or affected or result in the
creation of a lien or other
encumbrance on any of its assets or
properties.
6. Conditions Precedent to the
Company's Obligations. The obligations of
the Company to purchase the Shares and the
Voting Preferred Shares and issue the
Warrant pursuant to this Agreement are
subject to the fulfillment of the
following conditions:
<PAGE>
(a) The representations and
warranties of the Shareholder contained in
this Agreement shall be true and correct
in all material respects on and as of the
Closing Date, with the same force and
effect as if made as of the Closing Date;
(b) The performance of this
Agreement by the Company shall not
conflict with or violate any order,
judgment or decree applicable to the
Company or by which any of its assets or
properties are bound or affected;
(c) The Shareholder shall have
delivered to the Company certificate(s)
evidencing all of the Shares, together
with stock powers in form satisfactory to
the Company executed in blank;
(d) The Shareholder shall have
delivered to the Company certificate(s)
evidencing all of the Voting Preferred
Shares, together with stock powers in form
satisfactory to the Company executed in
blank;
(e) The stockholders of the
Company shall have approved the
transactions contemplated by this
Agreement; and
(f) All conditions to the
closing of the transactions contemplated
by the Stock Purchase and Warrant
Agreement dated the date hereof between
Richard C. Jelinek and the Company (the
"Jelinek Agreement") shall have been
satisfied.
7. Conditions Precedent to the
Shareholder's Obligations. The
obligations of the Shareholder to sell the
Shares and Voting Preferred Shares
pursuant to this Agreement are subject to
the fulfillment of the following
conditions:
<PAGE>
(a) The representations and
warranties of the Company contained in
this Agreement shall be true and correct
in all material respects on and as of the
Closing Date, with the same force and
effect as if made as of the Closing Date;
(b) The Company shall have
delivered to the Shareholder (i) by wire
transfer an amount equal to the Cash
Consideration, (ii) the Promissory Note,
and (iii) the Warrant;
(c) The stockholders of the
Company shall have approved the
transactions contemplated by this
Agreement;
(d) All conditions to the
closing of the transactions contemplated
by the Jelinek Agreement shall have been
satisfied.
8. Additional Agreements of
the Shareholder. (a) The Shareholder
agrees that, for a period of five years
from the date of this Agreement, the
Shareholder will not, without the prior
consent of the disinterested members of
the Board, transfer any shares of Common
Stock held by the Shareholder immediately
after the Closing (the "Remaining
Shares"), or any shares of Common Stock
issuable upon exercise of the Warrant
("Warrant Shares"), except as provided in
the following sentence. The restriction
set forth above shall lapse as to 20% of
the Remaining Shares and as to 20% of any
outstanding Warrant Shares on each
anniversary of the date of this Agreement,
provided that any transfer of Remaining
Shares or Warrant Shares as to which such
restriction has lapsed may only be made
(i) to a member of the immediate family of
Mr. Jelinek or any trust, partnership, or
corporation beneficially owned in its
entirety by members of the immediate
family of Mr. Jelinek, (ii) as a gift to
any tax-exempt organization, or (iii) in a
transaction satisfying the requirements of
Rule 144 promulgated under the Securities
Act of 1933.
