EXECUTION COPY
EXHIBIT 2
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STOCK PURCHASE AGREEMENT
by and among
PROXYMED, INC.,
GENERAL ATLANTIC PARTNERS 77, L.P.,
GAP COINVESTMENT PARTNERS II, L.P.,
GAPSTAR, LLC,
GAPCO GMBH & CO. KG,
PVC FUNDING PARTNERS, LLC,
COMVEST VENTURE PARTNERS, L.P.,
XXXX VENTURES, LLC,
XXXXXX XXXXXX,
and
(solely for the purpose of Section 8.5 and Section 10.5)
GENERAL ATLANTIC PARTNERS 74, L.P.
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Dated: December 5, 2003
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Table of Contents
Page
ARTICLE I DEFINITIONS 1
1.1 DEFINITIONS................................................................1
ARTICLE II PURCHASE AND SALE OF COMMON STOCK 8
2.1 PURCHASE AND SALE OF COMMON STOCK..........................................8
2.2 USE OF PROCEEDS............................................................8
2.3 CLOSING....................................................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY 8
3.1 CORPORATE EXISTENCE AND POWER..............................................8
3.2 AUTHORIZATION; NO CONTRAVENTION; FBCA
SECTIONS 607.0901 AND 607.0902.............................................9
3.3 GOVERNMENTAL AUTHORIZATION; THIRD PARTY
CONSENTS...................................................................9
3.4 BINDING EFFECT.............................................................9
3.5 LITIGATION................................................................10
3.6 COMPLIANCE WITH LAWS......................................................10
3.7 CAPITALIZATION............................................................10
3.8 NO DEFAULT OR BREACH; CONTRACTUAL OBLIGATIONS.............................11
3.9 TITLE TO PROPERTIES AND ASSETS............................................11
3.10 REPORTS; FINANCIAL STATEMENTS.............................................12
3.11 TAXES.....................................................................12
3.12 NO MATERIAL ADVERSE CHANGE; ORDINARY COURSE OF
BUSINESS..................................................................13
3.13 PRIVATE OFFERING..........................................................13
3.14 LABOR RELATIONS...........................................................13
3.15 EMPLOYEE BENEFIT PLANS....................................................13
3.16 LIABILITIES...............................................................14
3.17 INTELLECTUAL PROPERTY.....................................................14
3.18 NETWORK REDUNDANCY AND COMPUTER BACK-UP...................................16
3.19 PRIVACY OF CUSTOMER INFORMATION...........................................16
3.20 POTENTIAL CONFLICTS OF INTEREST...........................................16
3.21 TRADE RELATIONS...........................................................16
3.22 BROKER'S, FINDER'S OR SIMILAR FEES........................................16
3.23 STOCKHOLDER APPROVAL......................................................17
3.24 TRUE AND COMPLETE COPY OF MERGER AGREEMENT
AND OTHER TRANSACTION-RELATED AGREEMENTS..................................17
3.25 REGISTRATION RIGHTS.......................................................17
3.26 OBSERVANCE OF COVENANTS...................................................17
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE
PURCHASERS 17
i
4.1 EXISTENCE AND POWER.......................................................17
4.2 AUTHORIZATION; NO CONTRAVENTION...........................................17
4.3 GOVERNMENTAL AUTHORIZATION; THIRD PARTY
CONSENTS..................................................................18
4.4 BINDING EFFECT............................................................18
4.5 PURCHASE FOR OWN ACCOUNT..................................................18
4.6 RESTRICTED SECURITIES.....................................................19
4.7 BROKER'S, FINDER'S OR SIMILAR FEES........................................19
4.8 ACCREDITED INVESTOR.......................................................19
ARTICLE V CONDITIONS TO THE OBLIGATION OF THE PURCHASERS TO
CLOSE 20
5.1 REPRESENTATIONS AND WARRANTIES............................................20
5.2 COMPLIANCE WITH THIS AGREEMENT............................................20
5.3 OFFICER'S CERTIFICATE.....................................................20
5.4 SECRETARY'S CERTIFICATE...................................................20
5.5 PURCHASED SHARES..........................................................20
5.6 OPINION OF COUNSEL........................................................21
5.7 NASD......................................................................21
5.8 STOCKHOLDER APPROVAL......................................................21
5.9 AMENDED AND RESTATED REGISTRATION RIGHTS
AGREEMENT.................................................................21
5.10 NO MATERIAL ADVERSE CHANGE................................................21
5.11 CONSENTS AND APPROVALS....................................................21
5.12 NO MATERIAL JUDGMENT OR ORDER.............................................21
5.13 NO LITIGATION.............................................................21
5.14 SATISFACTION OF CONDITIONS; CONSUMMATION OF THE
MERGER....................................................................22
ARTICLE VI CONDITIONS TO THE OBLIGATION OF THE COMPANY AND
THE SELLING STOCKHOLDERS TO CLOSE 22
6.1 PAYMENT OF PURCHASE PRICE.................................................22
6.2 REPRESENTATIONS AND WARRANTIES............................................22
6.3 STOCKHOLDER APPROVAL......................................................22
6.4 SATISFACTION OF CONDITIONS................................................22
ARTICLE VII INDEMNIFICATION 22
7.1 INDEMNIFICATION...........................................................22
7.2 NOTIFICATION..............................................................23
7.3 CONTRIBUTION..............................................................24
7.4 CAP ON INDEMNIFICATION....................................................24
ARTICLE VIII COVENANTS OF THE COMPANY 24
8.1 INTERIM ACTIONS...........................................................24
8.2 STOCKHOLDER APPROVAL......................................................25
ii
8.3 THE ACQUISITION...........................................................26
8.4 AMENDMENT OF ACQUISITION DOCUMENTS........................................26
8.5 RESTRICTION ON TRANSFER OF SECURITIES.....................................26
8.6 WAIVER OF ANTI-DILUTION PROVISIONS........................................27
ARTICLE IX TERMINATION OF AGREEMENT 27
9.1 TERMINATION...............................................................27
9.2 SURVIVAL..................................................................28
ARTICLE X MISCELLANEOUS 28
10.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES................................28
10.2 NOTICES...................................................................29
10.3 SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES.........................31
10.4 AMENDMENT AND WAIVER......................................................32
10.5 AMENDMENT TO STOCK AND WARRANT PURCHASE
AGREEMENT.................................................................32
10.6 COUNTERPARTS..............................................................32
10.7 HEADINGS..................................................................32
10.8 GOVERNING LAW.............................................................32
10.9 SEVERABILITY..............................................................32
10.10 RULES OF CONSTRUCTION.....................................................33
10.11 ENTIRE AGREEMENT..........................................................33
10.12 FEES......................................................................33
10.13 PUBLIC ANNOUNCEMENTS......................................................33
10.14 FURTHER ASSURANCES........................................................33
iii
EXHIBITS
A Form of Holland & Knight LLP Opinion
B Form of Amended and Restated Registration Rights Agreement
SCHEDULES
2.1 Purchased Shares and Purchase Price
3.1 Corporate Existence, Power
3.2 Authorization; No Contravention
3.3 Governmental Authorization; Third Party Consents
3.5 Litigation
3.6(a) Compliance with Laws
3.7(a) Capitalization
3.7(b) List of Subsidiaries and their Equity Holders
3.9 Title to Properties and Assets
3.11 Taxes
3.12 No Material Adverse Change; Ordinary Course of Business
3.17(a) Intellectual Property - Ownership
3.17(b) Intellectual Property - Infringement
3.17(d) Intellectual Property - Employee Agreements
3.17(e) Intellectual Property - Trade Secrets
3.19 Privacy of Customer Information
3.20 Conflicts of Interest
3.21 Trade Relations
3.22 Broker's, Finder's or Similar Fees
iv
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated December 5, 2003 (this "Agreement"), by
and among ProxyMed, Inc., a Florida corporation (the "Company"), General
Atlantic Partners 77, L.P., a Delaware limited partnership ("GAP LP"), GAP
Coinvestment Partners II, L.P., a Delaware limited partnership ("GAP
Coinvestment"), GAPCO GmbH & Co. KG, a German limited partnership ("GmbH
Coinvestment"), GapStar, LLC, a Delaware limited liability company ("GapStar"),
PVC Funding Partners, LLC, a Delaware limited liability company ("PVC"), ComVest
Venture Partners, L.P., a Delaware limited partnership ("ComVest"), Xxxx
Ventures, LLC ("Xxxx"), Xxxxxx Xxxxxx ("Xxxxxx" and, collectively with GAP LP,
GAP Coinvestment, GmbH Coinvestment, GapStar, PVC, ComVest and Xxxx, the
"Purchasers") and, solely for the purposes set forth in Section 8.5 and Section
10.5 hereto, General Atlantic Partners 74, L.P., a Delaware limited partnership
("GAP 74").
WHEREAS, upon the terms and conditions set forth in this Agreement, the
Company proposes to issue and sell to each of the Purchasers for the aggregate
purchase price set forth opposite such Purchaser's name on Schedule 2.1 hereto
the aggregate number of shares, par value $0.001 per share, of common stock of
the Company (the "Common Stock"), determined by dividing the aggregate purchase
price set forth opposite such Purchaser's name on Schedule 2.1 hereto by the
Price Per Share (as defined below).
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"Acquisition Documents" has the meaning set forth in Section 3.24 of
this Agreement.
"Affiliate" shall mean any Person who is an "affiliate" as defined in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act.
"Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"Amended and Restated Registration Rights Agreement" has the meaning set
forth in Section 5.9 of this Agreement.
"Articles of Incorporation" means the Restated Articles of
Incorporation, as amended, of the Company, as in effect on the date hereof.
"Assets" has the meaning set forth in Section 3.9 of this Agreement.
"Audited Financial Statements" has the meaning set forth in Section 3.10
of this Agreement.
"Beneficial Ownership" has the meaning given such term in Section
13(d)(3) of the Exchange Act and the rules and regulations promulgated
thereunder.
"Board of Directors" means the Board of Directors of the Company.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in the State of New York are authorized or required by
law or executive order to close.
