<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): April 15, 2000
MEDCOM USA, INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 0-25474 65-0287558
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.) Identification No.)
18001 COWAN, SUITES C & D
IRVINE, CALIFORNIA 92614
(Address of Principal Executive Offices)
(949) 261-6665
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report.)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 15, 2000 Medcom USA, Incorporated ("the Company") acquired all
of the outstanding units of limited liability company interest of DCB Actuaries
& Consultants, S.R.O., a Czech Republic limited liability company ("DCB"). The
limited liability company interests were acquired from Martin Chvatal, Karel
Barak, Pavel Juranek, Petr Hamza, Vladimir Kanovsky, Vladimir Havlena and David
Robinson. Concurrently with the acquisition of the outstanding limited liability
company interests of DCB, the Company acquired certain related technology
rights, pertaining to DCB's software programs, from DSM, LLC, a Florida limited
liability company.
DCB develops and markets software programs which are used in providing
information to health care providers, hospitals, insurance companies and
insurance plans. DCB is headquartered in Brno, Czech Republic.
The acquisition is expected to be accounted for using the purchase
method of accounting. The aggregate purchase price, excluding acquisition costs,
consisted of $1.9 million in cash, and 2,850 shares of the Company's Series D
Cumulative Convertible Preferred Stock. In addition, the Company will pay an
aggregate of $250,000 to the existing employees of DCB. The cash portion of the
purchase price was funded from the Company's working capital balances. The
purchase price was arrived at as a result of an offer made by the sellers, and a
determination by the Company that the value of the business and assets being
acquired, viewed in light of the Company's present and proposed operations,
exceeded the offered price.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired
It is impracticable to provide the required financial
statements for the acquired business at the time this Form 8-K is
filed. The registrant shall file the required financial statements
under cover of Form 8-K/A on or before June 29, 2000.
(b) Pro forma financial information.
To be provided on or before June 29, 2000.
(c) Exhibits
Exhibit No. Description
- ----------- -----------
2.1 Shareholder Agreement dated March 31, 2999 between Medcom USA,
Inc. and Vladimir Havlena.
2.2 Shareholder Agreement dated March 31, 2999 between Medcom USA,
Inc. and Vladimir Kanovsky.
2.3 Shareholder Agreement dated March 31, 2999 between Medcom USA,
Inc. and Petr Hamza.
2
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2.4 Shareholder Agreement dated March 31, 2999 between Medcom USA,
Inc. and Martin Chvatal.
2.5 Shareholder Agreement dated March 31, 2999 between Medcom USA,
Inc. and Pavel Juranek.
2.6 Shareholder Agreement dated March 31, 2999 between Medcom USA,
Inc. and Karel Barak.
2.7 Supplement to Shareholder Agreement, dated April 13, 2000,
between Medcom USA, Inc. and Vladimir Kanovsky.
2.8 Supplement to Shareholder Agreement, dated April 13, 2000,
between Medcom USA, Inc. and Petr Hamza.
2.9 Supplement to Shareholder Agreement, dated April 13, 2000,
between Medcom USA, Inc. and Martin Chvatal.
2.10 Supplement to Shareholder Agreement, dated April 13, 2000,
between Medcom USA, Inc. and Pavel Juranek.
2.11 Supplement to Shareholder Agreement, dated April 13, 2000,
between Medcom USA, Inc. and Karel Barak.
2.12 Share Purchase Agreement dated as of April 15, 2999 by and
among DCB Actuaries and Consultants, SRO, David Robinson
Vladimir Havlena and Medcom USA, Inc.
2.13 Technology Purchase Agreement dated as of April 15, 2999 by
and between DSM, LLC and Medcom USA, Inc.
4.1 Certificate of Designations of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights of
Preferred Stock and Qualifications, Limitations and
Restrictions thereof, relating to Series D Cumulative
Convertible Preferred Stock.
3
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: April 28, 2000 MEDCOM USA, INCORPORATED
By: /S/ ALAN RUBEN
------------------------------------
Alan Ruben
Chief Financial Officer
4
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EXHIBIT INDEX
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Exhibit No. Description
- ----------- -----------
2.1 Shareholder Agreement dated March 31, 2999 between Medcom USA,
Inc. and Vladimir Havlena.
2.2 Shareholder Agreement dated March 31, 2999 between Medcom USA,
Inc. and Vladimir Kanovsky.
2.3 Shareholder Agreement dated March 31, 2999 between Medcom USA,
Inc. and Petr Hamza.
2.4 Shareholder Agreement dated March 31, 2999 between Medcom USA,
Inc. and Martin Chvatal.
2.5 Shareholder Agreement dated March 31, 2999 between Medcom USA,
Inc. and Pavel Juranek.
2.6 Shareholder Agreement dated March 31, 2999 between Medcom USA,
Inc. and Karel Barak.
2.7 Supplement to Shareholder Agreement, dated April 13, 2000,
between Medcom USA, Inc. and Vladimir Kanovsky.
2.8 Supplement to Shareholder Agreement, dated April 13, 2000,
between Medcom USA, Inc. and Petr Hamza.
2.9 Supplement to Shareholder Agreement, dated April 13, 2000,
between Medcom USA, Inc. and Martin Chvatal.
2.10 Supplement to Shareholder Agreement, dated April 13, 2000,
between Medcom USA, Inc. and Pavel Juranek.
2.11 Supplement to Shareholder Agreement, dated April 13, 2000,
between Medcom USA, Inc. and Karel Barak.
2.12 Share Purchase Agreement dated as of April 15, 2999 by and
among DCB Actuaries and Consultants, SRO, David Robinson
Vladimir Havlena and Medcom USA, Inc.
2.13 Technology Purchase Agreement dated as of April 15, 2999 by
and between DSM, LLC and Medcom USA, Inc.
4.1 Certificate of Designations of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights of
Preferred Stock and Qualifications, Limitations and
Restrictions thereof, relating to Series D Cumulative
Convertible Preferred Stock.
5
EXHIBIT 2.1
SHAREHOLDER AGREEMENT
MR. VLADIMIR HAVLENA, residing at Eerna Hora, Na vyhlidee 457, Czech Republic,
DOB 20 June 1956, Birth Code Number 560620/2371 (the "Seller")
and
MEDCOM USA, INC., registered office at 18001 Cowan, Suites C&D, Irvine,
California 92614, USA, represented by Mark Bennett, President (the "Buyer").
execute this shareholder agreement ("Agreement") in compliance with Czech law
and the provisions of Article 115, Pars 2 and 3 of At 513/1991 Sb.
ARTICLE I
The Seller is the owner of a 15% share in DCB Actuaries and Consultants s.r.o.,
registered office of Brno, Kozi 7, Czech Republic ("DCB") on the size of his
investment of 150,000 CZK in the DCB founding capital totaling 1,000,000 CZK.
ARTICLE II
In agreement with the decision of the general meeting of DCB held on 31 March
2000, the Seller hereby transfers his entire share defined in Article I of this
Agreement to the Buyer, and the Buyer shall accept the share. At the same time,
the Buyer states that it agrees with the Memorandum of Association that governs
the legal situation in DCB.
ARTICLE III
For his entire share, the Seller shall receive within 30 days after the
execution of this Agreement from the Buyer an amount of 173,077 (one hundred and
seventy three thousand and seventy seven) USD to the Seller's bank account and
preferred stock, convertible after 1 year to 15,000 of the Buyer common shares.
The preferred stock certificate will be mailed by certified carrier.
ARTICLE IV
The transfer of the share shall take effect as of the date of signing this
Agreement and under the terms outlined in Article VI. The Buyer agrees with the
terms and conditions of this Agreement.
ARTICLE V
By signing this Agreement, the Buyer becomes the owner of a 15% share of DCB.
<PAGE>
ARTICLE VI
By signing this Agreement, the Seller ceases to be a shareholder in DCB and
shall have no rights or obligations of DCB shareholders. This agreement will
only be effective if the Buyer acquires one hundred percent (100%) of the DCB
shares.
In Brno, on this 31st day of March, 2000
/S/ VLADIMIR HAVLENA /S/ MARK BENNETT
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Vladimir Havlena Mark Bennett, President
MedCom USA, Inc.
As a translator of the English language accredited on 5 September 1994 by the
Regional court in Brno under No. 373/94, I hereby certify that the translation
corresponds to the text of the attached document.
The translation is registered under No. 150 in the Translator's Ledger.
In Brno, on this 31st day of March 2000.
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EXHIBIT 2.2
SHAREHOLDER AGREEMENT
RNDR. VLADIMIR KANOVSKY CSC., residing at Brno, Letovicka, Czech Republic, DOB
26 April 1948, Birth Code Number 480426/150 (the "Seller")
and
MEDCOM USA, INC., registered office at 18001 Cowan, Suites C&D, Irvine,
California 92614, USA, represented by Mark Bennett, President (the "Buyer").
execute this shareholder agreement ("Agreement") in compliance with Czech law
and the provisions of Article 115, Pars 2 and 3 of At 513/1991 Sb.
ARTICLE I
The Seller is the owner of a 12% share in DCB Actuaries and Consultants s.r.o.,
registered office of Brno, Kozi 7, Czech Republic ("DCB") on the size of his
investment of 120,000 CZK in the DCB founding capital totaling 1,000,000 CZK.
ARTICLE II
In agreement with the decision of the general meeting of DCB held on 31 March
2000, the Seller hereby transfers his entire share defined in Article I of this
Agreement to the Buyer, and the Buyer shall accept the share. At the same time,
the Buyer states that it agrees with the Memorandum of Association that governs
the legal situation in DCB.
ARTICLE III
For his entire share, the Seller shall receive within 30 days after the
execution of this Agreement from the Buyer an amount of 138,462 (one hundred
thirty eight thousand and four hundred and sixty two) USD to the Seller's bank
account and preferred stock, convertible after 1 year to 12,000 of the Buyer
common shares. The preferred stock certificate will be mailed by certified
carrier.
ARTICLE IV
The transfer of the share shall take effect as of the date of signing this
Agreement and under the terms outlined in Article VI. The Buyer agrees with the
terms and conditions of this Agreement.
ARTICLE V
By signing this Agreement, the Buyer becomes the owner of a 12% share of DCB.
<PAGE>
ARTICLE VI
By signing this Agreement, the Seller ceases to be a shareholder in DCB and
shall have no rights or obligations of DCB shareholders. This agreement will
only be effective if the Buyer acquires one hundred percent (100%) of the DCB
shares.
In Brno, on this 31st day of March, 2000
/S/ RNDR. VLADIMIR KANOVSKY CSC. /S/ MARK BENNETT
- -------------------------------- ---------------------------
RNDR. Vladimir Kanovsky CSc. Mark Bennett, President
MedCom USA, Inc.
As a translator of the English language accredited on 5 September 1994 by the
Regional court in Brno under No. 373/94, I hereby certify that the translation
corresponds to the text of the attached document.
The translation is registered under No. 170 in the Translator's Ledger.
In Brno, on this 31st day of March 2000.
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EXHIBIT 2.3
SHAREHOLDER AGREEMENT
MR. PETR HAMZA, residing at Brno, Mozokly 16, Czech Republic, DOB 4 July 1961,
Birth Code Number 610704/1248 (the "Seller")
and
MEDCOM USA, INC., registered office at 18001 Cowan, Suites C&D, Irvine,
California 92614, USA, represented by Mark Bennett, President (the "Buyer").
execute this shareholder agreement ("Agreement") in compliance with Czech law
and the provisions of Article 115, Pars 2 and 3 of At 513/1991 Sb.
ARTICLE I
The Seller is the owner of a 13% share in DCB Actuaries and Consultants s.r.o.,
registered office of Brno, Kozi 7, Czech Republic ("DCB") on the size of his
investment of 130,000 CZK in the DCB founding capital totaling 1,000,000 CZK.
ARTICLE II
In agreement with the decision of the general meeting of DCB held on 31 March
2000, the Seller hereby transfers his entire share defined in Article I of this
Agreement to the Buyer, and the Buyer shall accept the share. At the same time,
the Buyer states that it agrees with the Memorandum of Association that governs
the legal situation in DCB.
ARTICLE III
For his entire share, the Seller shall receive within 30 days after the
execution of this Agreement from the Buyer an amount of 150,000 (one hundred
fifty thousand) USD to the Seller's bank account and preferred stock,
convertible after 1 year to 13,000 of the Buyer common shares. The preferred
stock certificate will be mailed by certified carrier.
ARTICLE IV
The transfer of the share shall take effect as of the date of signing this
Agreement and under the terms outlined in Article VI. The Buyer agrees with the
terms and conditions of this Agreement.
ARTICLE V
By signing this Agreement, the Buyer becomes the owner of a 13% share of DCB.
<PAGE>
ARTICLE VI
By signing this Agreement, the Seller ceases to be a shareholder in DCB and
shall have no rights or obligations of DCB shareholders. This agreement will
only be effective if the Buyer acquires one hundred percent (100%) of the DCB
shares.
In Brno, on this 31st day of March, 2000
/s/ MR. PETR HAMZA /S/ MARK BENNETT
- --------------------------------- -----------------------------
Mr. Petr Hamza Mark Bennett, President
MedCom USA, Inc.
As a translator of the English language accredited on 5 September 1994 by the
Regional court in Brno under No. 373/94, I hereby certify that the translation
corresponds to the text of the attached document.
The translation is registered under No. 175 in the Translator's Ledger.
In Brno, on this 31st day of March 2000.
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EXHIBIT 2.4
SHAREHOLDER AGREEMENT
MR. MARTIN CHVATAL, residing at Brno, V aleji 75, Czech Republic, DOB 9 November
1956, Birth Code Number 561109/2223 (the "Seller")
and
MEDCOM USA, INC., registered office at 18001 Cowan, Suites C&D, Irvine,
California 92614, USA, represented by Mark Bennett, President (the "Buyer").
execute this shareholder agreement ("Agreement") in compliance with Czech law
and the provisions of Article 115, Pars 2 and 3 of At 513/1991 Sb.
ARTICLE I
The Seller is the owner of a 9% share in DCB Actuaries and Consultants s.r.o.,
registered office of Brno, Kozi 7, Czech Republic ("DCB") on the size of his
investment of 90,000 CZK in the DCB founding capital totaling 1,000,000 CZK.
ARTICLE II
In agreement with the decision of the general meeting of DCB held on 31 March
2000, the Seller hereby transfers his entire share defined in Article I of this
Agreement to the Buyer, and the Buyer shall accept the share. At the same time,
the Buyer states that it agrees with the Memorandum of Association that governs
the legal situation in DCB.
ARTICLE III
For his entire share, the Seller shall receive within 30 days after the
execution of this Agreement from the Buyer an amount of 103,846 (one hundred and
three thousand eight hundred and forty six) USD to the Seller's bank account and
preferred stock, convertible after 1 year to 9,000 of the Buyer common shares.
The preferred stock certificate will be mailed by certified carrier.
ARTICLE IV
The transfer of the share shall take effect as of the date of signing this
Agreement and under the terms outlined in Article VI. The Buyer agrees with the
terms and conditions of this Agreement.
ARTICLE V
By signing this Agreement, the Buyer becomes the owner of a 9% share of DCB.
<PAGE>
ARTICLE VI
By signing this Agreement, the Seller ceases to be a shareholder in DCB and
shall have no rights or obligations of DCB shareholders. This agreement will
only be effective if the Buyer acquires one hundred percent (100%) of the DCB
shares.
In Brno, on this 31st day of March, 2000
/S/ MR. MARTIN CHVATAL /S/ MARK BENNETT
- ------------------------------------ --------------------------------
Mr. Martin Chvatal Mark Bennett, President
MedCom USA, Inc.
As a translator of the English language accredited on 5 September 1994 by the
Regional court in Brno under No. 373/94, I hereby certify that the translation
corresponds to the text of the attached document.
The translation is registered under No. 160 in the Translator's Ledger.
In Brno, on this 31st day of March 2000.
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EXHIBIT 2.5
SHAREHOLDER AGREEMENT
MR. PAVEL JURANEK, residing at Brno, Tuekova 18, Czech Republic, DOB 22 January
1952, Birth Code Number 520122/043 (the "Seller")
and
MEDCOM USA, INC., registered office at 18001 Cowan, Suites C&D, Irvine,
California 92614, USA, represented by Mark Bennett, President (the "Buyer").
execute this shareholder agreement ("Agreement") in compliance with Czech law
and the provisions of Article 115, Pars 2 and 3 of At 513/1991 Sb.
ARTICLE I
The Seller is the owner of a 9% share in DCB Actuaries and Consultants s.r.o.,
registered office of Brno, Kozi 7, Czech Republic ("DCB") on the size of his
investment of 90,000 CZK in the DCB founding capital totaling 1,000,000 CZK.
ARTICLE II
In agreement with the decision of the general meeting of DCB held on 31 March
2000, the Seller hereby transfers his entire share defined in Article I of this
Agreement to the Buyer, and the Buyer shall accept the share. At the same time,
the Buyer states that it agrees with the Memorandum of Association that governs
the legal situation in DCB.
ARTICLE III
For his entire share, the Seller shall receive within 30 days after the
execution of this Agreement from the Buyer an amount of 103,846 (one hundred and
three thousand eight hundred and forty six) USD to the Seller's bank account and
preferred stock, convertible after 1 year to 9,000 of the Buyer common shares.
The preferred stock certificate will be mailed by certified carrier.
ARTICLE IV
The transfer of the share shall take effect as of the date of signing this
Agreement and under the terms outlined in Article VI. The Buyer agrees with the
terms and conditions of this Agreement.
ARTICLE V
By signing this Agreement, the Buyer becomes the owner of a 9% share of DCB.
<PAGE>
ARTICLE VI
By signing this Agreement, the Seller ceases to be a shareholder in DCB and
shall have no rights or obligations of DCB shareholders. This agreement will
only be effective if the Buyer acquires one hundred percent (100%) of the DCB
shares.
In Brno, on this 31st day of March, 2000
/S/ MR. PAVEL JURANEK /S/ MARK BENNETT
- ------------------------------------ -------------------------------
Mr. Pavel Juranek Mark Bennett, President
MedCom USA, Inc.
As a translator of the English language accredited on 5 September 1994 by the
Regional court in Brno under No. 373/94, I hereby certify that the translation
corresponds to the text of the attached document.
The translation is registered under No. 155 in the Translator's Ledger.
In Brno, on this 31st day of March 2000.
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EXHIBIT 2.6
SHAREHOLDER AGREEMENT
MR. KAREL BARAK, residing at EernA HORA 203, Czech Republic, DOB 8 May 1948,
Birth Code Number 480508/421 (the "Seller")
and
MEDCOM USA, INC., registered office at 18001 Cowan, Suites C&D, Irvine,
California 92614, USA, represented by Mark Bennett, President (the "Buyer").
execute this shareholder agreement ("Agreement") in compliance with Czech law
and the provisions of Article 115, Pars 2 and 3 of At 513/1991 Sb.
ARTICLE I
The Seller is the owner of a 9% share in DCB Actuaries and Consultants s.r.o.,
registered office of Brno, Kozi 7, Czech Republic ("DCB") on the size of his
investment of 90,000 CZK in the DCB founding capital totaling 1,000,000 CZK.
ARTICLE II
In agreement with the decision of the general meeting of DCB held on 31 March
2000, the Seller hereby transfers his entire share defined in Article I of this
Agreement to the Buyer, and the Buyer shall accept the share. At the same time,
the Buyer states that it agrees with the Memorandum of Association that governs
the legal situation in DCB.
ARTICLE III
For his entire share, the Seller shall receive within 30 days after the
execution of this Agreement from the Buyer an amount of 103,846 (one hundred and
three thousand eight hundred and forty six) USD to the Seller's bank account and
preferred stock, convertible after 1 year to 9,000 of the Buyer common shares.
The preferred stock certificate will be mailed by certified carrier.
ARTICLE IV
The transfer of the share shall take effect as of the date of signing this
Agreement and under the terms outlined in Article VI. The Buyer agrees with the
terms and conditions of this Agreement.
ARTICLE V
By signing this Agreement, the Buyer becomes the owner of a 9% share of DCB.
<PAGE>
ARTICLE VI
By signing this Agreement, the Seller ceases to be a shareholder in DCB and
shall have no rights or obligations of DCB shareholders. This agreement will
only be effective if the Buyer acquires one hundred percent (100%) of the DCB
shares.
In Brno, on this 31st day of March, 2000
/S/ KAREL BARAK /S/ MARK BENNETT
- -------------------------- ------------------------------
Karel Barak Mark Bennett, President
MedCom USA, Inc.
As a translator of the English language accredited on 5 September 1994 by the
Regional court in Brno under No. 373/94, I hereby certify that the translation
corresponds to the text of the attached document.
The translation is registered under No. 169 in the Translator's Ledger.
In Brno, on this 31st day of March 2000.
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EXHIBIT 2.7
SUPPLEMENT TO SHAREHOLDER AGREEMENT
This SUPPLEMENT TO SHAREHOLDER AGREEMENT is made this 13th day of
April, 2000, by and between MedCom USA, Inc., a Delaware corporation
("PURCHASER") and Vladimir Kanovsky, an individual ("SELLER"), with respect to
the following facts:
RECITALS:
A. Pursuant to a Shareholder Agreement dated March 31, 2000 between
Seller and Purchaser (the "SHAREHOLDER AGREEMENT"), the Seller has agreed to
sell to Purchaser, subject to certain conditions, all of Seller's share in DCB
Actuaries and Consultants, s.r.o., a limited liability company organized under
the laws the Czech Republic (the "COMPANY"). For purposes hereof, the term
"Share" shall refer to the limited liability company interest in the Company
owned by Seller, including Seller's entire legal and economic interest in the
Company.