<PAGE>
(b) The Shareholder further
agrees that, from the date hereof through
and including the fifth anniversary of the
date hereof, without the Company's prior
written consent, the Shareholder will not:
(i) acquire, announce an
intention to acquire, offer or
propose to acquire, or agree to
acquire, directly or indirectly, by
purchase or otherwise beneficial
ownership of any Common Stock or
other voting securities of the
Company (collectively the "Voting
Securities") or direct or indirect
rights or options to acquire (through
purchase, exchange, conversion or
otherwise) any Voting Securities;
(ii) make, or in any way
participate, directly or indirectly,
in any "solicitation" of proxies (as
such terms are defined in Rule 14a-1
under the Securities Exchange Act of
1934, as amended (the "Exchange
Act")) to vote any Voting Securities,
seek to advise, encourage or
influence any person or entity with
respect to the voting of any Voting
Securities, initiate or propose any
shareholder proposal or induce or
attempt to induce any other person to
initiate any shareholder proposal;
(iii) make any
statement or proposal, whether
written or oral, to the Board of
Directors of the Company, or to any
director, officer or agent of the
Company, or make any public
announcement or proposal whatsoever
with respect to a merger or other
business combination, sale or
transfer of assets, recapitalization,
dividend, share repurchase,
liquidation or other extraordinary
corporate transaction with the
Company or other transaction which
could result in a change of control,
or solicit or encourage any other
person to make such statement or
proposal;
<PAGE>
(iv) after consummation of
the Closing, form, join or in any way
participate in a "group" (within the
meaning of Section 13(d)(3) of the
Exchange Act) with respect to any
securities of the Company;
(v) otherwise act, alone
or in concert with others, to seek to
exercise any control over the
management, Board of Directors or
policies of the Company;
(vi) make a public request
to the Company (or its directors,
officers, shareholders, employees or
agents) to amend or waive any
provisions of this Agreement, the
Certificate of Incorporation or By-
Laws of the Company;
(vii) take any action
which might require the Company to
make a public announcement regarding
the possibility of any transaction
referred to in paragraph (ii) above
or similar transaction or, advise,
assist or encourage any other persons
in connection with the foregoing; or
(viii) disclose any
intention, plan or arrangement
inconsistent with the foregoing.
<PAGE>
(c) The Shareholder agrees that
the Shareholder will vote in favor of
approval of the transactions contemplated
by this Agreement at least that number of
shares of Common Stock as represents the
same percentage of the Shareholder's
holdings of Common Stock as the number of
shares of Common Stock voted in favor of
such approval by holders other than the
Shareholder represents of all shares voted
on such proposal (excluding shares which
are not present, are not voted or abstain)
by holders other than the Shareholder.
9. Additional Agreements of
the Company. The Company agrees that it
will use its reasonable best efforts to
cause its upcoming Annual Meeting of
Stockholders (the "Annual Meeting") to be
held on March 3, 1997 or as soon
thereafter as practicable, that it will
seek approval of the transactions
contemplated in this Agreement at the
Annual Meeting, and that it will promptly
prepare and file with the Securities and
Exchange Commission ("SEC") preliminary
proxy materials, and as promptly as
practicable following SEC review, mail
definitive proxy materials to
stockholders, in connection with the
Annual Meeting.
10. Registration Rights. The
Shareholder shall have the following
rights with respect to the Warrant Shares.
<PAGE>
10.1 Demand Registrations.
(a) Upon the written request of the
Shareholder that the Company register all
or part of the Warrant Shares then owned
by the Shareholder or which the
Shareholder has a right to acquire upon
exercise of the Warrant (which request
shall satisfy the requirements of
paragraph (c) of this Section 10.1), the
Company shall, subject in all cases to the
provisions of paragraph (b) of this
Section 10.1, thereupon, use its
reasonable best efforts to cause the
Warrant Shares specified in such request
to be so registered as soon as
practicable, but not later than 90 days
after the date of the Shareholder's
written request to register.
