HEALTHEON CORPORATION
AMENDED AND RESTATED
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
OCTOBER 31, 1996
TABLE OF CONTENTS
Page
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SECTION 1 - Authorization and Sale of Stock.................................. 1
1.1 Authorization........................................................... 1
1.2 Sale of Stock........................................................... 1
SECTION 2 - Closing Date; Delivery........................................... 1
2.1 Closing Date............................................................ 1
2.2 Subsequent Closing...................................................... 1
2.3 Delivery................................................................ 2
SECTION 3 - Representations and Warranties of the Company.................... 2
3.1 Organization and Standing; Certificate and Bylaws....................... 2
3.2 Corporate Power......................................................... 2
3.3 Subsidiaries............................................................ 2
3.4 Capitalization.......................................................... 2
3.5 Authorization........................................................... 3
3.6 Title to Properties and Assets; Liens, etc.............................. 3
3.7 Financial Statements.................................................... 4
3.8 Activities Since Balance Sheet Date..................................... 4
3.9 Tax Returns and Payments................................................ 5
3.10 Patents, Trademarks, etc............................................... 5
3.11 Material Contracts and Commitments..................................... 5
3.12 Compliance with Other Instruments, None Burdensome, etc................ 5
3.13 Litigation, etc........................................................ 6
3.14 Employees.............................................................. 6
3.15 Registration Rights.................................................... 6
3.16 Governmental Consent, etc.............................................. 6
3.17 Brokers or Finders..................................................... 7
3.18 Disclosures............................................................ 7
3.19 Permits................................................................ 7
SECTION 4 - Representations and Warranties of the Investors.................. 7
4.1 Authorization........................................................... 7
4.2 Purchase Entirely for Own Account....................................... 7
4.3 Investment Experience................................................... 8
4.4 Accredited Investor..................................................... 8
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4.5 No Public Market........................................................ 8
4.6 Receipt of Information.................................................. 8
4.7 Restricted Securities................................................... 8
4.8 Further Limitations on Disposition...................................... 8
4.9 Legends................................................................. 9
4.10 Government Consents.................................................... 9
4.11 Waiver of Right of First Refusal...................................... 10
SECTION 5 - Conditions to Closing of Investors.............................. 10
5.1 Representations and Warranties Correct................................. 10
5.2 Covenants.............................................................. 10
5.3 Opinion of Company's Counsel........................................... 10
5.4 Compliance Certificate................................................. 10
5.5 Blue Sky............................................................... 10
5.6 Board of Directors..................................................... 10
5.7 Restated Certificate................................................... 10
5.8 No Material Adverse Change............................................. 11
5.9 Investors' Rights Agreement............................................ 11
SECTION 6 - Conditions to Closing of Company................................ 11
6.1 Representations........................................................ 11
6.2 Blue Sky............................................................... 11
6.3 Restated Certificate................................................... 11
SECTION 7 - Miscellaneous................................................... 11
7.1 Governing Law.......................................................... 11
7.2 Survival............................................................... 11
7.3 Successors and Assigns................................................. 11
7.4 Entire Agreement; Amendment............................................ 11
7.5 Notices, etc........................................................... 12
7.6 Delays or Omissions.................................................... 12
7.7 California Corporate Securities Law.................................... 12
7.8 Expenses............................................................... 12
7.9 Counterparts........................................................... 13
7.10 Severability.......................................................... 13
7.11 Gender................................................................ 13
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EXHIBITS
A. Schedule of Investors
B. Restated Certificate of Incorporation
C. Form of Warrant
D. Exceptions to Representations and Warranties of the Company
E. Second Amended and Restated Investors' Rights Agreement
F. Form of Opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
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HEALTHEON CORPORATION
AMENDED AND RESTATED
SERIES B PREFERRED
STOCK PURCHASE AGREEMENT
This Amended and Restated Series B Preferred Stock Purchase Agreement
(the "Agreement") is made as of October 31, 1996, by and among Healtheon
Corporation, a Delaware corporation (the "Company"), with its principal
office at 00 Xxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, and the persons and
entities listed on the Schedule of Investors attached as Exhibit A hereto
(the "Investors"). This Agreement amends and restates, in its entirety, the
Series B Preferred Stock Purchase Agreement dated as of October 1, 1996.