"By-laws" means the By-laws of the Company as in effect on the date
hereof.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting or non-voting) of, such Person's capital stock (including,
without limitation, common stock and preferred stock) and any and all rights,
warrants or options exchangeable for or convertible into such capital stock.
"Claims" has the meaning set forth in Section 3.5 of this Agreement.
"Closing" has the meaning set forth in Section 2.3 of this Agreement.
"Closing Date" has the meaning set forth in Section 2.3 of this
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
"Commission" means the United States Securities and Exchange Commission
or any similar agency then having jurisdiction to enforce the Securities Act.
"Common Stock" has the meaning set forth in the preamble to this
Agreement.
"Commonly Controlled Entity" means any entity which is under common
control with the Company within the meaning of Code Section 414(b), (c), (m),
(o) or (t).
"Company" has the meaning set forth in the preamble to this Agreement.
2
"Company Plans" means each Plan that the Company and each of its
Subsidiaries maintains or to which the Company and each of its Subsidiaries
contributes.
"Condition of the Company" means the assets, business, properties,
prospects, operations or condition (financial or otherwise) of the Company and
its Subsidiaries, taken as a whole.
"Contractual Obligations" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument to which such Person is a
party or by which it or any of its property is bound.
"Copyrights" means any foreign or United States copyright registrations
and applications for registration thereof, and any non-registered copyrights.
"Effective Time" has the meaning set forth in the Merger Agreement.
"Environmental Laws" means federal, state, local and foreign laws,
principles of common laws, civil laws, regulations, and codes, as well as
orders, decrees, judgments or injunctions, issued, promulgated, approved or
entered thereunder relating to pollution, protection of the environment or
public health and safety.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
"Family Member" has the meaning set forth in Section 8.5(b) of this
Agreement.
"Financial Statements" has the meaning set forth in Section 3.10 of this
Agreement.
"Form 13F Filer" means any Person required under Section 13(f) of the
Exchange Act to file a Form 13F or that would be a Person that would satisfy the
requirements under Rule 13d-1(b)(1)(i) and (ii)(A-F, H or I) under the Exchange
Act with respect to the acquisition of securities of the Company, including as a
result of a transfer of Restricted Shares from the Purchaser and such Person's
Permitted Transferees.
"GAAP" means United States generally accepted accounting principles in
effect from time to time.
"GAP Coinvestment" has the meaning set forth in the preamble to this
Agreement.
3
"GAP LLC" means General Atlantic Partners, LLC, a Delaware limited
liability company and the general partner of GAP LP and the managing member of
GapStar, and any successor to such entity.
"GAP LP" has the meaning set forth in the preamble to this Agreement.
"GAP 74" has the meaning set forth in the preamble to this Agreement.
"GmbH Coinvestment" has the meaning set forth in the preamble to this
Agreement.
"GapStar" has the meaning set forth in the preamble to this Agreement.
"Governmental Authority" means the government of any nation, state,
city, locality or other political subdivision thereof, any entity, including,
without limitation, the Nasdaq Stock Market, Inc., exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Group" has the meaning given such term in Section 13(d)(3) of the
Exchange Act and the rules and regulations promulgated thereunder.
"Indemnified Party" has the meaning set forth in Section 7.1 of this
Agreement.
"Indemnifying Party" has the meaning set forth in Section 7.1 of this
Agreement.
"Intellectual Property" has the meaning set forth in Section 3.17 of
this Agreement.
"Internet Assets" means any Internet domain names and other computer
user identifiers and any rights in and to sites on the worldwide web, including
rights in and to any text, graphics, audio and video files and html or other
code incorporated in such sites.
"Liabilities" has the meaning set forth in Section 3.16 of this
Agreement.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other) or preference, preemptive
right, priority, right or other security interest or preferential arrangement of
any kind or nature whatsoever (excluding preferred stock and equity related
preferences).
"Losses" has the meaning set forth in Section 7.1 of this Agreement.
"Material Adverse Effect" has the meaning ascribed to the term "Parent
Material Adverse Effect" in Section 4.01 of the Merger Agreement.
4
"Material Contractual Obligations" has the meaning set forth in Section
3.8 of this Agreement.
"Merger" has the meaning set forth in the Merger Agreement.
"Merger Agreement" means the Agreement and Plan of Merger, dated as of
December 5, 2003, by and among the Company, Planvista and Planet Acquisition
Corp., a Delaware corporation.
"Orders" has the meaning set forth in Section 3.2 of this Agreement.
"Patents" means any foreign or United States patents and patent
applications, including any divisions, continuations, continuations-in-part,
substitutions or reissues thereof, whether or not patents are issued on such
applications and whether or not such applications are modified, withdrawn or
resubmitted.
"Permits" has the meaning set forth in Section 3.6 of this Agreement.
"Permitted Transferee" has the meaning set forth in Section 8.5(b) of
this Agreement.
"Person" means any individual, firm, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
limited liability company, Governmental Authority or other entity of any kind,
and shall include any successor (by merger or otherwise) of such entity.
"Plan" means any employee benefit plan, arrangement, policy, program,
agreement or commitment (whether or not an employee plan within the meaning of
section 3(3) of ERISA), including, without limitation, any employment,
consulting or deferred compensation agreement, executive compensation, bonus,
incentive, pension, profit-sharing, savings, retirement, stock option, stock
purchase or severance pay plan, any life, health, disability or accident
insurance plan, whether oral or written, whether or not subject to ERISA, as to
which the Company or any Commonly Controlled Entity has or in the future could
have any direct or indirect, actual or contingent liability.
"Planvista" means Planvista Corporation, a Delaware corporation.
"Price Per Share" means $14.25.
"Purchased Shares" has the meaning set forth in Section 2.1 of this
Agreement.
"Purchasers" has the meaning set forth in the preamble to this
Agreement.
"Registerable Securities" has the meaning set forth in the Amended and
Restated Registration Rights Agreement.
5
"Requirement of Law" means, as to any Person, any law, Environmental
Law, statute, treaty, rule, regulation, right, privilege, qualification, license
or franchise or determination of an arbitrator or a court or other Governmental
Authority or stock exchange, in each case applicable or binding upon such Person
or any of its property or to which such Person or any of its property is subject
or pertaining to any or all of the transactions contemplated or referred to
herein.
"Restricted Shares" means (a) with respect to GAP LP, GAP Coinvestment,
GapStar and GMBH Coinvestment, the Purchased Shares purchased by such Purchaser
and all of the shares of Common Stock beneficially owned by such Purchaser on
the date hereof, (b) with respect to GAP 74, all of the shares of Common Stock
beneficially owned by GAP 74 on the date hereof; provided, however, that
nothwithstanding the preceding clauses (a) and (b), an aggregate of 434,568
shares of Common Stock beneficially owned by GAP 74, GAP Coinvestment, GapStar
or GMBH Coinvestment on the date hereof shall not constitute "Restricted Shares"
(subject to adjustment for any subdivision, combination or reclassification of
shares of Common Stock, or upon any dividend or distribution payable in shares
of Common Stock) and (c) with respect to PVC, ComVest, Xxxx and Xxxxxx, the
Purchased Shares purchased by such Purchaser and all of the shares of Common
Stock issued to such Purchaser pursuant to the Merger.
"Sale Transaction" means (a) (i) the merger or consolidation of the
Company into or with one or more Persons, (ii) the merger or consolidation of
one or more Persons into or with the Company or (iii) a tender offer or other
business combination if, in the case of (i), (ii) or (iii), the stockholders of
the Company prior to such merger or consolidation do not retain at least a
majority of the voting power of the surviving Person or (b) the voluntary sale,
conveyance, exchange or transfer to another Person of the voting Capital Stock
of the Company if, after such sale, conveyance, exchange or transfer, the
stockholders of the Company prior to such sale, conveyance, exchange or transfer
do not retain at least a majority of the voting power of the Company.
"SEC Reports" has the meaning set forth in Section 3.10 of this
Agreement.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder.
"Secretary" has the meaning set forth in the Company's By-laws.
"Software" means any computer software programs, source code, object
code, data and documentation, including, without limitation, any computer
software programs that incorporate and run the Company's pricing models,
formulae and algorithms.
"Stock and Warrant Purchase Agreement" means the Stock and Warrant
Purchase Agreement, dated March 26, 2002, by and among the Company, GAP LP, GAP
Coinvestment, GapStar and GmbH Coinvestment.
6
"Stock Equivalents" means any security or obligation which is by its
terms convertible into or exchangeable or exercisable for shares of Common Stock
or other capital stock of the Company, and any option, warrant or other
subscription or purchase right with respect to common stock or such other
capital stock.
"Stock Option Plans" means collectively, the Company's 2002 Stock Option
Plan, 2001 Stock Option Plan, Amended 2000 1/2 Stock Option Plan, 2000 Stock
Option Plan, 1999 Stock Option Plan, 1997 Stock Option Plan, 1995 Stock Option
Plan, 1995 Outside Directors Stock Option Plan, 1993 Stock Option Plan and
ProxyMed Employee Non-Qualified Stock Option Agreement.
"Stockholder Approval" has the meaning set forth in Section 3.23 of this
Agreement.
"Subsidiaries" means, as of the relevant date of determination, with
respect to any Person, a corporation or other Person of which 50% or more of the
voting power of the outstanding voting equity securities or 50% or more of the
outstanding economic equity interest is held, directly or indirectly, by such
Person. Unless otherwise qualified, or the context otherwise requires, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Company.
"Taxes" means any federal, state, provincial, county, local, foreign and
other taxes (including, without limitation, income, profits, windfall profits,
alternative, minimum, accumulated earnings, personal holding company, capital
stock, premium, estimated, excise, sales, use, occupancy, gross receipts,
franchise, ad valorem, severance, capital levy, production, transfer,
withholding, employment, unemployment compensation, payroll and property taxes,
import duties and other governmental charges and assessments), whether or not
measured in whole or in part by net income, and including deficiencies,
interest, additions to tax or interest, and penalties with respect thereto, and
including expenses associated with contesting any proposed adjustments related
to any of the foregoing.