(b) The Company's obligation to
register all or part of the Warrant Shares
pursuant to paragraph (a) of this Section
10.1 shall in all cases be subject to the
following limitations and qualifications:
(i) The Company shall
(x) be required to effect only one
such registration if such
registration is ordered or declared
effective and (y) not be obligated to
file a registration statement at any
time if a special audit of the
Company would be required by the
rules and regulations of the
Securities and Exchange Commission
(the "Commission") in connection
therewith; and
<PAGE>
(ii) The Company shall be
entitled to postpone for a reasonable
period of time not to exceed 90 days
the filing of any registration
statement otherwise required to be
prepared and filed by it if, at the
time it receives a request for
registration, the Company determines,
in its reasonable judgment, that such
registration would materially
interfere with any financing,
acquisition, corporate reorganization
or other material transaction then
being contemplated by its Board of
Directors, involving the Company, and
promptly gives the Shareholder
written notice of such determination
and the reasons therefor, provided
that the Company shall not defer its
obligations in this manner more than
twice in any twelve month period and
the Company shall not defer its
obligations until 90 days have
expired after any prior deferral. In
such event, the Shareholder shall
have the right to withdraw the
request for registration by giving
written notice to the Company within
30 days after receipt of the notice
of postponement (and, in the event of
such withdrawal, such request shall
be ignored for purposes of counting
the demand registration to which the
Shareholder is entitled pursuant to
this paragraph (b)).
For purposes of this paragraph
(b), "special audit" shall mean an audit
other than a year-end audit, requiring an
opinion of the Company's independent
public accountants.
<PAGE>
(c) Any written request of the
Shareholder made pursuant to paragraph (a)
of this Section 10.1 shall:
(i) specify the number of
the Warrant Shares which the
Shareholder intends to offer and
intends to sell;
(ii) state the firm
intention of the Shareholder to offer
such shares for sale;
(iii) describe the
intended method of distribution of
such shares; and
(iv) contain an undertaking
on the part of the Shareholder to
provide all such information and
materials concerning the Shareholder
and take all such action as may be
required to permit the Company to
comply with all applicable
requirements of the Commission and to
obtain acceleration of the effective
date of the registration statement.
10.2 Participation
Registrations. (a) If, at any time from
the date hereof, the Company shall propose
to register under the Securities Act an
offering of Common Stock to be offered and
sold by it or any stockholder, it shall
give written notice of such proposed
registration to the Shareholder as
promptly as possible and shall, subject in
all cases to paragraph (b) of this Section
10.2, use its reasonable best efforts to
include in the offering such number of the
Warrant Shares then owned by the
Shareholder as the Shareholder shall
request, within 10 days after the giving
of such notice, to be included, such
offering to be upon the same terms
(including the method of distribution) as
the Common Stock being sold by the Company
pursuant to any such offering.
<PAGE>
(b) The Company's obligation to
include the Warrant Shares owned by the
Shareholder in any offering pursuant to
paragraph (a) of this Section 10.2 shall
in all cases be subject to the following
limitation and qualifications:
(i) The Company shall not
be required to give notice to the
Shareholder or include such shares in
any such registration if the proposed
registration is (x) a registration of
stock option or compensation plan or
of the Company Common Stock issued or
issuable pursuant to any such plan,
or (y) a registration of the Company
Common Stock proposed to be issued in
exchange for securities or assets of,
or in connection with a merger or
consolidation with, another
corporation;
(ii) The Company may
require that the number of such
shares requested to be included in
such registration be reduced, or that
all such shares be excluded from any
such registration, if it is advised
in writing by its managing
underwriter that such reduction or
exclusion, as the case may be, is
necessary to permit the orderly sale
and distribution of the securities
being offered by the Company. Any
reduction shall be made pro rata
among all Selling Shareholders in
proportion to the relative number of
shares sought by each to be
registered. If the Company shall
require such a reduction, the
Shareholder shall have the right to
withdraw from the offering;
(iii) The Company may,
in its sole discretion and without
the consent of the Shareholder,
withdraw such registration statement
and abandon the proposed offering in
which the Shareholder had requested
to participate; and
<PAGE>
(iv) The Company shall be
required to effect only one such
registration; provided that the
Shareholder's right to registration
under this Section 10.2 shall not
expire unless all shares the
Shareholder has requested under
Section 10.2(a) to be registered have
been so registered.