SECTION I
AUTHORIZATION AND SALE OF STOCK AND ISSUANCE OF THE WARRANTS
1.1 AUTHORIZATION. The Company has authorized the sale and issuance of
up to an aggregate of five million (5,000,000) shares of its Series B
Preferred Stock (the "Series B Preferred"), having the rights, restrictions,
privileges and preferences as set forth in the Company's Restated Certificate
of Incorporation in the form attached to this Agreement as Exhibit B (the
"Restated Certificate').
1.2 SALE OF STOCK AND ISSUANCE OF WARRANTS. Subject to the terms and
conditions hereof, the Company will issue and sell to the Investors, and the
Investors will buy from the Company, the number of shares (the "Shares") of
Series B Preferred specified opposite each Investor's name on the Schedule of
Investors, at a cash purchase price of two dollars ($2.00) per share and the
Company will issue warrants, in the form attached hereto as Exhibit C, with
respect to the number of shares of Series B Preferred specified opposite the
applicable Investors' names on the Schedule of Investors (the "Warrants"). The
Company's agreements with each of the Investors are separate agreements, and the
sales of the Shares, and the issuance of the warrant, if applicable, to each of
the Investors are separate sales and issuances.
SECTION 2
CLOSING DATE, DELIVERY
2.1 CLOSING DATE. The initial closing of the purchase and sale of an
aggregate of one million eight hundred seventy five thousand (1,875,000) of
the Shares hereunder was held at 1:00 p.m. on October 1, 1996 (the "First
Closing"). The subsequent closing and the issuance of the Warrants hereunder
shall be held on October 31, 1996 or on such later date or dates as the
Company and the affected Investors may agree to (the "Second Closing"). The
date of each such Closing
being referred to as a "Closing Date". The place of the Closing (including
the place of delivery to the Investors by the Company of the certificates
evidencing all shares Series B Preferred being purchased and the Warrants
being issued and the place of payment to the Company by the Investors of the
purchase price therefor) shall be at the offices of the Company located at 00
Xxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, or such other place as the
Investors and the Company may mutually agree.
2.2 SUBSEQUENT CLOSING. The Company may, in its sole discretion, provide
for deferred closings hereunder (a "Subsequent Closing"), to be held at the
offices of the Company, at such time and dates as the Company may determine
(the date of any such Subsequent Closing being referred to as a "Subsequent
Closing Date"). Any Subsequent Closing(s) will take place as promptly as
possible following the initial Closing hereunder. The number of shares of
Series B Preferred which any Subsequent Investor shall be entitled to
purchase, shall be determined within the sole discretion of the Company, but
in no event shall the total number of shares of Series B Preferred sold
pursuant to this Agreement and/or subject to the Warrants or any other
purchase rights be more than an aggregate of five million (5,000,000) shares.
Upon completion of any Subsequent Closing, if any, all additional purchasers
of shares of Series B Preferred shall be considered "Investors" within the
meaning of this Agreement.
2.3 DELIVERY. At each Closing the Company will deliver to each Investor
a certificate or certificates representing the applicable number of Shares,
as designated in column 2 of the Schedule of Investors to be purchased by
such Investor at such Closing, against payment of the purchase price
therefor, by check or wire transfer payable to the Company, or by
cancellation of outstanding indebtedness from the Company to such Investor,
or by a combination thereof, in the amount specified in column 3 of the
Schedule of Investors and at the Second Closing the Company shall issue the
Warrants as set forth in the Schedule of Investors.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on Exhibit D attached hereto, the Company hereby
represents and warrants to the Investors as follows:
3.1 ORGANIZATION AND STANDING: CERTIFICATE AND BYLAWS. The Company is a
corporation duly organized and existing under, and by virtue of, the laws of
the State of Delaware and is in good standing under such laws. The Company
has requisite corporate power to own and operate its properties and assets,
and to carry on its business as presently conducted and as proposed to be
conducted. The Company is not qualified to do business as a foreign
corporation in any jurisdiction and such qualification is not presently
required.
