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NOTE AND SHARE PURCHASE AGREEMENT
Between
MEDE AMERICA CORPORATION
and
WCAS CAPITAL PARTNERS II, L.P.
Dated as of February 14, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I. PURCHASE AND SALE OF SECURITIES....................... 1
SECTION 1.01 Issuance, Sale and Delivery of
the Securities................................. 1
SECTION 1.02 Payment for the Securities....................... 1
SECTION 1.03 Closing Date..................................... 1
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF
THE COMPANY................................ 2
SECTION 2.01 Organization, Qualifications and
Corporate Power.................... 2
SECTION 2.02 Authorization of Agreements, Etc................. 2
SECTION 2.03 Validity......................................... 2
SECTION 2.04 Authorized Capital Stock......................... 3
SECTION 2.05 Governmental Approvals........................... 3
SECTION 2.06 Use of Proceeds.................................. 3
SECTION 2.07 Offering of the Securities....................... 3
SECTION 2.08 Compliance With Law.............................. 4
ARTICLE III. REPRESENTATIONS AND WARRANTIES
OF PURCHASER............................... 4
SECTION 3.01 Certain Securities Laws Matters.................. 4
ARTICLE IV. CONDITIONS TO THE OBLIGATION OF
PURCHASER.................................. 5
ARTICLE V. CONDITIONS TO THE OBLIGATION OF
THE COMPANY................................ 6
ARTICLE VI. MISCELLANEOUS......................................... 6
SECTION 6.01 Expenses......................................... 6
SECTION 6.02 Survival of Agreement............................ 6
SECTION 6.03 Brokerage........................................ 6
SECTION 6.04 Parties in Interest.............................. 7
SECTION 6.05 Notices.......................................... 7
SECTION 6.06 Law Governing.................................... 7
SECTION 6.07 Entire Agreement; Amendments..................... 7
SECTION 6.08 Successors and Assigns........................... 8
SECTION 6.09 Counterparts..................................... 8
SECTION 6.10 Headings......................................... 8
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INDEX TO EXHIBITS
Exhibit Description
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EXHIBIT A Form of 10% Senior Subordinated Note
EXHIBIT B Form of Registration Rights Agreement
INDEX TO SCHEDULES
Schedule Description
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2.02(a) Defaults
2.04(b) Capital Stock, Options, Warrants, Etc.
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NOTE AND SHARE PURCHASE AGREEMENT, dated as of February 14,
1997, by and between MEDE AMERICA CORPORATION, a Delaware corporation (the
"Company"), and WCAS CAPITAL PARTNERS II, L.P., a Delaware limited partnership
("Purchaser").
WHEREAS the Company wishes to issue and sell to Purchaser (i)
its 10% Senior Subordinated Note in the principal amount of $25,000,000 and (ii)
1,700,000 shares (collectively, the "Shares") of common stock, $.01 par value
("Common Stock"), of the Company, subject to the conditions set forth herein;
and
WHEREAS Purchaser wishes to purchase said securities, all on
the terms and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereby agree as follows:
I.
PURCHASE AND SALE OF SECURITIES
SECTION 1.01 Issuance, Sale and Delivery of the Securities. On
the Closing Date (as defined herein) the Company shall issue, sell and deliver
to Purchaser, and Purchaser shall purchase from the Company, (i) a 10% Senior
Subordinated Note of the Company, substantially in the form attached hereto as
Exhibit A, registered in the name of Purchaser, in the principal amount of
$25,000,000 (said note, and any notes issued in exchange or substitution
therefor, being hereinafter collectively called the "Subordinated Notes"), and
(ii) the Shares, to be evidenced by a stock certificate of the Company
registered in the name of the Purchaser. The Shares and the Subordinated Notes
are sometimes collectively referred to herein as the "Securities".
SECTION 1.02 Payment for the Securities. As payment in full
for the Securities being purchased by it hereunder, and against delivery thereof
as aforesaid, on the Closing Date Purchaser shall pay to the Company, by wire
transfer to an account designated in writing by the Company, the sum of
$25,000,000.