"Trade Secrets" means any trade secrets, research records, processes,
procedures, manufacturing formulae, technical know-how, technology, blue prints,
designs, plans, inventions (whether patentable and whether reduced to practice),
invention disclosures and improvements thereto.
"Trademarks" means any foreign or United States trademarks, service
marks, trade dress, trade names, brand names, designs and logos, corporate
names, product or service identifiers, whether registered or unregistered, and
all registrations and applications for registration thereof.
"Transfer" has the meaning set forth in Section 8.5(a) of this
Agreement.
"Unaudited Financial Statements" has the meaning set forth in Section
3.11 of this Agreement.
7
"Warrants" means, collectively, those warrants, exercisable for shares
of Common Stock, issued pursuant to the Stock and Warrant Purchase Agreement,
dated March 26, 2002, by and among the Company, General Atlantic Partners 74,
L.P., GAP Coinvestment, GmbH Coinvestment and GapStar and those warrants issued
to General Atlantic Partners 74, L.P., GAP Coinvestment, GmbH Coinvestment and
GapStar on July 8, 2003.
ARTICLE II
PURCHASE AND SALE OF COMMON STOCK
2.1 Purchase and Sale of Common Stock. Subject to the terms and
conditions herein set forth, the Company agrees to issue and sell to each
Purchaser, and each Purchaser, severally and not jointly, agrees to purchase
from the Company, on the Closing Date the aggregate number of shares of Common
Stock determined by dividing (x) the aggregate purchase price set forth opposite
such Purchaser's name on Schedule 2.1 hereto by (y) the Price Per Share (rounded
up to the nearest share), for the aggregate purchase price set forth opposite
such Purchaser's name on Schedule 2.1 hereto (all of the shares of Common Stock
being purchased pursuant to this Section 2.1 being referred to herein as the
"Purchased Shares").
2.2 Use of Proceeds. The Company shall use the proceeds from the sale of
the Purchased Shares to fund the acquisition by the Company of Planvista
pursuant to the Merger Agreement and to fulfill the Company's obligations under
the Merger Agreement.
2.3 Closing. Unless this Agreement shall have been terminated pursuant
to Article IX, and subject to the satisfaction or waiver of the conditions set
forth in Articles V and VI, the closing of the sale and purchase of the
Purchased Shares (the "Closing") shall take place at the offices of Holland &
Knight LLP, one East Broward Boulevard, Suite 1300, Xxxx Xxxxxxxxxx, Xxxxxxx
00000, at 10:00 a.m., local time, on the Effective Time of the Merger, or at
such other time, place and date that the Company and the Purchasers purchasing a
majority of the Purchased Shares may agree in writing (the "Closing Date"). On
the Closing Date, the Company shall deliver to each of the Purchasers a
certificate or certificates in definitive form and registered in the name of
each such Purchaser, representing its Purchased Shares.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to each of the Purchasers on and as
of the date hereof as follows:
3.1 Corporate Existence and Power. Except as set forth on Schedule 3.1,
the Company and each of its Subsidiaries (a) is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation;
8
(b) has all requisite power and authority to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which it
is currently, or is proposed to be, engaged; and (c) is duly qualified as a
foreign corporation, licensed and in good standing under the laws of each
jurisdiction in which its ownership, lease or operation of property or the
conduct of its business requires such qualification, except where the failure to
be so qualified could not reasonably be expected to have a material adverse
effect on the Condition of the Company. The Company has the corporate power and
authority to execute, deliver and perform its obligations under this Agreement.
3.2 Authorization; No Contravention; FBCA Sections 607.0901 and
607.0902. Except as set forth on Schedule 3.2, the execution, delivery and
performance by the Company of this Agreement and the transactions contemplated
hereby (a) except for receipt of the Stockholder Approval, have been duly
authorized by all necessary corporate action of the Company, including all
actions, consents and approvals required by the Company's Board of Directors and
stockholders; (b) do not contravene the terms of the Certificate of
Incorporation or the By-laws or the organizational documents of any of the
Subsidiaries; (c) do not violate, conflict with or result in any breach, default
or contravention of (or with due notice or lapse of time or both would result in
any breach, default or contravention of), or the creation of any Lien under, any
Contractual Obligation of the Company or any of its Subsidiaries or any
Requirement of Law applicable to the Company or any of its Subsidiaries; and (d)
do not violate any judgment, injunction, writ, award, decree or order of any
nature (collectively, "Orders") of any Governmental Authority against, or
binding upon, the Company or any of its Subsidiaries. Section 607.0901 and
Section 607.0902 of the Florida Business Corporation Act are not applicable to
the Company or to any of the transactions contemplated by this Agreement. The
Board of Directors of the Company approved this Agreement and the transactions
contemplated hereby and thereby at a meeting of the Board of Directors duly
convened on December 4, 2003.
3.3 Governmental Authorization; Third Party Consents. Except as set
forth on Schedule 3.3, no approval, consent, compliance, exemption,
authorization or other action by, or notice to, or filing with, any Governmental
Authority or any other Person, and no lapse of a waiting period under a
Requirement of Law, is necessary or required in connection with the execution,
delivery or performance (including, without limitation, the sale, issuance and
delivery of the Purchased Shares) by, or enforcement against, the Company of
this Agreement or the transactions contemplated hereby.
3.4 Binding Effect. This Agreement has been duly executed and delivered
by the Company, and constitutes the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity relating to enforceability (regardless of whether
considered in a proceeding at law or in equity).
9
3.5 Litigation. Except as set forth on Schedule 3.5, there are no
actions, suits, proceedings, claims (including, without limitation, claims
involving the prior employment of any of the Company's or any of its
Subsidiaries' employees, their use in connection with the Company's or any of
its Subsidiaries' business of any information or techniques allegedly
proprietary to any of their former employers or their obligations under any
agreements with prior employers), complaints, disputes, arbitrations or
investigations (collectively, "Claims") pending or, to the knowledge of the
Company, threatened, at law, in equity, in arbitration or before any
Governmental Authority against the Company or any of its Subsidiaries nor is the
Company or any of its Subsidiaries aware that there is any basis for any of the
foregoing that could reasonably be expected to have a material adverse effect on
the Condition of the Company. No Order has been issued by any court or other
Governmental Authority against the Company or any of its Subsidiaries purporting
to enjoin or restrain the execution, delivery or performance of this Agreement.
3.6 Compliance with Laws.
(a) Except as set forth on Schedule 3.6(a), the Company and each of its
Subsidiaries is in compliance in all material respects with all Requirements of
Law and all Orders issued by any court or Governmental Authority against the
Company and each of its Subsidiaries. To the knowledge of the Company, there is
no Requirement of Law which could reasonably be expected to prohibit or restrict
the Company or any of its Subsidiaries from, or otherwise materially adversely
effect the Company or any of its Subsidiaries in, conducting its business in any
jurisdiction in which it now conducts its business.
(b) The Company and each of its Subsidiaries has all material licenses,
permits and approvals of any Governmental Authority (collectively, "Permits")
that are necessary for the conduct of the business of the Company and each of
its Subsidiaries; (ii) such Permits are in full force and effect; and (iii) no
violations are or have been recorded in respect of any Permit.
3.7 Capitalization.
(a) As of the date of this Agreement, the authorized capital stock of
the Company consists of (i) 13,333,333 and 1/3 shares of Common Stock, of which
6,783,493 shares shall be issued and outstanding and (ii) 2,000,000 shares of
preferred stock, par value $0.01 per share, 130,000 of which are designated as
Series A Preferred Stock, 15,000 of which are designated as Series B Preferred
Stock, and 300,000 of which are designated as Series C Preferred Stock of which
no shares of Series A Preferred Stock, no shares of Series B Preferred Stock and
2,000 shares of Series C Preferred Stock are issued and outstanding and
convertible into 13,333 shares of Common Stock and (iv) 1,555,000 shares of
which are undesignated "blank check" preferred stock. As of the date of this
Agreement, the aggregate number of options to purchase shares of Common Stock
which may be issued under the Stock Option Plans is 1,648,482 of which 1,370,080
are outstanding. Except for the Warrants, and except as set forth on Schedule
3.7(a), there are no options (other than options granted under the Stock Option
Plans),
10
warrants, conversion privileges, subscription or purchase rights or other rights
currently outstanding to purchase or otherwise acquire (i) any authorized but
unissued, unauthorized or treasury shares of the Company's capital stock, (ii)
any Stock Equivalents or (iii) any other securities of the Company and there are
no commitments, contracts, agreements, arrangements or understandings by the
Company to issue any shares of the Company's capital stock or any Stock
Equivalents or other securities of the Company. No anti-dilution rights of any
capital stock or other securities issued by the Company shall be triggered as a
result of the transactions contemplated hereby. The Purchased Shares are duly
authorized, and when issued and sold to the Purchasers after payment therefor,
will be validly issued, fully paid and non-assessable, will be issued in
compliance with the registration and qualification requirements of all
applicable federal, state and foreign securities laws and will be free and clear
of all other Liens. All of the issued and outstanding shares of Common Stock are
duly authorized, validly issued, fully paid and non-assessable, and were issued
in compliance with the registration and qualification requirements of all
applicable federal, state and foreign securities laws.
(b) Schedule 3.7(b) sets forth, as of the Closing Date, a true and
complete list of (x) each of the Subsidiaries of the Company and (y) the
aggregate number of authorized and issued shares of capital stock of such
Subsidiary. The Company owns all of the issued and outstanding capital stock of
the Subsidiaries, free and clear of all Liens. All of such shares of capital
stock are duly authorized, validly issued, fully paid and non-assessable, and
were issued in compliance with the registration and qualification requirements
of all applicable federal, state and foreign securities laws. There are no
options, warrants, conversion privileges, subscription or purchase rights or
other rights currently outstanding to purchase or otherwise acquire any
authorized but unissued, unauthorized or treasury shares of capital stock or
other securities of, or any proprietary interest in, any of the Subsidiaries,
and there is no outstanding security of any kind convertible into or
exchangeable for such shares or proprietary interest.