3.2 CORPORATE POWER. The Company will have at the Closing Date all
requisite corporate power to execute and deliver this Agreement and the
Second Amended and Restated Investors' Rights Agreement attached hereto as
Exhibit E (the "Investors' Rights Agreement"), to sell and issue the Shares
hereunder, to issue the underlying Series B-1 Preferred Stock (the
"Series B-1
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Preferred") and Common Stock (together, the "Conversion Stock") in accordance
with the provisions of the Restated Certificate, and to carry out and
perform its obligations under the terms of this Agreement and the
Investors' Rights Agreement.
3.3 SUBSIDIARIES. The Company has no subsidiaries or affiliated
companies and does not otherwise own or control, directly or indirectly, any
other corporation, association or business entity.
3.4 CAPITALIZATION. The authorized capital stock of the Company consists
of 28,000,000 shares of Common Stock, 2,230,834 shares of which are issued
and outstanding prior to the Closing, 10,305,000 shares of Series A
Preferred, 10,285,000 shares of which are issued and outstanding prior to the
Closing and 10,305,000 shares of Series A-1 Preferred, none of which has been
or will be issued or outstanding prior to the Closing, and 5,000,000 shares
of Series B Preferred 1,875,000 of which were issued in the First Closing and
are outstanding as of the date hereof, and 5,000,000 shares of Series B-1
Preferred, none of which has been or will be issued or outstanding prior to
the Closing. The Company has reserved (i) an aggregate of 5,000,000 shares of
Series B Preferred for issuance hereunder and/or for issuance pursuant to the
exercise of the Warrants which may be issued hereunder, (ii) sufficient
shares of Common Stock for issuance upon conversion of the Series B Preferred
and/or Series B-1 Preferred, (iii) 5,000,000 shares of Series B-1 Preferred
for issuance upon conversion of the Series B Preferred, (iv) 10,285,000
shares of Series A-1 Preferred for issuance upon conversion of the Series A
Preferred, (v) sufficient shares of Common Stock for issuance upon conversion
of the Series A Preferred and/or Series A-1 Preferred and (vi) 9,000,000
shares of Common Stock for issuance to employees and consultants pursuant to
the Company's 1996 Stock Plan (of which 4,268,934 shares have been issued
and/or option granted with respect thereto, prior to the date hereof). The
Series B Preferred and the Series B-1 Preferred shall have the rights,
preferences, privileges and restrictions set forth in the Restated
Certificate. There are no other options, warrants, conversion privileges or
other rights presently outstanding to purchase or otherwise acquire any
authorization but unissued shares of capital stock or other securities of the
Company. Assuming the accuracy of each Investor's representations in Section
4 below, upon issuance, the Shares will have been issued in compliance with
all federal and state securities laws.
3.5 AUTHORIZATION. All corporate action on the part of the Company, its
directors and shareholders necessary for the authorization, execution,
delivery and performance of this Agreement and the Investors' Rights
Agreement by the Company, the authorization, sale, issuance and delivery of
the Shares and the Conversion Stock and the performance of the Company's
obligations hereunder has been taken or will be taken prior to the Closing.
This Agreement and the Investors' Rights Agreement, when executed and
delivered by the Company, shall constitute the valid and binding obligations
of the Company enforceable in accordance with their respective terms except
(i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement of
creditors' rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief, and other equitable
remedies, and (iii) to the extent the indemnification provisions contained in
the Investors' Rights Agreement may be limited by applicable federal and
state securities laws. The Shares, when issued in compliance with the
provisions of this Agreement, will be validly issued and will be fully paid
and nonassessable; the Series B-1 Preferred issuable upon conversion of the
Series B Preferred has been
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duly and validly reserved and, when issued in compliance with the provisions
of this Agreement, will be validly issued and will be fully paid and
nonassessable and the Common Stock issuable upon conversion of the Series B
Preferred and/or the Series B-1 Preferred has been duly and validly reserved
and, when issued in compliance with the provisions of this Agreement, will be
validly issued and will be fully paid and nonassessable, and free of any
liens or encumbrances (assuming the Investors take the Shares with no notice
thereof) other than any liens or encumbrances created by or imposed upon the
holders; provided, however, that the Shares and the Conversion Stock may be
subject to restrictions on transfer under state or federal securities laws
and restrictions set forth herein.
