Stock Purchase Agreement - Medical Advisory Systems Inc. and SACNAS International
STOCK PURCHASE AGREEMENT
AGREEMENT (this "Agreement'), dated as of July 29, 1999, by and
between MEDICAL ADVISORY SYSTEMS, INC. (the "Seller") and SACNAS INTERNATIONAL
(the "Purchaser").
WHEREAS, the Seller and the Purchaser entered into a binding letter
agreement (the "Letter Agreement") dated March 8, 1999, pursuant to which (i)
the Seller agreed to sell to the Purchaser 250 shares (the "Shares") of the
issued and outstanding common stock, $100 par value, of ASSISTANCE SERVICES OF
AMERICA, INC. (the "Company"), which shares constitute 50% of the total issued
and outstanding common stock of the Company; (ii) the Purchaser forgave as of
the date of the Letter Agreement the remaining balance, in the approximate
amount of $250,000 (two hundred fifty thousand U.S. dollars), of a loan (the
"Loan") made by the Purchaser to the Seller in the original principal amount of
$500,000 (five hundred thousand U.S. dollars); (iii) the Seller paid to the
Purchaser accrued interest on the Loan to the date of forgiveness of the Loan in
the amount of $57,000 (fifty seven thousand U.S. dollars) and Seller has no
further obligations for repayment of the Loan or under the Loan Agreement dated
September 10, 1996; (iv) the Seller redeemed 295,378 (two hundred ninety-five
thousand three hundred seventy-eight) shares of the common stock of the Seller
owned by the Purchaser for the consideration of a payment by the Seller to the
Purchaser of FrF 700,755 (seven hundred thousand seven hundred fifty-five French
francs) being approximately equivalent to $164,000 (one hundred sixty-four
thousand U.S. dollars); (v) each of Thomas M. Hall and Ronald W. Pickett
resigned as an officer and as a director of the Company and Jean-Paul Babey
resigned as a director of the Seller, effective March 8, 1999; (vi) the joint
venture between the Seller and the Purchaser terminated, effective March 8,
1999, and neither the Seller nor the
<PAGE>
Purchaser has any obligation to the other respecting such joint venture,
including without limitation obligations under that certain joint venture
contract between the Purchaser and the Seller dated June 1993 and any amendments
thereto (collectively, the "Joint Venture Agreement"); (vii) the Purchaser has
paid to the Seller a $164,000 Transition fee to compensate the Seller for
unaccountable expenses and costs associated with the transition of business
contemplated by the parties; and (viii) the Seller and the Purchaser agreed to
certain transitional relationships prior to and subsequent from July 30, 1999,
which relationships shall be the subject of a separate services agreement (the
"Services Agreement") to be negotiated in good faith by the Seller and the
Purchaser between the Closing Date (as defined below) and July 30, 1999;
WHEREAS, the Seller and the Purchaser timely completed on or about
March 8, 1999 all actions, requirements and obligations to effectuate and
complete the transactions described in subparagraphs (ii), (iii), (iv), (v),
(vi) and (vii) above, all in accordance with the terms of the Letter Agreement;
WHEREAS, by entering into this Agreement, the Seller and the Purchaser
shall complete all actions, requirements and obligations to effectuate the
transaction described in subparagraph (i);
NOW, THEREFORE, in consideration of the covenants and mutual
agreements herein set forth and in reliance upon the representations and
warranties contained herein, the parties do hereby agree as follows:
Section 1. Sale and Purchase of the Shares.
Subject to all of the terms and conditions hereof, the Seller hereby
agrees to deliver to the Purchaser on the date of the Closing (as hereinafter
defined) the Shares, free and
-2-
<PAGE>
clear of all liens, and the Purchaser hereby agrees to pay to the Seller the
purchase price in accordance with Section 2 hereof.
Section 2. Purchase Price.
The purchase price for the Shares shall be $25,000 (twenty-five
thousand U.S. dollars) (the "Purchase Price"), payable by delivery to the Seller
at the Closing of certified or bank cashier's checks made payable to the order
of the Seller (the "Closing Payment").
Section 3. The Closing.