B. Under agreements similar to the Shareholder Agreement (the
"Remaining Agreements"), certain of the remaining holders of a limited liability
interest in the Company have also agreed to sell such interest in the Company to
the Purchaser. Pursuant to an agreement (the "Share Purchase Agreement") with
David Robinson and Vladimir Havlena, the Purchaser has agreed to purchase their
limited liability company interests in the Company.
C. Purchaser and Seller desire that Seller agree to the terms hereof in
order to induce Purchaser to complete the transactions contemplated by the Share
Purchase Agreement and the Remaining Agreements. Seller acknowledges that as of
the date hereof, Purchaser is not obligated to proceed with or consummate such
transactions.
AGREEMENT
---------
1. PURCHASE PRICE. The purchase price for the Share being purchased by
the Purchaser shall be as set forth in the Shareholder Agreement, and this
Agreement does not modify such purchase price in any way.
2. CLOSING OF TRANSACTION. The sale of the Share by Seller to Purchaser
under the Shareholder Agreement shall be coordinated with and shall occur
simultaneously with the closing of the transactions contemplated by the Share
Purchase Agreement and the Remaining Agreements. Within one business day after
the Closing, the Purchaser shall deliver to Seller the cash portion of the
purchase price as set forth in the Shareholder Agreement. The cash portion of
the purchase price for all outstanding shares of limited liability company
interest may be transferred by wire transfer to the Company's US dollar account,
for immediate distribution to the Seller and the other sellers of such limited
liability company interests. Within 30 days after the Closing, the Purchaser
shall deliver to the Seller a stock certificate representing the preferred stock
of the Purchaser to which the Seller shall be entitled hereunder and under the
Shareholder Agreement.
3. REPRESENTATIONS AND WARRANTIES. Seller agrees with, and represents
and warrants to Buyer as follows:
<PAGE>
(a) ORGANIZATION. This Agreement and the Shareholder Agreement
each has been duly executed and delivered by Seller, and constitutes a
legal, valid and binding obligation of Seller, enforceable against him
in accordance with its terms.
(b) OWNERSHIP OF SHARES AND POWER TO TRANSFER. The Share is
validly issued and outstanding, fully paid and nonassessable. The Share
represents a 12% limited liability company interest in the Company.
Seller has not granted any, and there are no outstanding options,
subscription rights, proxy or voting rights or any other commitments of
any character relating to the Share. Seller has good and valid title to
the Share, free and clear of any claims or other rights or interests of
any person, and Seller has the absolute and unrestricted right, power,
authority and capacity to transfer the Share to Buyer at the Closing.
Upon consummation of the Closing, without exception Buyer will acquire
from Seller legal and beneficial ownership of, and good and valid title
to, and all rights to vote, the Share, free and clear of all
restrictions, options, security interests and adverse or equitable
claims or rights whatsoever.
(c) CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. No
approval, authorization or filing or registration with any governmental
or regulatory authority by Purchaser, Seller or the Company is required
in connection with the execution, delivery and performance of this
Agreement by Seller.
(d) AGREEMENT NOT A BREACH. The execution and performance of
this Agreement by Seller will not (i) conflict with or result in a
breach of the terms of any obligation under, or permit termination of,
any agreement to which Seller is a party; (ii) conflict with or violate
the provisions of any law or any judgment, decree, order, regulation or
rule of any court or governmental authority binding upon Seller or the
Company; (iii) violate or result in the modification or loss of any
permit, license or other authorization applicable to the Company; or
(iv) result in the creation of any material lien or charge upon the
Share or any assets of the Company.
(e) LITIGATION. No legal proceedings are pending or, to the
knowledge of Seller, threatened against the Company or the Seller.
(f) COMPLIANCE WITH LAW. To the Seller's knowledge, the
conduct of business by the Company has not violated and does not
violate in any material respect any federal, state, local or foreign
laws, rules, regulations, orders, or other similar items in force on
the date hereof.
(g) BROKERS COMMISSION OR FINDER'S FEE. Seller has not
retained any broker or finder or agreed to become obligated to pay any
fee or commission to any broker or finder for or an account of the
transactions contemplated by this Agreement. The Purchaser shall be
responsible for the fees and commissions of any broker or finder
engaged by it in connection with these transactions.
(h) DISCLOSURE. Seller acknowledges that he has received and
had an opportunity to review: (i) the Purchaser's Annual Report on Form
10-K for the year ended June 30, 1999; (ii) the Purchaser's Quarterly
Report on Form 10-Q for the quarter ended December 31, 1999; and (iii)
the Purchaser's supplemental disclosure document dated April 10, 2000,
concerning certain risks associated with an investment in the
Purchaser's securities. Seller further acknowledges that he has had the
opportunity to ask questions and receive answers concerning the terms
and conditions of the issuance of the Purchaser's securities to Seller,
and to obtain any additional information which the Purchaser possesses
or can acquire without unreasonable effort or expense that is necessary
to verify the accuracy of the information provided to Seller concerning
the Purchaser.
-2-
<PAGE>
(i) RESIDENCE. Seller's permanent residence is in the Czech
Republic.
(j) RESTRICTIONS ON RESALE. Seller understands that the
preferred shares to be issued by the Purchaser upon the closing of the
transactions contemplated by the Shareholder Agreement, and the common
shares that are issuable upon the conversion of such preferred shares,
shall be issued pursuant to an exemption from registration under the
United States securities laws, and that, accordingly, such shares are
being purchased for investment and not with a view to the unregistered
distribution or resale thereof, except to the extent permitted by
applicable law. Seller understands that he will not be entitled to
resell or transfer such preferred stock or common stock of the
Purchaser until such resale or transfer is registered under the
applicable securities laws or an exemption from registration is
available. Purchaser has no obligation to register such securities. The
certificate representing such securities shall bear a legend reflecting
such restrictions.
4. NO OTHER EFFECT ON SHAREHOLDER AGREEMENT. Except as expressly set
forth herein, the Shareholder Agreement shall remain in full effect, according
to its terms.
5. COUNTERPARTS. This Supplement to Shareholder Agreement may be
executed in two counterparts, which taken together shall be deemed a single
instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the dates indicated opposite their names below.
MEDCOM.USA, INC.
Date: April 14, 2000 By: /S/ MICHAEL MALET
--------------------------------
Michael Malet
SELLER
Date: April 13, 2000 /S/ Vladimir Kanovsky
------------------------------------
Vladimir Kanovsky
-3-
EXHIBIT 2.8
SUPPLEMENT TO SHAREHOLDER AGREEMENT
This SUPPLEMENT TO SHAREHOLDER AGREEMENT is made this 13th day of
April, 2000, by and between MedCom USA, Inc., a Delaware corporation
("PURCHASER") and Petr Hamza, an individual ("SELLER"), with respect to the
following facts:
RECITALS:
A. Pursuant to a Shareholder Agreement dated March 31, 2000 between
Seller and Purchaser (the "SHAREHOLDER AGREEMENT"), the Seller has agreed to
sell to Purchaser, subject to certain conditions, all of Seller's share in DCB
Actuaries and Consultants, s.r.o., a limited liability company organized under
the laws the Czech Republic (the "COMPANY"). For purposes hereof, the term
"Share" shall refer to the limited liability company interest in the Company
owned by Seller, including Seller's entire legal and economic interest in the
Company.
B. Under agreements similar to the Shareholder Agreement (the
"Remaining Agreements"), certain of the remaining holders of a limited liability
interest in the Company have also agreed to sell such interest in the Company to
the Purchaser. Pursuant to an agreement (the "Share Purchase Agreement") with
David Robinson and Vladimir Havlena, the Purchaser has agreed to purchase their
limited liability company interests in the Company.
C. Purchaser and Seller desire that Seller agree to the terms hereof in
order to induce Purchaser to complete the transactions contemplated by the Share
Purchase Agreement and the Remaining Agreements. Seller acknowledges that as of
the date hereof, Purchaser is not obligated to proceed with or consummate such
transactions.
AGREEMENT
---------
1. PURCHASE PRICE. The purchase price for the Share being purchased by
the Purchaser shall be as set forth in the Shareholder Agreement, and this
Agreement does not modify such purchase price in any way.
2. CLOSING OF TRANSACTION. The sale of the Share by Seller to Purchaser
under the Shareholder Agreement shall be coordinated with and shall occur
simultaneously with the closing of the transactions contemplated by the Share
Purchase Agreement and the Remaining Agreements. Within one business day after
the Closing, the Purchaser shall deliver to Seller the cash portion of the
purchase price as set forth in the Shareholder Agreement. The cash portion of
the purchase price for all outstanding shares of limited liability company
interest may be transferred by wire transfer to the Company's US dollar account,
for immediate distribution to the Seller and the other sellers of such limited
liability company interests. Within 30 days after the Closing, the Purchaser
shall deliver to the Seller a stock certificate representing the preferred stock
of the Purchaser to which the Seller shall be entitled hereunder and under the
Shareholder Agreement.
3. REPRESENTATIONS AND WARRANTIES. Seller agrees with, and represents
and warrants to Buyer as follows:
<PAGE>
(a) ORGANIZATION. This Agreement and the Shareholder Agreement
each has been duly executed and delivered by Seller, and constitutes a
legal, valid and binding obligation of Seller, enforceable against him
in accordance with its terms.
(b) OWNERSHIP OF SHARES AND POWER TO TRANSFER. The Share is
validly issued and outstanding, fully paid and nonassessable. The Share
represents a 13% limited liability company interest in the Company.
Seller has not granted any, and there are no outstanding options,
subscription rights, proxy or voting rights or any other commitments of
any character relating to the Share. Seller has good and valid title to
the Share, free and clear of any claims or other rights or interests of
any person, and Seller has the absolute and unrestricted right, power,
authority and capacity to transfer the Share to Buyer at the Closing.
Upon consummation of the Closing, without exception Buyer will acquire
from Seller legal and beneficial ownership of, and good and valid title
to, and all rights to vote, the Share, free and clear of all
restrictions, options, security interests and adverse or equitable
claims or rights whatsoever.
(c) CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. No
approval, authorization or filing or registration with any governmental
or regulatory authority by Purchaser, Seller or the Company is required
in connection with the execution, delivery and performance of this
Agreement by Seller.
(d) AGREEMENT NOT A BREACH. The execution and performance of
this Agreement by Seller will not (i) conflict with or result in a
breach of the terms of any obligation under, or permit termination of,
any agreement to which Seller is a party; (ii) conflict with or violate
the provisions of any law or any judgment, decree, order, regulation or
rule of any court or governmental authority binding upon Seller or the
Company; (iii) violate or result in the modification or loss of any
permit, license or other authorization applicable to the Company; or
(iv) result in the creation of any material lien or charge upon the
Share or any assets of the Company.
(e) LITIGATION. No legal proceedings are pending or, to the
knowledge of Seller, threatened against the Company or the Seller.
(f) COMPLIANCE WITH LAW. To the Seller's knowledge, the
conduct of business by the Company has not violated and does not
violate in any material respect any federal, state, local or foreign
laws, rules, regulations, orders, or other similar items in force on
the date hereof.
(g) BROKERS COMMISSION OR FINDER'S FEE. Seller has not
retained any broker or finder or agreed to become obligated to pay any
fee or commission to any broker or finder for or an account of the
transactions contemplated by this Agreement. The Purchaser shall be
responsible for the fees and commissions of any broker or finder
engaged by it in connection with these transactions.
(h) DISCLOSURE. Seller acknowledges that he has received and
had an opportunity to review: (i) the Purchaser's Annual Report on Form
10-K for the year ended June 30, 1999; (ii) the Purchaser's Quarterly
Report on Form 10-Q for the quarter ended December 31, 1999; and (iii)
the Purchaser's supplemental disclosure document dated April 10, 2000,
concerning certain risks associated with an investment in the
Purchaser's securities. Seller further acknowledges that he has had the
opportunity to ask questions and receive answers concerning the terms
and conditions of the issuance of the Purchaser's securities to Seller,
and to obtain any additional information which the Purchaser possesses
or can acquire without unreasonable effort or expense that is necessary
to verify the accuracy of the information provided to Seller concerning
the Purchaser.
-2-
<PAGE>
(i) RESIDENCE. Seller's permanent residence is in the Czech
Republic.
(j) RESTRICTIONS ON RESALE. Seller understands that the
preferred shares to be issued by the Purchaser upon the closing of the
transactions contemplated by the Shareholder Agreement, and the common
shares that are issuable upon the conversion of such preferred shares,
shall be issued pursuant to an exemption from registration under the
United States securities laws, and that, accordingly, such shares are
being purchased for investment and not with a view to the unregistered
distribution or resale thereof, except to the extent permitted by
applicable law. Seller understands that he will not be entitled to
resell or transfer such preferred stock or common stock of the
Purchaser until such resale or transfer is registered under the
applicable securities laws or an exemption from registration is
available. Purchaser has no obligation to register such securities. The
certificate representing such securities shall bear a legend reflecting
such restrictions.
4. NO OTHER EFFECT ON SHAREHOLDER AGREEMENT. Except as expressly set
forth herein, the Shareholder Agreement shall remain in full effect, according
to its terms.
5. COUNTERPARTS. This Supplement to Shareholder Agreement may be
executed in two counterparts, which taken together shall be deemed a single
instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the dates indicated opposite their names below.
MEDCOM.USA, INC.
Date: April 14, 2000 By: /S/ MICHAEL MALET
--------------------------------
SELLER
Date: April 13, 2000 /S/ PETR HAMZA
------------------------------------
Petr Hamza
-3-
EXHIBIT 2.9
SUPPLEMENT TO SHAREHOLDER AGREEMENT
This SUPPLEMENT TO SHAREHOLDER AGREEMENT is made this 13th day of
April, 2000, by and between MedCom USA, Inc., a Delaware corporation
("PURCHASER") and Martin Chvatal, an individual ("SELLER"), with respect to the
following facts:
RECITALS:
A. Pursuant to a Shareholder Agreement dated March 31, 2000 between
Seller and Purchaser (the "SHAREHOLDER AGREEMENT"), the Seller has agreed to
sell to Purchaser, subject to certain conditions, all of Seller's share in DCB
Actuaries and Consultants, s.r.o., a limited liability company organized under
the laws the Czech Republic (the "COMPANY"). For purposes hereof, the term
"Share" shall refer to the limited liability company interest in the Company
owned by Seller, including Seller's entire legal and economic interest in the
Company.
B. Under agreements similar to the Shareholder Agreement (the
"Remaining Agreements"), certain of the remaining holders of a limited liability
interest in the Company have also agreed to sell such interest in the Company to
the Purchaser. Pursuant to an agreement (the "Share Purchase Agreement") with
David Robinson and Vladimir Havlena, the Purchaser has agreed to purchase their
limited liability company interests in the Company.
C. Purchaser and Seller desire that Seller agree to the terms hereof in
order to induce Purchaser to complete the transactions contemplated by the Share
Purchase Agreement and the Remaining Agreements. Seller acknowledges that as of
the date hereof, Purchaser is not obligated to proceed with or consummate such
transactions.
AGREEMENT
---------
1. PURCHASE PRICE. The purchase price for the Share being purchased by
the Purchaser shall be as set forth in the Shareholder Agreement, and this
Agreement does not modify such purchase price in any way.
2. CLOSING OF TRANSACTION. The sale of the Share by Seller to Purchaser
under the Shareholder Agreement shall be coordinated with and shall occur
simultaneously with the closing of the transactions contemplated by the Share
Purchase Agreement and the Remaining Agreements. Within one business day after
the Closing, the Purchaser shall deliver to Seller the cash portion of the
purchase price as set forth in the Shareholder Agreement. The cash portion of
the purchase price for all outstanding shares of limited liability company
interest may be transferred by wire transfer to the Company's US dollar account,
for immediate distribution to the Seller and the other sellers of such limited
liability company interests. Within 30 days after the Closing, the Purchaser
shall deliver to the Seller a stock certificate representing the preferred stock
of the Purchaser to which the Seller shall be entitled hereunder and under the
Shareholder Agreement.
3. REPRESENTATIONS AND WARRANTIES. Seller agrees with, and represents
and warrants to Buyer as follows:
<PAGE>
(a) ORGANIZATION. This Agreement and the Shareholder Agreement
each has been duly executed and delivered by Seller, and constitutes a
legal, valid and binding obligation of Seller, enforceable against him
in accordance with its terms.
(b) OWNERSHIP OF SHARES AND POWER TO TRANSFER. The Share is
validly issued and outstanding, fully paid and nonassessable. The Share
represents a 9% limited liability company interest in the Company.
Seller has not granted any, and there are no outstanding options,
subscription rights, proxy or voting rights or any other commitments of
any character relating to the Share. Seller has good and valid title to
the Share, free and clear of any claims or other rights or interests of
any person, and Seller has the absolute and unrestricted right, power,
authority and capacity to transfer the Share to Buyer at the Closing.
Upon consummation of the Closing, without exception Buyer will acquire
from Seller legal and beneficial ownership of, and good and valid title
to, and all rights to vote, the Share, free and clear of all
restrictions, options, security interests and adverse or equitable
claims or rights whatsoever.
(c) CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. No
approval, authorization or filing or registration with any governmental
or regulatory authority by Purchaser, Seller or the Company is required
in connection with the execution, delivery and performance of this
Agreement by Seller.
(d) AGREEMENT NOT A BREACH. The execution and performance of
this Agreement by Seller will not (i) conflict with or result in a
breach of the terms of any obligation under, or permit termination of,
any agreement to which Seller is a party; (ii) conflict with or violate
the provisions of any law or any judgment, decree, order, regulation or
rule of any court or governmental authority binding upon Seller or the
Company; (iii) violate or result in the modification or loss of any
permit, license or other authorization applicable to the Company; or
(iv) result in the creation of any material lien or charge upon the
Share or any assets of the Company.
(e) LITIGATION. No legal proceedings are pending or, to the
knowledge of Seller, threatened against the Company or the Seller.
(f) COMPLIANCE WITH LAW. To the Seller's knowledge, the
conduct of business by the Company has not violated and does not
violate in any material respect any federal, state, local or foreign
laws, rules, regulations, orders, or other similar items in force on
the date hereof.
(g) BROKERS COMMISSION OR FINDER'S FEE. Seller has not
retained any broker or finder or agreed to become obligated to pay any
fee or commission to any broker or finder for or an account of the
transactions contemplated by this Agreement. The Purchaser shall be
responsible for the fees and commissions of any broker or finder
engaged by it in connection with these transactions.
(h) DISCLOSURE. Seller acknowledges that he has received and
had an opportunity to review: (i) the Purchaser's Annual Report on Form
10-K for the year ended June 30, 1999; (ii) the Purchaser's Quarterly
Report on Form 10-Q for the quarter ended December 31, 1999; and (iii)
the Purchaser's supplemental disclosure document dated April 10, 2000,
concerning certain risks associated with an investment in the
Purchaser's securities. Seller further acknowledges that he has had the
opportunity to ask questions and receive answers concerning the terms
and conditions of the issuance of the Purchaser's securities to Seller,
and to obtain any additional information which the Purchaser possesses
or can acquire without unreasonable effort or expense that is necessary
to verify the accuracy of the information provided to Seller concerning
the Purchaser.
-2-
<PAGE>
(i) RESIDENCE. Seller's permanent residence is in the Czech
Republic.
(j) RESTRICTIONS ON RESALE. Seller understands that the
preferred shares to be issued by the Purchaser upon the closing of the
transactions contemplated by the Shareholder Agreement, and the common
shares that are issuable upon the conversion of such preferred shares,
shall be issued pursuant to an exemption from registration under the
United States securities laws, and that, accordingly, such shares are
being purchased for investment and not with a view to the unregistered
distribution or resale thereof, except to the extent permitted by
applicable law. Seller understands that he will not be entitled to
resell or transfer such preferred stock or common stock of the
Purchaser until such resale or transfer is registered under the
applicable securities laws or an exemption from registration is
available. Purchaser has no obligation to register such securities. The
certificate representing such securities shall bear a legend reflecting
such restrictions.
4. NO OTHER EFFECT ON SHAREHOLDER AGREEMENT. Except as expressly set
forth herein, the Shareholder Agreement shall remain in full effect, according
to its terms.
5. COUNTERPARTS. This Supplement to Shareholder Agreement may be
executed in two counterparts, which taken together shall be deemed a single
instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the dates indicated opposite their names below.
MEDCOM.USA, INC.
Date: April 14, 2000 By: /S/ MICHAEL MALET
---------------------------------
SELLER
Date: April 13, 2000 /S/ Martin Chvatal
------------------------------------
Martin Chvatal
-3-
EXHIBIT 2.10
SUPPLEMENT TO SHAREHOLDER AGREEMENT
This SUPPLEMENT TO SHAREHOLDER AGREEMENT is made this 13th day of
April, 2000, by and between MedCom USA, Inc., a Delaware corporation
("PURCHASER") and Pavel Juranek, an individual ("SELLER"), with respect to the
following facts:
RECITALS:
A. Pursuant to a Shareholder Agreement dated March 31, 2000 between
Seller and Purchaser (the "SHAREHOLDER AGREEMENT"), the Seller has agreed to
sell to Purchaser, subject to certain conditions, all of Seller's share in DCB
Actuaries and Consultants, s.r.o., a limited liability company organized under
the laws the Czech Republic (the "COMPANY"). For purposes hereof, the term
"Share" shall refer to the limited liability company interest in the Company
owned by Seller, including Seller's entire legal and economic interest in the
Company.
B. Under agreements similar to the Shareholder Agreement (the
"Remaining Agreements"), certain of the remaining holders of a limited liability
interest in the Company have also agreed to sell such interest in the Company to
the Purchaser. Pursuant to an agreement (the "Share Purchase Agreement") with
David Robinson and Vladimir Havlena, the Purchaser has agreed to purchase their
limited liability company interests in the Company.