3.8 No Default or Breach; Contractual Obligations. All of the
Contractual Obligations filed as exhibits or described in the SEC Reports or
which are otherwise material to the Condition of the Company (collectively, the
"Material Contractual Obligations") are valid, subsisting, in full force and
effect and binding upon the Company or its Subsidiaries, as the case may be,
and, to the knowledge of the Company, the other parties thereto, and the Company
and each of its Subsidiaries has paid in full or accrued all amounts due
thereunder and has satisfied in full or provided for all of its liabilities and
obligations thereunder. Neither the Company nor any of its Subsidiaries has
received notice of a default or is in default under, or with respect to, any
Material Contractual Obligation nor does any condition exist that with notice or
lapse of time or both would constitute a default thereunder. No other party to
any such Material Contractual Obligation is in default thereunder, nor does any
condition exist that with notice or lapse of time or both would constitute a
default by such other party thereunder.
3.9 Title to Properties and Assets. Except as set forth in Schedule 3.9,
the Company and each of its Subsidiaries holds interests as lessee under leases
in full force and effect in all real property used in connection with its
business or otherwise owned or leased by it. The Company and each of its
Subsidiaries owns and has good,
11
valid, and marketable title to all of the material properties and assets used in
its business and reflected as owned on the Financial Statements or so described
in any Schedule hereto (collectively, the "Assets"), in each case free and clear
of all Liens, except for Liens specifically described on the notes to the
Financial Statements.
3.10 Reports; Financial Statements. (a) As of the respective dates of
their filing with the Commission, all reports, registration statements and other
filings, together with any amendments thereto, filed by the Company with the
Commission since January 1, 2000 (the "SEC Reports"), complied in all material
respects with the applicable requirements of the Securities Act, the Exchange
Act, and the rules and regulations of the Commission promulgated thereunder. The
SEC Reports did not at the time they were filed with the Commission contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(b) The audited consolidated financial statements of the Company and its
Subsidiaries (balance sheet and statements of operations, cash flow and
stockholders' equity, together with the notes thereto) for the fiscal year ended
December 31, 2002 which contains the unqualified report of
PricewaterhouseCoopers LLP (the "Audited Financial Statements") and the
unaudited consolidated financial statements of the Company and its Subsidiaries
(balance sheet and statements of operations) for the fiscal quarter ended
September 30, 2003 (the "Unaudited Financial Statements" and, together with the
Audited Financial Statements, the "Financial Statements") set forth in the SEC
Reports are complete and correct in all material respects and have been prepared
in accordance with GAAP applied on a consistent basis throughout the periods
indicated and with each other, except that the Unaudited Financial Statements do
not contain footnotes or normal year-end adjustments. The Financial Statements
fairly present in all material respects the financial condition, operating
results and cash flows of the Company and its Subsidiaries as of the respective
dates and for the respective periods indicated in accordance with GAAP, except
that the Unaudited Financial Statements do not contain footnotes or normal
year-end adjustments.
3.11 Taxes. Except as set forth in Schedule 3.11, (a) The Company and
each of its Subsidiaries has paid all material Taxes which have come due and are
required to be paid by it through the date hereof, and all deficiencies or other
additions to Tax, interest and penalties owed by it in connection with any such
Taxes, other than Taxes being disputed by the Company and each of its
Subsidiaries in good faith for which adequate reserves have been made in
accordance with GAAP; (b) the Company and each of its Subsidiaries has timely
filed or caused to be filed all returns for Taxes that it is required to file on
and through the date hereof (including all applicable extensions), and all such
Tax returns are accurate and complete in all material respects; (c) with respect
to all Tax returns of the Company and each of its Subsidiaries, (i) to the
knowledge of the Company, there is no unassessed Tax deficiency proposed or, to
the knowledge of the Company or any of its Subsidiaries, threatened against the
Company or any of its Subsidiaries and (ii) no audit is in progress with respect
to any return for Taxes, no
12
extension of time is in force with respect to any date on which any return for
Taxes was or is to be filed and no waiver or agreement is in force for the
extension of time for the assessment or payment of any Tax; (d) all provisions
for Tax liabilities of the Company and each of its Subsidiaries with respect to
the Financial Statements have been made in accordance with GAAP consistently
applied; and (e) there are no Liens for Taxes on the assets of either the
Company or any of its Subsidiaries.
3.12 No Material Adverse Change; Ordinary Course of Business. Except as
set forth in Schedule 3.12 or in the SEC Reports filed prior to the date hereof,
since December 31, 2002, (a) there has not been any material adverse change in
the Condition of the Company, (b) the Company and each of its Subsidiaries has
not participated in any transaction material to the Condition of the Company
which is outside the ordinary course of business, (c) the Company and each of
its Subsidiaries has not increased the compensation of any of its officers or
the rate of pay of any of its employees, except as part of regular compensation
increases in the ordinary course of business, (d) the Company and each of its
Subsidiaries has not created or assumed any Lien on a material asset of the
Company or any of its Subsidiaries, and (e) there has not occurred a material
change in the Company's or any of its Subsidiaries' accounting principles or
practice except as required by reason of a change in GAAP.
3.13 Private Offering. No form of general solicitation or general
advertising was used by the Company or its representatives in connection with
the offer or sale of the Purchased Shares. Assuming the accuracy of the
representations and warranties of the Purchasers set forth in Article IV, no
registration of the Purchased Shares, pursuant to the provisions of the
Securities Act or any state securities or "blue sky" laws, will be required by
the offer, sale or issuance of the Purchased Shares. The Company agrees that
neither it, nor anyone acting on its behalf, shall offer to sell the Purchased
Shares or any other securities of the Company so as to require the registration
of the Purchased Shares pursuant to the provisions of the Securities Act or any
state securities or "blue sky" laws, unless such Purchased Shares or other
securities are so registered.
3.14 Labor Relations. Except as could not reasonably be expected to have
a material adverse effect on the Condition of the Company, (a) neither the
Company nor any of its Subsidiaries is engaged in any unfair labor practice; (b)
there is no strike, labor dispute, slowdown or stoppage pending or, to the
knowledge of the Company, threatened against the Company or any of its
Subsidiaries; and (c) neither the Company nor any of its Subsidiaries is a party
to any collective bargaining agreement or contract.
3.15 Employee Benefit Plans.
(a) The SEC Reports disclose or describe each Company Plan that is
required to be disclosed or described in such SEC Reports pursuant to the
Exchange Act and the Securities Act. The Company and each of its Subsidiaries
has no liability under any Plans other than the Company Plans. Except as
disclosed in the SEC Reports, neither the Company, its Subsidiaries nor any
Commonly Controlled Entity maintains or contributes to, or has within the
preceding six years maintained or contributed to, or may
13
have any liability with
respect to any Plan subject to Title IV of ERISA or Section 412 of the Code or
any "multiple employer plan" within the meaning of the Code or ERISA. Each
Company Plan (and related trust, insurance contract or fund) has been
established and administered in all material respects in accordance with its
terms, and complies in form and in operation in all material respects with the
applicable requirements of ERISA and the Code and other applicable Requirements
of Law.
(b) No Claim with respect to the administration or the investment of the
assets of any Company Plan (other than routine claims for benefits) is pending.
(c) Each Company Plan that is intended to be qualified under Section
401(a) of the Code is so qualified and has been so qualified during the period
since its adoption; and each trust created under any such Plan is exempt from
tax under Section 501(a) of the Code and has been so exempt since its creation.
(d) The consummation of the transactions contemplated by this Agreement
will not accelerate the time of the payment or vesting of, or increase the
amount of, compensation due to any employee or former employee whether or not
such payment would constitute an "excess parachute payment" under section 280G
of the Code.
(e) All material unfunded obligations under any Company Plan which are
required to be reflected on the Financial Statements in accordance with GAAP
have been reflected on the Financial Statements.
3.16 Liabilities. The Company and each of its Subsidiaries do not have
any direct or indirect obligation or liability (the "Liabilities") other than
(a) Liabilities fully and adequately reflected or reserved against on the
Financial Statements and (b) Liabilities incurred since December 31, 2002 in the
ordinary course of business.
3.17 Intellectual Property.
(a) (i) Except as set forth in Schedule 3.17(a), the Company and each of
its Subsidiaries is the owner of all, or has a license under all of, the
material Copyrights, Patents, Trade Secrets, Trademarks, Internet Assets,
Software and other proprietary rights (collectively, "Intellectual Property")
that are used in connection with its business as presently conducted, free and
clear of all Liens.
(ii) None of the Intellectual Property owned by the Company or
any of its Subsidiaries is subject to any outstanding Order, and no action,
suit, proceeding, hearing, investigation, charge, complaint, claim or demand is
pending or, to the knowledge of the Company, threatened, which challenges the
validity, enforceability, use or ownership of the item.
(iii) The Company and each of its Subsidiaries has substantially
performed all material obligations imposed upon it under any material license,
material sublicenses, material distribution agreement or other material
agreement relating to any Intellectual Property not owned by the Company or any
of its Subsidiaries,
14
and is not, nor to the knowledge of the Company, is any other party thereto, in
material breach of any material terms or default of any material terms
thereunder in any respect, nor is there any event which with notice or lapse of
time or both would constitute a default thereunder. All such Intellectual
Property licenses are valid, enforceable and in full force and effect, and will
continue to be so on identical terms immediately following the Closing except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity relating to enforceability (regardless of whether
considered in a proceeding at law or in equity).
(iv) Except as set forth in Schedule 3.17(a) and except as
disclosed in the SEC Reports, none of the Intellectual Property currently sold
or licensed by the Company or any of its Subsidiaries to any Person, or, to the
knowledge of the Company, used by or licensed to the Company or any of its
Subsidiaries by any Person, infringes in any material respect upon or otherwise
violates in any material respect any Intellectual Property rights of others.
(v) Except as disclosed in the SEC Reports, no litigation is
pending and no Claim has been made against the Company or any of its
Subsidiaries or, to the knowledge of the Company, is threatened, contesting the
right of the Company or any of its Subsidiaries to sell or license to any Person
or use the Intellectual Property presently sold or licensed to such Person or
used by the Company or any of its Subsidiaries.
