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EXHIBIT 10.26
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made as of the 17th day
of April, 1998 by and between XXXXXXX CENTRAL HOLDINGS, INC., a Delaware
Corporation (the "Company"), ECLIPSYS CORPORATION, a Delaware corporation (the
"Purchaser"), and the Stockholders listed on Schedule I attached hereto
(individually, a "Stockholder" and collectively, the "Stockholders").
Preliminary Statement
A. The Stockholders own the shares (collectively, the "Shares") of the
common stock, $.00 1 par value per share (the "Common Stock"), of the Company
set forth opposite their respective names on Schedule I attached hereto.
B. The Purchaser desires to purchase, and the Stockholders desire to
sell, the Shares for the consideration set forth below, subject to the terms and
conditions of this Agreement.
C. It is in the interests of the Company to join in this Agreement in
connection with the execution of a reseller agreement and the grant of a right
in favor of the purchaser to acquire additional shares of Common Stock under
certain circumstances, each as provided herein.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereby agree as follows:
1. Purchase and Sale of Shares from the Stockholders. Subject
to and upon the terms and conditions of this Agreement, each Stockholder shall
concurrently sell, and deliver to the Purchaser, and the Purchaser shall
purchase and accept from each Stockholder, the Shares set forth opposite such
Stockholder's name on Schedule I attached hereto at a price of $13.25 per share
for an aggregate purchase price of $5,565,000.
2. Closing Delivery.
(a) The closing of the purchase and sale of the Shares
hereunder (the "Closing") shall be held at the
offices of the Purchaser, on the date hereof or at
such other time and place upon which the Company and
the Purchaser shall agree.
(b) At the Closing, each Stockholder will deliver to the
Purchaser a certificate representing the Shares duly
endorsed in blank or with stock powers duty executed
by such Stockholder, and the Purchaser shall deliver
to the shareholders, the purchase price therefor due
to each Stockholder in cash, by cashier's or
certified check, or by wire transfer immediately
available funds to an account designated by the
Stockholder.
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(c) At the Closing, the Company and the Purchasers shall
also enter into a Remarketing Agreement in the form
of Exhibit A attached hereto.
3. Representations and Warranties of the Company Regarding the
Company. The Company represents and warrants to the Purchaser as follows:
(a) The Company is a corporation duty organized, validly existing
and in good standing, under the laws of the jurisdiction of
its incorporation. No proceedings have been taken or
authorized by the Company or, to the best of the Company's
knowledge, by any other party, with respect to the bankruptcy,
insolvency, liquidation, dissolution or winding-up of the
Company.
(b)(i) The authorized capital stock of the Company consists of
20,000,000 shares of Common Stock and 10,000,000 shares of
Preferred Stock, $.001 par value per share ("Preferred
Stock"). As of March 31, 1998: (i) 8,524,478 shares of Common
Stock were issued and outstanding, all of which are validly
issued, fully paid and nonassessable; (ii) no shares of
Preferred Stock were issued or outstanding; (iii) no shares of
Common Stock or Preferred Stock were held in the treasury of
the Company or by subsidiaries of the Company; (iv) 186,079
shares were reserved for issuance under outstanding warrants
("Warrants"); (v) 1,683,356 shares of Common Stock were
reserved for issuance pursuant to stock options granted and
outstanding as of March 31, 1998 and the plans or other
arrangements under which such options were granted (the
"Company Stock Plans"). The Shares, and all shares of Common
Stock subject to issuance as specified above, upon issuance on
the terms and conditions specified herein and in the
instruments pursuant to which they are issuable, shall be duly
authorized, validly issued, fully paid and nonassessable.
There are no obligations, contingent or otherwise, of the
Company or any of its subsidiaries to repurchase, redeem or
otherwise acquire any shares of Common Stock.