C. Purchaser and Seller desire that Seller agree to the terms hereof in
order to induce Purchaser to complete the transactions contemplated by the Share
Purchase Agreement and the Remaining Agreements. Seller acknowledges that as of
the date hereof, Purchaser is not obligated to proceed with or consummate such
transactions.
AGREEMENT
---------
1. PURCHASE PRICE. The purchase price for the Share being purchased by
the Purchaser shall be as set forth in the Shareholder Agreement, and this
Agreement does not modify such purchase price in any way.
2. CLOSING OF TRANSACTION. The sale of the Share by Seller to Purchaser
under the Shareholder Agreement shall be coordinated with and shall occur
simultaneously with the closing of the transactions contemplated by the Share
Purchase Agreement and the Remaining Agreements. Within one business day after
the Closing, the Purchaser shall deliver to Seller the cash portion of the
purchase price as set forth in the Shareholder Agreement. The cash portion of
the purchase price for all outstanding shares of limited liability company
interest may be transferred by wire transfer to the Company's US dollar account,
for immediate distribution to the Seller and the other sellers of such limited
liability company interests. Within 30 days after the Closing, the Purchaser
shall deliver to the Seller a stock certificate representing the preferred stock
of the Purchaser to which the Seller shall be entitled hereunder and under the
Shareholder Agreement.
3. REPRESENTATIONS AND WARRANTIES. Seller agrees with, and represents
and warrants to Buyer as follows:
<PAGE>
(a) ORGANIZATION. This Agreement and the Shareholder Agreement
each has been duly executed and delivered by Seller, and constitutes a
legal, valid and binding obligation of Seller, enforceable against him
in accordance with its terms.
(b) OWNERSHIP OF SHARES AND POWER TO TRANSFER. The Share is
validly issued and outstanding, fully paid and nonassessable. The Share
represents a 9% limited liability company interest in the Company.
Seller has not granted any, and there are no outstanding options,
subscription rights, proxy or voting rights or any other commitments of
any character relating to the Share. Seller has good and valid title to
the Share, free and clear of any claims or other rights or interests of
any person, and Seller has the absolute and unrestricted right, power,
authority and capacity to transfer the Share to Buyer at the Closing.
Upon consummation of the Closing, without exception Buyer will acquire
from Seller legal and beneficial ownership of, and good and valid title
to, and all rights to vote, the Share, free and clear of all
restrictions, options, security interests and adverse or equitable
claims or rights whatsoever.
(c) CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. No
approval, authorization or filing or registration with any governmental
or regulatory authority by Purchaser, Seller or the Company is required
in connection with the execution, delivery and performance of this
Agreement by Seller.
(d) AGREEMENT NOT A BREACH. The execution and performance of
this Agreement by Seller will not (i) conflict with or result in a
breach of the terms of any obligation under, or permit termination of,
any agreement to which Seller is a party; (ii) conflict with or violate
the provisions of any law or any judgment, decree, order, regulation or
rule of any court or governmental authority binding upon Seller or the
Company; (iii) violate or result in the modification or loss of any
permit, license or other authorization applicable to the Company; or
(iv) result in the creation of any material lien or charge upon the
Share or any assets of the Company.
(e) LITIGATION. No legal proceedings are pending or, to the
knowledge of Seller, threatened against the Company or the Seller.
(f) COMPLIANCE WITH LAW. To the Seller's knowledge, the
conduct of business by the Company has not violated and does not
violate in any material respect any federal, state, local or foreign
laws, rules, regulations, orders, or other similar items in force on
the date hereof.
(g) BROKERS COMMISSION OR FINDER'S FEE. Seller has not
retained any broker or finder or agreed to become obligated to pay any
fee or commission to any broker or finder for or an account of the
transactions contemplated by this Agreement. The Purchaser shall be
responsible for the fees and commissions of any broker or finder
engaged by it in connection with these transactions.
(h) DISCLOSURE. Seller acknowledges that he has received and
had an opportunity to review: (i) the Purchaser's Annual Report on Form
10-K for the year ended June 30, 1999; (ii) the Purchaser's Quarterly
Report on Form 10-Q for the quarter ended December 31, 1999; and (iii)
the Purchaser's supplemental disclosure document dated April 10, 2000,
concerning certain risks associated with an investment in the
Purchaser's securities. Seller further acknowledges that he has had the
opportunity to ask questions and receive answers concerning the terms
and conditions of the issuance of the Purchaser's securities to Seller,
and to obtain any additional information which the Purchaser possesses
or can acquire without unreasonable effort or expense that is necessary
to verify the accuracy of the information provided to Seller concerning
the Purchaser.
-2-
<PAGE>
(i) RESIDENCE. Seller's permanent residence is in the Czech
Republic.
(j) RESTRICTIONS ON RESALE. Seller understands that the
preferred shares to be issued by the Purchaser upon the closing of the
transactions contemplated by the Shareholder Agreement, and the common
shares that are issuable upon the conversion of such preferred shares,
shall be issued pursuant to an exemption from registration under the
United States securities laws, and that, accordingly, such shares are
being purchased for investment and not with a view to the unregistered
distribution or resale thereof, except to the extent permitted by
applicable law. Seller understands that he will not be entitled to
resell or transfer such preferred stock or common stock of the
Purchaser until such resale or transfer is registered under the
applicable securities laws or an exemption from registration is
available. Purchaser has no obligation to register such securities. The
certificate representing such securities shall bear a legend reflecting
such restrictions.
4. NO OTHER EFFECT ON SHAREHOLDER AGREEMENT. Except as expressly set
forth herein, the Shareholder Agreement shall remain in full effect, according
to its terms.
5. COUNTERPARTS. This Supplement to Shareholder Agreement may be
executed in two counterparts, which taken together shall be deemed a single
instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the dates indicated opposite their names below.
MEDCOM.USA, INC.
Date: April 14, 2000 By: /S/ MICHAEL MALET
--------------------------------
SELLER
Date: April 13, 2000 /S/ PAVEL JURANEK
------------------------------------
Pavel Juranek
-3-
EXHIBIT 2.11
SUPPLEMENT TO SHAREHOLDER AGREEMENT
This SUPPLEMENT TO SHAREHOLDER AGREEMENT is made this 13th of April,
2000, by and between MedCom USA, Inc., a Delaware corporation ("PURCHASER") and
Karel Barak, an individual ("SELLER"), with respect to the following facts:
RECITALS:
A. Pursuant to a Shareholder Agreement dated March 31, 2000 between
Seller and Purchaser (the "SHAREHOLDER AGREEMENT"), the Seller has agreed to
sell to Purchaser, subject to certain conditions, all of Seller's share in DCB
Actuaries and Consultants, s.r.o., a limited liability company organized under
the laws the Czech Republic (the "COMPANY"). For purposes hereof, the term
"Share" shall refer to the limited liability company interest in the Company
owned by Seller, including Seller's entire legal and economic interest in the
Company.
B. Under agreements similar to the Shareholder Agreement (the
"Remaining Agreements"), certain of the remaining holders of a limited liability
interest in the Company have also agreed to sell such interest in the Company to
the Purchaser. Pursuant to an agreement (the "Share Purchase Agreement") with
David Robinson and Vladimir Havlena, the Purchaser has agreed to purchase their
limited liability company interests in the Company.
C. Purchaser and Seller desire that Seller agree to the terms hereof in
order to induce Purchaser to complete the transactions contemplated by the Share
Purchase Agreement and the Remaining Agreements. Seller acknowledges that as of
the date hereof, Purchaser is not obligated to proceed with or consummate such
transactions.
AGREEMENT
---------
1. PURCHASE PRICE. The purchase price for the Share being purchased by
the Purchaser shall be as set forth in the Shareholder Agreement, and this
Agreement does not modify such purchase price in any way.
2. CLOSING OF TRANSACTION. The sale of the Share by Seller to Purchaser
under the Shareholder Agreement shall be coordinated with and shall occur
simultaneously with the closing of the transactions contemplated by the Share
Purchase Agreement and the Remaining Agreements. Within one business day after
the Closing, the Purchaser shall deliver to Seller the cash portion of the
purchase price as set forth in the Shareholder Agreement. The cash portion of
the purchase price for all outstanding shares of limited liability company
interest may be transferred by wire transfer to the Company's US dollar account,
for immediate distribution to the Seller and the other sellers of such limited
liability company interests. Within 30 days after the Closing, the Purchaser
shall deliver to the Seller a stock certificate representing the preferred stock
of the Purchaser to which the Seller shall be entitled hereunder and under the
Shareholder Agreement.
3. REPRESENTATIONS AND WARRANTIES. Seller agrees with, and represents
and warrants to Buyer as follows:
<PAGE>
(a) ORGANIZATION. This Agreement and the Shareholder Agreement
each has been duly executed and delivered by Seller, and constitutes a
legal, valid and binding obligation of Seller, enforceable against him
in accordance with its terms.
(b) OWNERSHIP OF SHARES AND POWER TO TRANSFER. The Share is
validly issued and outstanding, fully paid and nonassessable. The Share
represents a 9% limited liability company interest in the Company.
Seller has not granted any, and there are no outstanding options,
subscription rights, proxy or voting rights or any other commitments of
any character relating to the Share. Seller has good and valid title to
the Share, free and clear of any claims or other rights or interests of
any person, and Seller has the absolute and unrestricted right, power,
authority and capacity to transfer the Share to Buyer at the Closing.
Upon consummation of the Closing, without exception Buyer will acquire
from Seller legal and beneficial ownership of, and good and valid title
to, and all rights to vote, the Share, free and clear of all
restrictions, options, security interests and adverse or equitable
claims or rights whatsoever.
(c) CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. No
approval, authorization or filing or registration with any governmental
or regulatory authority by Purchaser, Seller or the Company is required
in connection with the execution, delivery and performance of this
Agreement by Seller.
(d) AGREEMENT NOT A BREACH. The execution and performance of
this Agreement by Seller will not (i) conflict with or result in a
breach of the terms of any obligation under, or permit termination of,
any agreement to which Seller is a party; (ii) conflict with or violate
the provisions of any law or any judgment, decree, order, regulation or
rule of any court or governmental authority binding upon Seller or the
Company; (iii) violate or result in the modification or loss of any
permit, license or other authorization applicable to the Company; or
(iv) result in the creation of any material lien or charge upon the
Share or any assets of the Company.
(e) LITIGATION. No legal proceedings are pending or, to the
knowledge of Seller, threatened against the Company or the Seller.
(f) COMPLIANCE WITH LAW. To the Seller's knowledge, the
conduct of business by the Company has not violated and does not
violate in any material respect any federal, state, local or foreign
laws, rules, regulations, orders, or other similar items in force on
the date hereof.
(g) BROKERS COMMISSION OR FINDER'S FEE. Seller has not
retained any broker or finder or agreed to become obligated to pay any
fee or commission to any broker or finder for or an account of the
transactions contemplated by this Agreement. The Purchaser shall be
responsible for the fees and commissions of any broker or finder
engaged by it in connection with these transactions.
(h) DISCLOSURE. Seller acknowledges that he has received and
had an opportunity to review: (i) the Purchaser's Annual Report on Form
10-K for the year ended June 30, 1999; (ii) the Purchaser's Quarterly
Report on Form 10-Q for the quarter ended December 31, 1999; and (iii)
the Purchaser's supplemental disclosure document dated April 10, 2000,
concerning certain risks associated with an investment in the
Purchaser's securities. Seller further acknowledges that he has had the
opportunity to ask questions and receive answers concerning the terms
and conditions of the issuance of the Purchaser's securities to Seller,
and to obtain any additional information which the Purchaser possesses
or can acquire without unreasonable effort or expense that is necessary
to verify the accuracy of the information provided to Seller concerning
the Purchaser.
-2-
<PAGE>
(i) RESIDENCE. Seller's permanent residence is in the Czech
Republic.
(j) RESTRICTIONS ON RESALE. Seller understands that the
preferred shares to be issued by the Purchaser upon the closing of the
transactions contemplated by the Shareholder Agreement, and the common
shares that are issuable upon the conversion of such preferred shares,
shall be issued pursuant to an exemption from registration under the
United States securities laws, and that, accordingly, such shares are
being purchased for investment and not with a view to the unregistered
distribution or resale thereof, except to the extent permitted by
applicable law. Seller understands that he will not be entitled to
resell or transfer such preferred stock or common stock of the
Purchaser until such resale or transfer is registered under the
applicable securities laws or an exemption from registration is
available. Purchaser has no obligation to register such securities. The
certificate representing such securities shall bear a legend reflecting
such restrictions.
4. NO OTHER EFFECT ON SHAREHOLDER AGREEMENT. Except as expressly set
forth herein, the Shareholder Agreement shall remain in full effect, according
to its terms.
5. COUNTERPARTS. This Supplement to Shareholder Agreement may be
executed in two counterparts, which taken together shall be deemed a single
instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the dates indicated opposite their names below.
MEDCOM.USA, INC.
Date: April 14, 2000 By: /S/ MICHAEL MALET
--------------------------------
SELLER
Date: April 13, 2000 /S/ KAREL BARAK
------------------------------------
Karel Barak
EXHIBIT 2.12
SHARE PURCHASE AGREEMENT
BY AND AMONG
DCB ACTUARIES AND CONSULTANTS, SRO
A LIMITED LIABILITY COMPANY ORGANIZED UNDER THE LAWS OF THE CZECH REPUBLIC
DAVID ROBINSON
VLADIMIR HAVLENA
AND
MEDCOM U.S.A., INC.,
A DELAWARE CORPORATION
APRIL 15, 2000
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE I PURCHASE AND SALE OF SHARES AND PURCHASE PRICE...............1
1.1 Purchase and Sale of Shares..................................1
1.2 Purchase Price...............................................2
ARTICLE II CLOSING......................................................2
2.1 Closing......................................................2
2.2 Purchaser Deliveries.........................................2
2.3 Seller Deliveries and Actions................................3
2.4 Further Assurances...........................................3
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS....................3
3.1 Organization, Good Standing and Authority....................3
3.2 Ownership of Shares and Power to Transfer....................3
3.3 Subsidiaries.................................................4
3.4 Consents and Approvals.......................................4
3.5 Agreement not a Breach.......................................4
3.6 Financial Statements.........................................4
3.7 Absence of Certain Changes...................................5
3.8 Taxes........................................................6
3.9 Collective Bargaining Agreements and Employee Benefits.......7
3.10 Litigation...................................................7
3.11 Intangible Personal Property.................................8
3.12 Real Property................................................8
3.13 Contracts....................................................9
3.14 Management Personnel........................................10
3.15 Banking Facilities..........................................10
3.16 Compliance with Law.........................................10
3.17 Corporate Proceedings.......................................10
3.18 No Termination of Business Relationship.....................10
3.19 Brokers Commission or Finder's Fee..........................11
3.20 Accounts Receivable.........................................11
3.21 No Undisclosed Liabilities..................................11
3.22 Title to Assets.............................................11
3.23 Environmental Matters.......................................12
3.24 Disclosure..................................................12
3.25 Residence...................................................12
3.26 Restrictions on resale......................................12
3.27 No Misstatements or Omissions...............................13
3.28 Rights of First Refusal. ..................................13
3.29 Accredited Investor Status..................................13
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.............13
4.1 Existence...................................................13
4.2 Power and Authority.........................................13
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4.3 No Violation................................................13
4.4 Status of Preferred Stock...................................14
4.5 No Misstatements or Omissions...............................14
ARTICLE V CERTAIN POST-CLOSING COVENANTS..............................14
5.1 Books and Records...........................................14
5.2 Access to Books and Records.................................14
5.3 Legal Residency Assistance..................................14
5.4 Working Capital Funding.....................................14
5.5 Bonuses.....................................................14
5.6 Availability of Authorized Shares of Common Stock...........14
ARTICLE VI SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION.............................................15
6.1 Survival of Representations and Warranties..................15
6.2 Indemnification.............................................15
ARTICLE VII MISCELLANEOUS PROVISIONS....................................17
7.1 Public Announcements........................................17
7.2 Amendment; Waiver...........................................17
7.3 Fees and Expenses...........................................18
7.4 Notices.....................................................18
7.5 Assignment..................................................19
7.6 Governing Law; Consent to Jurisdiction......................19
7.7 Counterparts................................................20
7.8 Headings....................................................20
7.9 Entire Agreement............................................20
7.10 Severability................................................20
7.11 No Third Party Beneficiaries................................20
7.12 Attorneys' Fees.............................................20
7.13 Miscellaneous...............................................20
ii
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EXHIBIT 2.12
SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (this "AGREEMENT") is made and entered
into as of April 15, 2000, by and among DCB ACTUARIES AND CONSULTANTS, SRO., a
limited liability company organized under the laws of the Czech Republic (the
"COMPANY"), DAVID ROBINSON, an individual ("ROBINSON"), VLADIMIR HAVLENA, an
individual ("HAVLENA" and, together with Robinson, collectively referred to
herein as the "SELLERS" and, individually, as a "SHAREHOLDER"), and MEDCOM
U.S.A., INC., a Delaware corporation (the "PURCHASER").
R E C I T A L S
- - - - - - - -
WHEREAS, the Company is in the business of developing, marketing,
licensing, and distributing certain software programs, including without
limitation a program entitled "Health Information Gateway" (the "BUSINESS"); and
WHEREAS, the Shareholders own, in the aggregate, limited liability
company interests representing 48% of the total outstanding limited liability
company interests of the Company (the "SHARES"), and
WHEREAS, the Shareholders desire to sell to the Purchaser, and the
Purchaser desires to purchase from the Sellers, all of the Shares, subject to
the terms and conditions set forth herein.
NOW, THEREFORE, for and in consideration of the premises and mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
each of the parties, and intending to be legally bound, the parties agree as
follows:
A G R E E M E N T
- - - - - - - - -
ARTICLE I
PURCHASE AND SALE OF SHARES AND PURCHASE PRICE
----------------------------------------------
1.1 PURCHASE AND SALE OF SHARES. The Sellers do hereby sell, transfer
and assign to Purchaser, and the Purchaser hereby purchases, all of the
following Shares, free and clear of all liens, security interests, restrictions
and adverse claims of any kind:
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PERCENTAGE OF
OUTSTANDING LIMITED
NAME OF SELLER LIABILITY COMPANY INTEREST
-------------- --------------------------
David Robinson 33%
Vladimir Havlena 15%
1.2 PURCHASE PRICE. The aggregate purchase price to be paid for the
Shares (the "PURCHASE PRICE") to the Sellers shall be the cash amount of U.S.
$553,847, and 237.12 shares of the Purchaser's Series D Cumulative Convertible
Preferred Stock (the "PREFERRED STOCK"), which shall have the rights,
preferences and privileges set forth on Exhibit A hereto. Each of the Sellers
shall be paid his pro rata portion of the above-described Purchase Price, as set
forth in Section 2.2 below.
ARTICLE II.
CLOSING
-------
2.1 CLOSING. The closing (the "CLOSING") of the transactions
contemplated by this Agreement is being held on the date of execution hereof
(the "CLOSING DATE") at the offices of Holland & Knight, LLP, 1201 West
Peachtree Street N.E., Suite 2000, Atlanta, Georgia 30309
2.2 PURCHASER DELIVERIES. In connection with the Closing, the Purchaser
shall deliver:
(a) within one business day after the Closing, to the Sellers,
cash, or by cashier's or certified check or by wire transfer to the
respective accounts which the Sellers have identified in writing to the
Purchaser at least one (1) day prior to the Closing Date, funds in the
following amounts:
NUMBER OF
NAME OF SELLER CASH CONSIDERATION PREFERRED SHARES
-------------- ------------------ ----------------
David Robinson $380,770 163.02
Vladimir Havlena $173,077 74.10
-------- ------
TOTAL $553,847 237.12
(b) within 30 days after the Closing, stock certificates
representing the number of shares of Preferred Stock to be issued to
the Sellers hereunder as set forth in Section 2.2(a) above;
(c) at the Closing, to Robinson, a duly executed Employment
Agreement in form and substance reasonably acceptable to the parties
hereto, and within 14 business days after the Closing, to Havlena, a
duly executed Employment Agreement in form and substance reasonably
acceptable to the parties.
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2.3 SELLER DELIVERIES AND ACTIONS.
(a) At the Closing, the Sellers shall deliver to the Purchaser
any and all consents, approvals, notices, filings or recordations of
third parties required with respect to the execution and delivery of
this Agreement or the transactions contemplated hereby or by any of the
agreements, documents or instruments referred to herein.
(b) Simultaneously with such deliveries, the Sellers shall
take such other steps and actions as may be necessary to put the
Purchaser in actual possession and operating control of the Company and
the Business, as may be requested by Purchaser.
2.4 FURTHER ASSURANCES. From time to time after the Closing, and
without further consideration, each of the Sellers shall execute and deliver
such other instruments of conveyance, assignment, transfer and delivery, and
take such other actions as the Purchaser may reasonably request in order more
effectively to transfer to the Purchaser, and to place the Purchaser in
possession or control of, the Company and all of the rights, properties and
assets associated with the Business intended to be transferred hereunder, to
reasonably assist in the collection of any and all such rights, properties and
assets, and to enable the Purchaser to exercise and enjoy all of the rights and
benefits with respect thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
-----------------------------------------
Sellers agree with, and jointly and severally represent and warrant to
Buyer as follows:
3.1 ORGANIZATION, GOOD STANDING AND AUTHORITY. The Company is a limited
liability company duly organized, validly existing and in good standing under
the laws of the Czech Republic. The Company has full corporate power and
corporate authority to carry on its business as it is now conducted, and is
entitled to own, lease or operate the properties and assets it now owns, leases
or operates. The Company is qualified to do business, is in good standing and
has all required and appropriate licenses in each jurisdiction in which its
failure to obtain or maintain such qualification, good standing or licensing (i)
would have a material adverse effect on its business, assets, operations or
prospects (a "Material Adverse Effect") or (ii) would result in a material
breach of any of the other representations, warranties or covenants set forth in
this Agreement. This Agreement constitutes the legal, valid and binding
obligation of the Seller, enforceable against him in accordance with its terms,
except (i) as the same may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to creditors'
rights generally and (ii) that the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses and to
the discretion of the court before which any proceeding therefor may be brought.
