Stock Purchase Agreement - Medical Advisory Systems Inc. and Jaspin Interactive Inc.
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and dated as of
December 22, 2000, by and between MEDICAL ADVISORY SYSTEMS, INC., a Delaware
corporation having its principle place of business at 8050 Southern Maryland
Blvd., Owings, Maryland 20736 (the "Purchaser" or "MAS") and JASPIN INTERACTIVE
INC., a Delaware close corporation having its principle place of business at
21630 Ridgetop Circle, Suite 120, Dulles, Virginia 20166 (the "Seller" or
"Jaspin").
WHEREAS, the Seller now desires to sell, and the Purchaser now desires to
purchase twenty-nine thousand one hundred eighteen (29,118) shares (the
"Shares") of the issued and outstanding common stock of Jaspin, which shares
constitute approximately 19.3% of the total issued and outstanding common stock
of Jaspin following this transaction, and 15% of the total issued and
outstanding common stock of Jaspin following this transaction on a fully diluted
basis.
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.
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Subject to all of the terms and conditions hereof, the Seller hereby agrees
to sell, assign, transfer, convey and deliver to the Purchaser on the date of
the Closing (as hereinafter defined) the Shares, free and 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.
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The purchase price for the Shares shall be one hundred fifty-nine thousand
U.S. dollars cash ($159,000) and 40,000 shares of MAS common stock, par value
$.005 per share (the "MAS Shares" and, together with the $159,000 cash, the
"Purchase Price"), payable for the cash portion by wire transfer to the escrow
account of the Seller at the Closing plus delivery for the MAS Shares to the
Seller of a MAS share certificate, bearing a 144 Restrictive Legend, at the
Closing (the "Closing Payment").
SECTION 3. THE CLOSING.
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The sale and purchase of the Shares will be effected at a closing (the
"Closing") to be held at the Purchaser's offices in Owings, Maryland on December
22, 2000, 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 in the name of Purchaser; or a suitable interim
document pending preparation of the final certificate; The Purchaser shall
deliver to the Seller the Closing Payment; and The Purchaser and Seller will
execute the MAS/JASPIN SERVICE AGREEMENT.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF SELLER.
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The Seller hereby makes the following representations and warranties to the
Purchaser:
(a) Ownership of Shares. When issued, the Shares will be fully paid and
non-assessable. No other person, firm or corporation will have any interest
whatsoever in any of the Shares. The sale provided for herein will vest in the
Purchaser directly, absolute title to the Shares, 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 sell and 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 the
Seller in accordance with its 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 Seller has an authorized capital of three
hundred thousand (300,000) shares of common stock, no par value, of which
150,618 shares and options to purchase an additional 43,500 shares shall be
issued and outstanding following completion of this transaction.
SECTION 4A. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
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The Purchaser hereby represents and warrants to the Seller:
(a) Ownership of Shares. When issued, the MAS Shares will be fully paid and
non-assessable. No other person, firm or corporation will have any interest
whatsoever in any of the MAS Shares. The sale provided for herein will vest in
the Seller directly, absolute title to the MAS Shares, free of any liens,
options, agreements or conditions.
(b) Authority and Enforceability. The Purchaser has the full right,
corporate power and authority to enter into and perform its obligations under
this Agreement, and to sell and transfer the MAS Shares to the Seller, free and
clear of any statutory, contractual or other limitations. This Agreement
constitutes a valid and legally binding obligation of the Purchaser, enforceable
against the Purchaser in accordance with is terms.
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(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 Purchaser has an authorized capital of Ten
Million (10,000,000) shares of common stock, no par value, of which 5,211,240
shares shall be issued and outstanding following completion of this transaction.
(e) Purchaser understands that the offering and sale of the Shares
purchased by it are intended to be exempt from registration under the Securities
Act of 1933, as amended (the "Securities Act") by virtue of Section 4(2) of the
Securities Act and from any other applicable laws, rules or regulations,
including all applicable state securities laws (collectively, the "Applicable
Laws") and, in accordance therewith and in furtherance thereof, the Purchaser
hereby acknowledges, represents, warrants and agrees as follows:
(i) The Purchaser has received such written information as Purchaser
deems appropriate to evaluate its investment in the Shares. The Purchaser
has had a reasonable opportunity to ask questions of and receive answers
from a person or persons acting on behalf of Seller concerning the offering
of the Shares purchased by the Purchaser;
(ii) The Purchaser is not purchasing Shares as a result of or pursuant
to any advertisement, article, notice or other communication published in
any newspaper, magazine or similar media or broadcast over television or
radio;
(iii) The Purchaser has such knowledge and experience in financial, tax
and business matters so as to enable it to utilize the information made
available to it in connection with the offering of the Shares to evaluate
the merits and risks of an investment by the Purchaser in the Shares and to
make an informed investment decision with respect thereto;
(iv) The Purchaser will not sell or otherwise transfer the Shares
purchased by it without registration under the Securities Act or an
exemption therefrom and otherwise in accordance with all Applicable Laws.