The delivery of and payment for the Shares will be effected at a
closing (the "Closing") to be held at the Company's offices in Owings, Maryland
on July 30, 1999, or at such other place and date as shall be agreed upon by the
parties hereto (the "Closing Date"). At the Closing:
(a) the Seller shall deliver to the Purchaser a stock certificate or
certificates for the Shares, duly endorsed in blank or with blank stock powers
attached and with the requisite stock transfer stamps, if any, attached; and
(b) the Purchaser shall deliver to the Seller the Closing Payment.
Section 4. Representations and Warranties.
The Seller hereby makes the following representations and warranties
to the Purchaser:
(a) Ownership of Shares. The Seller is the sole and exclusive
registered and beneficial owner of the Shares free and clear of all liens. The
Shares are fully paid and nonassessable. No other person, firm or corporation
has any interest whatsoever in any of the
-3-
<PAGE>
Shares. The sale of the Shares vests absolute title to the Shares in the
Purchaser directly, free of any liens, options, agreements or conditions.
(b) Authority and Enforceability. The Seller has the full right,
corporate power and authority to enter into and perform its obligations under
this Agreement, and to transfer the Shares to the Purchaser, free and clear of
any statutory, contractual or other limitations. This Agreement constitutes a
valid and legally binding obligation of the Seller, enforceable against Seller
in accordance with is terms.
(c) Absence of Litigation. No action, suit or proceeding before any
court or governmental body or authority, pertaining to the transactions
contemplated by this Agreement or to its consummation has been instituted or
threatened.
(d) Capital of Company. The Company has an authorized capital of
1,500,000 shares of common stock, par value $100 per share, of which 500 shares
are issued and outstanding. The Shares represent the Seller's entire interest in
the Company.
The Purchaser hereby represents and warrants to the Seller:
(aa) Authority and Enforceability. The Purchaser has all requisite
power and the full right and authority to enter into and perform its obligations
under this Agreement. The Purchaser has taken all necessary action on its part
as may be required under applicable laws, under its constituent documents, or
otherwise to authorize the execution, delivery and carrying out of the Agreement
on its behalf. This Agreement constitutes a valid and legally binding obligation
of the Purchaser enforceable against it in accordance with its terms.
-4-
<PAGE>
Section 5. Conditions to Purchaser's Obligations.
The obligations of the Purchaser to proceed with the Closing and to
consummate the transactions contemplated hereby shall be subject to the
fulfillment at or before the Closing of the following conditions precedent:
(a) The Purchaser shall have completed to its sole satisfaction its
due diligence investigation in connection with the transactions contemplated by
this Agreement.
(b) All representations and warranties by the Seller contained in this
Agreement shall be true and correct in all material respects at and as of the
Closing as though such representations and warranties were made at and as of
that time.
(c) As of Closing, there shall not be pending or threatened before any
court or governmental body or authority any action, suit, proceeding, injunction
or other order challenging, restraining or prohibiting the transactions
contemplated by this Agreement.
Section 6. Conditions to Seller's Obligations.
The obligations of the Seller to proceed with the Closing and to
consummate the transactions contemplated hereby shall be subject to the
fulfillment at or before the Closing of the following conditions precedent:
(a) All representations and warranties by the Purchaser contained in
this Agreement shall be true and correct in all material respects at and as of
the Closing as though such representations and warranties were made at and as of
that time.
-5-
<PAGE>
(b) As of Closing, there shall not be pending or threatened before any
court or governmental body or authority any action, suit, proceeding, injunction
or other order challenging, restraining or prohibiting the transactions
contemplated by this Agreement.
Section 7. Additional Obligations.
(a) As promptly as practicable, but in all events within fifteen (15)
days after the execution of this Agreement, the Seller will return to the
Company all documents, files or copies related to the Mondial Assistance
International Network (the "Network"), it being understood that with the
Purchaser's express prior written consent, the Seller may retain documents
reasonably necessary for the future provision of services by the Seller to the
Company. Except as expressly provided in this Agreement or in any Services
Agreement that the parties may hereafter execute or deliver, the Seller hereby
agrees not to use or participate in such Network from and after the date hereof
without the express prior written consent of the Purchaser.
(b) As promptly as practicable after the execution of this Agreement,
each of the Purchaser and the Seller shall, in cooperation with the other, file
any reports or notifications that may be required to be filed or supplied by
them pursuant to applicable law in connection with the transactions contemplated
hereby.
(c) From and after the date hereof, each party shall execute and
deliver such documents and take such actions as may reasonably be requested by
the other party in order to consummate or effect the transactions contemplated
hereby.