(ii) Except as reserved for grants of options or rights of
issuances of stock after March 31, 1998 under the Warrants
and Company Stock Plans and as disclosed on Schedule II, there
are no equity securities of any class of the Company or any of
its subsidiaries, or any security exchangeable into or
exercisable for such equity securities, issued, reserved for
issuance or outstanding. Except pursuant to the Warrants and
the Company's Stock Plans and as otherwise disclosed on
Schedule II, there are no options, warrants, equity
securities, calls, rights, commitments or agreements of any
character to which the Company or any of its subsidiaries is
a party or by which it is bound obligating the Company or any
of its subsidiaries to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock
of the Company or any of its subsidiaries or obligating, the
Company or any of its subsidiaries to grant, extend or
accelerate the vesting of or enter into any such option,
warrant, equity security, call, right, commitment or
agreement, and, to the best knowledge of the Company, as of
the date of the Agreement, there are no
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voting trust, proxies or other agreements or understandings
with respect to the shares of capital stock of the Company
except with respect to the Xxxxxxx Central Holding, Inc.
Profit-Sharing Plan Trust and except as disclosed in the
Company's 1997 definitive proxy statement.
(c) The Company has all requisite power and authority to execute
and deliver this Agreement and to perform its obligations
hereunder. The execution and delivery of this Agreement by the
Company and the performance of this Agreement and the
consummation of the transactions contemplated hereby by the
Company have been duly and validly authorized by all necessary
corporate action on the part of the Company. This Agreement
has been duly and validly executed and delivered by the
Company and constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with
its terms.
(d) Neither the execution and delivery of this Agreement by the
Company, nor the consummation by the Company of the
transactions contemplated hereby, will (i) conflict with or
violate any provision of the charter or By-laws of the
Company, (ii) require on the part of the Company any filing
with, or permit, authorization, consent or approval of, and
governmental entity, (iii) conflict with, result in a breach
of, constitute (with or without due notice or lapse of time or
both) a default under, result in the acceleration of, create
in any party any right to accelerate, terminate, modify or
cancel, or require any notice, consent or waiver under, any
contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness, security interest or other
arrangement to which the Company is a party or by which either
is bound or to which any of their assets are subject, or (iv)
violate any order, writ, injunction, decree, status, rule or
regulation applicable to the Company or any of its properties
or assets.
(e) The Company has previously furnished to the Purchaser complete
and accurate copies, as amended or supplemented, of its (i)
Annual Report on Form 10-K for the fiscal year ended December
31, 1997, as filed with the Securities and Exchange Commission
("SEC"), and (ii) all other reports filled by the Company
under Section 13 of the Exchange Act with the SEC since
December 11, 1997 (collectively, the "Company Reports"). As of
their respective dates, the Company Reports did not contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
under which they were made, not misleading. The audited
financial statements and unaudited interim financial
statements of the Company included in the Company Reports (i)
comply as to form in all material respects with applicable
accounting requirements and the published rules and
regulations of the SEC with respect thereto, (ii) have been
prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby (except as may be
indicated therein or in the notes thereto, and in the case of
quarterly financial statements, as permitted by Form 10-Q
under the Exchange Act) and (iii) fairly
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present the consolidated financial condition, results of
operations and cash flows of the Company as of the respective
dates thereof and for the periods referred to therein
(subject, in the case of unaudited statements, to normal
recurring year-end adjustments).
(f) Since December 31, 1997, to the Company's knowledge, there has
not been any material adverse change in the assets, business,
financial condition or results of operations or future
prospects of the Company.
(g) The Company has no liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement.
(h) Except as disclosed in the Company Reports, there is no (i)
unsatisfied judgment, order, decree, stipulation or injunction
or (ii) claim, complaint action, suit, proceeding, hearing or
investigation of or in any governmental entity before any
arbitrator to which the Company is a party or, to the
Company's knowledge, threatened to be made a party, that could
reasonably be expected to have a material adverse effect on
the assets, business, financial condition, results of
operations or future prospects of the Company.