3.6 TITLE TO PROPERTIES AND ASSETS, LIENS, ETC. The Company has good and
valid title to its properties and assets, and has good title to all its
leasehold interests, in each case subject to no mortgage, pledge, lien,
lease, encumbrance or charge, other than (i) the lien of current taxes not yet
due and payable, and (ii) possible minor liens and encumbrances which do not
in any case materially detract from the value of the property subject thereto
or materially impair the operations of the Company, and which have not arisen
otherwise than in the ordinary course of business.
3.7 FINANCIAL STATEMENTS. The Company has delivered to each Investor
its unaudited financial statements (balance sheet and income statement) at
July 31, 1996 and for the period from inception through July 31, 1996 (the
"Financial Statement"). The Financial Statements have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods indicated and with each other, except
that the Financial Statements may not contain all footnotes required by
generally accepted principles and are subject to normal year end adjustments.
The Financial Statements fairly present the financial condition and operating
results of the Company as of the dates, and for the periods, indicated
therein. Except as set forth in the Financial Statements, the Company has no
material liabilities, contingent or otherwise, other than (i) liabilities
incurred in the ordinary course of business subsequent to July 31, 1996,
which individually or in the aggregate are not material to the financial
condition or operating results of the Company, and (ii) obligations not
required under generally accepted accounting principles to be reflected in
the Financial Statements.
3.8 ACTIVITIES SINCE BALANCE SHEET DATE. Since the Company's balance
sheet dated July 31, 1996 there has not been:
(a) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the assets, properties,
financial condition, operating results, or business of the Company;
(b) any waiver by the Company of a valuable right or of a material
debt owed to it;
(c) any material change or amendment to a material contract or
arrangement by which the Company or any of its assets or properties is bound
or subject, except for changes or amendments which are expressly provided for
or disclosed in this Agreement;
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(d) any loans or guarantees made by the Company to or for the
benefit of its employees, officers or directors, or any members of their
immediate families, other than travel advances or other advances made in the
ordinary course of business;
(e) any declaration, setting aside or payment or other distribution
in respect of any of the Company's capital stock, or any direct or indirect
redemption, purchase or other acquisition of any such stock by the Company;
(f) any incurrence of indebtedness for money borrowed individually
in excess of $50,000 or in excess of $100,000 in the aggregate;
(g) any material change in any compensation arrangement or agreement
with any employee;
(h) any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets;
(i) any resignation or termination of employment of any key officer
of the Company; and
(j) to the Company's knowledge, any other event or condition or any
character which would be reasonably likely to materially and adversely affect
the assets, properties, financial condition, operating results or business of
the Company;
3.9 TAX RETURNS AND PAYMENTS. The Company has timely filed all tax
returns and reports when and as required by law and has never been audited by
any state or federal taxing authority. All tax and reports of the Company, if
applicable, are true and correct in all material respects.
3. 10 PATENTS, TRADEMARKS, ETC. The Company owns or has the right, or
prior to the Closing will own or have the right, to use, free and clear of
all liens, charges, claims and restrictions, all patents, trademarks, service
marks, trade names, copyrights, licenses and rights necessary to its business
as now conducted, and is not, to the best of its knowledge, infringing upon
or otherwise acting adversely to the right or claimed right of any person
under or with respect to any of the foregoing. There are no outstanding
options, licenses, or agreements of any kind relating to the foregoing, nor
is the Company bound by or a party to any options, licenses or agreements of
any kind with respect to the patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information, proprietary rights and
processes of any other person or entity. The Company has not received any
written communications alleging that the Company has violated or, by
conducting its business as proposed, would violate any patent, trademark,
service xxxx, trade name, copyright or trade secret or other proprietary
right of any other person or entity. The Company is not aware that any of its
employees is obligated under any contract (including licenses, covenants or
commitments of any nature) or other agreement, or subject to any judgment,
decree or order of any court or administrative agency, that would interfere
with the use of such employee's best efforts to promote the interests of the
Company or that would conflict with the Company's business as proposed to be
conducted. Neither the execution nor delivery of this Agreement, nor the
carrying
5
on of the Company's business by the employees of the Company, nor the conduct
of the Company's business as proposed, will, to the Company's knowledge,
conflict with or result in a breach of the terms, conditions or provisions
of, or constitute a default under, any contract, covenant or instrument under
which any of such employees is now obligated. The Company does not believe it
is or will be necessary to utilize any inventions of any of its employees (or
people it currently intends to hire) made prior to their employment by the
Company.