3.2 OWNERSHIP OF SHARES AND POWER TO TRANSFER. All of the Shares are
validly issued and outstanding, fully paid and nonassessable. The Shares
transferred to Purchaser hereby constitute the entire legal, equitable and
economic interest of the Sellers in the Company. Neither Seller nor the Company
has granted, issued or made or agreed to grant, issue or make any, and there are
no outstanding, warrants, options, subscription rights, securities that are
convertible into or exchangeable for or any other commitments of any character
relating to the any limited liability company interest, or other equity
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<PAGE>
interest, in the Company. Each Seller has good and valid title to, and sole
record and beneficial ownership of, the Shares indicated opposite his name in
Section 1.1 above, free and clear of any claims, liens, pledges, options,
security interests, trusts, encumbrances or other rights or interests of any
person, and each Seller has the absolute and unrestricted right, power,
authority and capacity to transfer the Shares to Buyer at the Closing, and upon
consummation of the Closing, without exception Buyer will acquire from Seller
legal and beneficial ownership of, good and valid title to, and all rights to
vote, the Shares, free and clear of all covenants, conditions, restrictions,
voting restrictions or trusts, encumbrances, options, pledges, security
interests and adverse or equitable claims or rights whatsoever. The other
holders of limited liability company interests of the Company are as set forth
in Schedule 3.2 hereto, and no other person owns any such interest, or any other
legal, equitable or economic interest in the Company.
3.3 SUBSIDIARIES. The Company has no subsidiaries, and does not own an
equity or other proprietary interest in any other corporation, partnership,
company or business entity. Without limiting the generality of the foregoing,
the Company has divested its entire interest in H.I.T. Centrum, without
liability or cost to the Company. In addition, Robinson Partners, Brno has been
liquidated, without liability or cost to the Company.
3.4 CONSENTS AND APPROVALS. No consent, approval or authorization of,
or declaration, filing or registration with, any governmental, nongovernmental
or regulatory authority or third party is required in connection with the
execution, delivery and performance of this Agreement by the Sellers and the
consummation by either Seller of the transactions contemplated hereby.
3.5 AGREEMENT NOT A BREACH. The execution of this Agreement by either
Seller or the Company and the fulfillment, performance and compliance with the
terms and provisions of this Agreement by each Seller or the Company will not
(i) conflict with, violate or result in a breach of the terms, conditions or
provisions of, or constitute a default or result in the acceleration of any
obligation under, or permit termination of, any material agreement, lease,
license, note, contract or instrument to which either Seller or the Company is a
party or by which any of them is bound, except for the Company's contract with
Woodrow Milliman (the "WOODROW MILLIMAN AGREEMENT"); (ii) accelerate, or
constitute an event entitling the holder of any indebtedness of either Seller or
the Company to accelerate the maturity of any such indebtedness, permit
subordination of any such indebtedness of Seller or the Company to any other
indebtedness of Sellers or the Company to which Seller or the Company was not
already subordinated; (iii) conflict with or violate the provisions of any law
or any material judgment, decree, order, regulation or rule of any court or
governmental authority or any material covenant or restriction binding upon him
or the Company, including, without limitation, the Certificate of Incorporation
or Bylaws of him or the Company; (iv) violate or result in the modification,
termination or loss of any material permit, license or other authorization
applicable to the Company; or (v) result in the creation of any material lien,
charge or encumbrance upon any shares of capital stock or assets of the Company
under any agreement or instrument to which the Company is a party or by which it
is bound.
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3.6 FINANCIAL STATEMENTS. Sellers have delivered to Purchaser's
representative the audited balance sheet of the Company as of December 31, 1999
(the "BALANCE SHEET") and related statements of income and cash flow for the
twelve month period then ended. The Balance Sheet and the related statements of
income and cash flow for the twelve (12) month period then ended (i) were
prepared in accordance with the books and records of the Company; (ii) were
prepared in accordance with the Company's accounting policies and principles and
are in accordance with generally accepted accounting principles as in effect in
the Czech Republic; and (iii) present fairly the financial position and results
of operations of the Company at the dates and for the periods covered thereby.
3.7 ABSENCE OF CERTAIN CHANGES. Since the Balance Sheet Date there has
not been:
(a) Any Material Adverse Effect;
(b) Any increase in the compensation paid or payable by the
Company other than in the ordinary course of business (i) to any of
their officers or directors or (ii) to their employees or agents;
(c) Any declaration, setting aside or payment of dividends or
distributions in respect of the limited liability company interests of
the Company, any split-up or other recapitalization in respect of the
capital structure of the Company or any direct or indirect redemption,
purchase or other acquisition of any such limited liability company
interests or any agreement to do any of the foregoing, other than
payment of the Company's 1998 distributions to its equity holders, in
amounts which have been disclosed to the Purchaser or its
representatives;
(d) Any issuance, transfer, sale or pledge by the Company of
any limited liability company interests or other securities or of any
commitments, options, rights or privileges under which the Company is
or may become obligated to issue any shares of stock or other
securities;
(e) Any indebtedness incurred by the Company (excluding
intercompany transactions), except such as may have been incurred or
entered into in the ordinary course of business and consistent with
past practices;
(f) Any loan made or agreed to be made by the Company, nor has
the Company become liable or agreed to become liable as a guarantor
with respect to any loan (other than a loan in the amount of $130,000
from Purchaser);
(g) Any waiver by the Company of any right or rights of
material value or any payment, direct or indirect, of any material
debt, liability or other obligation before the same became due in
accordance with its terms;
(h) Any change in the accounting methods, practices or
policies followed by the Company from those in affect during the past
three fiscal years;
(i) Except for the purchase, replacement or disposition of
fixed assets in the ordinary course of business, any purchase or other
acquisition of, or any sale, lease, disposition of, mortgage, pledge or
subjection to any lien or encumbrance on, any material property or
assets, tangible or intangible assets of the Company or any agreement
to do any of the foregoing;
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<PAGE>
(j) Any actual or threatened amendment or termination of (i)
any material contract, lease license or other agreement to which the
Company was a party or (ii) any authorization required for the
continued operation by the Company of any material portion of any of
their respective businesses; or
(k) Any change in or amendment to the charter documents of the
Company (other than changes or amendments effected pursuant to
"Shareholder Agreements" between the equity holders of the Company and
the Purchaser).
3.8 TAXES.
(a) The Company has (i) timely filed or caused to be timely
filed all required federal, state and local tax returns for income
taxes, franchise taxes, sales taxes, withholding taxes, property taxes
and all other taxes required as of the date hereof, and prior hereto,
imposed by any government or subdivision thereof upon the business,
assets or employees or independent contractors of the Company, and (ii)
paid, when due, all taxes as shown on said returns, or pursuant to any
assessment or otherwise. No tax liabilities, disallowances or
assessments relating to the business, assets or employees or
independent contractors of the Company have been assessed or proposed
as of the date hereof and all such tax returns are complete, accurate
and in all material respects in accordance with all legal requirements
applicable thereto.
(b) As of the date hereof, the Company does not have any
liability for unrecorded value added taxes (VAT), including penalties
and interest thereon, in excess of CZK 2,627,500.
(c) All of the Company's income tax returns through 1995 have
audited by the appropriate governmental authorities, with no material
resulting adjustment being made. To the Sellers' knowledge, no
adjustments will be required with respect to the Company's tax returns
or amounts payable in connection therewith, for tax years after 1995.
(d) No audits have been conducted with respect to the
Company's payroll tax returns, health insurance tax returns or road tax
returns. An audit has been completed with respect to the Company's
social security tax returns for the tax years 1997 through 1999, and
the Company has not received notice that any significant adjustment
will be required with respect to such tax returns. No audits have been
conducted with respect to the Company's VAT returns, except for local
investigations. The Company has not been notified of any inaccuracies
in any such return in connection with such local investigations.
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<PAGE>
(e) The amount paid by the Company for the license from
Callucia Holding BV is reasonable and in compliance with applicable tax
regulations.
(f) The Company has properly withheld and remitted to
applicable tax authorities, as required by applicable law, all
withholding taxes relating to compensation and other amounts paid to
employees, all profit and other distributions paid to owners of the
Company, and/or to the license payments paid to Callucia Holding BV.
3.9 COLLECTIVE BARGAINING AGREEMENTS AND EMPLOYEE BENEFITS. The Company
is not involved in any labor discussion with any unit or group seeking to become
the bargaining unit for any of its employees, nor has any such unit or group
notified either Seller or the Company of an intention to commence any
organizational activities among the employees of the Company. The Company is not
subject to or bound by any collective bargaining agreement and other labor
agreement. Within 30 days of the date hereof, Sellers shall deliver to Purchaser
Schedule 3.9, which shall list (i) each employment, consulting, severance,
deferred compensation, bonus, option, equity purchase and any other employee
benefit plan, agreement, or other arrangement (whether or not in writing)
providing for compensation or other benefits to employees (including officers),
or independent contractors, individually or as a group, to which the Company is
a party or by which it bound; (iii) each employee benefit plan maintained by the
Company or to which the Company contributes or is required to contribute, and
each other plan under which "fringe benefits" (including, without limitation,
vacation plans or programs, severance benefits, sick leave plans or programs,
dental or medical plans or programs, and related or similar benefits) are
afforded to employees of, or otherwise required to be provided by, the Company.
The Company has complied in all material respects with all applicable laws,
rules and regulations relating to employment. All employee benefit plans of the
Company in effect at any time since inception of the Company are now, and have
always been, established, maintained and operated in accordance, in all material
respects, with all applicable laws and all regulations and interpretations
thereunder and in accordance with their plan documents. There is no unfunded
liability for vested or nonvested benefits under any funded or unfunded employee
benefit or governmental plan (including under any deferred compensation or bonus
plan), and all contributions required to be made to or with respect to each
employee benefit plan and all costs of administering each employee benefit plan
have been completely and timely paid.
3.10 LITIGATION. Except as set forth in Schedule 3.10:
(a) Neither Seller nor the Company is a party to, or to their
knowledge is affected by, any writ, injunction or decree of any court
or governmental instrumentality which could reasonably have a Material
Adverse Effect;
(b) The Company is not engaged in, or to the knowledge of
either Seller or the Company, threatened with any legal action or other
proceeding before any court or administrative agency and no written
claims have been made against the Company except any such action,
proceeding or claim which individually involves an amount in
controversy of less than $5,000;
(c) No investigations of or claims against the Company or its
officers or directors, are to the knowledge of Seller or the Company
threatened by any governmental body or agency; and
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(d) There is no claim or legal action pending or, to the
knowledge of either Seller, threatened against either Seller which
could reasonably, if adversely decided, have a Material Adverse Effect.
3.11 INTANGIBLE PERSONAL PROPERTY.
(a) Within 30 days of the date hereof Sellers shall deliver to
Purchaser Schedule 3.11, which shall list all material licenses or
similar agreements or arrangements to which the Company is a party
either as licensee or licensor for any item of computer software or
other item of intangible personal property ("Intangible Personal
Property"). With respect to Intangible Personal Property:
(i) No proceedings have been instituted or are
pending or, to the knowledge of Seller and the Company,
threatened which challenge the rights of the Company in any
material respect in and to any of such Intangible Personal
Property or any license thereof; and
(ii) There are no pending or, to the knowledge of
Seller and the Company, threatened claims, demands or
proceedings, restricting the right of the Company to use,
charging the Company with infringement of, or making any other
claim with respect to, any of such Intangible Personal
Property or any license thereof which, if adversely
determined, could reasonably be expected to have a Material
Adverse Effect.
(b) To the extent that the Company is using any software,
programs or proprietary rights that are provided by a third party,
except as set forth on Schedule 3.11 the Company has a license for such
use, is in compliance with the requirements of such license, and is not
using such software, programs or proprietary right in violation of the
legal rights of the third party (provided that the foregoing shall not
apply to software programs valued at $500 or less).
3.12 REAL PROPERTY. The Company does not own any real property or any
interest therein. Schedule 3.12 contains a listing of each lease of real
property under which the Company is a lessee, lessor, sublessee or sublessor, as
so designated therein (collectively the "REAL PROPERTY"). Except as indicated in
Schedule 3.12:
(a) All material leases, easements and other real property
interests held by each of the Company are valid and subsisting and none
of the Company is in material default thereunder;
(b) Neither the Sellers nor the Company have received any
notice, or is aware, that any of the buildings, structures or other
material improvements erected on the Real Property leased by any of the
Company, or the present use thereof, (i) do not conform in all material
respects with all applicable laws (or does not constitute a legal
nonconforming use), ordinances, regulations or other laws and
applicable deed restrictions, or (ii) materially encroach on property
of others; and
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(c) the Company and Seller have received no notice from any
municipal body or other public authority requiring work to be done or
improvements to be made upon any of the Real Property and have no
knowledge of the enactment or adoption of any ordinance or resolution
by any such body or authority authorizing work or improvements for
which any of the Real Property may be assessed.
3.13 CONTRACTS. Within 30 days of the date hereof, Sellers shall
provide Purchaser with Schedule 3.13, which shall set forth a true and correct
list of:
(a) Each customer contract, whether written or oral, between
the Company and any party to whom the Company provides services which
involves more than $100,000 in consideration for any twelve month
period;
(b) Each contract (except for real property leases and
insurance contracts), whether written or oral, between the Company and
any party to whom the Company is obligated to pay more than $100,000 in
consideration for any twelve month period.
The contracts and agreements which are required to be identified in Schedule
3.13 pursuant to subsections (a) and (b) above are hereinafter referred to as
the "CONTRACTS." True and complete copies of each written Contract, or access
thereto for the purpose of inspection, and true and complete written summaries
of each oral Contract have been delivered to Purchaser or its representative by
the Company. With respect to the Contracts required to be included in Schedule
3.13:
(i) Each of such Contracts is a valid, binding and
enforceable agreement of the Company and, to the knowledge of
each Seller and the Company, the other parties thereto. To the
knowledge of each Seller and the Company, each such Contract
will continue to be valid, binding and enforceable immediately
after the Closing, subject to equitable defenses to specific
performance and injunctive relief;
(ii) As of the date hereof, the Company and each
Seller have no reason to believe that the Company will not be
able to fulfill in all material respects all of its
obligations under the Contracts which remain to be performed
after the date hereof;
(iii) To the knowledge of the Company and each
Seller, there has not occurred any material default (or event
which upon provision of notice or lapse of time or both would
become such a default) under any of the Contracts on the part
of the Company party thereto;
(iv) The Contracts listed on Schedule 3.13 are all of
the agreements, promissory notes, contracts and instruments
that are material to the Company or its business;
(v) With respect to the SCOR Contract referred to in
Section 3.21(a)(i) below, the exclusivity provisions contained
therein pertain only to the licensee's rights to the data
generated in connection with such agreement, and not to any of
the Company's proprietary rights in its programs, software or
related methodologies;
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(vi) There are no projects currently underway or
recently completed which are expected to result in a material
amount of loss for the Company, or for which total related
expenditures by the Company have or will exceed the total
revenues received or to be received by the Company, in any
material amount.
3.14 MANAGEMENT PERSONNEL. Schedule 3.14 contains a true and complete
list of the names and current salaries of all management employees of the
Company who earned in excess of $50,000 (or equivalent amount in CZ Crowns) in
fiscal 1999 or who will, at their present salaries, earn in excess of $50,000
U.S. (or equivalent amount in Cz Crowns)in fiscal 2000.
3.15 BANKING FACILITIES. Schedule 3.15 contains a true and complete
list of:
(a) Each bank, savings and loan or other institution in which
the Company has a deposit, custodial, trust or similar account or
safety deposit or lock box account and the numbers and types of the
accounts or safety deposit boxes maintained by the Company thereat; and
(b) The names of all persons authorized to draw on each such
account, or to have access to any such safety deposit or lock box
facility, together with a description of the authority (and conditions
thereof, if any) of each such person with respect thereto.
3.16 COMPLIANCE WITH LAW. The conduct of business by the Company has
not violated and does not violate in any material respect any federal, state,
local or foreign laws, statutes, ordinances, rules, regulations, decrees,
orders, permits or other similar items in force on the date hereof including,
without limitation, federal, state and municipal (a) laws and regulations
affecting the protection of the health and safety of employees, and (b) laws and
regulations affecting equal employment opportunity. There are no unresolved
notices of deficiency or charges of violation brought or, to the best knowledge
of the Company or either Seller, threatened against the Company, including under
any federal or state regulation or otherwise, which individually or in the
aggregate will or could have a Material Adverse Effect, and there are no facts
or circumstances known to the Company or either Seller that would constitute a
reasonable basis on which any such proceedings, notices or actions may be
instituted, issued or brought hereafter.
3.17 CORPORATE PROCEEDINGS. The minute books of the Company contains,
and at the Closing will contain, true, complete and accurate records of all
meetings and other corporate actions of its shareholders and directors and the
stock record books of the Company contain, and at the Closing will contain,
true, complete and accurate records regarding the issuance and transfer of
limited liability company interests of the Company.
3.18 NO TERMINATION OF BUSINESS RELATIONSHIP. None of the customers
with which the Company has a material business relationship has given notice of
an intention to cancel or otherwise terminate a material business relationship
with the Company and neither the Company nor either Seller have any knowledge of
any event (including without limitation the transactions contemplated hereby)
which would precipitate the cancellation or termination of, or entitle any such
entity or customer to terminate, such a material business relationship.
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<PAGE>
3.19 BROKERS COMMISSION OR FINDER'S FEE. Neither Seller has retained
any broker or finder or agreed to become obligated to pay any fee or commission
to any broker or finder for or an account of the transactions contemplated by
this Agreement.
3.20 ACCOUNTS RECEIVABLE. All accounts receivable of the Company shown
on the Balance Sheet and all accounts receivable of the Company created after
December 31, 1999 up to the date hereof arose from valid transactions in the
ordinary course of business and, to the best of each Seller's knowledge, such
accounts receivable are (except to the extent of the reserves thereon)
collectible in the ordinary course of business. All accounts receivable of the
Company as of the Balance Sheet Date have been collected or will be collectable
in full within 120 days of the date hereof, net of an allowance of CZK
2,500,000, and net of accounts specifically written off or reserved against in
the amount of CZK 597,000, as shown in Schedule 3.20 hereto.
3.21 NO UNDISCLOSED LIABILITIES.
(a) The Company does not have any liabilities, obligations or
commitments of any nature (absolute, accrued, contingent or otherwise)
matured or unmatured (herein "LIABILITIES") except (i) Liabilities
which are adequately reflected or fully reserved against in the Balance
Sheet, (ii) Liabilities which have been incurred in the ordinary course
of business and consistent with past practice since the date of the
Balance Sheet, (iii) Liabilities expressly disclosed in the Schedules
hereto, and (iv) Liabilities arising under contracts or other
agreements which because of the dollar amount involved are not required
to be listed in Schedule 3.13 hereto (collectively, the "KNOWN
LIABILITIES"). Without limiting the generality of the foregoing:
(i) The Company does not have any liabilities, other
than liabilities reflected on the Balance Sheet, related to
the Company's customer contracts, including without limitation
its contract with SCOR Vie (the "SCOR Contract"). The Company
does not have any unperformed obligations under the SCOR
Contract, other than minor maintenance obligations during the
remaining eight years of the SCOR Contract.
(ii) The Company does not have any obligations to
make any refunds to IPB Pojist'ovna, with respect to the SCOR
Contract.
(b) Sellers have disclosed to the Purchaser that there is an
unrecorded liability in an amount not to exceed U.S. $50,000 related to
unreimbursed travel expenses for Robinson. No adjustment to the
purchase price or liability to the Sellers shall be made as a result of
such unrecorded liability.
(c) The Company does not have any liabilities to any third
parties with respect to any previously completed contracts.
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3.22 TITLE TO ASSETS. The Company has good and marketable title to all
of its assets (real, personal or mixed, tangible and intangible). None of the
Company's assets is subject to any mortgage, dead of trust, pledge, lien,
security interest, encumbrance, claim or charge of any kind or character except
(i) liens for taxes or other amounts not yet due and payable, and (ii) liens and
encumbrances which in the aggregate do not materially impair the usefulness or
value of such assets. All of such assets are and have been maintained in good
working condition and repair subject to normal wear and tear.
3.23 ENVIRONMENTAL MATTERS. Neither the Company or either Seller, have
received any notices, directives, violation reports, actions or claims from or
by (1) any federal, state or local governmental agency concerning the Company
and any environmental laws or regulations or (2) any person alleging that, in
connection with any hazardous materials, conditions at the real properties of
the Company have resulted in or caused or threatened to result in or cause
injury or death to any person or damage to any property, including without
limitation, damage to natural resources, and to the Company's and Seller's
knowledge, no such notices, directives, violation reports, actions, claims,
assessments or allegations exist. Neither Seller nor the Company is aware of any
facts, events, or conditions (including without limitation the generation,
treatment, transport, storage, emission, disposal, release or other placement,
deposit or location of any substance) which materially interfere with or prevent
continued compliance by the Company with, or give rise to any present or
potential liability (including with respect to past activities) under any
environmental laws.
