COMMON STOCK PURCHASE AGREEMENT
This COMMON STOCK PURCHASE AGREEMENT (this "AGREEMENT") is made
and entered into as of January 25, 2001 by and between Xxxxxxxx.xxx, Inc.,
a Delaware corporation (the "COMPANY"), and VHA Inc., a Delaware
corporation ("VHA").
RECITALS
WHEREAS, the Company desires to sell to VHA, and VHA desires to
purchase from the Company, shares of the Company's common stock, par value
$0.001 per share (the "COMMON STOCK") on the terms and conditions set forth
in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements set forth in this
Agreement, the parties agree as follows:
ARTICLE I
AGREEMENT TO SELL AND PURCHASE STOCK
1.1 Agreement to Sell and Purchase the Shares. The Company agrees
to sell to VHA at the Closing, and VHA agrees to purchase from the Company
at the Closing, 11,834,320 shares of Common Stock (the "SHARES") at a
purchase price of $1.69 per share.
ARTICLE II
CLOSING
2.1 Closing. The purchase and sale of the Shares will take place
at the offices of Fenwick & West LLP, Two Palo Alto Square, Palo Alto,
California, at 10 a.m. Pacific Time on January 25, 2001, or at such other
date, time and location as the Company and VHA mutually agree upon (which
time and place are referred to in this Agreement as the "CLOSING"). At the
Closing, the Company will deliver to VHA a certificate representing the
Shares against delivery to the Company by VHA of the purchase price paid by
(i) a check payable to the Company's order or (ii) wire transfer of
immediately available funds to the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to VHA, subject to the
exceptions specifically disclosed in writing in the disclosure letter
delivered by the Company dated as of the date hereof and certified by a
duly authorized officer of the Company (the "COMPANY DISCLOSURE LETTER")
(which Company Disclosure Letter shall be deemed to be representations and
warranties to VHA by the Company under this Article III), as follows:
3.1 Organization of the Company.
(a) The Company and each of its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority, and all requisite qualifications to do business as a foreign
corporation, to conduct its business in the manner in which its business is
currently being conducted, except where the failure to be so organized,
existing or in good standing or to have such power, authority or
qualifications would not, individually or in the aggregate, have a Material
Adverse Effect on the Company.
(b) The Company has delivered or made available to VHA a true and
correct copy of the Certificate of Incorporation (including any
Certificates of Designation) and Bylaws of the Company and similar
governing instruments of each of its subsidiaries, each as amended to date
(collectively, the "COMPANY CHARTER DOCUMENTS"), and each such instrument
is in full force and effect. Neither the Company nor any of its
subsidiaries is in violation of any of the provisions of the Company
Charter Documents.
3.2 Capitalization.
(a) The authorized capital stock of the Company consists solely of
300,000,000 shares of Common Stock, of which there were 158,593,007 shares
issued and outstanding as of the close of business on December 29, 2000,
and 5,000,000 shares of Preferred Stock, par value $0.001 per share, of
which no shares are issued or outstanding. All outstanding shares of Common
Stock are duly authorized, validly issued, fully paid and nonassessable and
are not subject to any right of rescission or preemptive rights created by
statute, the Company Charter Documents or any agreement or document to
which the Company is a party or by which it is bound. As of the date of
this Agreement, there are no shares of Common Stock held in treasury by the
Company.
(b) As of the close of business on December 29, 2000, (i)
12,093,686 shares of Common Stock are subject to issuance pursuant to
outstanding options (the "COMPANY OPTIONS") to purchase Common Stock under
the Company's 1997 Stock Plan and 1999 Equity Incentive Plan ("COMPANY
STOCK OPTION PLANS") for an aggregate exercise price of $54,922,563, (ii)
90,000 shares of Common Stock are subject to issuance pursuant to Company
Options other than pursuant to Company Stock Option Plans for an aggregate
exercise price of $996,891, (iii) 1,081,792 shares of Common Stock are
subject to issuance pursuant to Company Options other than pursuant to the
Company Stock Option Plans from the Pharos and EquipMD acquisitions for an
aggregate exercise price of $3,384,412 and (iv) 572,635 shares of Company
Common Stock are reserved for future issuance under the Company's 1999
Employee Stock Purchase Plan (the "COMPANY ESPP"). All shares of Common
Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are
issuable, will be duly authorized, validly issued, fully paid and
nonassessable. Other than as set forth on Part 3.2(b) of the Company
Disclosure Letter, there are no commitments or agreements of any character
to which the Company is bound obligating the Company to accelerate the
vesting of any Company Option as a result of the consummation of the
transactions contemplated by this Agreement.