10.3 Certain Covenants of the
Company. (a) In connection with any
registration of the Warrant Shares
undertaken by the Company pursuant to
Section 10.1 and, if and to the extent
appropriate, Section 10.2, the Company
shall:
(i) prepare and file with
the Commission a registration
statement with respect to such shares
and use its best efforts to cause
such registration statement to become
effective;
(ii) prepare and file with
the Commission such amendments and
supplements to such registration
statement and the prospectus used in
connection therewith as may be
necessary to keep such registration
statement current for such period not
to exceed 270 days as the Shareholder
shall request and to comply with the
provisions of the Securities Act with
respect to the sale of all the
Warrant Shares covered by such
registration statement during such
period;
<PAGE>
(iii) provide the
Shareholder a reasonable opportunity
to review and, in the case of
registrations effected pursuant to
Section 10.1, approve prior to filing
(x) any registration statement filed
by the Company in connection with a
registration effected pursuant to
Section 10.1 or Section 10.2 and (y)
any amendments or supplements to such
registration statement and any
prospectus used in connection
therewith;
(iv) furnish to the
Shareholder such number of conformed
copies of such registration statement
and of each such amendment and
supplement thereto (in each case
including all exhibits), such number
of copies of the prospectus included
in such registration statement
(including each preliminary
prospectus and prospectus
supplement), copies of which are in
conformity with the requirements of
the Securities Act, and such other
documents as the Shareholder may
reasonably request in order to
facilitate the sale of the Warrant
Shares covered by such registration
statement;
(v) use its best efforts
to register or qualify the Warrant
Shares covered by such registration
statement under such other securities
or blue sky laws of such
jurisdictions as the Shareholder
shall reasonably request, and do any
and all other acts and things which
may be reasonably necessary or
advisable to enable the Shareholder
to consummate the sale in such
jurisdictions of such shares;
provided that the Company shall not
for any such purpose be required to
qualify generally to do business as a
foreign corporation in any
jurisdiction wherein it would not but
for the requirements of this
paragraph (v) be obligated to be so
qualified, to subject itself to
taxation in any such jurisdiction or
to consent to general service of
process in any such jurisdiction;
<PAGE>
(vi) notify the
Shareholder, at any time when a
prospectus relating to the Warrant
Shares covered by such registration
statement is required to be delivered
under the Securities Act, of the
Company's becoming aware that the
prospectus included in such
registration statement, as then in
effect, includes an untrue statement
of a material fact or omits to state
any material fact required to be
stated therein or necessary to make
the statements therein not misleading
in light of the circumstances then
existing, and at the request of the
Shareholder promptly prepare and
furnish to the Shareholder a
reasonable number of copies of a
prospectus supplemented or amended so
that, as thereafter delivered to the
purchasers of such shares, such
prospectus shall not include an
untrue statement of a material fact
or omit to state a material fact
required to be stated therein or
necessary to make the statements
therein not misleading in light of
the circumstances then existing;
(vii) use its best
efforts to cause all the Warrant
Shares covered by such registration
statement to be listed on each
securities exchange on which
securities of the same class issued
by the Company are then listed or, if
there shall then be no such listing,
to be accepted for quotation on
NASDAQ;
<PAGE>
(viii) provide a
transfer agent and registrar for the
Warrant Shares covered by such
registration statement not later than
the effective date of such
registration statement; and
(ix) enter into such
agreements (including an underwriting
agreement in customary form) and take
such other actions as the Shareholder
reasonably requests in order to
expedite or facilitate the
disposition of such shares.
(b) The Company shall take all
reasonable actions necessary so as to
enable the Shareholder to make sales of
the Warrant Shares under Rule 144 (or any
successor rule) under the Securities Act
and in accordance with applicable laws,
rules and regulations, the requirements of
the Company's transfer agent(s), and the
reasonable requirements of the broker
through which the sales are proposed to be
executed.
(c) From and after the date of
this Agreement, the Company shall not,
without the written consent of the
Shareholder, enter into any agreement
granting to any person or entity any
registration rights that are more
favorable than the registration rights
granted to the Shareholder under this
Note, unless the same rights are granted
to the Shareholder.