SECTION 1.03 Closing Date. The closing of the sale and
purchase of the Securities shall take place at the offices of Reboul, MacMurray,
Xxxxxx, Xxxxxxx & Kristol, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx, at 10 a.m.,
New York time, on February 14, 1997, or at such other date and time as may be
mutually agreed upon by Purchaser and the Company (such date and time of closing
being herein called the "Closing Date").
II.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Purchaser as follows:
SECTION 2.01 Organization, Qualifications and Corporate Power.
The Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and is duly licensed or
qualified to transact business as a foreign corporation and is in good standing
in each jurisdiction in which the nature of its business or the ownership of its
properties makes such licensing or qualification necessary, except where the
failure to be so licensed or qualified would not have a material adverse effect
on the business, assets, operations or condition (financial or other) of the
Company (a "Material Adverse Effect"). The Company has the corporate power and
authority to own and hold its properties and to carry on its business as
currently conducted, to execute, deliver and perform this Agreement and a
Registration Rights Agreement substantially in the form of Exhibit B hereto (the
"Registration Rights Agreement") and to issue, sell and deliver the Securities.
SECTION 2.02 Authorization of Agreements, Etc. (a) The
execution and delivery by the Company of this Agreement and the Registration
Rights Agreement, the performance by the Company of its obligations hereunder
and thereunder and the issuance, sale and delivery of the Securities have been
duly authorized by all requisite corporate action and, except as set forth in
Schedule 2.02(a) hereto, will not (x) violate any provision of law applicable to
the Company, any order of any court or other agency of government, the
Certificate of Incorporation or By-laws of the Company or any provision of any
indenture, agreement or other instrument to which the Company or any of its
properties or assets is bound; (y) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument; or (z) result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of the properties or assets of the Company that, in any such case, would have a
Material Adverse Effect.
(b) The Shares will, when issued and paid for in accordance
with the terms hereof, be validly issued, fully paid and nonassessable shares of
Common Stock. The issuance, sale and delivery of the Securities is not subject
to any preemptive rights of stockholders of the Company or to any right of first
refusal or other similar right in favor of any person.
SECTION 2.03 Validity. Each of this Agreement and the
Registration Rights Agreement has been duly executed and
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delivered by the Company and constitutes the legal, valid and binding obligation
of the Company, enforceable in accordance with its terms.
SECTION 2.04 Capital Stock. (a) The authorized capital stock
of the Company consists of (i) 250,000 shares of Preferred Stock, $.01 par
value, of which an aggregate 239,956 shares are validly issued and outstanding,
fully paid and nonassessable, and (ii) 29,000,000 shares of Common Stock, $.01
par value, of which an aggregate 24,235,038 shares are validly issued and
outstanding, fully paid and nonassessable.
(b) Except as set forth in Schedule 2.04(b) hereto and as
contemplated by this Agreement, (i) no subscription, warrant, option,
convertible security or other right (contingent or other) to purchase or acquire
any shares of any class of capital stock from the Company is authorized or
outstanding, (ii) there is no commitment of the Company to issue any shares,
warrants, options or other such rights or to distribute to holders of any class
of its capital stock any evidences of indebtedness or assets and (iii) the
Company has no obligation (contingent or other) to purchase, redeem or otherwise
acquire any shares of its capital stock or any interest therein or to pay any
dividend or make any other distribution in respect thereof.
SECTION 2.05 Governmental Approvals. No registration or filing
with, or consent or approval of, or other action by, any federal, state or other
governmental agency or instrumentality is or will be necessary for (i) the valid
execution, delivery and performance of this Agreement and the Registration
Rights Agreement or (ii) the issuance, sale and delivery of the Securities.
SECTION 2.06 Use of Proceeds. None of the transactions
contemplated by this Agreement (including, without limitation, the use of the
proceeds from the sale of the Subordinated Notes), will violate or result in a
violation of (a) Section 7 of the Securities Exchange Act of 1934, as amended,
or of any regulations issued pursuant thereto, or (b) Regulations G, T and X of
the Board of Governors of the Federal Reserve System. None of the proceeds from
the sale of the Subordinated Notes will be used to purchase or carry (or
refinance any borrowings the proceeds of which were used to purchase or carry)
any "margin security" within the meaning of said Regulation G, or for any other
purpose which would constitute the transactions contemplated by this Agreement a
"purpose credit" within the meaning of said Regulation G.