(b) Except as set forth on Schedule 3.17(b) or as disclosed in the SEC
Reports, to the knowledge of the Company, no Person is infringing upon or
otherwise violating the Intellectual Property rights of the Company or any of
its Subsidiaries.
(c) No former employer of any employee of the Company or any of its
Subsidiaries, and no client of any consultant of the Company or any of its
Subsidiaries, has made a claim against the Company or any of its Subsidiaries
or, to the knowledge of the Company, against any other Person, that such
employee or such consultant is utilizing Intellectual Property of such former
employer or client.
(d) Except as set forth on Schedule 3.17(d), to the knowledge of the
Company, no employee of the Company or any of its Subsidiaries is in violation
of any employment agreement, patent or invention disclosure agreement or other
contract or agreement setting forth the terms of employment of such employee
with the Company or any of its Subsidiaries or any prior employer.
(e) Except as set forth on Schedule 3.17(e), to the knowledge of the
Company, none of the material Trade Secrets of the Company, wherever located,
the value of which is contingent upon maintenance of confidentiality thereof,
has been disclosed to any Person other than employees, representatives and
agents of the Company or any of its Subsidiaries or to other Persons who have
executed appropriate
15
nondisclosure agreements, except as required pursuant to the filing of a patent
application by the Company or any of its Subsidiaries.
(f) All present key employees of the Company and each of its
Subsidiaries have executed and delivered invention agreements with the Company
and each of its Subsidiaries, and are obligated under the terms thereof to
assign all inventions made by them during the course of employment to the
Company and each of its Subsidiaries. No such employee or present consultant of
the Company or any of its Subsidiaries has excluded works or inventions used by
the Company but made prior to his employment with, or work for, the Company or
any of its Subsidiaries from his assignment of inventions pursuant to such
proprietary invention agreements.
3.18 Network Redundancy and Computer Back-up. Except as could not
reasonably be expected to have a material adverse effect on the Condition of the
Company, the Company and each of its Subsidiaries has made back-ups of all
material computer Software and databases utilized by it and maintain such
Software and databases at a secure off-site location.
3.19 Privacy of Customer Information. Except as set forth on Schedule
3.19, neither the Company nor any of its Subsidiaries uses any of the customer
information it receives through its website or otherwise in a manner violative
in any material respect of the Company's or any of its Subsidiaries' privacy
policy or the privacy rights of its customers under applicable law.
3.20 Potential Conflicts of Interest. Except as set forth on Schedule
3.20, or as disclosed in the SEC Reports, to the knowledge of the Company, no
officer or director of the Company, no stockholder Beneficially Owning in excess
of five percent of the outstanding Common Stock, and no spouse of any such
officer or director (a) owns, directly or indirectly, any interest in (excepting
less than one percent (1%) stock holdings for investment purposes in securities
of publicly held and traded companies), or is an officer, director, employee or
consultant of, any Person which is, or is engaged in business as, a competitor,
lessor, lessee, supplier, distributor, sales agent or customer of, or lender to
or borrower from, the Company or any of its Subsidiaries; or (b) owns, directly
or indirectly, in whole or in part, any tangible or intangible property material
to the conduct of the business of the Company or its Subsidiaries.
3.21 Trade Relations. Except as set forth in Schedule 3.21, there exists
no actual or, to the knowledge of the Company or any of its Subsidiaries,
threatened termination, cancellation or limitation of, or any adverse change in,
the business relationship of the Company or any of its Subsidiaries with any
customer or supplier or any group of customers or suppliers whose purchases or
inventories provided to the Company's and each of its Subsidiaries' business are
individually or in the aggregate material to the Condition of the Company.
3.22 Broker's, Finder's or Similar Fees. Except as set forth on Schedule
3.22, there are no brokerage commissions, finder's fees or similar fees or
commissions payable by the Company or any of its Subsidiaries in connection with
the
16
transactions contemplated hereby based on any agreement, arrangement or
understanding with the Company or any of its Subsidiaries or any action taken by
any such Person.
3.23 Stockholder Approval. The approval of the holders of a majority of
the outstanding shares of the Company's Common Stock, present in person or proxy
at a properly convened meeting of the Company's stockholders (the "Stockholder
Approval"), is the sole stockholder consent required for (i) the issuance and
sale of the Purchased Shares to the Purchasers in accordance with this
Agreement, (ii) the consummation of the Merger in accordance with the Merger
Agreement and (iii) the consummation of the other transactions contemplated by
this Agreement and the Merger Agreement.
3.24 True and Complete Copy of Merger Agreement and Other
Transaction-Related Agreements. The Company has delivered to each of the
Purchasers a true, correct and complete copy of the Merger Agreement and all
other agreements related thereto or to the transactions contemplated thereby,
including without limitation, the Merger (collectively, the "Acquisition
Documents"). The Acquisition Documents (i) have been executed in the exact form
as provided, (ii) have not been amended or modified and (iii) are in full force
and effect. Each of the representations and warranties of the Company made in
Article IV of the Merger Agreement are true and correct in all material
respects.
3.25 Registration Rights. The Purchased Shares purchased by GAP LP, GAP
Coinvestment, GapStar and GmbH Coinvestment shall be Registerable Securities.
3.26 Observance of Covenants. The Company has not failed to observe or
perform any of the covenants set forth in Article VIII of the Stock and Warrant
Purchase Agreement, except that the Board of Directors of the Company is
comprised of eight members. Subject to Section 10.5 hereof, all of such
covenants are in full force and effect and remain binding upon the Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each of the Purchasers hereby represents and warrants, severally and not
jointly, to the Company as follows:
4.1 Existence and Power. Such Purchaser (a) is a limited partnership or
limited liability company, as the case may be, duly organized and validly
existing under the laws of the jurisdiction of its formation and (b) has the
requisite partnership or limited liability company, as the case may be, power
and authority to execute, deliver and perform its obligations under this
Agreement.
4.2 Authorization; No Contravention. The execution, delivery and
performance by such Purchaser of this Agreement and the transactions
contemplated hereby (a) have been duly authorized by all necessary partnership
or limited liability
17
company, as the case may be, action, (b) do not contravene the terms of such
Purchaser's organizational documents, or any amendment thereof, and (c) do not
violate, conflict with or result in any breach or contravention of, or the
creation of any Lien under, any Contractual Obligation of such Purchaser or any
Requirement of Law applicable to such Purchaser (except for the Lien created on
the Purchased Shares purchased by GapStar to secure its obligations under a bona
fide loan made to acquire such Purchased Shares), and (d) do not violate any
Orders of any Governmental Authority against, or binding upon, such Purchaser.
4.3 Governmental Authorization; Third Party Consents. No approval,
consent, compliance, exemption, authorization or other action by, or notice to,
or filing with, any Governmental Authority or any other Person, and no lapse of
a waiting period under any Requirement of Law, is necessary or required in
connection with the execution, delivery or performance (including, without
limitation, the purchase of the Purchased Shares) by, or enforcement against,
such Purchaser of this Agreement or the transactions contemplated hereby.
4.4 Binding Effect. This Agreement has been duly executed and delivered
by such Purchaser and constitutes the legal, valid and binding obligations of
such Purchaser, enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws
affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability (regardless of whether considered in a
proceeding at law or in equity).
4.5 Purchase for Own Account. The Purchased Shares to be acquired by
such Purchaser pursuant to this Agreement are being acquired for its own account
for investment only, and not with a view to, or for sale in connection with, any
distribution of such Purchased Shares or any part thereof in any transaction
that would be in violation of the securities laws of the United States of
America, any state of the United States or any foreign jurisdiction. Such
Purchaser understands and agrees that such Purchased Shares have not been
registered under the Securities Act and are "restricted securities" within the
meaning of Rule 144 under the Securities Act; and that the Purchased Shares
cannot be sold, transferred or otherwise disposed of except in compliance with
the Securities Act and applicable state and foreign securities laws, as then in
effect. Such Purchaser agrees to the imprinting of a legend on certificates
representing all of its Purchased Shares to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY FOREIGN JURISDICTION. THE SECURITIES
MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT
REQUIRED.
18
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS UPON TRANSFER PURSUANT TO A STOCK PURCHASE AGREEMENT DATED AS OF
DECEMBER 5, 2003, AS MAY BE AMENDED FROM TIME TO TIME. A COPY OF THE STOCK
PURCHASE AGREEMENT MAY BE OBTAINED FROM THE COMPANY WITHOUT CHARGE UPON THE
WRITTEN REQUEST OF THE HOLDER HEREOF.
4.6 Restricted Securities. Such Purchaser understands that the Purchased
Shares will not be registered at the time of their issuance under the Securities
Act for the reason that the sale provided for in this Agreement is exempt
pursuant to Section 4(2) of the Securities Act and that the reliance of the
Company on such exemption is predicated in part on such Purchaser's
representations set forth herein.
4.7 Broker's, Finder's or Similar Fees. There are no brokerage
commissions, finder's fees or similar fees or commissions payable by such
Purchaser in connection with the transactions contemplated hereby based on any
agreement, arrangement or understanding with such Purchaser or any action taken
by such Purchaser.
4.8 Accredited Investor. Such Purchaser is an "Accredited Investor"
within the meaning of Rule 501 of Regulation D under the Securities Act, as
presently in effect.
19
ARTICLE V
CONDITIONS TO THE OBLIGATION
OF THE PURCHASERS TO CLOSE
The obligation of each of the Purchasers to purchase the Purchased
Shares, to pay the purchase price therefor at the Closing and to perform any
obligations hereunder shall be subject to the satisfaction as determined by, or
waiver by, the Purchasers purchasing a majority of the Purchased Shares of the
following conditions on or before the Closing Date.
5.1 Representations and Warranties. The representations and warranties
of the Company contained in Article III hereof shall be true and correct in all
material respects (except for any such representations and warranties which are
qualified by their terms by a reference to materiality or material adverse
effect, which representation as so qualified shall be true and correct in all
respects) at and on the Closing Date as if made at and on such date, except
where the failure of such representations or warranties to be true or correct
would not have, individually or in the aggregate, a Material Adverse Effect,
and, to the knowledge of the Company, each of the representations and warranties
of Planvista contained in Article III of the Merger Agreement shall be true and
correct, except where the failure of such representations or warranties to be
true or correct would not have, individually or in the aggregate, a Company
Material Adverse Effect (as defined in the Merger Agreement).