<PAGE>
10.4 Standstill. In the event
of a registered public offering, the
Shareholder will agree with the
underwriters not to sell any Shares for up
to 180 days following commencement of the
offering if and only if the Shareholder
has been offered the opportunity to
participate in the offering and the
underwriters have not reduced the number
of shares that the Shareholder may sell.
10.5 Expenses. (a) The
Shareholder shall pay all out-of-pocket
expenses incurred by the Company in
connection with any registration of the
Warrant Shares pursuant to Section 10.1
including, without limitation, all
registration and filing fees, printing
expenses, underwriting discounts,
commissions and expenses, fees and
disbursements of the Company's legal
counsel and accountants, transfer agents
and registrars, and expenses incidental to
any post-effective amendment to any such
registration statement. For purposes of
this Section 10.5, "out-of-pocket
expenses" shall not include salaries of
the Company employees or expenses
attributable to the Company's corporate
overhead.
(b) In connection with any
registration pursuant to Section 10.2, the
Company shall pay all registration and
filing fees, underwriting discounts,
commissions and expenses (other than those
attributable to the Warrant Shares being
sold by the Shareholder), printing
expenses, fees and disbursements of the
Company's legal counsel and accountants,
transfer agents and registrars fees, and
expenses incidental to any post-effective
amendment to any such registration
statement. The Shareholder shall pay all
other out-of-pocket expenses attributable
to the inclusion in the offering of the
Warrant Shares being sold by it including,
without limitation, registration and
filing fees and underwriting discounts,
commissions and expenses attributable
thereto and fees and disbursements of the
Shareholder's legal counsel and
accountants.
<PAGE>
10.6 Indemnification. (a) In
the case of each registration effected by
the Company pursuant to Section 10.1 or
Section 10.2, the Company agrees to
indemnify and hold harmless the
Shareholder, each underwriter of the
Warrant Shares so registered and each
person who controls any such underwriter
within the meaning of Section 15 of the
Securities Act, against any and all
losses, claims, damages or liabilities to
which they or any of them may become
subject under the Securities Act or any
other statute or common law, including any
amount paid in settlement of any
litigation, commenced or threatened, if
such settlement is effected with the
written consent of the Company, which
consent is not unreasonably withheld in
light of all factors which are important
to such indemnified party, and to
reimburse them for any legal or other
expenses incurred by them in connection
with investigating any claims and
defending any actions, insofar as any such
losses, claims, damages, liabilities or
actions arise out of or are based upon
(i) any untrue statement or alleged untrue
statement of a material fact contained in
the registration statement relating to the
sale of the Warrant Shares, or any post-
effective amendment thereto, or the
omission or alleged omission to state
therein a material fact required to be
stated therein or necessary to make the
statements therein not misleading or
(ii) any untrue statement or alleged
untrue statement of a material fact
contained in any preliminary prospectus,
if used prior to the effective date of
such registration statement, or contained
in the final prospectus (as amended or
supplemented if the Company shall have
filed with the Commission any amendment
thereof or supplement thereto) if used
within the period during which the Company
is required to keep the registration
statement to which such prospectus relates
current, or the omission or alleged
omission to state therein (if so used) a
material fact necessary in order to make
the statements therein, in light of the
circumstances under which they were made,
not misleading; provided, however, that
the indemnification agreement contained in
this paragraph (a) shall not (x) apply to
such losses, claims, damages, liabilities
or actions arising out of, or based upon,
any such untrue statement or alleged
untrue statement, or any such omission or
alleged omission, if such statement or
omission was made in reliance upon and in
conformity with information furnished in
writing to the Company by the Shareholder
or such underwriter for use in connection
with the preparation of the registration
statement, any preliminary prospectus or
final prospectus contained in the
registration statement, or any amendment
or supplement thereto, or (y) inure to the
benefit of any underwriter or any person
controlling such underwriter, if such
underwriter failed to send or give a copy
of the final prospectus to the person
asserting the claim at or prior to the
written confirmation of the sale of the
Warrant Shares to such person and if the
untrue statement or omission concerned had
been corrected in such final prospectus.