4. Representations of the Stockholders Regarding the Shares. Each
Stockholder represents and warrants to the Purchaser as follows:
(a) Such Stockholder has good and marketable title to the Shares
which are to be transferred to the Purchaser by such
Stockholder pursuant here, to, free and clear of any and all
covenants, conditions, restrictions (other than under the
Securities Act, as hereinafter defined), voting, trust
arrangements, liens, charges, encumbrances, options and
adverse claims or rights whatsoever.
(b) Such Stockholder has the full right, power and authority to
enter into this Agreement and to transfer, convey and sell to
the Purchaser at the Closing the Shares to be sold by such
Stockholder hereunder and, upon consummation of the purchase
contemplated hereby, the Purchaser will acquire from such
Stockholder good and marketable title to such Shares, free and
clear of all covenants, conditions, restrictions (other than
under the Securities Act, as hereinafter defined, or
hereunder), voting, trust arrangements, liens, charges,
encumbrances, options and adverse claims or rights whatsoever.
(c) Such Stockholder is not a party to, subject to or bound by any
agreement or any judgment, order, writ, prohibition,
injunction or decree of any court or other governmental body
which would prevent the execution or delivery of this
Agreement by such Stockholder or the transfer, conveyance and
sale of the Shares to be sold by such Stockholder to the
Purchaser pursuant to the terms hereof.
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(d) No broker or finder has acted for such Stockholder in
connection with this Agreement or the transactions
contemplated hereby, and no broker or finder is entitled to
any brokerage or finder's fee or other commissions in respect
of such transactions based upon agreements, arrangements or
understandings made by or on behalf of such Stockholder.
5. Company Board of Directors. So long as this Agreement
continues in effect:
(a) The Purchaser shall have the right to designate a
representative reasonably acceptable to the Company's Board of
Directors for election as a Director. Pursuant to such right,
at the next regularly scheduled meeting, of the Company's
Board of Directors after receiving notice from the Purchaser
that it has elected to designate a representative to serve on
the Board, the Company shall expand its Board of Directors by
one Director and shall appoint such nominee representative to
fill the vacant directorship created by such expansion. The
Company represents to the Purchaser that pursuant to its
By-laws, as currently in effect, its Board of Directors has
the authority, without further action by its shareholders, to
effect such expansion in the number of the Company's Directors
and to fill the vacancy created by such expansion.
(b) Such representative shall excuse himself or herself from
voting in any portion of any meeting relating to the
consideration of any matter in which Purchaser has a material
interest, other than solely as a stockholder.
(c) Prior to the next regular meeting of the Company's
shareholders after appointment of any such Purchaser
representative to the Board and thereafter prior to all
meetings of the Company's shareholders at which Directors will
be elected, the Company shall nominate and recommend the
Purchaser representative (or a successor reasonably acceptable
to the Company's Board of Directors) for election to a seat
on the Company's Board of Directors, and shall use its best
efforts to cause such Purchaser representative to be elected
as such Director. In the event that this Agreement shall
terminate as provided in Section 8 below, no such termination
shall preclude the Purchaser from thereafter voting those
shares that then have the right to vote on Directors of the
Company for election of a Purchaser representative to the
Company's Board. At any time upon written request of the
Company following the termination of this Agreement,
Purchaser shall cause the Purchaser's representative to resign
from the Company's Board of Directors.
(d) Purchaser shall take such action as may be required so that
all Shares are voted for nominees to the Board of Directors of
the Company, and unless the Company otherwise consents in
writing, on all other matters to be voted on by holders of the
Common Stock, in favor of all such matters recommended by the
Company's Board of Directors.
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(e) Notwithstanding the provisions of this Section 5, the Company
shall not be obligated to nominate or appoint any person to
the Company's Board of Directors who (i) in the written
opinion of outside counsel, would not be qualified under
applicable law, rule or regulation to serve as a director of
the Company, or (ii) has been involved in any of the events
enumerated in Item 2(d) or (c) of Schedule 13D promulgated
under the Securities Exchange Act of 1934, or who is the
target of an investigation by any governmental authority or
agency relating to felonious criminal activity, or subject to
any order, decree or judgment of any court or agency
prohibiting service as a director of any public company or
providing investment or financial advisory services.