3.11 MATERIAL CONTRACTS AND COMMITMENTS. Neither the Company, nor, to
the best knowledge of the Company, any third party is in default under any
material contract, agreement or instrument to which the Company is a party.
3.12 COMPLIANCE WITH OTHER INSTRUMENTS, NONE BURDENSOME, ETC. The
Company is not in violation of any term of the Restated Certificate of
Incorporation or Bylaws, or in any material respect of any term or provision
of any material mortgage, indenture, contact, agreement or instrument to
which it is a party or by which it is bound, and to the best of its
knowledge, is not in violation of any order, statute, rule or regulation
applicable to the Company, which violation reasonably would be expected to
have a material adverse effect on the Company's business or financial
condition. The execution, delivery and performance of and compliance with
this Agreement, and the issuance of the Shares and the Conversion Stock, have
not resulted and will not result in any violation of, or conflict with, or
constitute a default under, or result in the creation of, any material
mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of the Company.
3.13 LITIGATION, ETC. There are no actions, suits, proceedings or
investigations pending against the Company or its properties before any court
or governmental agency (nor, to the best of the Company's knowledge, is there
any written threat thereof), which, either in any case or in the aggregate,
reasonably would be expected to result in any material adverse change in the
business or financial condition of the Company or any of its properties or
assets, or in any material impairment of the right or ability of the Company
to carry on its business as now conducted, and none which questions the
validity of this Agreement or the Investors' Rights Agreement or any action
taken or to be taken in connection herewith. The Company is not a party to,
or to the best of its knowledge named in any order, writ, injunction,
judgment or decree of any court or government agency or instrumentality.
There is no action, suit or proceeding by the Company currently pending or
that the Company currently intends to initiate.
3.14 EMPLOYEES. To the best of the Company's knowledge, no employee of
the Company is in violation of any term of any employment contract, patent
disclosure agreement or any other contract or agreement relating to the
relationship of any such employee with the Company or any other party because
of the nature of the business conducted or to be conducted by the Company.
The Company does not have any collective bargaining agreements covering any
of its employees.
3.15 REGISTRATION RIGHTS. Except as set forth in the Investors' Rights
Agreement, the Company is not currently under any obligation to register
under the Securities Act of 1933, as amended (the "Act) any of its presently
outstanding securities or any of its securities which may hereafter be issued.
6
3.16 GOVERNMENTAL CONSENT ETC. No consent, approval or authorization
of, or designation, declaration or filing with, any federal, state or local
governmental authority on the part of the Company is required in connection
with the valid execution and delivery of this Agreement and the Investors'
Rights Agreement, or the offer, sale or issuance of the Shares and the
Conversion Stock, or the consummation of any other transaction contemplated
hereby, except (a) filing of the Restated Certificate in the office of the
Secretary of State of the State of Delaware, and (b) qualification (or taking
such action as may be necessary to secure an exemption from qualification, if
available) of the offer and sale of the Shares and the Conversion Stock under
the California Corporate Securities Law and other applicable Blue Sky laws,
which filing and qualification, if required, will be accomplished in a timely
manner prior to or promptly upon completion of the Closing.
3.17 BROKERS OR FINDERS. The Company has not incurred, and will not
incur, directly or indirectly, any liability for brokerage or finders' fees
or agents' commissions or any similar charges in connection with this
Agreement or any transaction contemplated hereby.
3.18 DISCLOSURES. No representation, warranty or statement by the
Company in this Agreement, or in any written statement or certificate
furnished to the Investors pursuant to this Agreement, contains any untrue
statement of a material fact or, when taken together, omits to state a
material fact necessary to make the statements made herein, in light of the
circumstances under which they were made, not misleading. However, as to any
projections furnished to the Investors, such projections were prepared in
good faith by the Company, but the Company makes no representation or
warranty that it will be able to achieve such projections. The Company has
fully provided each Investor with all the information that such Investor has
requested for deciding whether to purchase the Shares.