Notwithstanding the foregoing, the Company
agrees to be subject to such
indemnification and contribution
provisions as the underwriters may
reasonably request in connection with any
underwritten offering and that to the
extent that the provisions on
indemnification and contribution contained
in the underwriting agreement entered into
in connection with such offerings are in
conflict with the foregoing provisions,
the provisions in the underwriting
agreement shall control.
<PAGE>
(b) In the case of each
registration effected by the Company
pursuant to Section 10.1 or 10.2, the
Shareholder and each underwriter of the
Warrant Shares to be registered (each such
party and such underwriters being referred
to severally in this paragraph (b) as the
"indemnifying party") shall agree in the
same manner and to the same extent as set
forth in paragraph (a) of this Section
10.6 to indemnify and hold harmless the
Company, each person who controls the
Company, the directors of the Company and
those of its officers who shall have
signed any such registration statement,
with respect to any untrue statement or
alleged untrue statement in, or omission
or alleged omission from, such
registration statement or any post-
effective amendment thereto or any
preliminary prospectus or final prospectus
(as amended or as supplemented, if amended
or supplemented as aforesaid) contained in
such registration statement, if such
statement or omission was made in reliance
upon and in conformity with information
furnished in writing to the Company by
such indemnifying party specifically for
use in connection with the preparation of
such registration statement or any
preliminary prospectus or final prospectus
contained in such registration statement
or any such amendment or supplement
thereto.
(c) Each indemnified party
shall, with reasonable promptness after
its receipt of written notice of the
commencement of any action against such
indemnified party in respect of which
indemnity may be sought from an
indemnifying party on account of an
indemnity agreement contained in this
Section 10.6, notify the indemnifying
party in writing of the commencement
thereof. In case any such action shall be
brought against any indemnified party and
it shall so notify an indemnifying party
of the commencement thereof, the
indemnifying party shall be entitled to
participate therein and, to the extent it
may wish, jointly with any other
indemnifying party similarly notified, to
assume the defense thereof with counsel
reasonably satisfactory to such
indemnified party, and after notice from
the indemnifying party to such indemnified
party of its election so to assume the
defense thereof, the indemnifying party
shall not be liable to such indemnified
party under this Section 10.6 for any
legal or other expenses subsequently
incurred by such indemnified party in
connection with the defense thereof other
than reasonable costs of investigation.
Notwithstanding the foregoing, the
indemnifying party shall promptly pay as
incurred the reasonable fees and expenses
of the counsel retained by the indemnified
party in the event (i) the indemnifying
party and the indemnified party shall have
mutually agreed to the retention of such
counsel or (ii) the named parties to any
such proceeding (including any impleaded
parties) include both the indemnifying
party and the indemnified party and the
indemnified party shall have reasonably
concluded that there may be a conflict
between the positions of the indemnifying
party and the indemnified party in
conducting the defense of any such action
or that there may be legal defenses
available to it or other indemnified
parties that are different from or in
addition to those available to the
indemnifying party. The indemnity
agreements in this Section 10.5 shall be
in addition to any liabilities which the
indemnifying parties may have pursuant to
law.
<PAGE>
11. Cooperation, Etc. The
Company and the Shareholder shall
cooperate and use all efforts to take all
action, and to do all things necessary,
proper or advisable to consummate the sale
of the Shares to the Company and to
otherwise consummate and make effective
the transactions contemplated by this
Agreement, and shall refrain from taking
any action that shall be inconsistent
with, or contrary to, this Agreement.