SECTION 2.07 Offering of the Securities. Neither the Company
nor any person acting on its behalf has taken or will take any action
(including, without limitation, any offer, issuance or sale of any securities
under circumstances which
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might require the integration of such securities with the Subordinated Notes
and/or the Shares under the Securities Act of 1933, as amended (the "Securities
Act"), or the rules and regulations of the Securities and Exchange Commission
(the "Commission") thereunder) which might subject the offering, issuance or
sale of the Subordinated Notes and/or the Shares to the registration provisions
of the Securities Act.
SECTION 2.08 Compliance With Law. The Company is not in
default in any material respect under any order of any court, governmental
authority or arbitration board or tribunal or under any laws, ordinances,
governmental rules or regulations to which the Company is subject. The Company
has not failed to obtain any material licenses, permits, franchises or other
governmental authorizations necessary to the ownership of its properties or to
the conduct of its business.
III.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
SECTION 3.01 Certain Securities Law Matters. Purchaser
represents and warrants to the Company as follows:
(i) that it is acquiring the Securities and for its own
account for the purpose of investment and not with a view to, or for
sale in connection with, any distribution thereof;
(ii) that it is an "accredited investor" within the meaning of
Regulation D as promulgated by the Commission under the Securities Act;
(iii) that it understands that (a) neither the Subordinated
Notes nor the Shares have been registered under the Securities Act by
reason of their issuance in a transaction exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) thereof,
(b) the Securities must be held indefinitely unless a subsequent
disposition thereof is registered under the Securities Act or is exempt
from such registration, (c) the Subordinated Notes and the Shares will
bear a legend to such effect and (d) the Company will make notations on
its transfer books to such effect;
(iv) that it is a sophisticated investor with knowledge and
experience in business and financial matters, is able to evaluate the
risks and benefits of the investment in the Subordinated Notes and the
Shares, has received certain information concerning the Company and has
had the opportunity to obtain additional information as desired in
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order to evaluate the merits of and the risks inherent in purchasing
the Securities; and
(v) that it understands that the exemption from registration
afforded by Rule 144 under the Securities Act depends on the
satisfaction of various conditions and that, if applicable, Rule 144
affords the basis of sales of the Securities in limited amounts under
certain conditions.
IV.
CONDITIONS TO THE OBLIGATION OF PURCHASER
The obligation of Purchaser to purchase and pay for the
Securities to be purchased by it hereunder on the Closing Date is, at its
option, subject to the satisfaction, on or before such date, of the following
conditions:
(i) Representations and Warranties to Be True and Correct. The
representations and warranties contained in Article II hereof shall be
true and correct on and as of the Closing Date with the same force and
effect as though such representations and warranties had been made on
and as of such date.
(ii) Performance. The Company shall have performed and complied
with all agreements and conditions contained herein required to be
performed or complied with by it prior to or at the Closing Date.
(iii) Opinion of Counsel. Purchaser shall have received an opinion
of counsel to the Company, in form and substance reasonably
satisfactory to Purchaser and its counsel, as to the matters set forth
in Sections 2.01, 2.02, 2.03, 2.04 and 2.05 hereof.
(iv) Registration Rights Agreement. The Company shall have executed
and delivered the Registration Rights Agreement, and the same shall be
in full force and effect.
(v) All Proceedings to Be Satisfactory. All corporate and other
proceedings to be taken by the Company in connection with the
transactions contemplated hereby and all documents incident thereto
shall be satisfactory in form and substance to Purchaser and its
counsel, and Purchaser and said counsel shall have received all such
counterpart originals or certified or other copies of such documents as
they may reasonably request.
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V.