3.19 PERMITS. The Company has all franchises, permits, licenses, and
any similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which could materially and adversely affect the
business, properties or financial condition of the Company, and believes it
can obtain without undue burden or expense, any similar authority for the
conduct of its business as planned to be conducted. The Company is not in
default in any material respect under any of such franchises, permits,
licenses or other similar authority.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each Investor hereby represents and warrants to the Company with
respect to its purchase of the Shares as follows:
4.1 AUTHORIZATION. This Agreement and the Investors' Right Agreement,
when executed and delivered by the Investor, will each constitute the
Investor's valid and legally binding obligation, enforceable in accordance
with its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, (ii) as limited by laws relating
to the availability of specific
7
performance, injunctive relief, or other equitable remedies, and (iii) to the
extent the indemnification provisions contained in the Investors' Rights
Agreement may be limited by applicable federal or state securities laws.
4.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made with the
Investor in reliance upon the Investor's representation to the Company, which
by the Investor's execution of this Agreement the Investor hereby confirms,
that the Common Stock or Series B Preferred to be received by the Investor
and the Common Stock and Series B-1 Preferred issuable upon conversion of the
Series B Preferred (collectively, the "Securities') will be acquired for
investment for the Investor's own account, not as a nominee or agent, and not
with a view to the resale or distribution of any part thereof, and that the
Investor has no present intention of selling, granting any participation in,
or otherwise distributing the same. By executing this Agreement, the Investor
further represents that the Investor does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of
the Securities. The Investor represents that it has the full power and
authority to enter into this Agreement.
4.3 INVESTMENT EXPERIENCE. The Investor is an investor in securities
of companies in the development stage and acknowledges that it is able to
fend for itself, can bear the economic risk of its investment, and has such
knowledge and experience in financial or business matters that it is capable
of evaluating the merits and risks of the investment in the Common Stock or
Series B Preferred. If other than an individual, the Investor also represents
it has not been organized solely for the purpose of acquiring the Common
Stock or Series B Preferred or if the Investor has been organized solely for
the purpose of acquiring the Common Stock or Series B Preferred that all of
the equity owners of the Investor are "accredited investors" as defined below.
4.4 ACCREDITED INVESTOR. The Investor is an "accredited investor"
within the meaning of Securities and Exchange Commission ("SEC") Rule 501 of
Regulation D, as presently in effect.
4.5 NO PUBLIC MARKET. Each Investor understands that no public market
now exists for any of the securities issued by the Company and that it is
unlikely that a public market will ever exist for the Shares.
4.6 RECEIPT OF INFORMATION. Each Investor has received and reviewed
this Agreement and all Exhibits thereto; it, its attorney and its accountant
have had access to, and an opportunity to review all documents and other
materials requested of, the Company; it and they have been given an
opportunity to ask any and all questions of, and receive answers from, the
Company concerning the terms and conditions of the offering and to obtain all
information it or they believe necessary or appropriate to evaluate the
suitability of an investment in the Common Stock or Series B Preferred; and,
in evaluating the suitability of an investment in the Common Stock or Series
B Preferred, it and they have not relied upon any representations or other
information (whether oral or written) other than as set forth in the
documents and answers referred to above.
4.7 RESTRICTED SECURITIES. The Investor understands that the
Securities it is purchasing are characterized as "restricted securities"
under the federal securities laws inasmuch as they are being acquired from
the Company in a transaction not involving a public offering and that under
such laws and applicable regulations such securities may be resold without
registration under the Act only in certain limited circumstances. In
addition, the Investor represents that it is familiar with Rule 144
promulgated under the Act, as presently in effect, and understands the resale
limitations imposed thereby and by the Act.