Each of the parties hereto shall cooperate
and use all reasonable efforts to resist
any attempts to impose any legal
prohibition or restraint on the purchase
and sale of the Shares in accordance
herewith and, in the event thereof, to
remove, vacate and/or reverse any such
prohibition or restraint.
12. Expenses. The Shareholder
shall be responsible for any legal fees or
other expenses incurred by the Shareholder
in connection with the transactions
contemplated by this Agreement. The
Company shall be responsible for any legal
fees or other expenses incurred by it in
connection with the transactions
contemplated by this Agreement including
the fees due to the investment banking
firm of Punk, Ziegel & Knoell ("Punk
Ziegel") and the expenses of preparation,
printing and mailing of the Company's
proxy statement.
13. Non-Disclosure. The
Company and the Shareholder acknowledge
that disclosure concerning this Agreement
is required by law, and agree that each
party will have the opportunity to review
the Company's proxy materials, the
Company's 8-K (if any) and the
Shareholder's Amendment to Schedule 13D
with respect to this Agreement prior to
the filing thereof. Except for such
filings and except to the extent otherwise
required by law, neither the Company nor
the Shareholder shall make any disclosure
of the terms hereof or the negotiations
with respect hereto (other than to the
parties hereto and their representatives
and advisors) except pursuant to a press
release which shall be approved by all of
the parties hereto prior to the release
thereof. The Shareholder (and their
agents and advisors) shall not make any
disparaging public statements with respect
to the Company or any of its employees,
and the Company (and its employees, agents
and advisors) shall make no disparaging
public statements concerning the
Shareholder.
<PAGE>
14. Amendments; Waivers. This
Agreement shall not be modified, amended,
altered or supplemented, nor shall any
provision of this Agreement be waived,
except upon the execution and delivery of
a written agreement executed by each of
the parties hereto.
15. Assignments; Successors.
(a) Neither the Company nor
the Shareholder shall assign any of
their rights or delegate any of their
duties under this Agreement.
(b) This Agreement shall be
binding upon, inure to the benefit of, and
be enforceable by, the parties hereto.
Nothing expressed or referred to in this
Agreement is intended or shall be
construed to give any person other than
the parties to this Agreement any legal or
equitable right, remedy or claim under or
in respect of this Agreement or any
provision contained herein.
16. Specific Performance and
Injunctive Relief. The parties hereto
agree that irreparable damage would occur
in the event of the breach of any
provision of this Agreement and that the
parties shall be entitled to specific
performance of the terms hereof, in
addition to any other remedy at law or
equity.
<PAGE>
17. Notices. All notices and
other communications provided for
hereunder shall be in writing (including
telex and telecopy communication) and
shall be sent by mail, telex, telecopier
or hand delivery: (i) if to the Company,
at its address at One Rotary Center, Suite
1111, Evanston, IL 60201,
Attention: Patrick C. Sommers, or (ii) if
to the Shareholder, at Mellon Private
Asset Management, Boston Safe Deposit and
Trust Company of California, 400 South
Hope Street, Suite 400, Los Angeles,
California 90071, attention Ms.
M. Patricia Whiteley.
18. Governing Law. This
Agreement shall be governed by, and
construed in accordance with, the laws of
the State of Illinois applicable to
contracts executed in and to be performed
in that State.
19. Headings. The descriptive
headings contained in this Agreement are
included for convenience of reference only
and shall not affect in any way the
meaning or interpretation of this
Agreement.
20. Counterparts. This
Agreement may be executed in one or more
counterparts, and by the different parties
hereto in separate counterparts, each of
which when executed shall be deemed to be
an original but all of which taken
together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be
executed as of the date first written
above.
MEDICUS SYSTEMS
CORPORATION
By /s/ Patrick C. Sommers
--------------------------
Patrick C. Sommers,
President and Chief
Executive Officer
THE SHAREHOLDER
By /s/ Brenden Gilmore
-----------------------
Brenden Gilmore,
as Trustee