(d) From and after the date hereof through and including July 30,
1999, the Seller shall provide to the Company, upon the Purchaser's request,
such case-management
-6-
<PAGE>
services as the Company may require at fees equal to those fees currently
charged by the Seller to the Company for such services (as detailed in Exhibit
A), it being understood that neither the Purchaser nor the Company is or shall
be under any obligation whatsoever to request such services, and that the
Company shall not be prohibited from obtaining similar services from a service
provider other than the Seller. However, should the Purchaser request such
casemanagement services from the Seller, Purchaser will allow Seller to continue
to use and have access to the Mondial Assistance International Network, Section
7(a) of this Agreement notwithstanding. In addition, should such case-management
services be requested by Purchaser, Purchaser (or the Company) will provide a
sufficient advance of funds to Seller to cover all external fees and payment
guarantees (so-called CADE expenses) incurred by Seller in providing the
requested case-management services. On or before the Closing Date, Purchaser
agrees to pay (or cause to be paid) all outstanding invoices issued by Seller to
Company, and to pay (or cause to be paid) all subsequent invoices within 30 days
of issuance by Seller. Seller has no obligation under this Agreement to provide
case-management services above current levels of support to the Company, or
beyond the capacity of Seller's current personnel.
(e) The Seller agrees that, from and after the date hereof through and
including July 30, 1999, the Company may continue to use the four existing
offices it currently occupies and shall continue to have reasonable access to
the conference room, computer network cables and common areas of the Seller's
building in which it currently operates. In addition, through and including July
31, 1999, the Company may continue to use the dedicated telephones lines listed
on Exhibit A hereto, and related services. It is understood and agreed by the
parties that such lines, while registered in the name of the Seller with
relevant telephone companies, are to be transferred to the Company in connection
with the sale of stock that is the subject of this
-7-
<PAGE>
Agreement, and the Seller hereby agrees to promptly take any and all actions
reasonably necessary to effect such transfer of lines to the Company as soon as
practicable. Any internal transfers of telephone lines shall be by mutual
agreement of the Seller, the Purchaser and the Company and shall be made by the
Seller at no cost to either the Purchaser or the Company. Transfers of telephone
lines by the Company to a new office location shall be at the Company's expense.
After July 30, 1999, the Company may, but need not, request the Seller to
negotiate in good faith a new service agreement respecting the matter set forth
in this Section 7 (d), but the Seller shall have no obligation to provide any
services absent a mutually satisfactory agreement.
(f) As promptly as practicable, but in no event later than July 30,
1999, the Seller shall return to the Company all Company files in the Seller's
possession, including without limitation correspondence, e-mail, accounting
books and records, legal records, invoices, insurance policies and electronic
databases, and the Purchaser shall cause the Company to return to the Seller all
files of the Seller in the Company's possession, it being understood that no
party shall be required to return to any other party any medical records that
must as a matter of law and in accordance with an opinion of legal counsel
(which opinion shall be delivered in writing to any party hereto upon any other
party's reasonable request) be retained by such party. Except as provided in the
foregoing sentence, no party shall retain any copies of any such records without
the express written consent of the other.
(g) The Seller agrees that the Company may hire any member of the
operational staff of the Seller who is currently devoted to the "Maison de la
France" contract, as well as Ian Pratt, Sandy Eichorn and Lynn Phillips, it
being understood that the Company shall not be entitled hereby to offer
employment to any other employee of the Seller.
-8-
<PAGE>
(h) In accordance with Paragraph 9 of the Letter Agreement, and in
lieu of any obligation under Section 12.2 of the Joint Venture Agreement which
the parties agree shall be amended hereby and of no further force and effect,
Seller and Purchaser hereby agree that the phrase "not interfere with the
business of the other for a period not less than 2 years after the date of this
letter" shall mean and shall be interpreted as follows:
(i) During the Restricted Period (as hereinafter defined),
Seller shall not engage in any business wherein Seller (A) actively markets for
Seller's own account and as Seller's business enterprise (and not as the
operator of an internet or telephone call center) travel medical assistance
insurance policies in the United States of America ("USA"), and (B) provides
roadside travel and emergency services through insurance policies or otherwise
in the USA.