The Purchaser represents that it is purchasing the Shares for the
Purchaser's own account, for investment and not with a view to resale or
distribution except in compliance with the Securities Act and all
Applicable Laws.
(f) The Purchaser represents that it is an "accredited investor" as such
term is defined in Rule 501(a) promulgated under the Securities Act by virtue of
the fact that Purchaser is a corporation not formed for the specific purpose of
acquiring the Shares with total assets in excess of $5,000,000.
(g) The Purchaser understands that the Shares have not been registered
under the Securities Act, and agrees that none of the Shares may be sold,
offered for sale, transferred, pledged, hypothecated or otherwise disposed of
except in compliance with the Securities Act. The Purchaser will not, directly
or indirectly, voluntarily offer, sell, transfer, pledge, hypothecate or
otherwise dispose of (or solicit any offers to purchase or otherwise acquire or
take a pledge of) any Shares unless (i) registered pursuant to the provisions of
the Securities Act, or (ii) an exemption from registration is available under
the Securities Act. The Purchaser has been advised that the Seller has no
obligation, and does not intend, to cause any Shares to be registered under the
Securities Act, or to take any action necessary for the Purchaser to comply with
any exemption under the Securities Act that would permit such Shares to be sold
by the Purchaser. The Purchaser understands that the legal consequences of the
foregoing mean that the Purchaser must bear the economic risk of its investment
in the Seller for an indefinite period of time. The Purchaser further
understands that, if the Purchaser desires to sell or transfer all or any part
of the Shares, the Seller may require the Purchaser's counsel to provide a legal
opinion that the transfer may be made without registration under the Securities
Act. The Purchaser understands that the Shares will bear substantially the
following restrictive legend:
THE SHARES OF STOCK EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED ("THE ACT") NOR QUALIFIED UNDER THE
SECURITIES LAWS OF ANY STATES, AND HAVE BEEN ISSUED IN RELIANCE UPON EXEMPTIONS
FROM SUCH REGISTRATION AND QUALIFICATION FOR NONPUBLIC OFFERINGS. ACCORDINGLY,
THE SALE, TRANSFER, PLEDGE, HYPOTHECATION, OR OTHER DISPOSITION OF ANY SUCH
SECURITIES OR ANY INTEREST THEREIN MAY NOT BE ACCOMPLISHED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND QUALIFICATION UNDER
APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN OPINION OF COUNSEL
SATISFACTORY IN FORM AND SUBSTANCE TO THE CORPORATION TO THE EFFECT THAT SUCH
REGISTRATION AND QUALIFICATION ARE NOT REQUIRED.
(h) The Purchaser acknowledges that Seller is a Delaware close corporation,
that there are restrictions on the transfer of the Shares contained in the
Certificate of Incorporation and Bylaws of Seller and that, in addition to the
legend in (g) above, the Shares will bear substantially the following
restrictive legend: THE SHARES OF STOCK EVIDENCED HEREBY ARE SHARES IN A
DELAWARE CLOSE CORPORATION, THE TRANSFER OF WHICH IS RESTRICTED PURSUANT TO
ARTICLE SEVENTH
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OF THE CERTIFICATE OF INCORPORATION AND ARTICLE IV SECTION 3 OF THE BYLAWS OF
THE CORPORATION. PURSUANT TO THOSE PROVISIONS, TRANSFERS OF SHARES OF STOCK OF
THE CORPORATION MUST BE APPROVED IN WRITING BY THE BOARD OF DIRECTORS (THE
"BOARD"), AND THE BOARD RESERVES THE RIGHT TO PURCHASE SUCH SHARES AT THEIR FAIR
MARKET VALUE.
SECTION 5. CONDITIONS TO PURCHASER'S OBLIGATIONS.
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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 the 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.
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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.
(b) 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.
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(a) 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.
(b) 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.
(c) At the closing, the Purchaser and the Seller shall execute the
MAS/JASPIN SERVICE AGREEMENT.