4.8 FURTHER LIMITATIONS ON DISPOSITION. Without in any way limiting
the representations set forth above, the Investor further agrees not to make
any disposition of all or any portion of the Securities unless:
(a) There is then in effect a Registration Statement under the
Securities Act covering such proposed disposition and such disposition is
made in accordance with such Registration Statement;
(b) The Investor shall have notified the Company of the proposed
disposition and shall have furnished the Company with a statement of the
circumstances surrounding the proposed disposition, and if requested by the
Company, the Investor shall have furnished the Company with either (i) an
unqualified written opinion of counsel who shall be reasonably satisfactory
to the Company addressed to the Company and reasonably satisfactory in form
and substance to the Company's counsel to the effect that the proposed
transfer may be effected without registration under the Act or (ii) a "No
Action" letter from the Securities and Exchange Commission to the effect that
the transfer of such securities without registration will not result in a
recommendation by the staff of the Securities and Exchange Commission that
action be taken with respect thereto, whereupon the holder of such Securities
shall be entitled to offer such Securities in accordance with the terms of
the notice delivered by the Holder to the Company; or
(c) The Investor shall have sold, assigned, transferred, pledged
or otherwise disposed of the Securities in a transaction involving the
distribution without consideration of the Securities by the Investor to any
of its partners or retired partners, or to the estate of any of its partners
or retired partners, or in a transaction involving the offer or distribution
of the Securities by a corporation to any subsidiary, parent or affiliated
corporation of such corporation; provided in each case that the Investor
shall give written notice to the Company of such Investor's intention to
effect such transfer, sale, assignment, pledge or other disposition. The
Investor will cause any such proposed purchaser, assignee, transferee or
pledgee of any Securities held by the Investor to agree to take and hold such
Securities subject to the provisions and upon the conditions specified in
this Agreement.
4.9 LEGENDS. It is understood that the certificates evidencing the
Securities may bear one or all of the following legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A OF SUCH ACT."
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(b) Any legend required by the laws of the State of Delaware or
the State of California, including any legend required by the California
Department of Corporations.
4.10 GOVERNMENT CONSENTS. Other than securities law filings required
to be made by the Company, no consent, approval or authorization of or
designation, declaration or filing with any state, federal or foreign
governmental authority on the part of the Investor is required in connection
with the valid execution and delivery of this Agreement and the Investors'
Rights Agreement by the Investor and the consummation by the Investor of the
transactions contemplated hereby and thereby.
4.11 WAIVER OF RIGHT OF FIRST REFUSAL. Each Investor hereby waives all
rights which it may have had under Section 2.5 of the Amended and Restated
Investors' Rights Agreement, including notice rights, with respect to the
sale of the Series B Preferred Stock and the issuance of the Warrants with
respect thereto, hereunder.
SECTION 5
CONDITIONS TO CLOSING OF INVESTORS
The Investors' obligations to purchase the Shares at the Closing or at
any Subsequent Closing are, at the option of each Investor, subject to the
fulfillment on or prior to the Closing Date or at any Subsequent Closing Date
of the following conditions:
5.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company in Section 3 hereof shall be true and correct
in all material respects when made, and shall be true and correct in all
material respects on the Closing Date, or the Subsequent Closing Date, as the
case may be, with the same force and effect as if they had been made on and
as of said date.
5.2 COVENANTS. All covenants, agreements and conditions contained in
this Agreement to be performed by the Company on or prior to the Closing Date
or the Subsequent Closing Date, as the case may be, shall have been performed
or compiled with in all material respects.
5.3 OPINION OF COMPANY'S COUNSEL. The Investors shall have received
from Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, counsel to
the Company, an opinion addressed to them, dated the Closing Date or the
Subsequent Closing Date, as the case may be, in substantially the form
attached hereto as Exhibit F.
5.4 COMPLIANCE CERTIFICATE. The Company shall have delivered to the
Investors a certificate executed by the President of the Company, dated the
Closing Date or the Subsequent Closing Date, as the case may be, and
certifying to the fulfillment of the conditions specified in Sections 5.1,
5.2, and 5.8 of this Agreement, and that he has made, or caused to be made,
such investigations as he deemed necessary in order to permit him to verify
the accuracy of the information set forth in such certificate.
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5.5 BLUE SKY. The Company shall have obtained all necessary Blue Sky law
permits and qualifications, or secured an exemption therefrom, required by
any state for the offer and sale of the Shares and the Conversion Stock.
5.6 BOARD OF DIRECTORS. The Board of Directors shall at the Closing
consist of Xxx Xxxxx, Xxxxx Xxxxx, Xxxx Xxxxxxxx, Xx., M.D. and Xxxxx
Xxxxxxx, M.D.
5.7 RESTATED CERTIFICATE. The Restated Certificate shall have been
filed with the Secretary of State of the State of Delaware.
5.8 NO MATERIAL ADVERSE CHANGE. There shall have been no material
adverse change in the Company's business or financial condition.
5.9 INVESTORS' RIGHTS AGREEMENT. The Investors and the Company shall
have entered into the Investors' Rights Agreement in substantially the form
attached hereto as Exhibit E.
