AGREEMENT OF STOCK PURCHASE AND PLAN OF RECAPITALIZATION
Agreement of Stock Purchase and Plan of Recapitalization dated
November 26, 1996, by and among ADVANCED MEDICAL, INC., a Delaware Corporation
("AM"), DECISIONS INCORPORATED, a Delaware corporation ("Decisions") and Jeffry
M. Picower, an individual residing at 1410 South Ocean Boulevard, Palm Beach, FL
WHEREAS, AM and Mr. Picower have entered into a letter agreement (the
"Letter Agreement") pursuant to which Mr. Picower agreed, among other things,
directly or through an affiliate (the "Designee"), to: (i) purchase AM common
stock from AM at a price of $3.00 per share for an aggregate purchase price of
$40 million (the "Takedown Amount") as a means of providing equity financing to
AM in connection with AM acquiring a company and entering into a merger
agreement (the "Merger Agreement") in connection therewith (the
"Transaction")(the transaction described in this clause (i) being referred to as
the "Stock Purchase"); and (ii) pursuant to a written plan of recapitalization,
cause the transfer of three outstanding notes (described in Section 4.5 below)
(the "Notes") held by Decisions to AM in exchange for shares (the "Shares")of AM
common stock, par value $.01 per share ("Common Stock") in a transaction that
will qualify as a recapitalization within the meaning of Section 368(a)(1)(E) of
the Internal Revenue Code of 1986, as amended (the "Code")(the transaction
described in this clause (ii) being referred to as the "Plan of
WHEREAS, the parties hereto agree that the Stock Purchase provided for
herein constitutes the purchase for fair market value of AM common stock by Mr.
WHEREAS, the parties hereto agree that the Plan of Recapitalization
provided for herein constitutes an exchange of equal values and is fair to AM
and Decisions; and
WHEREAS, Decisions has entered into an agreement with Mr. Picower
pursuant to which Decisions assumed all of the obligations and was assigned all
of the rights of Mr. Picower under the Letter Agreement and Mr. Picower has
designated Decisions as the Designee and Decisions agrees to act as the Designee
WHEREAS, AM and Mr. Picower now desire to formalize the terms of the
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereto, desiring to be legally bound, do hereby agree as follows:
1. ADDITIONAL FINANCING. Mr. Picower hereby agrees to purchase or
cause the Designee to purchase Common Stock from AM at a price of $3.00 per
share at an aggregate purchase price equal to the Takedown Amount which amount
will be provided by Mr. Picower or Designee to AM in order for AM to pay: (i)
the purchase price in connection with the Transaction; (ii) additional working
capital requirements resulting from the Transaction; and (iii) related
transaction expenses and the cost of other transactions currently contemplated
(collectively, the "Additional Financing").
2. PLAN OF RECAPITALIZATION.
2.1 EXCHANGE. The parties hereto agree that the Plan of
Recapitalization constitutes a plan of reorganization within the meaning of
Section 368 of the Code and the Treasury Regulations promulgated thereunder
whereby Decisions will transfer the Notes to AM, and AM, in exchange therefor,
will transfer 29,416,086 shares of Common Stock to Decisions in a transaction
qualifying as a recapitalization under Section 368(a)(1)(E) of the Code.
2.2 INTEREST. AM agrees that it will pay to Decisions, in cash,
all accrued and unpaid interest on the Notes through the date of Closing.
3. CLOSING. The closing (the "Closing") of the transactions
contemplated hereby will take place at the offices of Gordon Altman Butowsky
Weitzen Shalov & Wein, 114 West 47th Street, New York, New York 10036 or such
other place as the parties may agree, contemporaneously with the closing of the
Transaction. At the Closing, Decisions shall deliver the Takedown Amount and
the Notes to AM and AM shall deliver a stock certificate representing the Shares
4. REPRESENTATIONS AND WARRANTIES OF MR. PICOWER and Decisions. Mr.
Picower and Decisions (collectively, the "Picower Parties") hereby jointly and
severally represent and warrant to AM that:
4.1 AUTHORIZATION; BINDING AGREEMENT. This Agreement
constitutes the legal, valid and binding agreement of each of the Picower
Parties, enforceable against each in
accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors' rights generally or by general equitable
principles. No restrictions (whether legal capacity or otherwise) exist with
respect to any Picower Parties' right and ability to enter into this Agreement
and perform all of its obligations hereunder.
4.2 ORGANIZATION. Decisions is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Decisions has the requisite corporate power to conduct its businesses as it is
currently conducted and is duly qualified to do business in each jurisdiction in
which the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification necessary, except where the lack of
such qualification would not in the aggregate have a material adverse effect on
the business, results of operations or financial condition of Decisions taken as
4.3 INVESTMENT INTENT. Decisions is acquiring the Shares
hereunder solely for the purpose of investment for its own account and not with
a view to, or for sale in connection with, the "distribution," as such term is
used in Section 2(11) of the Securities Act of 1933, as amended (the "1933
Act"), of any of the Shares in violation of the 1933 Act or any applicable state
securities laws. Decisions understands that the Shares have not been
registered under the 1933 Act or any applicable state securities laws and that
it will not be legally entitled to offer for sale, sell, or otherwise transfer
any of the Shares unless they have been registered under the 1933 Act and
applicable state securities laws or unless an exemption from registration is
available for such offer, sale, or other transfer under the 1933 Act and
applicable state securities laws.