(d) Purchaser shall have the "First Refusal Right" (as described herein)
with respect to future Sale Offers (as defined herein) for a period beginning on
the date hereof until the earlier of the three year anniversary date hereof and
the day immediately prior to the date on which Seller engages in an initial
public offering of its stock. Purchaser shall have thirty (30) calendar days
commencing on the calendar day following receipt by Purchaser of the Notice of
Offer (as defined herein) within which to inform Seller in writing that it
exercises its First Refusal Right and will enter into the Sale Event (as defined
herein). In the event Purchaser notifies Seller of its exercise of its First
Refusal Right for a Sale Offer, Seller shall not consummate the Sale Offer, and
Purchaser and Seller shall cooperate in good faith in negotiating and executing
customary definitive documentation and in taking such other action as is
reasonably necessary and customary to consummate the Sale Event on substantially
the same terms and conditions as set forth in the Notice of Offer. For purposes
hereof, (1) "Sale Offer" means an offer to purchase Jaspin common stock from or
to sell Jaspin common stock by Seller by or to a third party buyer or buyers in
a private offering excluding the sale of common stock to employees of Seller or
due the exercise of stock options to purchase Jaspin common stock; (2) "Notice
of Offer" means a written notice to Purchaser indicating that a Sale Offer is
contemplated, the amount of securities to be sold and the price at which such
sale is intended to take place; and (3) "Sale Event" means a sale of securities
to Purchaser on substantially the same terms and conditions as the proposed Sale
Offer described in the Notice of Offer within fifteen (15) days of the receipt
by Seller from Purchaser that Purchaser is exercising its First Refusal Right
hereunder.
(e) Purchaser shall have "Anti-Dilution Rights" (as described herein) with
respect to the future issuance of additional shares in Jaspin. Purchaser shall
have thirty (30) calendar days commencing on the calendar day following receipt
by Purchaser of a Notice of Issuance (as defined herein) within which to inform
Seller in writing that it exercises its Anti-Dilution Rights and will enter into
a Purchase Event (as defined herein). In the event Purchaser notifies Seller of
its exercise of its Anti-Dilution Right, the Purchaser and Seller shall
cooperate in good faith in negotiating and executing customary definitive
documentation and in taking such other action as is
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reasonably necessary and customary to consummate the Purchase Event. For
purposes hereof, (1) "Notice of Issuance" means a written notice to Purchaser
indicating that a Sale Offer is contemplated or that an issuance of common stock
has occurred pursuant to the exercise of a stock option granted by Seller after
the date hereof (e.g., excluding existing options for the purchase of 43,500
shares of Seller common stock issued to current employees of Seller), the amount
of securities to be sold or that have been issued and the price at which such
sale is intended to take place or has taken place; provided, however, that a
Notice of Offer shall satisfy Seller's obligation to transmit a Notice of
Issuance to Purchaser; and (2) "Purchase Event" means a sale of securities to
Purchaser on substantially the same terms and conditions as the proposed Sale
Offer or issuance pursuant to stock options described in the Notice of Issuance
within fifteen (15) days of the receipt by Seller from Purchaser that Purchaser
is exercising its Anti-Dilution Right hereunder, provided, that the number of
Jaspin shares of common stock to be sold to Purchaser shall be equal to or, at
Purchaser's option, less than the number (rounded up to the nearest whole
number) obtained by dividing the number of Jaspin shares owned by Purchaser by
the total number of issued and outstanding Jaspin shares prior to the issuance
referred to in the Notice of Issuance, multiplied by the total number of Jaspin
shares issued and outstanding (or to be issued and outstanding) after the
issuance referred to in the Notice of Issuance, and subtracting the number of
Jaspin shares owned by Purchaser at the time of the Notice of Issuance.
SECTION 8. MISCELLANEOUS.
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(a) The representations and warranties contained in Sections 4 and 4A
hereof shall survive the delivery of the Shares and the MAS Shares referred to
in Section 3 hereof for a period of three years.
(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 the State of Maryland.
(e) Each of the parties shall bear is own costs and expenses in connection
with the negotiation, preparation, execution and delivery of this Agreement.
(f) All stock transfer taxes and other excise taxes imposed or which may
become due in connection with the sale, transfer or assignment of the Shares and
the MAS Shares, as the case may be, hereunder shall be borne and paid by the
Seller and Purchaser, respectively.
(g) 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.
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By:
Jaspin INTERACTIVE, INC.
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By: