PREFERRED STOCK PURCHASE AGREEMENT dated as of July 30, 1996, is entered into
by and among The Standish Care Company, a Delaware corporation (the "Company"),
and Abraham D. Gosman, an individual with an office at 777 South Flagler Drive,
West Palm Beach, Florida, 33401 (referred to hereinafter as the "Purchaser").
In consideration of the mutual promises and covenants contained in this
Agreement, the parties hereto agree as follows:
1. Authorization and Sale of Shares.
1.1 Authorization. The Company has, or before the Closing (as defined in
Section 2) will have, duly authorized the Series B Cumulative Convertible
Preferred Stock, $.01 par value per share (the "Series B Preferred Stock"),
having the rights, restrictions, privileges and preferences set forth in the
Certificate of Designation attached hereto as Exhibit A (the "Certificate").
The Board of Directors of the Company has, or on or before the Closing will
have, adopted the Certificate and filed the Certificate with the Secretary of
State of the State of Delaware.
1.2 Sale of Shares. Subject to the terms and conditions of this
Agreement, at the Closing the Company will sell and issue to the Purchaser,
and the Purchaser will purchase, One Hundred (100) shares of Series B
Preferred Stock (collectively, the "Shares") for a purchase price of $14,000
2. The Closing. The closing of the sale and purchase of the Shares under
this Agreement (the "Closing") shall take place at the offices of Nutter,
McClennen & Fish, LLP, One International Place, Boston, Massachusetts at 1:00
P.M. on July 30, 1996. At the Closing, the Company will deliver to the
Purchaser a certificate for the 100 Shares, registered in the name of the
Purchaser, and the purchase price shall be paid by the Purchaser by wire
transfer, certified or bank check, or other method acceptable to the Company.
The date of the Closing is hereinafter referred to as the "Closing Date." If
at the Closing any of the conditions specified in Section 5 shall not have
been fulfilled, the Purchaser shall, at his election, be relieved of all of
his obligations under this Agreement without thereby waiving any other rights
he may have by reason of such failure or such non-fulfillment.
3. Representations of the Company. Reference is made to the Agreement
and Plan of Merger dated July 3, 1996 (the "Merger Agreement") by and among
the Company, twelve of its subsidiaries and twelve other named corporations.
Except as disclosed by the Company in the Standish Disclosure Schedule
referred to in the Merger Agreement, the Company hereby incorporates herein
by reference all of its representations and warranties contained in the
Merger Agreement and authorizes the Purchaser to rely thereon as though such
representations and warranties were fully set forth herein. In addition, the
Company hereby represents and warrants to the Purchaser as follows:
3.1 Issuance of Shares. The issuance, sale and delivery of the Shares in
accordance with this Agreement, and the issuance and delivery of the shares
of Common Stock issuable upon conversion of the Shares or exercise of the
"Warrants" (as such term is hereinafter defined), have been, or will be on or
prior to the Closing, duly authorized and reserved for issuance, as the case
may be, by all necessary corporate action on the part of the Company. The
shares of Common Stock issuable upon conversion of the Shares or exercise of
the Warrants, when issued upon such conversion or exercise, will be duly and
validly issued, fully paid and non-assessable.
3.2 Authority for Agreement. The execution, delivery and performance by
the Company of this Agreement and the Registration Rights Agreement (as
defined in Section 5.8), have been duly authorized by all necessary corporate
action, and this Agreement and the Registration Rights Agreement have been
duly executed and delivered by the Company. This Agreement and the
Registration Rights Agreement constitute valid and binding obligations of the
Company enforceable in accordance with their respective terms. The execution
of and performance of the transactions contemplated by this Agreement and the
Registration Rights Agreement and compliance with their provisions by the
Company will not violate any provision of law and will not conflict with or
result in any breach of any of the terms, conditions or provisions of, or
constitute default under, its Certificate of Incorporation or By-Laws or any
indenture, lease, agreement or other instrument to which the Company is a
party or by which it or any or its properties is bound, or any decree,
judgment, order, statute, rule or regulation applicable to the Company or its
3.3 Governmental Consents. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with,
any governmental authority is required on the part of the
Company in connection with the execution, delivery and performance of this
Agreement, the offer, issuance, sale and delivery of the Shares or the
Warrants, or the other transactions to be consummated at the Closing, as
contemplated by this Agreement, except such filings as shall have been made
prior to and shall be effective on and as of the Closing. Based in part upon
the representations made by the Purchaser in Section 4 of this Agreement, the
offer and sale of the Shares and the Warrants to the Purchaser will be in
compliance with applicable federal and state securities laws.