6. Covenants.
(a) Purchaser agrees that neither the Purchaser nor any of its
affiliates, alone or with others, will in any mariner acquire,
agree to acquire, make any proposal (or request permission to
make any proposal) to acquire any securities (or direct or
indirect rights, warrants or options to acquire any
securities) of the Company (other than securities constituting
less than 1% of the outstanding Common Stock of the Company
or securities issued as a dividend or distribution upon the
Shares), unless such acquisition, agreement or making of a
proposal shall have been first approved (or in the case of a
proposal, first invited) by the Company's Board of Directors.
(b)(i) In the event that at any time on or before 180 days of the
date of this Agreement, the Company proposes to enter into any
agreement for merger or consolidation of the Company, a sale
or disposition of 50% or more of its assets or earning power,
or issuance of additional equity securities, as a result of
which the other party or parties to such agreement would
thereafter own, directly or indirectly, a substantial portion
of the Company's business or a majority of the outstanding
Voting Stock of the Company (any of the foregoing, an
"Acquisition Event"), the Company shall provide the Purchaser
written notice of such Acquisition Event at least 20 days
prior to entering into a definitive agreement for any such
Acquisition Event, which notice shall contain a description of
the general nature of the proposed transaction.
(ii) The Company shall also provide the Purchaser prompt written
notice:
(A) of all bona fide offers it receives to purchase more
than 5% of its outstanding Voting Stock or acquire a
substantial portion of its assets or business;
(B) if the Company receives notice that a third party
has purchased or made an offer to purchase 5% or more
of its outstanding Voting Stock or reasonably believes
there is a substantial possibility that a third party
intends to purchase, or to make an offer to purchase
more than 5% of its outstanding Voting Stock; and
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(C) if the Company intends to enter into a definitive
agreement to sell additional shares of its Voting
Stock comprising more than 5% of its outstanding
Voting Stock.
(iii) Upon the receipt by Purchaser of written notice pursuant to
clause (b)(1) above, the Purchaser shall have the right,
exercisable by written notice delivered within twenty (20)
days to the Company, to acquire, on the closing date of the
Acquisition Event ("Notified Closing Date") up to that number
of shares of Common Stock equal to 4.9% of the outstanding
Common Stock of the Company on the Notified Closing Date at a
purchase price of $13.25 a share, which acquisition shall be
effected on the Notified Closing Date in accordance with the
procedures of Section 2(b) above.
7. Investment Representation. The Purchaser represents, warrants
and covenants as follows:
(a) It is purchasing the shares for investment only, and not with
a view to, or for sale in connection with, any distribution of
the Shares in violation of the Securities Act of 1933 (the
"Securities Act"), or any rule or regulation under the
Securities Act.
(b) It has had such opportunities as it deems adequate to obtain
from representatives of the Company such information as is
necessary to permit it to evaluate the merits and risks of
investment in the Company.
(c) It can afford a complete loss of the value of the Shares and
is able to bear the economic risk of holding such Shares for
an indefinite period.
(d) It understands that (i) the Shares have not been registered
under the Securities Act and are "restricted securities"
within the meaning of Rule 144 under the Securities Act, (ii)
the Shares cannot be sold, transferred or otherwise disposed
of unless they are subsequently registered under the
Securities Act or an exemption from registration is then
available; (iii) in any event, the exemption from registration
under Rule 144 or otherwise may not be available for at least
one year and even then will not be available unless a public
market then exists for the Common Stock, adequate information
concerning the Company is then available to the public, and
other terms and conditions of Rule 144 are complied with; and
(iv) there is now no registration statement on file with the
securities and Exchange Commission with respect to any stock
of the Company and the Company has no obligation or current
intention to registered the Shares under the Securities Act.
(e) A legend substantially in the following form will be placed on
the certificate representing the Shares:
"The shares represented by this certificate have not
been registered under the Securities Act of 1933, as
amended, and may not be sold, transferred or
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otherwise disposed of in the absence of an effective
registration statement under such Act or an opinion
of counsel satisfactory to the corporation to the
effect that such registration is not required."