5.2 Compliance with this Agreement. The Company shall have performed and
complied in all material respects with all of its agreements set forth herein
that are required to be performed by the Company on or before the Closing Date.
5.3 Officer's Certificate. The Purchasers shall have received a
certificate from the Company, in form and substance satisfactory to the
Purchaser, dated the Closing Date, and signed by the Chief Executive Officer and
Chief Financial Officer of the Company, certifying as to the matters set forth
in Section 5.1 and 5.2.
5.4 Secretary's Certificate. The Purchasers shall have received a
certificate from the Company, in form and substance satisfactory to the
Purchasers purchasing a majority of the Purchased Shares, dated the Closing Date
and signed by the Secretary of the Company, certifying (a) that the Company is
in good standing with the Secretary of State of the State of Florida, (b) that
the attached copies of the Articles of Incorporation, the By-laws, resolutions
of the Board of Directors approving this Agreement and the transactions
contemplated hereby and thereby, are all true, complete and correct and remain
unamended and in full force and effect, and (c) as to the incumbency and
specimen signature of each officer of the Company executing this Agreement and
any other document delivered in connection herewith on behalf of the Company.
5.5 Purchased Shares. The Company shall have delivered to each of the
Purchasers certificates in definitive form representing the number of Purchased
20
Shares set forth opposite such Purchaser's name on Schedule 2.1 hereto,
registered in the name of such Purchaser.
5.6 Opinion of Counsel. The Purchasers shall have received an opinion of
Holland & Knight LLP, dated the Closing Date, relating to the transactions
contemplated by or referred to herein, substantially in the form attached hereto
as Exhibit A.
5.7 NASD. The Purchased Shares shall have been approved for quotation on
the Nasdaq Stock Market, Inc.
5.8 Stockholder Approval. The Company shall have received the
Stockholder Approval and the Purchasers shall have received satisfactory
evidence thereof.
5.9 Amended and Restated Registration Rights Agreement. The Company
shall have duly executed and delivered to the Purchasers the Amended and
Restated Registration Rights Agreement substantially in the form attached hereto
as Exhibit B (the "Amended and Restated Registration Rights Agreement").
5.10 No Material Adverse Change. Since the date hereof, there shall not
have occurred any event, change or effect having, individually or in the
aggregate, a Material Adverse Effect.
5.11 Consents and Approvals. All consents, exemptions, authorizations,
or other actions by, or notice to, or filings with, Governmental Authorities and
other Persons in respect of all Requirements of Law and with respect to those
Contractual Obligations of the Company which are necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, the Company of this Agreement shall have been obtained and be in full
force and effect, and the Purchasers shall have been furnished with appropriate
evidence thereof and all applicable waiting periods shall have expired without
any action being taken or threatened which would have a material adverse effect
on the Condition of the Company.
5.12 No Material Judgment or Order. There shall not be on the Closing
Date any Order of a court of competent jurisdiction or any ruling of any
Governmental Authority or any condition imposed under any Requirement of Law
which would, in the reasonable judgment of the Purchasers purchasing a majority
of the Purchased Shares, (a) prohibit or restrict (i) the purchase of the
Purchased Shares or (ii) the consummation of the other transactions contemplated
by this Agreement, (b) subject any of the Purchasers to any material penalty or
onerous condition under or pursuant to any Requirement of Law if the Purchased
Shares were to be purchased hereunder or (c) restrict the operation of the
business of the Company as conducted on the date hereof in a manner that would
have a Material Adverse Effect.
5.13 No Litigation. No action, suit, proceeding, claim or dispute shall
have been brought or otherwise arisen at law, in equity, in arbitration or
before any
21
Governmental Authority against the Company which would, if adversely determined
(a) have a material adverse effect on the Condition of the Company or (b) have a
Material Adverse Effect.
5.14 Satisfaction of Conditions; Consummation of the Merger.
(a) All conditions to the obligation of each party to the Merger
Agreement to effect the Merger thereunder shall have been satisfied.
(b) The Merger shall have been consummated in accordance with the Merger
Agreement.
ARTICLE VI
CONDITIONS TO THE OBLIGATION OF THE COMPANY
AND THE SELLING STOCKHOLDERS TO CLOSE
The obligation of the Company to issue and sell the Purchased Shares and
the obligations of the Company to perform its other obligations hereunder shall
be subject to the satisfaction as determined by, or waiver by, the Company of
the following conditions on or before the Closing Date:
6.1 Payment of Purchase Price. Each Purchaser shall be prepared to pay,
by wire transfer, the aggregate purchase price for the Purchased Shares to be
purchased by such Purchaser.
6.2 Representations and Warranties. The representations and warranties
of the Purchasers contained in Article IV hereof shall be true and correct in
all material respects (except for any such representations and warranties which
are qualified by their terms by a reference to materiality or material adverse
effect, which representation as so qualified shall be true and correct in all
respects) at and on the Closing Date as if made at and on such date.
6.3 Stockholder Approval. The Company shall have received the
Stockholder Approval.
6.4 Satisfaction of Conditions. All conditions to the obligation of each
party to the Merger Agreement to effect the Merger thereunder shall have been
satisfied.
ARTICLE VII
INDEMNIFICATION
7.1 Indemnification. Subject to the limitations set forth in Section
7.4, the Company (the "Indemnifying Party") agrees to indemnify, defend and hold
harmless each of the Purchasers and its Affiliates and their respective
officers, managers, directors, agents, employees, subsidiaries, partners,
members and controlling persons (each, an "Indemnified Party") to the fullest
extent permitted by law from and against any and all
22
losses, Claims, or written threats thereof (including, without limitation, any
Claim by a third party), damages, expenses (including reasonable fees,
disbursements and other charges of counsel incurred by the Indemnified Party in
any action between the Company Indemnifying Party and the Indemnified Party or
between the Indemnified Party and any third party (other than a third party who
is an Affiliate of such Indemnified Party) or otherwise in the manner described
in Section 7.2 below) or other liabilities (collectively, "Losses") resulting
from or arising out of any breach of any representation or warranty, covenant or
agreement by the Company in this Agreement. In connection with the obligation of
the Indemnifying Party to indemnify for expenses as set forth above, the
Indemnifying Party shall, upon presentation of appropriate invoices containing
reasonable detail, reimburse each Indemnified Party for all such expenses
(including reasonable fees, disbursements and other charges of counsel incurred
by the Indemnified Party in any action between the Indemnifying Party and the
Indemnified Party or between the Indemnified Party and any third party (other
than a third party who is an Affiliate of such Indemnified Party) as they are
incurred by such Indemnified Party; provided, however, that if an Indemnified
Party is reimbursed under this Article VII for any expenses, such reimbursement
of expenses shall be refunded to the extent it is finally judicially determined
that such expenses resulted solely from the gross negligence or willful
misconduct of such Indemnified Party.
7.2 Notification. Each Indemnified Party under this Article VII shall,
promptly after the receipt of notice of the commencement of any Claim against
such Indemnified Party in respect of which indemnity may be sought from the
Indemnifying Party under this Article VII, notify the Indemnifying Party in
writing of the commencement thereof. The omission of any Indemnified Party to so
notify the Indemnifying Party of any such action shall not relieve the
Indemnifying Parties from any liability which it may have to such Indemnified
Party (a) other than pursuant to this Article VII or (b) under this Article VII
unless, and only to the extent that, such omission results in such Indemnifying
Party's forfeiture of substantive rights or defenses. In case any such Claim
shall be brought against any Indemnified Party, and it shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party shall be
entitled to assume the defense thereof at their own expense, with counsel
satisfactory to such Indemnified Party in its reasonable judgment; provided that
any Indemnified Party may, at its own expense, retain separate counsel to
participate in such defense at its own expense. Notwithstanding the foregoing,
in any Claim in which both the Indemnifying Party, on the one hand, and an
Indemnified Party, on the other hand, are, or are reasonably likely to become, a
party, such Indemnified Party shall have the right to employ separate counsel
and to control its own defense of such Claim if, in the reasonable opinion of
counsel to such Indemnified Party, either (x) one or more defenses are available
to the Indemnified Party that are not available to the Indemnifying Parties or
(y) a conflict or potential conflict exists between the Indemnifying Party, on
the one hand, and such Indemnified Party, on the other hand, that would make
such separate representation advisable; provided, however, that the Indemnifying
Party (i) shall not be liable for the fees and expenses of more than one counsel
to all Indemnified Parties and (ii) shall reimburse the Indemnified Parties for
all of such fees and expenses of such counsel, as such fees and expenses are
incurred. The Indemnifying Party agrees that it
23
will not, without the prior written consent of the Purchasers purchasing a
majority of the Purchased Shares, settle, compromise or consent to the entry of
any judgment in any pending or threatened Claim relating to the matters
contemplated hereby (if any Indemnified Party is a party thereto or has been
actually threatened to be made a party thereto) unless such settlement,
compromise or consent includes an unconditional release of each Indemnified
Party from all liability arising or that may arise out of such Claim. The
Indemnifying Party shall not be liable for any settlement of any Claim effected
against an Indemnified Party without its written consent, which consent shall
not be unreasonably withheld. The rights accorded to an Indemnified Party
hereunder shall be in addition to any rights that any Indemnified Party may have
at common law, by separate agreement or otherwise; provided, however, that
notwithstanding the foregoing or anything to the contrary contained in this
Agreement, nothing in this Article VII shall restrict or limit any rights that
any Indemnified Party may have to seek equitable relief.
7.3 Contribution. If the indemnification provided for in this Article
VII from an Indemnifying Party is unavailable to an Indemnified Party hereunder
in respect of any Losses for which such Indemnified Party would otherwise be
required to indemnify the Indemnified Party under this Article VII, then such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses in such proportion as is appropriate to reflect the relative
fault of such Indemnifying Party and Indemnified Party in connection with the
actions which resulted in such Losses, as well as any other relevant equitable
considerations. The relative faults of such Indemnifying Party and Indemnified
Party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has been
made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the Losses referred to above shall be
deemed to include any legal or other fees, charges or expenses reasonably
incurred by such party in connection with any investigation or proceeding.