3.4 Absence of Changes. Since July 3, 1996, there has not been any
material adverse change in the assets, liabilities, financial condition,
operations or prospects of the Company or any event or condition of any
character that has affected, or may affect, materially and adversely, the
Company's business or prospects.
3.5 Disclosures. Neither this Agreement nor any exhibit hereto, nor any
report, certificate or instrument furnished to the Purchaser or his counsel
in connection with the transaction contemplated by this Agreement, when read
together, contains or will contain any material misstatement of fact or omits
or will omit to state a material fact necessary to make the statements
contained herein or therein, in light of the circumstances under which they
were made, not misleading. The Company knows of no information or fact which
has or would have a material adverse effect on the financial condition,
business or prospects of the Company which has not been disclosed to the
4. Representations of the Purchaser.
The Purchaser represents and warrants to the Company as follows:
4.1 Investment. Such Purchaser is acquiring his Shares and his Warrants,
and the shares of Common Stock into which the Shares may be converted or the
Warrants may be exercised, for his own account for investment and not with a
view to, or for sale in connection with, any distribution thereof, nor with
any present intention of distributing or selling the same; and such Purchaser
has no present or contemplated agreement, undertaking, arrangement,
obligation, indebtedness or commitment providing for the disposition thereof.
4.2 Authority. Such Purchaser has full power and authority to enter into
and to perform this Agreement in accordance with its terms.
4.3 Experience. Such Purchaser has sufficient business and financial
knowledge and experience so as to be capable of evaluating the merits and
risks of his its investment in the Company.
4.4 Accredited Investor. The Purchaser has reviewed the representations
concerning the Company contained in this Agreement and the Merger Agreement,
and has made such inquiry as the Purchaser has desired concerning the
Company, its business, assets, liabilities, risks and personnel. Officers of
the Company have made available to the Purchaser any and all written
information which the Purchaser has requested and have answered inquiries
made by the Purchaser. The Purchaser is an "accredited investor" within the
meaning of Rule 501(a) under the Securities Act of 1933, as amended (the
"Securities Act"), and understands that the Company has relied upon the
Purchaser being an accredited investor in deciding to proceed with the
transactions contemplated hereby, and in ascertaining the requirements of law
applicable to the issuance and the sale of the Shares and Warrants, and the
issuance of shares of Common Stock upon conversion of the Shares or upon
exercise of the Warrants; provided, however, that the Purchaser shall have
certain rights to registration of such shares of Common Stock pursuant to the
Registration Rights Agreement.
5. Conditions to Purchase of Shares.
The obligation of the Purchaser to purchase the Shares at the Closing is
subject to the fulfillment, or the waiver by the Purchaser, of the following
conditions on or before the Closing Date:
5.1 Accuracy of Representations and Warranties. Each representation and
warranty contained in Section 3 shall be true on and as of the Closing Date
with the same effect as though such representation and warranty had been made
on and as of that date.
5.2 Performance. The Company shall have performed and complied with all
agreements and conditions contained in this Agreement required to be
performed or complied with by the Company prior to or at the Closing.
5.3 Opinion of Counsel. The Purchaser shall have received an opinion
from Robinson & Cole, counsel for the Company, dated the Closing Date,
addressed to the Purchaser, and satisfactory in form and substance to the
Purchaser, to the effect that:
(a) The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has full corporate power
and authority to conduct its business as presently conducted, to enter into
and perform this Agreement and the Registration Rights Agreement, and to
carry out the transactions contemplated herein and therein. The Company is
duly qualified to do business as a foreign corporation in every jurisdiction
in which the failure to so qualify would have a material adverse effect on
the operations or financial condition of the Company.
(b) The authorized capital stock of the Company consists of: 30,000,000
shares of Common Stock, $.01 par value, of which 3,697,366 shares are
outstanding; 345,268 shares of Series A Cumulative Convertible Preferred
Stock, par value $.01 per share. of which 29,000 shares are outstanding and,
subject to the filing of the Certificate with the Secretary of State of the
State of Delaware, 100 shares of Series B Preferred Stock to be issued to the
Purchaser under this Agreement. All issued and outstanding shares of the
Company's Common Stock have been duly authorized and validly issued and are
fully paid and non-assessable and free of preemptive rights.