3.24 DISCLOSURE. Each Seller acknowledges that he has received and had
an opportunity to review: (i) the Purchaser's Annual Report on Form 10-K for the
year ended June 30, 1999; (ii) the Purchaser's Quarterly Report on Form 10-Q for
the quarter ended December 31, 1999; and (iii) the Purchaser's supplemental
disclosure document dated April 10, 2000, concerning certain risks associated
with an investment in the Purchaser's securities. Each Seller further
acknowledges that he has had the opportunity to ask questions and receive
answers concerning the terms and conditions of the issuance of the Purchaser's
securities to such Seller, and to obtain any additional information which the
Purchaser possesses or can acquire without unreasonable effort or expense that
is necessary to verify the accuracy of the information provided to Seller
concerning the Purchaser.
3.25 RESIDENCE. Havlena's permanent residence is in the Czech Republic.
Robinson's permanent residence is in Florida, U.S.A.
3.26 RESTRICTIONS ON RESALE. Seller understands that the Series D
Preferred Stock to be issued by the Purchaser upon the closing of the
transactions contemplated by this Agreement, and the common shares that are
issuable upon the conversion of such Series D Preferred Stock, shall be issued
pursuant to an exemption from registration under the United States securities
laws, and that, accordingly, such shares are being purchased for investment and
not with a view to the unregistered distribution or resale thereof, except to
the extent permitted by applicable law. Each Seller understands that he will not
be entitled to resell or transfer such preferred stock or common stock of the
Purchaser until such resale or transfer is registered under the applicable
securities laws or an exemption from registration is available. Purchaser has no
obligation to register such securities. The certificate representing such
securities shall bear a legend reflecting such restrictions.
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3.27 NO MISSTATEMENTS OR OMISSIONS. None of the materials provided to
the Purchaser by either Seller or the Company in connection with the
transactions contemplated hereby contain any untrue statement of a material
fact, or omit to state any material fact necessary in order to make the
statements made, in light of the circumstances under which they are made, not
misleading.
3.28 RIGHTS OF FIRST REFUSAL. All rights of first refusal to purchase
the Shares, including without limitation any such rights in favor of Woodrow
Milliman, have been irrevocably waived.
3.29 ACCREDITED INVESTOR STATUS. Robinson represents and warrants that
he is an "accredited investor," as such term is defined under Rule 501(a)
promulgated under the Securities Act of 1933, as amended. Robinson acknowledges
that he has consulted with legal counsel concerning the definition of this term
and understands the definition as set forth in such Rule.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
-----------------------------------------------
The Purchaser hereby represents and warrants to the Company and the
Sellers as follows:
4.1 EXISTENCE. The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
full corporate power and authority to conduct its business as it is now being
conducted.
4.2 POWER AND AUTHORITY. The Purchaser has full power and authority to
enter into this Agreement, perform its obligations hereunder, acquire and own
the Shares and carry out the transactions contemplated hereby. The execution and
delivery of this Agreement, the performance by the Purchaser of its obligations
hereunder and the consummation of the transactions contemplated hereby have been
duly authorized by all corporate, stockholder and other actions on the part of
the Purchaser required by applicable law, its Certificate of Incorporation, as
amended, or Bylaws, as amended, or otherwise. This Agreement constitutes the
legal, valid and binding obligation of the Purchaser, enforceable against it in
accordance with its terms, except (i) as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) that the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
4.3 NO VIOLATION. Neither the execution and delivery of this Agreement
nor the performance by the Purchaser of its obligations hereunder nor the
consummation of the transactions contemplated hereby will contravene any
provision of the Certificate of Incorporation, as amended, or Bylaws, as
amended, of the Purchaser or violate, or be in conflict with, or constitute a
default under, permit the termination of, or cause the acceleration of the
maturity of any debt or obligation of the Purchaser under, constitute a breach
of, create a loss of a material benefit under or upon any property or assets of
the Purchaser under, any mortgage, indenture, lease, or any material agreement,
instrument or commitment to which the Purchaser is a party or by which the
Purchaser or any of its assets or properties may be bound.
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<PAGE>
4.4 STATUS OF PREFERRED STOCK. Upon the issuance of the Series D
Preferred Stock to the Sellers at the Closing, such shares shall be duly and
validly issued, fully paid and nonassessable.
4.5 NO MISSTATEMENTS OR OMISSIONS. None of the materials referred to in
Section 3.24 above concerning the Purchaser contain any untrue statement of a
material fact, or omit to state any material fact necessary in order to make the
statements made, in light of the circumstances under which they are made, not
misleading.
ARTICLE V
CERTAIN POST-CLOSING COVENANTS
------------------------------
5.1 BOOKS AND RECORDS. Unless otherwise consented to in writing by the
Purchaser, neither the Company nor either Seller shall destroy, alter or
otherwise dispose of any original books or records of the Company without first
offering to surrender such books and records to the Purchaser and shall maintain
such books and records in good condition in a reasonably accessible location.
5.2 ACCESS TO BOOKS AND RECORDS. Following the Closing, Purchaser and
its auditors shall have full and unrestricted access to all contracts of the
Company, to the extent necessary to be able to issue audited financial
statements for the Purchaser and its subsidiaries under United States generally
accepted auditing standards.
5.3 LEGAL RESIDENCY ASSISTANCE. Following the Closing, Purchaser shall
use its reasonable efforts to assist Havlena with obtaining permanent residence
status ("Green Card") in the United States. Purchaser does not guarantee that it
will be able to secure permanent residence status for Havlena. All reasonable
legal fees related to such effort shall be paid by Purchaser.
5.4 WORKING CAPITAL FUNDING. During the eighteen (18) month period
following the Closing, Purchaser shall provide to the Company working capital
funding in a minimum amount of Two Million Dollars (U.S. $2,000,000), to fund
development of the Company's products, including the implementation of pilot
programs.
5.5 BONUSES. Following the Closing, Purchaser will pay U.S. $250,000 in
bonuses to non-owner employees of the Company. The allocation of such amounts
among such employees will be at the discretion of Seller.
5.6 AVAILABILITY OF AUTHORIZED SHARES OF COMMON STOCK. Within twelve
(12) months of the Closing, Purchaser will have adequate shares of its Common
Stock duly authorized and available for issuance at such time or times as the
shares of Preferred Stock are properly tendered for conversion by the holders
thereof.
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ARTICLE VI
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
-----------------------------------------------------------
6.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Notwithstanding (a) the
making of this Agreement or any related Agreement, (b) any examination made by
or on behalf of the parties hereto and (c) the Closing hereunder: (x) the
representations and warranties of the Company, the Sellers and the Purchaser
contained in this Agreement, or in any document delivered pursuant to the
provisions of this Agreement, shall survive the Closing for a period of 36
months, except for the representations and warranties made in Sections 3.2, 3.8,
3.16 and 3.26, which in each case shall survive until the expiration of the
applicable statute of limitations for the underlying cause of action plus six
months and (y) the covenants and agreements required to be performed after the
Closing or pursuant to Article V of this Agreement (unless noncompliance with
those covenants contained in Article V was waived in writing at the Closing)
shall survive until fully performed or fulfilled. No action may be brought with
respect thereto after such date; provided, however, that if, prior to such date,
one party has notified the other party of a claim for indemnity under this
Article VI (whether or not formal legal action shall have been commenced based
upon such claim), such claim shall continue to be subject to indemnification in
accordance with this Article VI.
6.2 INDEMNIFICATION.
(a) Subject to Section 6.1 above, from and after the Closing,
the Sellers shall jointly and severally indemnify and save harmless the
Purchaser and its officers, directors, partners, shareholders,
successors and assigns (collectively, the "Indemnified Party") from and
against any loss, claim, liability, damage (including consequential
damages), punitive damages, remedial costs, civil and criminal
penalties or expenses or other damages of any kind or nature, including
Purchaser's reasonable attorneys' fees incurred in connection with any
of the foregoing (collectively, the "Damages"), caused to the
Purchaser, the Business or the Company by or arising out of:
(i) the failure by any of the Sellers or the Company
to perform any covenant or agreement required to be performed
by it in this Agreement (unless noncompliance with such
covenant or agreement in such specific instance was waived in
writing by the Purchaser at the Closing);
(ii) the failure of the Company to pay, perform or
satisfy any obligation under any pension, retirement,
severance, welfare, deferred compensation, bonus or other
incentive plan or legal requirement, or other employee benefit
program, arrangement, agreement or understanding, or medical,
vision, dental or health plan, or life insurance or disability
plan, retiree medical plan or any other employee benefit
plans, including, without limitation, any withholding
obligations for employees (full-time and part-time) or any
obligations under any employee benefit plan or any other
plans, programs or arrangements of any kind to which the
Company contributes or is a party or by which it is bound or
under which it may have liability and under which employees or
former employees of the Company (or their beneficiaries) are
eligible to participate or derive a benefit, on or before the
Closing Date;
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<PAGE>
(iii) any judgments, orders or decrees entered in any
lawsuit or proceeding or actions against the Company arising
out of activities undertaken by the Company on or prior to the
Closing Date, including, without limitation, actions for (A)
personal injury, products liability or breach of warranty
arising from products or goods final-tested or shipped by the
Company involving or relating to the Company, any of its
assets, properties or rights, (B) noncompliance by the Company
with any environmental law; (C) the release into the
environment of any pollutant, toxic or hazardous material or
waste generated by the Company or the Business, whether or not
occurring at or on a site owned, leased or operated by the
Company; or (D) without limiting the generality of the
foregoing, any actions or threatened actions that may be
asserted against the Company arising out of the Company's
operations on or prior to the Closing Date;
(iv) the Company's noncompliance with any federal,
state or local laws, rules, regulations, standards and
requirements, on or prior to the Closing Date;
(v) the failure of the Company to pay promptly any
federal, state, local or foreign taxes of the Company
(including, without limitation, all taxes of any kind or
nature and all interest, additions to tax and penalties
thereon) claimed or assessed for any taxable period ended on
or prior to the Closing Date;
(vi) any actions, claims, demands, grievances or
disputes brought or initiated by third parties against the
Purchaser or any of its affiliates in connection with the
failure of the Company to pay any customer, supplier or vendor
of the Company the value of any account payable or trade
payable shown on the Closing Balance Sheet or incurred by the
Company on or prior to the Closing Date in accordance with
terms and conditions of payment with respect to such account
payable or trade payable or any other liabilities of the
Company which existed and were not disclosed to the Purchaser
prior to the Closing Date;
(vii) any breach of warranty or misrepresentation in
this Agreement made by or on behalf of the Company and/or the
Sellers and not waived in writing by the Purchaser;
(viii) any Damages suffered by the Company or the
Purchaser as a result of any allegation by a non-United States
tax authority that the amount paid by the Company was
inappropriate;
(ix) any claim by Woodrow Milliman relating to
termination of its agreement with the Company.
(b) The Indemnified Party shall notify the Sellers within a
reasonable period of time after becoming aware of, and shall provide to
the Sellers as soon as practicable thereafter all information and
documentation necessary to support and verify, any Damages which the
Indemnified Party shall have determined has given or could give rise to
a claim for indemnification hereunder, and the Sellers shall be given
reasonable access to all books and records in the possession or under
the control of the Indemnified Party which the Sellers reasonably
determine to be related to such claim.
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(c) All claims for indemnity under this Article VI shall be
paid by the Sellers on demand in immediately available funds in U.S.
dollars. At the Purchaser's option, in lieu of payment in cash,
Purchaser shall have the absolute right in Purchaser's sole discretion
to exercise any remedy it has with respect to such claim under any
other agreement between Purchaser and the Sellers or their affiliates.
(d) The Indemnified Party shall notify the Sellers with
reasonable promptness of its discovery of any matter giving rise to a
claim of indemnity or setoff pursuant to this Agreement. With respect
to any third party claim or action that could give rise to indemnity
under this Agreement, the Sellers shall be entitled to assume the
defense thereof with counsel satisfactory to the Indemnified Party,
provided, that upon the request of the Indemnified Party, the Sellers
provide reasonable evidence of its ability to perform its obligations
under this Section 6.2. After notice from the Sellers to the
Indemnified Party of its election so to assume the defense thereof, the
Sellers shall not be liable to the Indemnified Party under the
foregoing indemnity agreement for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the
defense thereof other than (i) those relating to investigation or the
furnishing of documents or witnesses and (ii) all reasonable fees and
expenses of separate counsel retained by such Indemnified Party if (A)
the Sellers and the Indemnified Party shall have agreed to the
retention of such counsel or (B) counsel to the Indemnified Party shall
have concluded reasonably that the representation of the Sellers and
the Indemnified Party by the same counsel would be inappropriate due to
actual or potential differing interests between them in the conduct of
the defense of such action. Promptly after receipt by an Indemnified
Party of notice of the commencement of any action to which a Seller is
not a party, such Indemnified Party shall, if such claim in respect
thereof is to be made against the Sellers pursuant to this Agreement,
notify the Sellers in writing of the commencement thereof, but the
failure or delay in so notifying the Sellers shall not relieve the
Sellers of their obligations to indemnify pursuant to the terms of this
Agreement. The Indemnified Party shall keep the Sellers informed of the
progress of any such action and shall not enter into any settlement of
any such action without the prior written consent of the Sellers, which
consent shall not be unreasonably withheld.
ARTICLE VII
MISCELLANEOUS PROVISIONS
------------------------
7.1 PUBLIC ANNOUNCEMENTS. Except as required by law or by any
securities exchange and except as the other party hereto shall authorize in
writing, the parties hereto shall not, and shall cause their respective
officers, directors, employees, affiliates and advisors not to, disclose any
matter or matters relating to this transaction to any Person not an officer,
director, employee, affiliate or advisor of such party.
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7.2 AMENDMENT; WAIVER. Neither this Agreement, nor any of the terms or
provisions hereof, may be amended, modified, supplemented or waived, except by a
written instrument signed by the parties hereto (or, in the case of a waiver, by
the party granting such waiver). No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver. No failure of either party hereto to insist upon strict compliance by
the other party with any obligation, covenant, agreement or condition contained
in this Agreement shall operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. Whenever this Agreement requires or permits consent
by or on behalf of any party hereto, such consent shall be given in a manner
consistent with the requirements for a waiver of compliance as set forth in this
Section 7.2.
7.3 FEES AND EXPENSES. Except as otherwise provided in this Agreement, each of
the parties hereto shall bear and pay its own costs and expenses incurred in
connection with the origin, preparation, negotiation, execution and delivery of
this Agreement and the agreements, instruments, documents and transactions
referred to in or contemplated by this Agreement (whether or not such
transactions are consummated) including, without limitation, any fees, expenses
or commissions of any of its advisors, attorneys, accountants, agents, finders
or brokers. The Purchaser shall indemnify the Shareholders against any claims of
third parties for any brokerage, finder's, agent's or similar fees or
commissions in connection with the transactions contemplated hereby insofar as
such claims are alleged to be based on arrangements or contacts made by, to or
with the Purchaser or its advisors or representatives. The Sellers shall
indemnify the Purchaser against all such claims insofar as they are alleged to
be based on arrangements or contacts made by, to or with any Seller or the
Company or their respective Advisors or representatives.
7.4 NOTICES.
(a) All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing
(including telefax, telegraphic, telex or cable communication) and
mailed, telegraphed, telexed, cabled or delivered:
(i) If to the Shareholders, to:
David Robinson
P.O. Box 5501
Lakeland, Florida 33807
Vladimir Havlena
NA-VYHLIBCE, 457
67921 Cerna Hora
Czech Republic
with a copy to:
Holland & Knight, LLP
One Broward Blvd. Suite 1300
Fort Lauderdale, Florida 33301-4811
Attn: William P. Sherman, Esq.
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(ii) If to the Company, to:
DCB Actuaries and Consultants, SRO.
Kozi 8
60200 Brno
Czech Republic
(iii) If to the Purchaser, to:
Medcom U.S. A., Inc.
18001 Cowan, Suite C-D
Irvine, California 92614
Attention: Alan Ruben
with a copy to:
Rutan & Tucker, LLP
611 Anton Blvd., Suite 1400
Costa Mesa, California 92626
Attention: Thomas G. Brockington, Esq.
(b) All notices and other communications required or permitted
under this Agreement which are addressed as provided in this Section
8.4 (i) if delivered personally against proper receipt or by confirmed
telefax or telex, shall be effective upon delivery and (ii) if
delivered (A) by certified or registered mail with postage prepaid, (B)
by Federal Express or similar courier service with courier fees paid by
the sender or (C) by telegraph or cable, shall be effective two
business days following the date when mailed, couriered, telegraphed or
cabled, as the case may be. Either party may from time to time change
its address for the purpose of notices to that party by a similar
notice specifying a new address, but no such change shall be deemed to
have been given until it is actually received by the party sought to be
charged with its contents.
7.5 ASSIGNMENT. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder may be assigned by any party
hereto without the prior written consent of the other parties; provided,
however, that the Purchaser may assign its rights and obligations under this
Agreement to any of its affiliates or any entity who by merger, consolidation,
purchase or sale subsequently becomes an affiliate without the prior consent of
the Sellers or the Company. Any assignment which contravenes this Section 7.5
shall be void ab initio.
7.6 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement and the
legal relations between the parties hereto shall be governed by and construed in
accordance with the internal laws of the State of California, without giving
effect to the conflicts of laws principles thereof. The Sellers and the Company
agree that any action, lawsuit or proceeding arising out of or relating to this
Agreement may be instituted in the United States District Court for the Central
District of California at the option of the Purchaser, and the Company and the
Sellers hereby waive any objection to the jurisdiction or venue of any such
court with respect to, or the convenience of any court as forum for, any such
suit, action or proceeding.
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7.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
7.8 HEADINGS. The headings contained in this Agreement are for
convenience of reference only and shall not constitute a part hereof or define,
limit or otherwise affect the meaning of any of the terms or provisions hereof.
7.9 ENTIRE AGREEMENT. This Agreement (which defined term includes the
Schedules and Exhibits to this Agreement) embodies the entire agreement and
understanding among the parties hereto with respect to the subject matter of
this Agreement and supersedes all prior agreements, commitments, arrangements,
negotiations or understandings, whether oral or written, between the parties
with respect thereto, including, without limitation, that certain "Shareholder
Agreement" executed by Havlena and the Purchaser dated March 31, 2000. There are
no agreements, covenants, undertakings, representations or warranties with
respect to the subject matter of this Agreement other than those expressly set
forth or referred to herein. This is an integrated agreement.
7.10 SEVERABILITY. Each term and provision of this Agreement
constitutes a separate and distinct undertaking, covenant, term and/or provision
hereof. In the event that any term or provision of this Agreement shall be
determined to be unenforceable, invalid or illegal in any respect, such
unenforceability, invalidity or illegality shall not affect any other term or
provision of this Agreement, but this Agreement shall be construed as if such
unenforceable, invalid or illegal term or provision had never been contained
herein. Moreover, if any term or provision of this Agreement shall for any
reason be held to be excessively broad as to time, duration, activity or
subject, it shall be construed, by limiting and reducing it, so as to be
enforceable to the extent permitted under applicable law as it shall then exist.
7.11 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement is
intended, nor shall anything in this Agreement be construed, to confer any
rights, legal or equitable, in any person (other than the parties hereto and
their respective heirs, distributees, beneficiaries, executors, successors and
assigns), including, without limitation, any employee of the Company or any
beneficiary of such employee.
7.12 ATTORNEYS' FEES. In the event that any action or proceeding is
commenced by any party hereto for the purpose of enforcing any provision of this
Agreement, the parties agree that the nonprevailing party in any such action or
proceeding shall pay to the prevailing party all costs and reasonable attorneys'
fees incurred by the prevailing party in connection with such action or
proceeding.
7.13 MISCELLANEOUS. The persons executing this Agreement in behalf of
the parties hereto are duly authorized to execute, acknowledge and deliver this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
"PURCHASER": MEDCOM U.S.A., INC.
By: /S/ MARK BENNETT
----------------------------------
Mark Bennett, President
"SELLERS": /S/ DAVID ROBINSIN
-------------------------------------
David Robinson
/S/ VLADIMIR HAVLENA
-------------------------------------
Vladimir Havlena
"COMPANY": DCB ACTUARIES AND CONSULTANTS, S.R.O.
By: /S/ DAVID ROBINSON
-------------------------------------
David Robinson, President
By:/S/ VLADIMIR HAVLENA
-------------------------------------
Vladimir Havlena, Director
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Omits the following schedules (which the registrant agrees to furnish
supplementally to the Securities and Exchange Commission upon request):
Exhibit A: Certificate of Designations Relating to Series D
Cumulative Convertible Preferred Stock
Schedule 3.2: Ownership of Shares
Schedule 3.9: Collective Bargaining Agreements and Employee Benefits
Schedule 3.10: Litigation
Schedule 3.11: Intangible Personal
Schedule 3.12: Real Property
Schedule 3.13: Contracts
Schedule 3.14: Management Personnel
Schedule 3.15: Banking Facilities
Schedule 3.20: Accounts Receivable
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EXHIBIT 2.13
TECHNOLOGY PURCHASE AGREEMENT
THIS TECHNOLOGY PURCHASE AGREEMENT is made and entered into on April
15, 2000 by and between DSM, LLC, a Florida limited liability company (the
"SELLER"), and MEDCOM U.S.A., Inc., a Delaware corporation (the "Purchaser").
RECITALS
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WHEREAS, the Seller desires to sell to the Purchaser, and the Purchaser
desires to purchase from the Seller, certain technology and intellectual
property including but not limited to Methodology for automated assessing and
controlling of medical risks in health insurance (collectively, the
"METHODOLOGY"), and
WHEREAS, the Purchaser and David Robinson and Vladimir Havlena as
shareholders of DCB Actuaries and Consultants, S.R.O., a Czech Republic limited
liability company ("DCB") have concurrently herewith executed a Share Purchase
Agreement ("Share Purchase Agreement") to sell all their shares of DCB which
transactions are an integral part of this Agreement.