4.4 FEES. Neither Mr. Picower nor his affiliates have paid or
become obligated to pay any fee or commission to any investment banker, broker,
finder or intermediary in connections with the transactions contemplated by this
4.5 NOTES. Decisions owns, and at the Closing will own, the
Notes free and clear of all liens, pledges, encumbrances, security interests or
other claims of any nature or kind. The Notes consist of (i) a $6 million 7%
convertible note issued by AM due January 4, 2001, convertible into
6,024,096 shares of AM common stock; (ii) a $6.5 million 9% convertible note
issued by AM due January 4, 2001, convertible into 10,534,848 shares of AM
common stock; and (iii) a $25 million 7% convertible note issued by AM due
January 4, 2001, convertible into 9,523,809 shares of AMI common stock.
4.6 AUTHORITY RELATIVE TO THIS AGREEMENT. Decisions has all
necessary corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Decisions and the consummation by Decisions of the
transactions contemplated hereby have been duly and validly authorized by its
Board of Directors and no other corporate proceedings on the part of Decisions
are necessary to authorize this Agreement or to consummate the transactions so
contemplated. This Agreement has been duly and validly executed and delivered
by Decisions and, constitutes a valid and binding obligation of Decisions,
enforceable against Decisions in accordance with its terms.
5. REPRESENTATIONS AND WARRANTIES OF AM. AM represents and warrants
to Mr. Picower that:
5.1 ORGANIZATION. AM is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. AM has
the requisite corporate power to conduct its businesses as it is currently
conducted and is duly qualified to do business in each jurisdiction in which the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification necessary, except where the lack of such
qualification would not in the aggregate have a material adverse effect on the
business, results of operations or financial condition of AM taken as a whole.
5.2 AUTHORITY RELATIVE TO THIS AGREEMENT. AM has all necessary
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by AM and the consummation by AM of the transactions contemplated
hereby have been duly and validly authorized by its Board of Directors and no
other corporate proceedings on the part of AM are necessary to authorize this
Agreement or to consummate the transactions so contemplated. This Agreement has
been duly and validly executed and delivered by AM and
constitutes a valid and binding agreement of AM, enforceable against AM in
accordance with its terms.
5.3 VALIDITY. The Shares to be issued to Decisions pursuant to
this Agreement will be duly authorized, validly issued, fully paid and non-
assessable and free of preemptive rights.
6. TERMINATION. If: (I) AM does not complete the Transaction and
request that Mr. Picower provide or direct Designee to provide the Additional
Financing as contemplated above, prior to June 30, 1997; or (ii) the Merger
Agreement is terminated in accordance with its terms, the obligations hereunder
will terminate unless this limitation is waived by the parties hereto in writing
7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained herein shall survive the closing of the transactions
8.1 SEVERABILITY AND GOVERNING LAW. Should any section or any
part of a section within this Agreement be rendered void, invalid or
unenforceable by any court of law for any reason, such provision shall be
construed to be enforceable to the maximum extent possible, and such invalidity
or unenforceability shall not void or render invalid or unenforceable any other
section or part of a section in this Agreement. This Agreement shall be
construed and governed by the laws of the State of New York.
8.2 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
8.3 SECTION HEADINGS. Section titles or captions contained in
this Agreement are inserted as a matter of convenience and for reference
purposes only, and in no way define, limit, extend or describe the scope of this
Agreement or the intent of any provision hereof.
8.4 SINGULAR AND PLURAL, ETC. Whenever the singular number is
used herein and where required by the context, the same shall include the
plural, and the neuter gender shall include the masculine and feminine genders
and vice versa.
8.5 SUCCESSORS AND ASSIGNS. All rights, covenants and
agreements of the parties contained in this Agreement shall, except as otherwise
provided herein, be binding upon and inure to the benefit of their respective
successors and assigns.
8.6 THIRD PARTY BENEFICIARIES. Except as otherwise provided
herein, nothing in this Agreement is intended to, or shall be construed so as to
create any third party beneficiary in this Agreement or otherwise confer any
rights upon any person, firm or corporation that is not a party hereto.
IN WITNESS WHEREOF, the parties have hereunto set their hands as of
the date first above written.
ADVANCED MEDICAL, INC.
By: /s/ Joseph W. Kuhn
Name: Joseph W. Kuhn
By: /s/ Jeffry M. Picower
Name: Jeffry M. Picower
Title: C of B
/s/ Jeffry M. Picower
Jeffry M. Picower