(c) The issuance, sale and delivery of the Shares by the Company in
accordance with this Agreement, and the issuance and delivery of the shares
of Common Stock issuable upon conversion of the Shares and exercise of the
Warrants, have been duly authorized and reserved for issuance, as the case
may be, by all necessary corporate action on the part of the Company, and the
Shares when so issued, sold and delivered against payment therefor in
accordance with the provisions of this Agreement, and the shares of Common
Stock issuable upon conversion of the Shares and upon exercise of the
Warrants, when issued upon such conversion or exercise, will be duly and
validly issued, fully paid and non-assessable.
(d) The execution, delivery and performance by the Company of this
Agreement and the Registration Rights Agreement have been duly authorized by
all necessary corporate action, and this Agreement and the Registration
Rights Agreement have been duly executed and delivered by the Company. This
Agreement and the Registration Rights Agreement constitute valid and binding
obligations of the Company, enforceable in accordance with their respective
terms, subject as to enforcement of remedies to applicable bankruptcy,
insolvency, reorganization or similar law affecting generally the enforcement
of creditors' rights and subject to a court's discretionary authority with
respect to the granting of a decree ordering specific performance or other
equitable remedies. The execution, delivery and performance of this Agreement
and the Registration Rights Agreement, and the offer, issue and sale of the
Shares hereunder, will not conflict with, or result in any breach of any of
the terms, conditions, or provisions of, or constitute a default under, the
Restated Certificate of Incorporation, as amended or By-Laws of the Company,
or any indenture, lease, agreement, or other instrument known to such counsel
to which the Company is a party or by which it or any of its properties are
bound, or any decree, judgment or order specifically naming the Company and
known to such counsel.
(e) Except as obtained and in effect at the Closing, no consent, approval,
order or authorization of, or registration, qualification, designation,
declaration, or filing with, any governmental authority (other than filings
required to be made after the Closing under applicable federal and state
securities laws) is required on the part of the Company in connection with
the execution and delivery of this Agreement, or the offer, issue, sale and
delivery of the Shares, or the other transactions to be consummated at the
Closing pursuant to this Agreement.
(f) Based on the representations of the Purchaser in Section 4 as to
certain factual matters, the offer and sale of the Shares pursuant to this
Agreement are exempt from the registration requirements of the Securities Act
and the securities registration requirements of the Massachusetts Uniform
5.4 Certificates and Documents. The Company shall have delivered to
counsel to the Purchaser:
(i) A copy of the Restated Certificate of Incorporation of the Company, as
amended and in effect prior to the Closing Date, certified by the Secretary
of State of Delaware;
(ii) Certificate, as of the most recent practicable date, as to the legal
existence of the Company issued by the Secretary of State of Delaware;
(iii) By-Laws of the Company, certified by its Assistant Secretary as of
the Closing Date; and
(iv) Resolutions of the Board of Directors of the Company, authorizing and
approving all matters in connection with this Agreement and the transactions
contemplated hereby, certified by the Assistant Secretary of the Company as
of the Closing Date.
5.5 Performance by The Purchaser. The Purchaser shall have performed his
obligations under Section 1.2 of this Agreement.
5.6 Compliance Certificate. The Company shall have delivered to the
Purchaser a certificate, executed by the Chief Financial Officer of the
Company, dated as of the Closing Date, certifying to the fulfillment of the
conditions specified in subsections 5.1 and 5.2 of this Agreement.
5.7 Other Matters. All corporate and other proceedings in connection
with the transactions contemplated at the Closing by this Agreement and all
documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to the Purchaser and his counsel, and the
Purchaser and his counsel shall have received all such counterpart originals
or certified or other copies of such documents as they may reasonably
5.8 Registration Rights Agreement. The Registration Rights Agreement
attached hereto as Exhibit B (the "Registration Rights Agreement") shall have
been executed and delivered by the Company and the Purchaser.
6. Covenants of the Company.
(a) Without limiting any rights otherwise granted pursuant to law, the
Purchaser shall have the right, subject to the confidentiality provisions set
forth in subsection (b) below, upon reasonable notice and during normal
business hours, to inspect (and copy if desired) all books and records of the
Company, whether financial, corporate, sales related (including projections)
or otherwise, to discuss the Company's business and finances with its
officers and other employees and to visit and inspect the facilities and
properties owned or leased by the Company.