NOW, THEREFORE, for and in consideration of the premises and mutual
covenants and agreements contained herein and in the Share Purchase Agreement,
and intending to be legally bound hereby, the parties hereto hereby agree as
follows:
ARTICLE I
PURCHASE AND SALE OF TECHNOLOGY AND PURCHASE PRICE
--------------------------------------------------
1.1 PURCHASE AND SALE OF TECHNOLOGY. Subject to the terms and
conditions of this Agreement, on the Closing Date (as defined in Section 2.1)
the Seller shall sell, transfer, convey, assign and deliver ("TRANSFER") to the
Purchaser, and the Purchaser shall purchase, acquire and accept from the Seller,
all of the Seller's right, title and interest in and to all of the Methodology
as of the Closing Date as set forth in Schedule 1.1, less and except the
Excluded Assets (as defined in Section 1.2) (after giving effect to the
exclusion of the Excluded Assets, such assets are hereinafter collectively
referred to as the "TRANSFERRED ASSETS"), free and clear of all Liens (as
defined in Section 3.5(b)).
1.2 EXCLUDED ASSETS. Notwithstanding anything in Section 1.1 to the
contrary, the Seller shall retain all of its right, title and interest in and to
all of, and shall not Transfer to the Purchaser any of, the following assets,
rights and properties (the "EXCLUDED ASSETS"):
(a) all other assets of Seller other than the Methodology set
forth in Schedule 1.1 whether tangible or intangible and wherever
located
<PAGE>
1.3 NO ASSUMPTION OF LIABILITIES. Subject to the terms and conditions
of this Agreement, on the Closing Date, the Purchaser shall not assume nor agree
to pay, perform and discharge when due any liabilities and obligations of the
Seller.
1.4 PURCHASE PRICE. The aggregate purchase price ("Purchase Price") to
be paid for the Transferred Assets shall include (i) Seven Hundred Forty-Six
Thousand One Hundred Fifty Three Dollars ($746,153.00) and (ii) 2356 shares of
Series D Cumulative Convertible Preferred Stock of Purchaser with a face value
of $11,638.64 ("Preferred Shares").
The Purchase Price shall be paid as follows:
(a) CASH. $746,153.00 in cash at the Closing;
(b) PREFERRED SHARES. 1644 Preferred Shares to be delivered to
Seller at Closing which is less the Hold Back referred to in this
Section 1.4(c). The Preferred Shares will have the conversion features
set forth in the Summary of Terms of Preferred Shares Schedule 1.4(b)
attached hereto.
(c) HOLD BACK. At the Closing, Purchaser shall hold back 712
Preferred Shares of the Purchase Price ("Hold Back Shares") for a
period of one (1)year (the "Hold Back Period") from the Closing Date as
a source of payment for the indemnification obligations of Seller
pursuant to Section 9 and to assure compliance with restrictions upon
transfer under applicable Federal and State securities laws. The Hold
Back Shares shall be held and disbursed to Seller in accordance with
the terms of this Agreement. The parties understand and agree that the
Purchaser has the absolute right, in accordance with Section 9.2, to
setoff immediately against any portion of the Hold Back Shares and
otherwise distributable to Seller upon conclusion of the Hold Back
Period, the full amount of any claims that Purchaser may have for
indemnity pursuant to the provisions of Section 9.2.
ARTICLE II
CLOSING
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2.1 CLOSING.
(a) The closing (the "Closing") of the transactions
contemplated by this Agreement will be held on April 15, 2000 (the
"Closing Date") at 10:00 a.m. at the offices of Holland & Knight, LLP,
1201 West Peachtree Street N.E., Suite 2000, Atlanta, Georgia 30309, or
at such other time, date or location as the parties hereto may mutually
agree upon.
(b) At the Closing, the Purchaser shall deliver (i) by wire
transfer $746,153.00 to Seller, (ii) the Preferred Shares less the Hold
Back Shares; and (iii) those items deliverable by Purchaser pursuant to
Article VI.
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<PAGE>
2.2 INSTRUMENTS OF CONVEYANCE AND TRANSFER.
(a) At the Closing, the Seller shall deliver to the Purchaser:
(i) with respect to the Methodology and copyrights,
if any, such assignments and endorsements and other good and
sufficient instruments of conveyance and transfer, in form
reasonably satisfactory to the Purchaser, as shall be
effective to vest in the Purchaser all of the Seller's right,
title and interest in and to the Methodology, all in
recordable form , to the extent possible, as may be required
by the U.S. Patent and Trademark Office;
(ii) those items deliverable by Seller pursuant to
Article VII.
(b) Simultaneously with such deliveries, the Seller shall take
such steps as may be necessary to put the Purchaser in actual
possession and control of the Transferred Assets.
2.3 FURTHER ASSURANCES. From time to time after the Closing, and
without further consideration, the Seller shall execute and deliver such other
instruments of conveyance, assignment, transfer and delivery, and take such
other actions as the Purchaser may reasonably request in order more effectively
to Transfer to the Purchaser, and to place the Purchaser in possession or
control of, all of the rights, properties, and assets intended to be Transferred
hereunder, to reasonably assist in the collection of any and all such rights,
properties and assets, and to enable the Purchaser to exercise and enjoy all of
the rights and benefits of the Seller with respect thereto.
2.4 TRANSFER TAXES. The Purchaser shall pay all sales and excise taxes,
if any, incurred in connection with the transactions contemplated by this
Agreement. With respect to any item that is exempt from sales or use tax on any
basis, the Seller shall deliver to the Purchaser an appropriate certificate
establishing the basis for such exemption. Except as hereinabove provided, the
party hereto which is responsible under applicable law shall bear and pay in
their entirety all other taxes and registration and transfer fees, if any,
payable by reason of the Transfer of the Transferred Assets pursuant to this
Agreement. Each party hereto will cooperate to the extent practicable in
minimizing all taxes (other than income taxes) and fees levied by reason of the
Transfer of the Transferred Assets.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
--------------------------------------------
The Seller hereby represents and warrants to the Purchaser that the
following representations and warranties are true and correct at the date
hereof:
3.1 CORPORATE EXISTENCE. The Seller is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Florida and has full corporate power and authority to conduct its business as it
is now being conducted and to own or lease all of its properties and assets. The
Seller is duly qualified or licensed to do business as a foreign company, and is
in good standing as a foreign company, in every jurisdiction in which the
ownership of its property or assets or the conduct or nature of its business
requires such qualification or license. The Seller has previously delivered to
the Purchaser true and complete copies of its Articles of Organization and
Regulations as in effect on the date hereof.
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<PAGE>
3.2 CORPORATE POWER AND AUTHORITY. The Seller has full corporate power
and authority to enter into this Agreement, perform its obligations hereunder,
Transfer the Transferred Assets and carry out the transactions contemplated
hereby. The execution and delivery of this Agreement, the performance by the
Seller of its obligations hereunder and the consummation of the transactions
contemplated hereby have been duly authorized by all corporate, member and other
actions on the part of the Seller required by applicable law, its Articles of
Organization or Regulations, or otherwise. This Agreement constitutes the legal,
valid and binding obligation of the Seller, enforceable against it in accordance
with its terms, except (i) as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to creditors' rights generally and (ii) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
3.3 NO VIOLATION. Neither the execution and delivery of this Agreement
nor the performance by the Seller of its obligations hereunder nor the
consummation of the transactions contemplated hereby will (a) contravene any
provision of the Articles of Organization or Regulations of the Seller; (b)
violate, be in conflict with, constitute a default under, permit the termination
of, cause the acceleration of the maturity of any debt or obligation of the
Seller under, require the consent of any other party to, constitute a breach of,
create a loss of a benefit under, or result in the creation or imposition of any
Lien (as defined in Section 3.5(b)), upon the Methodology under, any mortgage,
indenture, lease, contract, agreement, instrument or commitment to which the
Seller is a party; (c) violate any statute or law or any judgment, decree,
order, regulation or rule of any court or governmental authority to which the
Seller or the Methodology is subject; or (d) result in the loss of any license,
privilege or certificate benefiting the Methodology.
3.4 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. No consent,
approval or authorization of, or declaration, filing or registration with, any
governmental or regulatory authority is required to be made or obtained by the
Seller in connection with the execution, delivery or performance of this
Agreement by the Seller.
3.5 TITLE TO PROPERTIES; ENCUMBRANCES.
(a) The Seller has good and marketable title to all of its
properties and assets (tangible or intangible) constituting all or part
of the Transferred Assets. None of the Transferred Assets are subject
to any Lien (as defined in subsection (b) below).
(b) When used in this Agreement, "LIEN" or "LIENS" shall mean
any mortgage, pledge, security interest, conditional sale or other
title retention agreement, encumbrance, lien, claim, right, covenant,
restriction, warrant, option or charge of any kind.
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<PAGE>
3.6 METHODOLOGY AND OTHER INTANGIBLE PROPERTY.
(a) The Seller owns, or is licensed or otherwise has the full
right to use, all intellectual property rights, both registered and at
common law, relating to the Methodology, irrespective of where any of
the same were issued, whether pending or existing, and set forth on
Schedule 3.6, including, without limitation, all: registrations of
trademarks, service marks and of other marks, registrations of trade
names, labels, logos, trading styles or other trade rights, registered
user entries, and applications for any such registrations or entries;
United States and foreign copyrights, copyright registrations and
applications therefor; United States and foreign trademarks and other
marks, trade names, labels and other trade rights, whether or not
registered, and applications therefor; trade secrets, know-how,
inventions, discoveries, improvements, engineering or other drawings,
designs, processes and formulae, whether patented or patentable or not;
customer lists, technical data, marketing information and plans,
software and software documentation source codes; any other proprietary
information or intangible rights related in any way to the Methodology;
shop rights, license agreements and other agreements relating in whole
or in part to any of the foregoing; and all claims and causes of action
on behalf of the Seller or against third parties relating to any of the
foregoing, including claims and causes of action for past infringement.
Schedule 3.6 contains a true and complete list of (a) the Methodology
used or proposed to be used by the Seller, any applications therefor
and all licenses and other agreements relating thereto and (b) all
agreements relating to technology, know-how or processes which the
Seller is licensed or authorized to use by others or which the Seller
licenses or authorizes others to use in connection with the
Methodology. The Seller has (i) the sole and exclusive right to use the
trademarks, service marks, trade names, copyrights, technology,
know-how and processes described on Schedule 3.6, and no consent of any
third party is required for the use thereof by the Purchaser upon the
consummation of the transactions contemplated hereby or, if such
consent shall be necessary to assign such Methodology, such consent
shall have been obtained prior to the Closing Date. No claims have been
asserted by any person to the use any of the items of Methodology or
challenging or questioning the validity or effectiveness of any such
license or agreement, and the Seller knows of no valid basis for any
such claims. The Seller has no notice that the use of the Methodology
by the Seller infringes on the rights of any other person or entity.
Each item of Methodology is in full force and effect, fully protected
and, if registered, filed or issued, then duly and properly registered,
filed or issued in the appropriate office and jurisdiction for such
registration, filings or issuance. Each license, contract or other
agreement to which the Seller is a party pertaining to any item of
Methodology owned, used or available for use by the Seller is a valid,
legally binding obligation of all parties thereto, enforceable in
accordance with its terms. Each such license, contract or other
agreement is in full force and effect. With respect to each such
license, contract or other agreement, there is no payment due and not
paid and no default (or event which, with or without notice, lapse of
time or both, would constitute a default) by any party thereto. The
Seller has good and valid title to, or otherwise possesses adequate and
exclusive rights to use, all Methodology and other proprietary
information necessary to permit the Seller to operate the Methodology
in the same manner as the Methodology is presently operated, and all
items of Methodology is being transferred to the Purchaser free of any
encumbrance whatsoever.
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<PAGE>
(b) The proprietary rights, software, copyright and technology
and other legal rights owned by DCB, together with the Transferred
Assets, constitute the entire technology rights and legal and
proprietary rights relating to the Health Information Gateway Program
(the "Program") developed by DCB, and constitute all legal rights
necessary for the continued development, distribution and licensing of
such program by DCB. Except for DCB and the Seller, no other party owns
any legal or proprietary rights to any aspect of the Program, other
than nonexclusive licenses (which do not include the right to
sublicense) sold to DCB's customers in the ordinary course of business.
The Program performs substantially in compliance with the
specifications and operating manuals therefor which have been delivered
by DCB to Purchaser
3.7 LITIGATION. There are no actions, claims and proceedings and, to
the Seller's best knowledge, investigations to which the Seller is a party
(individually, an "Action" and, collectively, "Actions"), including, without
limitation, Actions for personal injury, products liability, wrongful death or
other tortious conduct, or breach of warranty arising from or relating to
materials, commodities, products or goods used, transferred, processed,
manufactured, sold, distributed or shipped by the Seller concerning the
Methodology (a) involving or relating to the Seller concerning the Methodology,
or (b) pending, or, to Seller's knowledge, after due inquiry and reasonable
investigation, threatened, against the Methodology before any court, arbitrator
or administrative or governmental body. There is no Action pending, or, to
Seller's knowledge, after due inquiry and reasonable investigation, threatened,
against the Seller, or the Methodology before any court, arbitrator or
administrative or governmental body, which questions or challenges the validity
of this Agreement or any Action taken or proposed to be taken by the Seller
pursuant to this Agreement or in connection with the transactions contemplated
hereby. No state of facts exists or has existed which would constitute grounds
for the institution of any Action against the Methodology, the Seller or against
any assets, properties or rights of the Seller which would adversely affect the
Methodology, which would not be covered or defended against by a carrier under
policies of insurance in favor of the Seller. The Seller is not subject to any
judgment, order or decree entered in any lawsuit or proceeding which has
affected, or which can reasonably be expected to affect, the Seller's business
practices as they affect the Methodology or its ability to acquire any property
or operate the Methodology in any way.
3.8 COMPLIANCE WITH LAWS. The Seller has not been charged with, and is
not threatened with or under any investigation with respect to, any charge
concerning any violation of any provision of any federal, state, local or
foreign law, regulation, ordinance, order or administrative ruling affecting the
Methodology, and the Seller is not in default with respect to any order, writ,
injunction or decree of any court, agency or instrumentality affecting the
Methodology. The Seller (a) is not in violation of any federal, state, local or
foreign law, ordinance or regulation or any other requirement of any
governmental or regulatory body, court or arbitrator applicable to the
Methodology or (b) would not, to the Seller's knowledge, be in violation of any
such law, ordinance, regulation or other requirement that has been enacted or
adopted but is not yet effective if it were effective at the date hereof.
3.9 BROKER'S AND FINDER'S FEES. The Seller is not a party to, nor in
any way obligated to make any payment relating to, any contract or outstanding
claim for the payment of any broker's or finder's fee in connection with the
origin, negotiation, execution or performance of this Agreement or the
consummation of the transactions contemplated hereby.
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<PAGE>
3.10 DISCLOSURE OF CONFIDENTIAL INFORMATION. The Seller has fully
disclosed, or will disclose on or before the Closing Date, to the Purchaser, all
processes, inventions, methods, formulae, plans, drawings, customer lists,
secret information and know-how (whether secret or not) known to it or usable by
it in connection with the Methodology as it is now operated.
3.11 GENERAL DISCLOSURE. No representation or warranty by the Seller in
this Agreement (including, without limitation, the Schedules hereto) contains or
will contain any untrue statement of a material fact or omits or will omit to
state any material fact necessary to make the statements herein or therein not
misleading. There is no fact known to the Seller which adversely affects, or
which might in the future adversely affect, the operations, business, assets,
properties, prospects or condition (financial or otherwise) of the Seller or the
Methodology which has not been set forth in this Agreement or on the Schedules
hereto.
3.12 SECURITIES LAW DISCLOSURE. Seller and its Member acknowledge that
they received and had an opportunity to review: (i) the Purchaser's Annual
Report on Form 10-K for the year ended June 30, 1999; (ii) the Purchaser's
Quarterly Report on Form 10-Q for the quarter ended December 31, 1999; and (iii)
the Purchaser's supplemental disclosure document dated April 10, 2000,
concerning certain risks associated with an investment in the Purchaser's
securities. Seller and its Member further acknowledge that they have had the
opportunity to ask questions and receive answers concerning the terms and
conditions of the issuance of the Purchaser's securities to Seller, and to
obtain any additional information which the Purchaser possesses or can acquire
without unreasonable effort or expense that is necessary to verify the accuracy
of the information provided to Seller concerning the Purchaser.
3.13 RESTRICTIONS ON RESALE. Seller understands that the Preferred
Shares to be issued by the Purchaser upon the closing of the transactions
contemplated by this Agreement, and the common shares that are issuable upon the
conversion of the Preferred Shares, shall be issued pursuant to an exemption
from registration under the United States securities laws, and that,
accordingly, such shares are being purchased for investment and not with a view
to the unregistered distribution or resale thereof, except to the extent
permitted by applicable law. Seller understands that it will not be entitled to
resell or transfer the Preferred Shares or common stock of the Purchaser until
such resale or transfer is registered under the applicable securities laws or an
exemption from registration is available Purchaser has no obligation to register
such securities. The certificate representing such securities shall bear a
legend reflecting such restrictions.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
-----------------------------------------------
The Purchaser hereby represents and warrants to the Seller as follows:
4.1 EXISTENCE. The Purchaser is a corporation, validly existing and in
good standing under the laws of the State of Delaware.
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<PAGE>
4.2 POWER AND AUTHORITY. The Purchaser has full power and authority to
enter into this Agreement, perform its obligations hereunder, acquire and own
the Transferred Assets, and carry out the transactions contemplated hereby. The
execution and delivery of this Agreement, the performance by the Purchaser of
its obligations hereunder and the consummation of the transactions contemplated
hereby have been duly authorized by all corporate, stockholder and other actions
on the part of the Purchaser required by applicable law, its Certificate of
Incorporation or Bylaws, or otherwise. This Agreement constitutes the legal,
valid and binding obligation of the Purchaser, enforceable against it in
accordance with its terms, except (i) as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) that the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
4.3 NO VIOLATION. Neither the execution and delivery of this Agreement
nor the performance by the Purchaser of its obligations hereunder nor the
consummation of the transactions contemplated hereby will contravene any
provision of the Certificate of Incorporation or Bylaws of the Purchaser.
4.4 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. No consent,
approval or authorization of, or declaration, filing or registration with, any
governmental or regulatory authority is required to be made or obtained by the
Purchaser in connection with the execution, delivery and performance of this
Agreement by the Purchaser.
4.5 BROKER'S AND FINDER'S FEE. The Purchaser is a party to, is
obligated to and will make payment of a fee to Karl Muehlberger in connection
with the origin, negotiation, execution and performance of this Agreement and
the Share Purchase Agreement or the consummation of the transactions
contemplated hereby.
ARTICLE V
CERTAIN OBLIGATIONS OF THE PARTIES PRIOR TO CLOSING
---------------------------------------------------
The Seller and the Purchaser hereby covenant as follows:
5.1 ACCESS PRIOR TO THE CLOSING. The Seller shall afford the Purchaser
and its counsel, accountants, and other authorized agents and representatives
(its "Advisors") reasonable access during normal business hours to the Seller's
plants, properties, books, records and personnel in order that the Purchaser and
its Advisors may have the opportunity to make such reasonable investigations as
they shall desire to make of the affairs of the Seller.
5.2 CONFIDENTIALITY PRIOR TO THE CLOSING. Except as required by law or
any securities exchange, each party hereto shall, and shall cause its officers
and Advisors to, hold in strict confidence, and not disclose to others (except
its Advisors) for any reason whatsoever, without the prior written consent of
the other party, any nonpublic information received by it from the other party
in connection with the transactions contemplated hereby and will not use such
information for any purpose in the event that no Closing occurs under this
Agreement. The Purchaser shall continue to be bound by the confidentiality
provisions of the LETTER OF INTENT, dated February 25, 2000, between the
Purchaser and the Seller.
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<PAGE>
5.3 COOPERATION. Each party hereto shall use its best efforts to cause
the transactions contemplated by this Agreement to be consummated, and to make
all filings with and give all notices to government agencies and third parties
which may be necessary or reasonably required in order to consummate the
transactions contemplated by this Agreement. The Seller shall give prompt notice
to the Purchaser, after receipt thereof by the Seller, of (i) any notice of, or
other communication relating to, any default or event which, with notice or the
lapse of time or both, would become a default under any indenture, instrument or
agreement material to the Methodology or the operations, condition (financial or
otherwise) or prospects of the Seller, to which the Seller is a party or by
which the Seller or its assets or properties or the Methodology are bound and
(ii) any notice or other communication from any third party alleging that the
consent of such third party is or may be required in connection with the
transactions contemplated by this Agreement.
5.4 NO NEGOTIATIONS, ETC. Prior to the Closing Date, the Seller shall
not, directly or indirectly, in any way contact, initiate, enter into or conduct
any discussions or negotiations, or enter into any agreements, whether written
or oral, with any Person with respect to the sale of all or any part of the
Methodology with any other Person. The Seller shall, immediately upon receipt
thereof, notify the Purchaser of any such offer for the acquisition of the
Methodology.