(ii) During the Restricted Period, Purchaser shall not engage in
any business activity in the USA wherein Purchaser (A) provides medical
assistance services and other assistance services to the maritime industry, and
(B) provides 900-number telephone medical information or internet real-time
medical chat services.
(iii) For purposes of this Agreement, the Restricted Period shall
commence on March 8, 1999 and shall end on March 8, 2001.
(i) Each of the Purchaser and the Seller hereby agrees to indemnify
the other and to hold the other harmless against any and all demands, claims,
losses, liabilities, damages, costs end expenses (including without limitation
attorneys' fees) which it may incur, directly or indirectly, relating to,
resulting from or arising out of a breach of any obligation of the other under
this Agreement, or because any representation or warranty by the other contained
herein is false in any material respect as of the Closing Date.
-9-
<PAGE>
(j) The Seller and the Purchaser hereby acknowledge and agree that the
parties have fully performed, on or about the date of the Letter Agreement, all
actions, requirements, duties and obligations with respect to the transactions
described in (ii), (iii), (iv), (v), (vi) and (vii) of the Recitals of this
Agreement and all such transactions have been fully completed and consummated.
The Seller and the Purchaser further acknowledge that the provisions of this
Agreement are intended solely by them to fully and properly effectuate the
transactions described in (i) of the Recitals above. In the event of any
inconsistency or conflict between this Agreement and the Letter Agreement, the
provisions of this Agreement shall control and govern.
Section 8. Releases.
Excepting any rights of contribution with respect to third party
claims of third parties who are not affiliates of either party and any
obligations to be performed or completed by the parties under the provisions of
this Agreement subsequent to the date hereof (the "Excluded Obligations"), each
of the Seller and the Purchaser, on behalf of itself and its parents,
subsidiaries, affiliates, successors and assigns, does hereby release and
discharge the other party, and each of its directors, officers, employees,
agents, successors and assigns, from and against any and all claims, demands,
actions, causes of action, liabilities, obligations, damages, costs or expenses,
including reasonable attorneys' fees, known to the parties on the closing date
arising from the relationship of the Seller and the Purchaser in any and all
transactions whatsoever, including, without limitation, the formation and
operation of the Company and the Joint Venture, which occurred, was taken,
existed or began prior to the date of this Agreement. The foregoing release
excludes and excepts only the Excluded Obligations. Each of the Seller and the
-10-
<PAGE>
Purchaser hereby covenant and agree not to sue the other party with regard to
any matter which has been released as described in this Section 8. The parties
agree to execute such other documents and to take such further actions as
reasonably required to confirm the releases set forth herein. The provisions of
this Section 8 shall be effective upon the execution of this Agreement and shall
survive the Closing and shall continue in full and effect from and after the
date of this Agreement.
Section 9 Miscellaneous.
(a) The representations and warranties contained in Section 4 hereof
shall survive the delivery of the Shares referred to in Section 3 hereof.
(b) This Agreement shall be binding on, and shall inure to the benefit
of and be enforceable by, the respective successors and assigns of the parties
hereto.
(c) This Agreement shall constitute the entire agreement of the
parties with respect to the subject matter hereof and may not be modified or
amended or any term or provision thereof waived or discharged except in a
writing signed by the party against whom such amendment, modification, waiver or
discharge is sought to be enforced.
(d) This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of France.
(e) Each of the parties shall bear is own costs and expenses in
connection with the negotiation, preparation, execution and delivery of this
Agreement.
-11-
<PAGE>
(f) The subject headings of the sections, paragraphs and subparagraphs
of this Agreement are included for the purposes of convenience only, and shall
not affect the construction or interpretation of any of its provisions.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on and as of the date first above written.
MEDICAL ADVISORY SYSTEMS, INC.
------------------------------------
By:
Title:
SACNAS INTERNATIONAL
------------------------------------
By:
Title:
-12-
<PAGE>
SI - MAS Stock Purchase Agreement
Exhibit - A
<TABLE>
<CAPTION>
Case Fee
(In U.S. Dollars)
<S> <C>
Medical Case US 257.16
Medical case Mondial Group country 107.12
Medical case Mondial Correspondant country 138.54
Technical Case US 190.81
Technical case Mondial Group country 96.82
Technical case Mondial Correspondant country 115.66
Question Only 4.10
Administrative 190.81
Permatel medical US 35.25
Permatel non medical US 18.09
</TABLE>