7.4 Cap on Indemnification. The amount of any payment by the
Indemnifying Party to the Indemnified Parties under this Article VII in respect
of Losses resulting from or arising out of any indemnification claim made
pursuant to Section 7.1 shall in no event exceed the aggregate purchase price
paid to the Company in consideration of the Purchased Shares.
ARTICLE VIII
COVENANTS OF THE COMPANY
The Company hereby covenants and agrees with the Purchasers as follows:
8.1 Interim Actions. From and after the date hereof through and until
the Closing, the Company shall not, except as contemplated by this Agreement,
and shall
24
cause each of its Subsidiaries not to, take any action or fail to take any
action that has the purpose or effect of obstructing, hindering or delaying the
issuance and sale of the Purchased Shares to the Purchasers in accordance with
this Agreement or any of the other transactions contemplated hereby; provided,
however, that the foregoing shall not prevent the Company from terminating the
Merger Agreement in accordance with its terms or otherwise exercising its rights
and performing its obligations under the Merger Agreement. 8.2 Stockholder
Approval.
(a) As soon as practicable following the date hereof, the Company will
prepare and file with the Commission a proxy statement to be distributed to the
Company's stockholders in connection with the solicitation of votes in favor of
the Stockholder Approval (as amended or supplemented from time to time, the
"Proxy Statement"). The Company shall use its reasonable best efforts to (i)
respond as promptly as practicable to any comments of the Commission with
respect thereto (ii) have or cause the Proxy Statement to be cleared by the
Commission as promptly as practicable and (iii) cause the Proxy Statement to be
mailed to the Company's stockholders as promptly as practicable thereafter. The
Company shall promptly notify each of the Purchasers upon the receipt of
comments from the Commission or its staff or any request from the Commission or
its staff for amendments or supplements to the Proxy Statement and shall provide
each of the Purchasers with copies of all correspondence between the Company and
its representatives, on the one hand, and the Commission and its staff, on the
other hand. Notwithstanding the foregoing, prior to filing or mailing the Proxy
Statement (or any amendment or supplement thereto) or responding to any comments
of the Commission with respect thereto, the Company (x) shall provide each of
the Purchasers with an opportunity to review and comment on such document or
response, (y) shall include in such document or response all comments reasonably
proposed by the Purchasers and (z) shall not file or mail such document or
respond to the Commission prior to receiving the approval of the Purchasers
purchasing a majority of the Purchased Shares, which approval shall not
unreasonably be withheld or delayed. The Company shall use its reasonable best
efforts to cause the Proxy Statement to comply in all material respects with the
applicable provisions of the Exchange Act and the rules and regulations
promulgated thereunder, including without limitation, Section 14(a) thereof.
(b) Following the clearance by the Commission of the Proxy Statement and
upon the mailing thereof to the Company's stockholders, the Company shall call
and arrange for a special meeting of the stockholders of the Company and take
such other actions necessary to obtain the Stockholder Approval as promptly as
practicable. Unless there has been a Parent Change of Recommendation (as such
term is defined in the Merger Agreement), the Company shall, through its Board
of Directors, recommend to its stockholders that they approve and authorize the
issuance and sale of the Purchased Shares to the Purchasers in accordance with
this Agreement.
25
8.3 The Acquisition. The Company acknowledges that the Purchasers have
entered into this Agreement in reliance upon the fact that the Company shall
consummate the transactions contemplated by the Merger Agreement.
8.4 Amendment of Acquisition Documents. From and after the date hereof
through and until the Effective Time of the Merger, without the prior written
consent of the Purchasers purchasing a majority of the Purchased Shares which
shall not be unreasonably withheld or delayed, the Company shall not, and shall
cause its Subsidiaries not to, amend, modify or waive any provision of the
Merger Agreement or any other Acquisition Document.
8.5 Restriction on Transfer of Securities.
(a) Each of the Purchasers and GAP 74 hereby agrees not to, directly or
indirectly, sell, offer, contract or grant any option to sell (including without
limitation any short sale), pledge, transfer, establish an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Exchange Act or
otherwise dispose (each, a "Transfer") of, any Restricted Shares prior to the
first anniversary of the Closing Date, except (i) GAP LP, GAP Coinvestment,
GapStar, GMBH Coinvestment and GAP 74 may Transfer, in the aggregate, so many
Restricted Shares in any three month period as would be permitted pursuant to
Rule 144(e)(1)(i) promulgated by the Commission under the Securities Act (as in
effect on the date hereof) whether or not Rule 144(e)(1)(i) is applicable and
whether or not the other conditions set forth in Rule 144 are satisfied, (ii)
PVC, ComVest, Xxxx and Xxxxxx may Transfer, in the aggregate, so many Restricted
Shares in any three month period as would be permitted pursuant to Rule
144(e)(1)(i) promulgated by the Commission under the Securities Act (as in
effect on the date hereof) whether or not Rule 144(e)(1)(i) is applicable and
whether or not the other conditions set forth in Rule 144 are satisfied, (iii)
to a Permitted Transferee in accordance with clause (b) of this Section 8.5 who
enters into a written joinder agreement reasonably acceptable to the Company
acknowledging that such Permitted Transferee is acquiring the Restricted Shares
subject to the obligations and restrictions set forth in this Agreement with
respect to such Restricted Shares, (iv) in connection with a Sale Transaction
and (v) any Transfer which has been approved in advance by the Board of
Directors. For the avoidance of doubt, any Transfer of Restricted Shares
pursuant to any of the foregoing clauses (i) through (v) shall be without
duplication of any Transfer of Restricted Shares pursuant to any other of the
foregoing clauses (i) through (v). The Company may neither waive the foregoing
restrictions on Transfer with respect to any of GAP LP, GAP Coinvestment,
GapStar, GMBH Coinvestment or GAP 74 without similarly waiving the foregoing
restrictions on Transfer with respect to PVC, ComVest, Xxxx or Xxxxxx (allocated
among such parties as such parties shall agree) nor waive the foregoing
restrictions on Transfer with respect to PVC, ComVest, Xxxx or Xxxxxx without
similarly waiving the foregoing restrictions on Transfer with respect to GAP LP,
GAP Coinvestment, GapStar, GMBH Coinvestment or GAP 74 (allocated among such
parties as such parties shall agree).
(b) Notwithstanding anything to the contrary contained in this
Agreement, at any time, (i) each of the Purchasers who is an individual may
Transfer all or any portion of his or its Restricted Shares to or among (x) a
member of such
26
Purchaser's immediate family, which shall include his spouse, siblings, children
or grandchildren ("Family Members") or (y) a trust, corporation, partnership or
limited liability company, all of the beneficial interests in which shall be
held by such Purchaser or one or more Family Members of such Purchaser;
provided, however, that during the period that any such trust, corporation,
partnership or limited liability company holds any right, title or interest in
any Restricted Shares, no Person other than such Purchaser or one of more Family
Members of such Purchaser may be or may become beneficiaries, stockholders,
limited or general partners or members thereof, (ii) (A) each of the Purchasers
may Transfer all or any portion of its Restricted Shares to any of its
Affiliates, (B) GapStar may pledge and grant a security interest in all or any
portion of its Restricted Shares to a lender to secure its obligations under a
bona fide loan made to acquire such Restricted Shares and (C) PVC may Transfer
all or any portion of its Restricted Shares to its members (the Persons referred
to in the preceding clauses (i) and (ii) are each referred to hereinafter as a
"Permitted Transferee"). A Permitted Transferee of Restricted Shares pursuant to
this Section 8.5(b) may Transfer its Restricted Shares pursuant to this Section
8.5(b) only to the transferor Purchaser or to a Person that is a Permitted
Transferee of such transferor Purchaser. No Purchaser shall avoid the provisions
of this Agreement by making one or more Transfers to one or more Permitted
Transferees and then disposing of all or any portion of such party' s interest
in any such Permitted Transferee, and any Transfer or attempted Transfer in
violation of this covenant shall be null and void ab initio.
8.6 Waiver of Anti-dilution Provisions. Each of PVC, Comvest, Xxxx and
Xxxxxx hereby waives on its own behalf and on behalf of each of its Affiliates
the operation of any anti-dilution or adjustment provisions set forth in any
security or Stock Equivalent of the Company held by such Person as a result of
the issuance of shares of the Common Stock by the Company in connection with the
transactions contemplated by this Agreement and the Merger Agreement.
ARTICLE IX
TERMINATION OF AGREEMENT
9.1 Termination. This Agreement may be terminated by written notice
prior to the Closing as follows:
(a) at any time on or prior to the Closing Date, by mutual written
consent of the Company and the Purchasers purchasing a majority of the Purchased
Shares;
(b) at the election of the Company or the Purchasers purchasing a
majority of the Purchased Shares by written notice to the other parties hereto
after 5:00 p.m., New York time, on April 30, 2004, if the Closing shall not have
occurred, unless such date is extended by the mutual written consent of the
Company and the Purchasers purchasing a majority of the Purchased Shares;
provided, however, that the right to terminate this Agreement under this Section
9.1(b) shall not be available to any party whose breach of any representation,
warranty, covenant or agreement under this
27
Agreement has been the cause of, or resulted in, the failure of the Closing to
occur on or before such date;
(c) at the election of the Purchasers purchasing a majority of the
Purchased Shares or the Company, if there has been a material breach of any
representation, warranty, covenant or agreement on the part of the Company
contained in this Agreement, which breach has not been cured within fifteen (15)
days of written notice to the Company of such breach.
(d) at the election of the Company, if there has been a material breach
of any representation, warranty, covenant or agreement on the part of any of the
Purchasers contained in this Agreement, which breach has not been cured within
fifteen (15) days of written notice to the Purchasers of such breach.
(e) at the election of any of the Purchasers (with respect to such
Purchaser) or the Company, if the Merger Agreement has been terminated.
If this Agreement so terminates, it shall become null and void and have
no further force or effect, except as provided in Section 9.2.