SECTION 6
CONDITIONS TO CLOSING OF COMPANY
The Company's obligation to sell and issue the Shares at the Closing or
at any Subsequent Closing, is at the option of the Company, subject to the
fulfillment of the following conditions:
6.1 REPRESENTATIONS. The representations made by the Investors in
Section 4 hereof shall be true and correct when made, and shall be true and
correct on the Closing Date or the Subsequent Closing Date, as the case may
be.
6.2 BLUE SKY. The Company shall have obtained all necessary Blue Sky law
permits and qualifications, or secured an exemption therefrom, required by
any state for the offer and sale of the Shares and the Conversion Stock.
6.3 RESTATED CERTIFICATE. The Restated Certificate shall have been filed
with the Secretary of State of the State of Delaware.
SECTION 7
MISCELLANEOUS
7.1 GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of California, without giving effect to the conflicts
of laws principles thereof.
7.2 SURVIVAL. The representations, warranties, covenants, and
agreements made herein shall survive any investigation made by any Investor
and the closing of the transactions contemplated hereby.
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7.3 SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors, and administrators of the parties
hereto, provided, however, that the rights of a Investor to purchase Shares
shall not be assignable without the written consent of the Company.
7.4 ENTIRE AGREEMENT, AMENDMENT. This Agreement and the other
documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof. Neither this Agreement nor any term hereof may be
amended, waived, discharged, or terminated other than by a written instrument
signed by the party against whom enforcement of any such amendment, waiver,
discharge, or termination is sought; provided, however, that holders of a
majority of the shares of Common Stock issued or issuable upon conversion of
the Shares and/or the Series B-1 Preferred and (whether or not converted) not
resold to the public may waive or amend, on behalf of all Investors, any
provisions hereof benefiting Investors in respect of the Shares.
7.5 NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
upon delivery to the party to be notified in person or by courier service or
five days after deposit with the United States mail, by registered or
certified mail, postage prepaid, addressed (a) if to a Investor, at such
Investor's address set forth in Exhibit A, or at such other address as such
Investor shall have furnished to the Company in writing, or (b) if to any
other holder of any Shares, at such address as such holder shall have
furnished the Company in writing, or, until any such holder so furnishes an
address to the Company, then to and at the address of the last holder of such
Shares who has so furnished an address to the Company, or (c) if to the
Company, one copy should be sent to its address set forth on the cover page
of this Agreement and addressed to the attention of the Corporate Secretary,
or at such other address as the Company shall have furnished to the Investors.
7.6 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any holder of any Shares, upon any breach or
default of the Company under this Agreement, shall impair any such right,
power or remedy of such holder nor shall it be construed to be a waiver of
any such breach or default, or an acquiescence therein, or of or in any
similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval
of any kind or character on the part of any holder of any breach or default
under this Agreement, or any waiver on the part of any holder of any
provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
holder, shall be cumulative and not alternative.
7.7 CALIFORNIA CORPORATE SECURITIES LAW. THE SALE OF THE SECURITIES
WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF
SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION
THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS AN EXEMPTION FROM
SUCH QUALIFICATION IS AVAILABLE. THE RIGHTS
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OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH
QUALIFICATION BEING OBTAINED, OR SUCH EXEMPTION BEING AVAILABLE.
7.8 EXPENSES. The Company and the Investors shall each bear their own
expenses and legal fees with respect to this Agreement and the transactions
contemplated hereby except that, assuming a successful completion of the
offering the Company will pay at the initial Closing the reasonable legal
fees and reasonable expenses upon receipt of a xxxx therefor, incurred by one
counsel to the Investors.
7.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all of the
Investors, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.
7.10 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that no such severability shall be effective
if it materially changes the economic benefit of this Agreement to any party.
7.11 GENDER. The use of the neuter gender herein shall be deemed to
include the masculine and the feminine gender, if the context so requires.
The foregoing Amended and Restated Series B Preferred Stock Purchase
Agreement is hereby executed as of the date first above written.
COMPANY:
HEALTHEON CORPORATION
By: /s/ Xxxxx Xxxxxxx, M.D.
------------------------------
Xxxxx Xxxxxxx, M.D.,
President
Address: 00 Xxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
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