ARTICLE VI
CONDITIONS TO THE PURCHASER'S OBLIGATIONS
-----------------------------------------
Each and every obligation of the Purchaser under this Agreement to be
performed on or before the Closing Date shall be subject to the satisfaction, on
or before the Closing Date, of each of the following conditions:
6.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of the Seller contained herein, in the Schedules and Exhibits hereto
and in all certificates and other documents delivered by the Seller to the
Purchaser pursuant hereto or in connection with the transactions contemplated
hereby, and including the representations and warranties of certain of the
shareholders in connection with the sale of shares of DCB pursuant to the Share
Purchase Agreement, shall be true and accurate as of the date of this Agreement
and as of the Closing Date with the same effect as if made on and as of the
Closing Date.
6.2 PERFORMANCE. The Seller shall have performed and complied in all
material respects with all agreements, obligations and conditions required by
this Agreement to be performed or complied with by it on or prior to the Closing
Date, including, without limitation, those referred to in Article V.
6.3 AUTHORIZATIONS AND APPROVALS. Prior to or on the Closing Date, the
Purchaser shall have secured whatever authorizations or approvals are required
to enable it to consummate the transactions contemplated hereby and incident
hereto.
6.4 CONSENTS. All filings with and consents from government agencies
and third parties required to consummate the transactions contemplated hereby,
if any, shall have been obtained by the Seller, unless the failure to obtain any
such consent or make any such filing would not have an adverse effect on the
assets, properties, business or condition (financial or otherwise) of the
Methodology or the transactions contemplated hereby, or except to the extent
that making any such filing or obtaining any such consent has been waived in
writing by the Purchaser.
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<PAGE>
6.5 TRANSFER INSTRUMENTS. The Seller shall have delivered to the
Purchaser such instruments of conveyance and transfer as are contemplated by
Section 2.2.
6.6 RESOLUTIONS. The Seller shall have furnished a copy of the
resolutions adopted by the Manager of the Seller authorizing this Agreement and
the transactions contemplated hereby.
6.7 PROCEEDINGS. All corporate and other proceedings in connection with
the transactions contemplated by this Agreement, and all documents incident
thereto, shall be in form and substance reasonably satisfactory to the Purchaser
and its counsel, and the Purchaser shall have received all such originals or
certified or other copies of such documents as it may reasonably request.
6.8 ABSENCE OF LITIGATION. There shall be no Action pending or
threatened before any federal, state or local court, governmental agency or
regulatory body which seeks (a) to invalidate or set aside, in whole or in part,
this Agreement, (b) to restrain, prohibit, invalidate or set aside, in whole or
in part, the consummation of the transactions contemplated hereby or (c) to
obtain substantial damages in connection therewith.
ARTICLE VII
CONDITIONS TO THE SELLER'S OBLIGATIONS
--------------------------------------
Each and every obligation of the Seller under this Agreement to be
performed on or before the Closing Date shall be subject to the satisfaction, on
or before the Closing Date, of each of the following conditions:
7.1 REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties of the Purchaser contained herein and in all certificates and other
documents delivered by the Purchaser to the Seller pursuant hereto or in
connection with the transactions contemplated hereby shall be in all material
respects true and accurate as of the date of this Agreement and as of the
Closing Date with the same effect as if made on and as of the Closing Date.
7.2 PERFORMANCE. The Purchaser shall have performed and complied in all
material respects with all agreements, obligations and conditions required by
this Agreement to be performed or complied with by it on or prior to the Closing
Date, including, without limitation, those referred to in Article V.
ARTICLE VIII
CERTAIN POST-CLOSING COVENANTS
------------------------------
8.1 BOOKS AND RECORDS; ACCESS. Unless otherwise consented to in writing
by the Purchaser, the Seller shall not destroy, alter or otherwise dispose of
any original books or records of the Seller without first offering to surrender
such books and records to the Purchaser and shall maintain such books and
records in good condition in a reasonably accessible location. The Seller shall
allow the Purchaser and its Advisors reasonable access during normal business
hours to examine and copy such books and records in order to perform a financial
statement audit if required by the Securities and Exchange Commission.
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<PAGE>
8.2 NONCOMPETITION; CONFIDENTIALITY.
(a) The Purchaser and the Seller acknowledge and understand
that the Purchase Price was fixed on the basis that the Transfer of the
Transferred Assets to the Purchaser would provide the Purchaser with
the full benefit of the Methodology. The Seller acknowledges that it is
proper for the Purchaser to have assurances that the value of the
Methodology will not be diminished by acts of the Seller after the
Closing Date. Accordingly, for a period of five (5) years from and
after the Closing Date, the Seller shall not, directly or indirectly,
through Affiliates, a partnership, joint venture or otherwise, enter
into, engage in, conduct or carry on any business which produces,
manufactures, sells or distributes products now produced, manufactured,
sold or distributed by the Seller employing the Methodology, or
participate in the management of any person, firm, enterprise or
corporation if such person, firm, enterprise or corporation engages or
proposed to engage in substantial competition with the Purchaser in any
line of business actively conducted at the time by Seller employing the
Methodology and which was conducted by the Seller prior to the Closing
Date in all of the counties in California, in the remaining 49 states
of the United States, and throughout the world.
(b) The Seller shall not use or disclose, or induce the use or
disclosure of, and shall otherwise keep confidential all secrets,
know-how, processes, formulas, discoveries, improvements, designs,
business affairs and other secrets ("CONFIDENTIAL MATTERS") used or
usable by the Seller to the extent that such Confidential Matters are
not or do not become readily available to the public at any relevant
time, other than through Seller's disclosure of such Confidential
Matters.
(c) If the Seller commits a breach, or threatens to commit a
breach, of any of the provisions of this Section 8.2, the Purchaser
shall have the right and remedy (in addition to any others) to have the
provisions of this Section 8.2 specifically enforced by any court
having equity jurisdiction, together with an accounting therefor, it
being acknowledged and understood by the Seller that any such breach or
threatened breach will cause irreparable injury to the Purchaser and
that money damages will not provide an adequate remedy therefor.
8.3 COVENANT NOT TO SUE. Except in the event of a breach of this
Agreement by the Purchaser, the Seller hereby covenants and agrees, and hereby
undertakes to have each of its executive officers and directors undertake and
agree, that from and after the Closing Date, it and they will not, directly or
indirectly, commence or prosecute, or assist in the filing, commencement or
prosecution of, any Action, claim or proceeding against the Purchaser, any of
its Affiliates and each present or former officer, director, employer of or
owner of any equity interest in the Purchaser or any of its Affiliates, in any
federal, state, local or foreign court, arbitral forum or administrative agency,
with respect to the Methodology transferred hereunder, whether known or not now
known.
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<PAGE>
8.4 SALES TAX. Seller covenants and represents that this transaction is
an exempted sale of an intangible and is therefore not subject to sales tax in
the State of Florida.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
-----------------------------------------------------------
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Notwithstanding (a) the
making of this Agreement, (b) any examination made by or on behalf of the
parties hereto and (c) the Closing hereunder, the representations and warranties
of the Seller and the Purchaser contained in this Agreement, or in any document
delivered pursuant to the provisions of this Agreement, including the
representations and warranties of the shareholders pursuant to the Share
Purchase Agreement, shall survive the Closing to and including the last day of
the thirty-sixth month following the month in which the Closing occurs
("Termination Date"), at which time all such representations and warranties
shall expire and be terminated, provided however, claims for indemnity made to
Seller or pending prior to the Termination Date or representations and
warranties contained in Section 3.5 relating to title to the Transferred Assets
shall not expire or terminate on the Termination Date.
9.2 INDEMNIFICATION.
(a) Subject to Section 9.1 above, from and after the Closing,
the Seller shall indemnify and save harmless the Purchaser and its
officers, directors, partners, shareholders, successors and assigns
(collectively, the "INDEMNIFIED PARTY") from and against any loss,
claim, liability, damage (including consequential damages), punitive
damages, remedial costs, civil and criminal penalties or expenses or
other damages of any kind or nature, including Purchaser's reasonable
attorneys' fees incurred in connection with any of the foregoing
(collectively, the "DAMAGES"), caused to the Methodology by or arising
out of (i) the failure by the Seller to perform any covenant or
agreement required to be performed by it in this Agreement, after the
Closing or pursuant to Article V of this Agreement; (ii) any judgments,
orders or decrees entered in any lawsuit or proceeding or Actions
against the Seller or the Methodology arising out of activities
undertaken by the Seller or the Methodology prior to the Closing Date
and arising out of activities undertaken by the Seller on or after the
Closing Date; (iv) any breach of warranty or representation in this
Agreement (including the Schedules hereto) made by or on behalf of the
Seller, (v) any breach of any warranty, representation, or covenant of
the shareholders of DCB pursuant to the Share Purchase Agreement and
not waived in writing by the Indemnified Party, or (vi) any claim by
any holder of a limited liability company interest of DCB that the
amount of consideration paid by Purchaser hereunder in any way violated
any legal rights of such holder.
(b) The Indemnified Party shall notify the Seller within a
reasonable period of time after becoming aware of, and shall provide to
the Seller as soon as practicable thereafter all information and
documentation necessary to support and verify, any Damages which the
Indemnified Party shall have determined has given or could give rise to
a claim for indemnification hereunder, and the Seller shall be given
access to all books and records in the possession or under the control
of the Indemnified Party which the Seller reasonably determines to be
related to such claim.
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<PAGE>
(c) All claims for indemnity under this Article IX shall be
paid by the Seller on demand in immediately available funds in U.S.
dollars. At the Purchaser's option, in lieu of payment in cash,
Purchaser shall have the absolute right in Purchaser's sole discretion
to setoff, in part or in full, against any portion or all of the Hold
Back Shares (defined in Section 1.4(c)), the full amount of any claim
for indemnity pursuant to the provisions of Sections 9.2(a)(i) through
9.2(a)(iv).
(d) The Indemnified Party shall notify the Seller with
reasonable promptness of its discovery of any matter giving rise to a
claim of indemnity or setoff pursuant to this Agreement. With respect
to any third party claim or action that could give rise to indemnity
under this Agreement, the Seller shall be entitled to assume the
defense thereof with counsel satisfactory to the Indemnified Party,
provided, that upon the request of the Indemnified Party, the Seller
provides reasonable evidence of its ability to perform its obligations
under this Section 9.2; and after notice from the Seller to the
Indemnified Party of its election so to assume the defense thereof, the
Seller shall not be liable to the Indemnified Party under the foregoing
indemnity agreement for any legal or other expenses subsequently
incurred by the Indemnified Party in connection with the defense
thereof other than (i) those relating to investigation or the
furnishing of documents or witnesses and (ii) all reasonable fees and
expenses of separate counsel retained by such Indemnified Party if (A)
the Seller and the Indemnified Party shall have agreed to the retention
of such counsel or (B) counsel to the Indemnified Party shall have
concluded reasonably that the representation of the Seller and the
Indemnified Party by the same counsel would be inappropriate due to
actual or potential differing interests between them in the conduct of
the defense of such action. Promptly after receipt by an Indemnified
Party of notice of the commencement of any action to which the Seller
is not a party, such Indemnified Party shall, if such claim in respect
thereof is to be made against the Seller pursuant to this Agreement,
notify the Seller in writing of the commencement thereof, but the
failure or delay in so notifying the Seller shall not relieve the
Seller of its obligations to indemnify pursuant to the terms of this
Agreement. The Indemnified Party shall keep the Seller informed of the
progress of any such action and shall not enter into any settlement of
any such action without the prior written consent of the Seller, which
consent shall not be unreasonably withheld.
ARTICLE X
TERMINATION
-----------
10.1 TERMINATION. This Agreement may be terminated at any time prior to
the Closing Date:
(a) by the mutual consent of the Purchaser and the Seller; or
(b) by either the Purchaser or the Seller, upon written
notice, if there has been a material misrepresentation or any breach on
the part of the other party hereto in the representations, warranties
or covenants contained in this Agreement which is not cured within
twenty (20) business days after such other party has been notified of
the intent to terminate this Agreement pursuant to this subsection (b).
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<PAGE>
10.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement as expressly permitted under Section 10.1, such termination shall be
the sole remedy and this Agreement shall forthwith become void (except for
Sections 5.2 and 11.3) and there shall be no liability on the part of either the
Seller or the Purchaser or any of their Affiliates; provided, however, that if
such termination shall result from the willful breach by a party hereto of its
obligations under this Agreement, such party shall be fully liable for any and
all damages, costs and expenses sustained or incurred by the other party as a
result of such breach. In the event of the termination of this Agreement without
a Closing, the Seller shall return promptly to the Purchaser all documents, work
papers and other materials of the Purchaser furnished or made available to the
Seller or its Advisors, and all copies thereof, and no information received by
the Seller shall be revealed to any third party or used for the advantage of the
Seller or any other party; and the Purchaser shall return promptly to the Seller
all documents, work papers and other material of the Seller furnished or made
available to the Purchaser or its Advisors, and all copies thereof, and no
information received by the Purchaser shall be revealed to any third party or
used for the advantage of the Purchaser or any other party.
ARTICLE XI
MISCELLANEOUS PROVISIONS
------------------------
11.1 PUBLIC ANNOUNCEMENTS. Prior to the Closing Date, the Purchaser and
the Seller shall notify and consult with each other prior to issuing any
statement or communication to the public or the press regarding the transactions
contemplated by this Agreement. Except as required by law or by any securities
exchange and except as the other party hereto shall authorize in writing or as
provided under this Section 11.1, the parties hereto shall not, and shall cause
their respective officers, directors, employees, Affiliates and Advisors not to,
disclose any matter or matters relating to this transaction to any Person not an
officer, director, employee, Affiliate or Advisor of such party.
11.2 AMENDMENT; WAIVER. Neither this Agreement, nor any of the terms or
provisions hereof, may be amended, modified, supplemented or waived, except by a
written instrument signed by the parties hereto (or, in the case of a waiver, by
the party granting such waiver). No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof (whether or not similar), nor shall such waiver constitute a continuing
waiver. No failure of either party hereto to insist upon strict compliance by
the other party with any obligation, covenant, agreement or condition contained
in this Agreement shall operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. Whenever this Agreement requires or permits consent
by or on behalf of any party hereto, such consent shall be given in a manner
consistent with the requirements for a waiver of compliance as set forth in this
Section 11.2.
11.3 FEES AND EXPENSES. Except as otherwise provided in this Agreement,
each of the parties hereto shall bear and pay its own costs and expenses
incurred in connection with the origin, preparation, negotiation, execution and
delivery of this Agreement and the agreements, instruments, documents and
transactions referred to in or contemplated by this Agreement (whether or not
such transactions are consummated) including, without limitation, any fees,
expenses or commissions of any of its Advisors, attorneys, agents, finders or
brokers. The Purchaser shall indemnify the Seller against any claims of third
parties for any brokerage, finder's, agent's or similar fees or commissions in
connection with the transactions contemplated hereby insofar as such claims are
alleged to be based on arrangements or contacts made by, to or with the
Purchaser or its Advisors or representatives. The Seller shall indemnify the
Purchaser against all such claims insofar as they are alleged to be based on
arrangements or contacts made by, to or with the Seller or its Advisors or
representatives.
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<PAGE>
11.4 BULK SALES LAW WAIVER. The Purchaser and the Seller each agrees to
waive compliance by the other with the provisions of the Bulk Sales Law of any
jurisdiction to the extent that the same may be applicable to the transactions
contemplated by this Agreement. In addition to any other indemnities provided in
this Agreement, the Seller agrees to indemnify and hold harmless the Purchaser
from and against any and all claims that may be asserted against the Purchaser
or liens claimed against any of the Transferred Assets by the creditors of the
Seller or other third parties under the Bulk Sales Law of any State.
11.5 NOTICES.
(a) All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing
(including telefax, telegraphic, telex or cable communication) and
mailed, telefaxed, telegraphed, telexed, cabled or delivered:
(i) If to the Seller, to:
DSM, LLC
P.O. Box 24926
Lakeland, FL 33802-4926
Attention: Manager
with a copy to:
Holland & Knight, LLP
One East Broward Boulevard, Suite 1300
Fort Lauderdale, FL 33301-4811
Attention: William B. Sherman, Esq.
(ii) If to the Purchaser, to
MEDCOM U.S.A., Inc.
18001 Cowan, Suite C-D
Irvine, CA 92614
Attention: Alan Ruben, Chief Financial
Officer
with a copy to:
Rutan & Tucker, LLP
611 Anton Boulevard, 14th Floor
Costa Mesa, CA 92626
Attention: James B. O'Neal, Esq.
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<PAGE>
(b) All notices and other communications required or permitted
under this Agreement which are addressed as provided in this Section
11.5 (i) if delivered personally against proper receipt or by confirmed
telefax or telex, shall be effective upon delivery and (ii) if
delivered (A) by certified or registered mail with postage prepaid, (B)
by Federal Express or similar courier service with courier fees paid by
the sender or (C) by telegraph or cable, shall be effective two (2)
business days following the date when mailed, couriered, telegraphed or
cabled, as the case may be. Either party may from time to time change
its address for the purpose of notices to that party by a similar
notice specifying a new address, but no such change shall be deemed to
have been given until it is actually received by the party sought to be
charged with its contents.
11.6 ASSIGNMENT. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder may be assigned by the parties
hereto without the prior written consent of the other party; provided, however,
that the Purchaser may assign its rights and obligations under this Agreement to
any of its Affiliates or any entity who by merger, consolidation, purchase or
sale subsequently becomes an Affiliate without the prior consent of the Seller.
Any assignment which contravenes this Section 11.6 shall be void ab initio.
11.7 GOVERNING LAW; CONSENT TO JURISDICTION AND VENUE. This Agreement
and the legal relations between the parties hereto shall be governed by and
construed in accordance with the internal laws of the State of California,
without giving effect to the conflicts of laws principles thereof. Any dispute
concerning this Agreement and the transactions contemplated hereby shall be
heard and decided in the Federal and state courts of Orange County, California.
11.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
11.9 HEADINGS. The headings contained in this Agreement are for
convenience of reference only and shall not constitute a part hereof or define,
limit or otherwise affect the meaning of any of the terms or provisions hereof.
11.10 ENTIRE AGREEMENT. This Agreement (which defined term includes the
Schedules and Exhibits to this Agreement) embodies the entire agreement and
understanding among the parties hereto with respect to the subject matter of
this Agreement and supersedes all prior agreements, commitments, arrangements,
negotiations or understandings, whether oral or written, between the parties
with respect thereto. There are no agreements, covenants, undertakings,
representations or warranties with respect to the subject matter of this
Agreement other than those expressly set forth or referred to herein.
11.11 SEVERABILITY. Each term and provision of this Agreement
constitutes a separate and distinct undertaking, covenant, term and/or provision
hereof. In the event that any term or provision of this Agreement shall be
determined to be unenforceable, invalid or illegal in any respect, such
unenforceability, invalidity or illegality shall not affect any other term or
provision of this Agreement, but this Agreement shall be construed as if such
unenforceable, invalid or illegal term or provision had never been contained
herein. Moreover, if any term or provision of this Agreement shall for any
reason be held to be excessively broad as to time, duration, activity or
subject, it shall be construed, by limiting and reducing it, so as to be
enforceable to the extent permitted under applicable law as it shall then exist.
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<PAGE>
11.12 NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement is
intended, nor shall anything in this Agreement be construed, to confer any
rights, legal or equitable, in any Person (other than the parties hereto and
their respective heirs, distributees, beneficiaries, executors, successors and
assigns), including, without limitation, any employee of the Seller or any
beneficiary of such employee.
11.13 MISCELLANEOUS. The persons executing this Agreement in behalf of
the parties hereto are duly authorized to execute, acknowledge and deliver this
Agreement.
11.14 AFFILIATE. When used in this Agreement, "Affiliate" or
"Affiliates" shall mean, with respect to any individual, partnership,
corporation, association, business trust, joint venture, governmental entity or
other entity of any nature ("Person"), any Person that controls, is controlled
by, or is under common control with, such Person.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
"SELLER": DSM, LLC, a Florida limited liability company
By: /S/ VLADIMIR HAVLENA
------------------------------------------
Vladimir Havlena
Its: Member/Manager
"PURCHASER": MEDCOM U.S.A., INC., a Delaware corporation
By: /S/ MICHAEL MALET
------------------------------------------
Michael Malet, Vice President
By: /S/ MICHAEL MALET
------------------------------------------
Michael Malet, Secretary
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<PAGE>
TECHNOLOGY PURCHASE AGREEMENT
SCHEDULE 1.1
METHODOLOGY
<PAGE>
TECHNOLOGY PURCHASE AGREEMENT
SCHEDULE 1.4(b)
SUMMARY OF TERMS OF PREFERRED SHARES SCHEDULE
<PAGE>
SUMMARY OF TERMS OF PREFERRED STOCK
The following provides a summary or certain material terms of the
Series D Cumulative Convertible Preferred Stock to be issued in connection with
the purchase of the outstanding limited liability company interests of DCB
Actuaries and Consultants, S.R.O. Reference should be made to the Certificate of
Designation for the Series D Cumulative Convertible Preferred Shares for a
complete description of the terms of such shares.
NUMBER OF SHARES AUTHORIZED: 2,900
DIVIDENDS: 4% of the Liquidation Preference (which is initially $1,000
per share), payable annually. The Company has the option of paying the dividends
in cash or in the form of shares of the Company's Common Stock, valued at it's
then Market Value.
LIQUIDATION PREFERENCE: $1,000 per share plus accrued but unpaid
dividends.
CONVERSION RIGHTS: After amendment of the Company's Certificate of
Incorporation to increase the Company's authorized Common Stock, the Series D
Cumulative Convertible Preferred Stock is convertible into Common Stock of the
Company, at a conversion price of $4.94 per share of Common Stock.. After one
year, the Company can require conversion of the preferred stock into Common
Stock, so long as the Market Price of the Common Stock at the time of conversion
exceeds the Conversion Price, and the resale of such Common Stock by the holder
is either registered under the Securities Act of 1933 or exempt from
registration.