9.2 Survival. If this Agreement is terminated and the transactions
contemplated hereby are not consummated as described above, this Agreement shall
become void and of no further force and effect, except for the provisions of
Article 1 and this Section 9.2; provided, however, that (a) none of the parties
hereto shall have any liability in respect of a termination of this Agreement
pursuant to Section 9.1(a) or Section 9.1(b) and (b) nothing shall relieve the
Company from liability for actual damages resulting from a termination of this
Agreement pursuant to Section 9.1(c), or Section 9.1(e) if the Merger Agreement
has been terminated pursuant to Section 8.01(h) thereof, and nothing shall
relieve the Purchasers from liability for actual damages resulting from a
termination of this Agreement pursuant to Section 9.1(d); and provided, further,
that none of the parties hereto shall have any liability for speculative,
indirect, unforeseeable or consequential damages or lost profits resulting from
any legal action relating to any termination of this Agreement.
ARTICLE X
MISCELLANEOUS
10.1 Survival of Representations and Warranties. All of the
representations and warranties made herein shall survive the execution and
delivery of this Agreement until the date that is ninety (90) days after the
receipt by the Purchasers of audited consolidated financial statements of the
Company and its Subsidiaries for the fiscal year ending December 31, 2004 (or,
if such fiscal year changes and no such audited consolidated financial
statements are available, then the successor fiscal year), except for (a)
Sections 3.1, 3.2, 3.4, 3.7, 3.13, 3.22, 3.23, 3.24, 3.25 and 3.26, which
representations and warranties shall survive indefinitely and (b) Section 3.11,
which shall survive until the later to occur of (i) the lapse of the statute of
limitations with respect to the
28
assessment of any Tax to which such representation and warranty relates
(including any extensions or waivers thereof) and (ii) sixty (60) days after the
final administrative or judicial determination of the Taxes to which such
representation and warranty relates, and no claim with respect to Section 3.11
may be asserted thereafter with the exception of claims arising out of any fact,
circumstance, action or proceeding to which the party asserting such claim shall
have given notice to the other parties to this Agreement prior to the
termination of such period of reasonable belief that a tax liability will
subsequently arise therefrom.
10.2 Notices. All notices, demands and other communications provided for
or permitted hereunder shall be made in writing and shall be by registered or
certified first-class mail, return receipt requested, telecopier, courier
service or personal delivery:
if to the Company:
ProxyMed, Inc.
0000 Xxxxx Xx., Xxxxx 000
Xxxx Xxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Chief Executive Officer
Xxxxxx X. Xxxxxxxxx, In-House Counsel
with a copy to:
Holland & Knight LLP
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
if to GAP LP, GAP Coinvestment or GapStar:
c/o General Atlantic Service Corporation
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
Xxxxxx X. Xxxxxx
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
29
if to GmbH Coinvestment:
c/o General Atlantic Partners GmbH
Xxxxxxxxxxx 00
00000 Xxxxxxxxxxx
Xxxxxxx
Telecopy: 011-49-211-602-888-89
Attention: Xxxxxxx Xxxxxx
Xxxxxx X. Xxxxxx
with a copy to:
General Atlantic Service Corporation
0 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
Xxxxxx X. Xxxxxx
and
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
if to PVC or ComVest:
c/o ComVest Investment Partners
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxxxxxx
with a copy to:
Xxxxxxxxx Traurig LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Annex
30
if to Xxxx:
Xxxx Ventures, LLC
000 Xxxx Xxxxxx Xxxx
Xxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx Xxxxx
with a copy to:
Xxxxxxxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Annex
if to Xxxxxx:
Xxxxxx Xxxxxx
0000 Xxxxxxxxx Xx XX 0000
Xxxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Annex
All such notices, demands and other communications shall be deemed to
have been duly given (i) when delivered by hand, if personally delivered; (ii)
one Business Day after being sent, if sent via a reputable nationwide overnight
courier service guaranteeing next business day delivery; (iii) five (5) Business
Days after being sent, if sent by registered or certified mail, return receipt
requested, postage prepaid; and (iv) when receipt is mechanically acknowledged,
if telecopied. Any party may by notice given in accordance with this Section
10.2 designate another address or Person for receipt of notices hereunder. Any
party may give any notice, request, consent or other communication under this
Agreement using any other means (including, without limitation, personal
delivery, messenger service, first class mail or electronic mail), but no such
notice, request, consent or other communication shall be deemed to have been
duly given unless and until it is actually received by the party to whom it is
given.
10.3 Successors and Assigns; Third Party Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the successors and permitted
31
assigns of the parties hereto. Subject to applicable securities laws and the
terms and conditions thereof, the Purchasers may assign any of their rights
under this Agreement to any of their respective Affiliates. The Company may not
assign any of its rights under this Agreement without the written consent of the
Purchasers purchasing a majority of the Purchased Shares. Except as provided in
Article VII, no Person other than the parties hereto and their successors and
permitted assigns is intended to be a beneficiary of this Agreement.
10.4 Amendment and Waiver.
(a) No failure or delay on the part of the Company or the Purchasers in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.
(b) Any amendment, supplement or modification of or to any provision of
this Agreement, any waiver of any provision of this Agreement, and any consent
to any departure by the Company or the Purchasers from the terms of any
provision of this Agreement, shall be effective (i) only if it is made or given
in writing and signed by the Company and the Purchasers purchasing a majority of
the Purchased Shares, and (ii) only in the specific instance and for the
specific purpose for which made or given. Except where notice is specifically
required by this Agreement, no notice to or demand on the Company in any case
shall entitle the Company to any other or further notice or demand in similar or
other circumstances.
10.5 Amendment to Stock and Warrant Purchase Agreement. The Stock and
Warrant Purchase Agreement is hereby amended by deleting Section 8.5 thereof in
its entirety.
10.6 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
10.7 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
10.8 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF.
10.9 Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not
32
be in any way impaired, unless the provisions held invalid, illegal or
unenforceable shall substantially impair the benefits of the remaining
provisions hereof.
10.10 Rules of Construction. Unless the context otherwise requires,
references to sections or subsections refer to sections or subsections of this
Agreement.
10.11 Entire Agreement. This Agreement, together with the exhibits and
schedules hereto, is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein and therein. There are no restrictions, promises,
representations, warranties or undertakings, other than those set forth or
referred to herein or therein. This Agreement, together with the exhibits and
schedules hereto, supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
10.12 Fees. Upon the Closing, the Company shall reimburse GAP LP, GAP
Coinvestment, GapStar and GMBH Coinvestment for their fees, disbursements and
other charges of counsel incurred in connection with the transactions
contemplated by this Agreement, provided that the amount of such reimbursement
shall not exceed in the aggregate $50,000.
10.13 Public Announcements. Following the date hereof, the Company shall
be permitted to issue a press release relating to this Agreement and the
transactions contemplated thereby. The Purchasers shall have the opportunity to
review and comment on such press release prior to its issuance, which review and
comment shall be provided as expeditiously as possible and in any event within
48 hours of delivery of such press release by the Company to the Purchasers, and
such press release shall be in form and substance reasonably satisfactory to the
Purchasers purchasing a majority of the Purchased Shares. Except as set forth in
the previous sentence, neither the Company nor the Purchasers will issue any
press release or make any public statements with respect to this Agreement or
the transactions contemplated hereby without the prior written consent of the
other parties hereto, except to the extent such party reasonably believes such
press release or public statement is required by applicable law or stock market
regulations; provided, however, that the Company and the Purchasers may make
reasonable public statements consistent with prior public statements otherwise
permitted under this Section 10.13; and provided further, that GAP LLC may
disclose on its worldwide web page, xxx.xxxxxxxxxx.xxx, the name of the Company,
the name of the Chief Executive Officer of the Company, a brief description of
the business of the Company, the Company's logo and the aggregate amount of the
Purchasers' investment in the Company. Notwithstanding the foregoing, the
Company will not use or refer to the name of any Purchaser in any public
statement or disclosure without the consent of such Purchaser except to the
extent that such party reasonably believes such statement or disclosure is
required by applicable law or stock market regulations.
10.14 Further Assurances. Each of the parties shall execute such
documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations or other actions by, or
giving any notices to, or
33
making any filings with, any Governmental Authority or any other Person) as may
be reasonably required or desirable to carry out or to perform the provisions of
this Agreement.
[Remainder of page intentionally left blank]
34
IN WITNESS WHEREOF, the undersigned have executed, or have caused to be
executed, this Stock Purchase Agreement on the date first written above.
PROXYMED, INC.
By:
-------------------------------------------
Name:
Title:
GENERAL ATLANTIC PARTNERS 77, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC,
its General Partner
By:
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: A Managing Member
GAP COINVESTMENT PARTNERS II, L.P.
By:
-------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: A General Partner
GAPSTAR, LLC
By: GENERAL ATLANTIC PARTNERS, LLC,
its Managing Member
By:
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: A Managing Member
GAPCO GMBH & CO. KG
By: GAPCO Management GMBH,
its General Partner
By:
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: A Managing Director
35
PVC FUNDING PARTNERS, LLC
By:
-------------------------------------------
Name:
Title:
COMVEST VENTURE PARTNERS, L.P.
By:
-------------------------------------------
Name:
Title:
XXXX VENTURES, LLC
By:
-------------------------------------------
Name:
Title:
XXXXXX XXXXXX
By:
-------------------------------------------
Name:
GENERAL ATLANTIC PARTNERS 74, L.P.
(solely for the purpose of Section 8.5 and
Section 10.5)
By: GENERAL ATLANTIC PARTNERS, LLC,
its General Partner
By:
---------------------------------------
Name: Xxxxxxx Xxxxxx
Title: A Managing Member
36
Schedule 2.1
Purchased Shares and Purchase Price
Purchaser Aggregate Purchase
Price
GAP LP $16,700,130.75
GAP Coinvestment $1,050,567.00
GapStar $224,993.25
GmbH Coinvestment $24,296.25
PVC $2,500,000.00
ComVest $1,600,000.00
Xxxx $1,000,000.00
Xxxxxx $1,000,000.00
Total: $24,099,987.25