(b) Purchaser shall keep confidential and not disclose, any non-public
information concerning the Company disclosed to or acquired by the Purchaser
pursuant to the provisions of this Agreement or the Registration Rights
Agreement (collectively, "Confidential Information"), and shall employ such
Confidential Information only in connection with his interests as a holder of
the Shares, the Warrants or the shares of Common Stock issuable upon
conversion of the Shares or exercise of the Warrants.
6.2 Financial Statements and Other Information.
(a) The Company will deliver to the Purchaser with reasonable promptness,
such information and data regarding the Company as the Purchaser may from
time to time reasonably request.
(b) The Company will deliver to the Purchaser such notices, information
and data with respect to the Company as the Company delivers to the holders
of its Common Stock generally.
6.3 Material Changes and Litigation. The Company will promptly notify
the Purchaser of any material adverse change in the business, properties,
assets or condition, financial or otherwise, of the Company and of any
litigation or governmental proceeding or investigation pending or, to the
best knowledge of the Company, threatened against the Company or against any
officer, director, key employee or principal stockholder of the Company
materially adversely affecting (or which, if adversely determined, would
materially adversely affect) its present or proposed business, properties,
assets or condition, taken as a whole.
6.4 Warrants. For $10.00, the Company will sell to the Purchaser, and
the Purchaser will purchase, the "Warrants," in the form attached hereto as
Exhibit C, to purchase an aggregate of 400,000 shares of Common Stock for an
exercise price of $4.16 per share.
7. Successors and Assigns. Except as provided in Section 12, the
provisions of this Agreement shall be binding upon, and inure to the benefit
of, the respective successors, assigns, heirs, executors and administrators
of the parties hereto.
8. Survival of Representations and Warranties. All agreements,
representations and warranties contained herein shall survive the execution
and delivery of this Agreement and the closing of the transactions
9. [Intentionally Omitted]
10. Notices. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be delivered by hand or
mailed by first class certified or registered mail, return receipt requested,
If to the Company, at 6 New England Executive Park, Burlington, MA 01803
Attention: President, or at such other address or addresses as may have been
furnished in writing by the Company to the Purchaser, with a copy to David A.
Garbus, Esq., Robinson & Cole, One Boston Place, Boston, MA 02108;
If to the Purchaser, at their respective addresses set forth above, or at
such other addresses or addresses as may have been furnished to the company
in writing by such Purchaser, with a copy to Michael J. Bohnen, Esq., Nutter,
McClennen & Fish, LLP, One International Place, Boston, MA 02110.
Notices provided in accordance with this Section 10 shall be deemed
delivered upon personal delivery or on the second business day after deposit
in the mail.
11. Brokers. The Company and the Purchaser (i) represents and warrants
to the other party hereto that he or it has retained no finder or broker or
taken any other action that would result in the payment of any brokerage fee
or sales commission in connection with the transactions contemplated by this
Agreement, and (ii) will indemnify and save the other party harmless from and
against any and all claims, liabilities or obligations with respect to
brokerage or finders' fees or commissions, or consulting fees in connection
with the transactions contemplated by this Agreement asserted by any person
on the basis of any statement or representation alleged to have been made by
such indemnifying party.
12. Entire Agreement. This Agreement and the Registration Rights
Agreement embody the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and thereof and supersede
all prior agreements and understandings relating to such subject matter.
13. Amendments and Waivers. Except as otherwise expressly set forth in
this Agreement, any term of this Agreement may be amended and the observance
of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) with the
written consent of the Company and the holders of at least 51% of the
Registrable Shares (as defined in the Registration Rights Agreement). Any
amendment or waiver effected in accordance with this Section 13 shall be
binding upon each holder of any Series B Preferred Stock and any Warrants
(including shares of Common Stock into which such Shares have been converted
and for which such Warrants shall have been exercised), each future holder of
all such securities and the Company. No waivers of or exceptions to any term,
condition or provision of this Agreement, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
term, condition or provision.
14. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15. Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the substantive laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands and
seals as of the day and year first above written.
THE STANDISH CARE COMPANY:
By: /s/ Michael J. Doyle
Michael J. Doyle,
Chairman and Chief Execuitve Officer
Abraham D. Gosman
c/o CareMatrix Corporation
197 First Avenue
Needham, MA 02194