VOTING RIGHTS: Votes with other voting securities of the Company, with
each share of preferred stock having that number of votes equal to the number of
shares of Common Stock into which it is convertible.
<PAGE>
TECHNOLOGY PURCHASE AGREEMENT
SCHEDULE 3.6
The Methodology is described in Schedule 1.1, attached hereto and
incorporated herein by reference. The Methodology is subject to the following
License and Sub-License.
1. License Agreement for the Methodology for Automated Assessing and
Controlling of Medical Risks in Health Insurance by and between DSM, LLC and
Callucia Holding B.V., dated as of August 31, 1999.
2. Sub-License Agreement for the Methodology for Automated Assessing
and Controlling of Medical Risks in Health Insurance by and between Callucia
Holding B.V. and DCB Actuaries and Consultants S.R.O. dated as of August 31,
1999.
EXHIBIT 4.1
CERTIFICATE OF DESIGNATIONS OF THE POWERS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL AND OTHER
SPECIAL RIGHTS OF PREFERRED STOCK AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS THEREOF
OF
SERIES D CUMULATIVE CONVERTIBLE PREFERRED STOCK
FOR
MEDCOM USA, INCORPORATED
MEDCOM USA, INCORPORATED, a Delaware corporation (the
"CORPORATION"), pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, does hereby make this Certificate of
Designations and does hereby state and certify that pursuant to the authority
expressly vested in the Board of Directors of the Corporation by the Certificate
of Incorporation of the Corporation, the Board of Directors duly adopted the
following resolutions, which resolutions remain in full force and effect as of
the date hereof:
RESOLVED, that, pursuant to Article Four of the Certificate of
Incorporation of the Corporation, the Board of Directors hereby authorizes the
issuance of, and fixes the designation and preferences and relative,
participating, optional and other special rights, and qualifications,
limitations and restrictions, of a series of Preferred Stock consisting of 2,900
shares, par value $.01, to be designated Series D Cumulative Convertible
Preferred Stock (the "PREFERRED SHARES").
RESOLVED, that subject to the terms and conditions of the
Purchase Agreement (as defined herein), 2,900 Preferred Shares may be issued.
RESOLVED, that each of the Preferred Shares shall rank equally
in all respects and shall be subject to the following terms and provisions:
1. DESIGNATION. There is hereby created out of the authorized and
unissued shares of preferred stock of the Corporation a series of preferred
stock designated as the Series D Cumulative Convertible Preferred Stock (the
"PREFERRED SHARES"). The number of shares constituting such series shall be
2,900.
2. DIVIDENDS.
(a) CUMULATIVE. The holders of the Preferred Shares shall be
entitled to receive cumulative dividends at the per share rate of four percent
(4%) of the Liquidation Preference (as defined below) of each Preferred Share,
per annum accruing daily and payable annually on March 31 of each year (each a
"DIVIDEND PAYMENT DATE") commencing with the first Dividend Payment Date
occurring after the original issuance date of such share, in preference and
priority to any payment of any dividend on the of common stock, par value $0.01,
<PAGE>
of the Corporation ("COMMON STOCK") or any other class or series of equity
security of the Corporation. Such dividends shall accrue (or shall be deemed to
have accrued) on any given share from the most recent date on which a dividend
has been paid with respect to such share, or if no dividends have been paid,
from April 15, 2000, and such dividends shall accrue from day to day whether or
not declared, based on the actual number of days elapsed. If at any time
dividends on the outstanding Preferred Shares at the rate set forth above shall
not have been paid or declared and set apart for payment with respect to all
preceding periods, the amount of the deficiency shall be fully paid or declared
and set apart for payment, but without interest, before any distribution,
whether by way of dividend or otherwise, shall be declared or paid upon or set
apart for the shares of any other class or series of equity security of the
Corporation
(b) PAYMENT OF DIVIDENDS. At its option, the Corporation may
pay dividends required hereunder either in cash or in the form of shares of
Common Stock of the Corporation. If the Corporation elects to pay dividends in
the form of its Common Stock, it shall issue to the holder of the Preferred
Shares that number of shares of Common Stock having a Fair Market Value equal to
the amount of the dividend to be paid; provided that the Corporation shall have
such option only if the Common Stock is then listed for trading on the Nasdaq
SmallCap Market, Nasdaq National Market, or another market providing regular
price quotations, as designated by the Corporation. For purposes of the
foregoing, the term "Fair Market Value" shall mean the average of the bid and
ask prices of the Corporation's Common Stock on the Nasdaq SmallCap System,
averaged for the 10 trading days ending 3 business days prior the dividend
payment date, and shall mean the last reported sale price averaged for the 10
trading days ending 3 business days prior to the dividend payment date, if the
Common Stock is then listed for trading on the Nasdaq National Market. If the
Common Stock is not then listed for trading on the Nasdaq SmallCap System or the
Nasdaq National Market, the "Fair Market Value" shall be determined by a
procedure approved by the Corporation's Board of Directors, in its reasonable
discretion, which is based primarily on the prices quoted on the market on which
the Common Stock is then trading.
3. LIQUIDATION PREFERENCE. In the event of any liquidation, dissolution
or winding up of the Corporation, either voluntary or involuntary, the holders
of the Preferred Shares shall be entitled to receive, out of the assets of the
Corporation available for distribution to stockholders, prior and in preference
to any distribution of any assets of the Corporation to the holders of the
Corporation's Common Stock, but after payment of the liquidation preference
payable with respect to the Corporation's outstanding Series A Preferred Shares,
the amount of $1,000 per share plus all accrued but unpaid dividends (the
"LIQUIDATION PREFERENCE").
4. CONVERSION. Effective immediately upon an amendment of the
Corporation's Certificate of Incorporation to increase the authorized number of
shares of Common Stock to at least 60,000,000 (the "Certificate Amendment") each
holder of the Preferred Shares shall have the right at any time and from time to
time, at the option of such holder, to convert any or all Preferred Shares held
by such holder, for such number of fully paid, validly issued and nonassessable
shares ("COMMON SHARES") of Common Stock, free and clear of any liens, claims or
-2-
<PAGE>
encumbrances, as is determined by dividing (i) the Liquidation Preference times
the number of Preferred Shares being converted (the "CONVERSION AMOUNT"), by
(ii) the applicable Conversion Price determined as hereinafter provided in
effect on the Conversion Date. Immediately following such conversion, the rights
of the holders of converted Preferred Shares shall cease and the persons
entitled to receive the Common Shares upon the conversion of Preferred Shares
shall be treated for all purposes as having become the owners of such Common
Shares, subject to the rights provided herein to holders.
(a) MECHANICS OF CONVERSION. To convert Preferred Shares into
Common Shares, the holder shall give written notice ("CONVERSION NOTICE") to the
Corporation in the form of page 1 of Exhibit A hereto (which Conversion Notice
may be given by facsimile transmission no later than the Conversion Date)
stating that such holder elects to convert the same and shall state therein the
number of Preferred Shares to be converted and the name or names in which such
holder wishes the certificate or certificates for Common Shares to be issued
(the conversion date specified in such Conversion Notice shall be referred to
herein as the "CONVERSION DATE"). Either simultaneously with the delivery of the
Conversion Notice, or within one (1) Trading Day (as defined below) thereafter,
the holder shall deliver (which also may be done by facsimile transmission) page
2 to Exhibit A hereto indicating the computation of the number of Common Shares
to be received. As soon as possible after delivery of the Conversion Notice,
such holder shall surrender the certificate or certificates representing the
Preferred Shares being converted, duly endorsed, at the office of the
Corporation or, if identified in writing to all the holders by the Corporation,
at the offices of any transfer agent for such shares. The Corporation shall,
within 10 days after receipt of such Conversion Notice, issue and deliver to or
upon the order of such holder, against delivery of the certificates representing
the Preferred Shares which have been converted, a certificate or certificates
for the number of Common Shares to which such holder shall be entitled (with the
number of and denomination of such certificates designated by such holder), and
the Corporation shall at such time issue and deliver to such holder a
certificate or certificates for the number of Preferred Shares (including any
fractional shares) which such holder has not yet elected to convert hereunder
but which are evidenced in part by the certificate(s) delivered to the
Corporation in connection with such Conversion Notice. In lieu of delivering
physical certificates representing the Common Shares issuable upon conversion of
Preferred Shares, provided the Corporation's transfer agent is participating in
the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST")
program, upon request of the holder, the Corporation shall use its best efforts
to cause its transfer agent to electronically transmit the Common Shares
issuable upon conversion or exercise to the holder, by crediting the account of
the holder's prime broker with DTC through its Deposit Withdrawal Agent
Commission ("DWAC") system. The time periods for delivery described above shall
apply to the electronic transmittals through the DWAC system. The conversion
pursuant to this Section 4 shall be deemed to have been made immediately prior
to the close of business on the Conversion Date. The person or persons entitled
to receive the Common Shares issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such Common Shares at the close
of business on the Conversion Date.
The term "TRADING DAY" means a day on which there is trading
on the Nasdaq National Market or such other market or exchange on which the
Common Stock is then principally traded.
If a holder of Preferred Shares converts any of such holder's
Preferred Shares, the Corporation shall pay any United States documentary, stamp
or similar issue or transfer tax due on the issue of shares of Common Stock upon
the conversion. However, such holder shall pay any such tax that is due because
the shares of Common Stock are issued in a name other than such holder's name.
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CONVERSION PRICE. The Conversion Price applicable with respect
to the Preferred Shares (the "CONVERSION PRICE"), shall be $4.94,
subject to adjustment as set forth below.
(b) STOCK SPLITS; DIVIDENDS; ADJUSTMENTS.
(i) If the Corporation, at any time while the
Preferred Shares are outstanding, (A) shall pay a stock dividend or
otherwise make a distribution or distributions on any equity securities
(including instruments or securities convertible into or exchangeable
for such equity securities) in shares of Common Stock, (B) subdivide
outstanding Common Shares into a larger number of shares, or (C)
combine outstanding Common Stock into a smaller number of shares, then
the Conversion Price shall be adjusted by multiplying the then
effective Conversion Price by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding before such event
and the denominator of which shall be the number of shares of Common
Stock outstanding after such event. Any adjustment made pursuant to
this Section 4(b)(i) shall become effective immediately after the
record date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision or combination.
(ii) If the Corporation, at any time while the
Preferred Shares are outstanding, shall distribute to all holders of
Common Stock evidences of its indebtedness or assets or cash or rights
or warrants to subscribe for or purchase any security of the
Corporation or any of its subsidiaries (excluding those referred to in
Section 4(b)(i) above), then concurrently with such distributions to
holder of Common Stock, the Corporation shall distribute to holders of
the Preferred Shares, the amount of such indebtedness, assets, cash or
rights or warrants which the holders of Preferred Shares would have
received had they converted all their Preferred Shares into Common
Shares immediately prior to the record date for such distribution.
(iii) Whenever the Conversion Price is adjusted
pursuant to Section 4(b)(i) above or the Corporation makes a
distribution as described in Section 4(b)(ii) above, the Corporation
shall promptly mail to each holder of the Preferred Shares a notice
setting forth the Conversion Price after such adjustment and setting
forth a brief statement of the facts requiring such adjustment, or
setting forth a description of the distribution and the facts
surrounding same.
(iv) All calculations under this Section 4(b) shall
be made to the nearest cent or to the nearest 1/100th of a share, as
the case may be.
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(v) No adjustment in the Conversion Price shall
reduce the Conversion Price below the then par value of the Common
Stock.
(vi) The Corporation from time to time may reduce the
Conversion Price by any amount for any period of time if the period is
at least 20 trading days and if the reduction is irrevocable during the
period. Whenever the Conversion Price is reduced, the Corporation shall
mail to the holders of Preferred Shares a notice of the reduction. The
Corporation shall mail, first class, postage prepaid, the notice at
least 15 days before the date the reduced Conversion Price takes
effect. The notice shall state the reduced Conversion Price and the
period it will be in effect. A reduction of the Conversion Price does
not change or adjust the Conversion Price otherwise in effect for
purposes of Section 4(b)(i), (ii), or (iii).
(c) NOTICE OF RECORD DATE. In the event of any taking by the
Corporation of a record date of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, any security or right convertible into or
entitling the holder thereof to receive additional Common Shares, or any right
to subscribe for, purchase or otherwise acquire any shares of stock of any class
or any other securities or property, or to receive any other right, the
Corporation shall deliver to each holder of Preferred Shares at least 20 days
prior to the date specified therein, a notice specifying the date on which any
such record is to be taken for the purpose of such dividend, distribution,
security or right and the amount and character of such dividend, distribution,
security or right.
(d) ISSUE TAXES. The Corporation shall pay any and all United
States issue and other taxes, excluding any income, franchise or similar taxes,
that may be payable in respect of any issue or delivery of Common Shares on
conversion of Preferred Shares pursuant hereto. However, the holder of any
Preferred Shares shall pay any tax that is due because the Common Shares
issuable upon conversion thereof are issued in a name other than such holder's
name.
(e) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. Effective
at such time as the Corporation has obtained shareholder approval of the
Certificate Amendment, the Corporation shall at all times thereafter reserve and
keep available out of its authorized but unissued Common Stock, solely for the
purposes of effecting the conversion of the Preferred Shares, an amount of
Common Shares equal to the number of shares issuable upon conversion of the
Preferred Shares at the then applicable Conversion Price. The Corporation
promptly will take such corporate action as may, in the opinion of its outside
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose,
including without limitation engaging in best efforts to obtain the requisite
stockholder approval.
(f) FRACTIONAL SHARES. No fractional shares shall be issued
upon the conversion of any Preferred Shares. All Common Shares (including
fractions thereof) issuable upon conversion of more than one Preferred Share by
a holder thereof and all Preferred Shares issuable upon the purchase thereof
shall be aggregated for purposes of determining whether the conversion and/or
purchase would result in the issuance of any fractional share. If, after the
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aforementioned aggregation, the conversion and/or purchase would result in the
issuance of a fraction of a share of Common Stock, the Corporation shall, in
lieu of issuing any fractional share, either round up the number of shares to
the next highest whole number or, at the Corporation's option, pay the holder
otherwise entitled to such fraction a sum in cash equal to the fair market value
of such fraction on the Conversion Date (as determined in good faith by the
Board of Directors of the Corporation).
(g) REORGANIZATION, MERGER. In case of any reorganization or
any reclassification of the capital stock of the Corporation or any
consolidation or merger of the Corporation with or into any other corporation or
corporations or a sale or transfer of all or substantially all of the assets of
the Corporation to any other person, then, as part of such reorganization,
consolidation, merger, or transfer if the holders of shares of Common Stock
receive any publicly traded securities as part or all of the consideration for
such reorganization, consolidation, merger or sale, then it shall be a condition
precedent of any such event or transaction that provision shall be made such
that each Preferred Share shall thereafter be convertible into such new
securities at a conversion price and pricing formula which places the holders of
Preferred Shares in an economically equivalent position as they would have been
if not for such event. In addition to the foregoing, if the holders of shares of
Common Stock receive any non-publicly traded securities or other property or
cash as part or all of the consideration for such reorganization, consolidation,
merger or sale, then such distribution shall be treated to the extent thereof as
a distribution under Section 4(c) above and such Section shall also apply to
such distribution.
(h) CERTIFICATE FOR CONVERSION PRICE ADJUSTMENT. The
Corporation shall promptly furnish or cause to be furnished to each holder a
certificate prepared by the Corporation setting forth any adjustments or
readjustments of the Conversion Price pursuant to this Section 4.
(i) MANDATORY CONVERSION. At the election of the Corporation
upon written notice given to the holder of the Preferred Shares, the Preferred
Shares may be converted into Common Shares, at the then effective Conversion
Price, at any time after April 15, 2001, so long as both (A) on the conversion
date the market price of the Corporation's Common Stock exceeds the then
applicable Conversion Price, and (B) on such conversion date, the resale of the
Common Stock issuable upon such conversion has either been registered under the
Act, pursuant to a Registration Statement that is then effective, or the holder
of the Preferred Shares to be converted is then entitled, pursuant to Rule 144
promulgated under the Act, to sell the Common Stock issuable to him upon such
conversion.
5. VOTING RIGHTS. Each holder of Preferred Shares shall be entitled to
vote on all matters and, except as otherwise expressly provided herein, shall be
entitled to the number of votes equal to the largest number of full shares of
Common Stock into which such Preferred Shares could be converted at the record
date for such vote, or, if no record date is established, at the date such vote
is taken. In addition to all other requirements imposed by Delaware law, and all
other voting rights granted under the Corporation's Certificate of
Incorporation, the affirmative vote of a majority in interest of the
Corporation's outstanding Preferred Shares shall be necessary for (i) any
amendment, modification or repeal of this Certificate of Designations (whether
by merger, consolidation or otherwise), or (ii) any amendment to the Certificate
of Incorporation or by-laws of the Corporation that may amend or change or
adversely affect any of the rights, preferences, or privileges of the Preferred
Shares.
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6. NOTICES. The Corporation shall distribute to the holders of
Preferred Shares copies of all notices, materials, annual and quarterly reports,
proxy statements, information statements and any other documents distributed
generally to the holders of shares of Common Stock of the Corporation, at such
times and by such method as such documents are distributed to such holders of
such Common Stock.
7. REPLACEMENT CERTIFICATES. The certificate(s) representing the
Preferred Shares held by any holder of Preferred Shares may be exchanged by such
holder at any time and from time to time for certificates with different
denominations representing an equal aggregate number of Preferred Shares, as
reasonably requested by such holder, upon surrendering the same. No service
charge will be made for such registration or transfer or exchange. Upon receipt
by the Corporation of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of any stock certificate representing the Preferred
Shares and, in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it, or upon surrender and cancellation of such stock certificate
if mutilated, the Corporation will make and deliver a new stock certificate of
like tenor and dated as of such cancellation at no charge to the holder.
8. NO REISSUANCE. No Preferred Shares acquired by the Corporation by
reason of redemption, purchase, conversion or otherwise shall be reissued.
9. SEVERABILITY OF PROVISIONS. If any right, preference or limitation
of the Preferred Shares set forth in this Certificate of Designations (as this
Certificate of Designations may be amended from time to time) is invalid,
unlawful or incapable of being enforced by reason of any rule or law or public
policy, all other rights, preferences and limitations set forth in this
Certificate of Designations, which can be given effect without the invalid,
unlawful or unenforceable right, preference or limitation shall nevertheless
remain in full force and effect, and no right, preference or limitation herein
set forth be deemed dependent upon any such other right, preference or
limitation unless so expressed herein.
10. LIMITATIONS. Except as may otherwise be required by law, the
Preferred Shares shall not have any powers, preference or relative
participating, optional or other special rights
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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other than those specifically set forth in this Certificate of Designations (as
may be amended from time to time) or otherwise in the Certificate of
Incorporation of the Corporation.
Signed on April 15, 2000
MEDCOM USA, INCORPORATED
By: /S/ MARK BENNETT
------------------------------------
Name: Mark Bennett
Title: President
By: /S/ MICHAEL MALET
------------------------------------
Name: Michael Malet
Title: Secretary
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EXHIBIT A
(To be Executed by Holder
in order to Convert Preferred Shares)
CONVERSION NOTICE
FOR
SERIES D CUMULATIVE CONVERTIBLE PREFERRED STOCK
The undersigned, as a holder ("HOLDER") of shares of Series D Cumulative
Convertible Preferred Stock ("PREFERRED SHARES") of Medcom USA, Incorporated
(the "CORPORATION"), hereby irrevocably elects to convert _____________
Preferred Shares for shares ("COMMON SHARES") of common stock, par value $0.01
per share (the "COMMON STOCK"), of the Corporation according to the terms and
conditions of the Certificate of Designations for the Preferred Shares as of the
date written below. The undersigned hereby requests that share certificates for
the Common Shares to be issued to the undersigned pursuant to this Conversion
Notice be issued in the name of, and delivered to, the undersigned or its
designee as indicated below. No fee will be charged to the Holder of Preferred
Shares for any conversion. Capitalized terms used herein and not otherwise
defined shall have the meanings ascribed thereto in the Certificate of
Designations.
Conversion Date: __________________________
Conversion Information: NAME OF HOLDER:_____________________________
By:__________________________________
Print Name:__________________________
Print Title:_________________________
Print Address of Holder:
____________________________________________
____________________________________________
Issue Common Stock to:______________________
at:_________________________________________
____________________________________________
IF COMMON SHARES ARE TO BE ISSUED TO A PERSON OTHER THAN HOLDER, HOLDER'S
SIGNATURE MUST BE GUARANTEED BELOW:
SIGNATURE GUARANTEED BY:
THE COMPUTATION OF NUMBER OF COMMON SHARES TO BE RECEIVED IS SET FORTH ON PAGE 2
OF THE CONVERSION NOTICE.
PAGE 1 OF CONVERSION NOTICE
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PAGE 2 TO CONVERSION NOTICE DATED _________________ FOR: _______________________
(CONVERSION DATE) (NAME OF HOLDER)
COMPUTATION OF NUMBER OF COMMON SHARES TO BE RECEIVED
-----------------------------------------------------
Number of Preferred Shares converted: ______________ shares
Number of Preferred Shares converted x Liquidation Preference $
TOTAL DOLLAR AMOUNT CONVERTED $
=============
CONVERSION PRICE $
Number of Common Shares = Total dollar amount converted
----------------------------- = -------------
Converted Price
NUMBER OF COMMON SHARES =
If the conversion is not being settled by DTC, please issue and deliver _____
certificate(s) for Common Shares in the following amount(s):
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
If the Holder is receiving certificate(s) for Preferred Shares upon the
conversion, please issue and deliver _____ certificate(s) for Preferred Shares
in the following amounts:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