CONDITIONS TO THE OBLIGATION OF THE COMPANY
The obligation of the Company to issue, sell and deliver the
Securities on the Closing Date is, at the Company's option, subject to the
satisfaction, on or before such date, of the following conditions:
(i) Representations and Warranties to Be True and Correct. The
representations and warranties contained in Article III hereof shall be
true and correct on and as of the Closing Date with the same force and
effect as though such representations and warranties had been made on
and as of such date.
(ii) Performance. Purchaser shall have performed and complied with
all agreements and conditions contained herein required to be performed
or complied with by it prior to or at the Closing Date.
(iii) All Proceedings to Be Satisfactory. All proceedings to be taken
by Purchaser in connection with the transactions contemplated hereby
and all documents incident thereto shall be satisfactory in form and
substance to the Company and its counsel, and the Company and said
counsel shall have received all such counterpart originals or certified
or other copies of such documents as it may reasonably request.
VI.
MISCELLANEOUS
SECTION 6.01 Expenses. Each party hereto will pay its own
expenses in connection with the transactions contemplated hereby, whether or not
such transactions shall be consummated; provided, however, that the Company
shall pay the fees and disbursements of Reboul, MacMurray, Xxxxxx, Xxxxxxx &
Kristol, counsel for Purchaser.
SECTION 6.02 Survival of Agreement. All covenants, agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement and the issuance, sale and delivery of the Securities
pursuant hereto, and all statements contained in any certificate or other
instrument delivered by the Company hereunder shall be deemed to constitute
representations and warranties made by the Company.
SECTION 6.03 Brokerage. Each party hereto will indemnify and
hold harmless the others against and in respect of
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any claim for brokerage or other commissions relative to this Agreement or to
the transactions contemplated hereby.
SECTION 6.04 Parties in Interest. All covenants and agreements
contained in this Agreement by or on behalf of any of the parties hereto shall
bind and inure to the benefit of the respective successors and assigns or legal
representatives of the parties hereto whether so expressed or not.
SECTION 6.05 Notices. All notices, requests, consents and
other communications hereunder shall be in writing and shall be delivered
personally, sent by nationally recognized overnight carrier, sent by facsimile
or mailed by first-class registered mail, postage prepaid, addressed as follows:
(a) if to the Company, to it at:
00 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000;
(b) if to Purchaser, to it at:
x/x Xxxxx, Xxxxxx, Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx X. xx Xxxxxx
Fax: (000) 000-0000
with a copy to:
Reboul, MacMurray, Xxxxxx, Xxxxxxx & Kristol
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
SECTION 6.06 LAW GOVERNING. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO ITS CONFLICTS OF LAW PROVISIONS.
SECTION 6.07 Entire Agreement; Amendments. This Agreement
constitutes the entire agreement of the parties with respect to the subject
matter hereof and may not be modified or amended except by a writing signed by
the Company and approved by the holders of not less than 66-2/3% of the then
outstanding
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principal amount of the Subordinated Notes.
SECTION 6.08 Successors and Assigns. All of the terms,
covenants and provisions of this Agreement and of the agreements delivered
hereunder shall be binding upon and inure to the benefit of any successors,
assigns, legal representatives, or beneficiaries hereof, as the case may be.
SECTION 6.09 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
SECTION 6.10 Headings. The headings of the Sections and
subsections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
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IN WITNESS WHEREOF, each of the Company and Purchaser has
executed this Note and Share Purchase Agreement as of the day and year first
above written.
MEDE AMERICA CORPORATION
By:
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President and Chief
Executive Officer
WCAS CAPITAL PARTNERS II, L.P.
By: WCAS XX XX Partners, General Partner
By:
--------------------------------------
General Partner
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Schedule 2.02(a)
Defaults
The issuance of the Notes shall constitute an event of default under the Credit
Agreement, dated December 18, 1995, between the Company and Bank of America
Illinois.
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Schedule 2.04(a)
Capital Stock, Options, Warrants, Etc.
The Company has issued warrants to acquire an aggregate 324,972 shares of Common
Stock to four stockholders.
The Company has issued options to acquire an aggregate 2,101,500 shares of
Common Stock to certain former and current employees, stockholders and
consultants.
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