(f) In the event of any purchase of Common Stock pursuant to
Section 6(b)(iii) above, the Purchaser shall make the
foregoing representations with respect to the Common Stock
purchased on the Notified Closing Date.
8. Term. This Agreement shall continue in effect until the
earlier of (i) April 17, 2001, or (ii) the date on which the
Remarketing Agreement terminates.
9. Miscellaneous.
(a) The parties agree to execute such further instruments and to
take such further action as may reasonably be necessary to
carry out the intent of this agreement.
(b) For purposes of this Agreement, and for all notices and
correspondence hereunder, the addresses of the respective
parties are as follows:
If to Purchaser:
Eclipsys Corporation
000 Xxxx Xxxxxxxx Xxxxxx, Xxxx 000
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxx, Chief Executive Officer
With a copy to:
Xxxx X. Xxxxxxx, Esq.
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
If to Company:
Xxxxxxx Central Holdings, Inc.
0000 Xxxxxx Xxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx, President and CEO
With a copy to:
Xxxxxxx Central Holdings, Inc.
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0000 Xxxxxx Xxxxx Xxxx
Xxxxxxx, XX 00000
Attention: General Counsel
If to the Stockholders:
Xxxx X. Xxxxxx
Xxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx, Xx.
c/x Xxxxxxx Central Holdings, Inc.
0000 Xxxxxx Xxxxx Xxxx
Xxxxxxx, XX 00000
Xxx X. Xxxxxxx
c/o Heathfield, Inc.
0000 Xxxxx Xxxxx Xxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
No change of address shall be binding upon the other party
hereto until written notice thereof is received by such party
at the address shown herein. All notices shall be in English
and shall be effective upon receipt if delivered personally,
two days after shipment by overnight delivery services and
seven (7) days after mailing if sent by mail.
(c) This Agreement shall be governed by the taws of the State of
Delaware and interpreted and determined in accordance with the
laws of the State of Delaware courts to contracts made and to
be performed entirely in Delaware by residents of that state.
(d) This Agreement shall inure to the benefit of the successors
and assigns of the Company and the Purchaser.
(e) In the event that any provision of this Agreement becomes or
is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue
in full force and effect without said provision.
(f) This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof and may not be
amended except in a writing signed by each party hereto.
(g) This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which shall constitute
the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ATTEST: PURCHASER:
Eclipsys Corporation
By: /s/
-------------------------------- ------------------------------------
Vice President
ATTEST: THE COMPANY:
Xxxxxxx Central Holdings, Inc.
By: /s/
-------------------------------- ------------------------------------
COO
STOCKHOLDERS:
Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
----------------------------------------
Xxx X. Xxxxxxx
/s/ X.X. Xxxxxxx
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SCHEDULE I
Stockholders Shares To Be Sold
Xxxx X. Xxxxxx 187,500
Xxxx X. Xxxxxx 20,000
Xxxxxxx X. Xxxxxxx, Xx. 25,000
Xxx X. Xxxxxxx 187,500
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SCHEDULE II
(1) Offer to issue shares of its Common Stock for $8,000,000 of the
proposed purchase price in an acquisition transaction. The purchase
price to be based upon the value of the Company's Common Stock at the
execution of a definitive agreement in connection with such proposed
acquisition.
(2) Effective April 15, 1998, the Company merged InfoMed, Inc. into its
wholly-owned subsidiary Xxxxxxx Central National, Inc. and in
connection with this merger, the Company issued 6,844 shares of its
Common Stock to the remaining minority shareholders of InfoMed, Inc.
(3) The Board of Directors has approved, subject to shareholder approval,
an increase in the number of shares available for grant of stock
options of 1,000,000 shares under the Company's 1997 Stock Plan.
Options for 344,725 shares have been granted by the Compensation
Committee subject to shareholder approval to total share increase.
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