(c) All outstanding shares of Company Common Stock, all
outstanding Company Options, and all outstanding shares of capital stock of
each subsidiary of the Company have been issued and granted in material
compliance with (i) all applicable securities laws and other applicable
material Legal Requirements and (ii) all material requirements set forth in
applicable agreements or instruments. For the purposes of this Agreement,
"LEGAL REQUIREMENTS" means any federal, state, local, municipal, foreign or
other law, statute, constitution, principle of common law, resolution,
ordinance, code, edict, decree, rule, regulation, ruling or requirement
issued, enacted, adopted, promulgated, implemented or otherwise put into
effect by or under the authority of any Governmental Entity (as defined in
Section 3.4).
(d) The Shares, when issued and paid for as provided in this
Agreement, will be duly authorized and validly issued, fully paid and
nonassessable.
(e) Based in part on the representations made by VHA in Article IV
hereof, the offer and sale of the Shares in accordance with this Agreement
(assuming no change in currently applicable law) is exempt from the
registration and prospectus delivery requirements of the Securities Act of
1933, as amended (the "1933 ACT").
3.3 Obligations With Respect to Capital Stock. Except as set forth
in Section 3.2 or Part 3.3 of the Company Disclosure Letter, there are no
equity securities, partnership interests or similar ownership interests of
any class of Company equity security, or any securities exchangeable or
convertible into or exercisable for such equity securities, partnership
interests or similar ownership interests, issued, reserved for issuance or
outstanding. All stock and rights to purchase stock of any subsidiary of
the Company are owned free and clear of all Encumbrances. Except as set
forth in Section 3.2 or Part 3.2 or Part 3.3 of the Company Disclosure
Letter, there are no subscriptions, options, warrants, equity securities,
partnership interests or similar ownership interests, calls, rights
(including preemptive rights), commitments or agreements of any character
to which the Company or any of its subsidiaries is a party or by which it
is bound obligating the Company or any of its subsidiaries to issue,
deliver or sell, or cause to be issued, delivered or sold, or repurchase,
redeem or otherwise acquire, or cause the repurchase, redemption or
acquisition of, any shares of capital stock, partnership interests or
similar ownership interests of the Company or any of its subsidiaries or
obligating the Company or any of its subsidiaries to grant, extend,
accelerate the vesting of or enter into any such subscription, option,
warrant, equity security, call, right, commitment or agreement. There are
no registration rights, and there is no shareholder agreement, investor
agreement, voting trust, proxy, rights agreement, "poison pill"
anti-takeover plan or other agreement or understanding to which the Company
is a party or by which it is bound with respect to any equity security of
any class of the Company or with respect to any equity security,
partnership interest or similar ownership interest of any class of any of
its subsidiaries.
3.4 Due Authorization.
(a) The Company has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of the Company. No approval of any
holder of any securities of the Company is required in connection with the
consummation of the transactions contemplated hereby. This Agreement has
been duly executed and delivered by the Company and, assuming the due
authorization, execution and delivery thereof by VHA, constitutes the valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as enforceability may be limited by
bankruptcy and other similar laws affecting the rights of creditors
generally and general principles of equity.
(b) The execution and delivery of this Agreement by the Company
does not, and the performance of this Agreement by the Company will not,
(i) conflict with or violate the Company Charter Documents, (ii) subject to
compliance with the requirements set forth in Section 3.4(c), conflict with
or violate any law, rule, regulation, order, judgment or decree applicable
to the Company or by which any of its properties is bound or affected, or
(iii) result in any breach of or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, or
impair the Company's rights or alter the rights or obligations of any third
party under, or give to others any rights of termination, amendment,
acceleration or cancellation of; or result in the creation of an
Encumbrance on any of the properties or assets of the Company pursuant to,
any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Company is
a party or by which the Company or any of its properties are bound or
affected, except, in the case of clauses (ii) and (iii), for such
conflicts, violations, breaches, defaults, impairments, or rights which,
individually or in the aggregate, would not have a Material Adverse Effect
on the Company. Part 3.4(b) of the Company Disclosure Letter lists all
consents, waivers and approvals under any of the Company's or any of its
subsidiaries' agreements, contracts, licenses or leases required to be
obtained in connection with the consummation of the transactions
contemplated hereby, which, if individually or in the aggregate not
obtained, would have a Material Adverse Effect on the Company.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with any court, administrative agency
or commission or other governmental entity or instrumentality, foreign or
domestic ("GOVERNMENTAL ENTITY") is required to be obtained or made by the
Company in connection with the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated hereby,
except for (i) such consents, approvals, orders, authorizations,
registrations, declarations and filings as may be required under applicable
federal, foreign and state securities (or related) laws and the securities
laws of any foreign country, and (ii) such other consents, authorizations,
filings, approvals and registrations which if not obtained or made would
not have a Material Adverse Effect on the Company or have a material
adverse effect on the ability of the parties hereto to consummate the
transactions contemplated hereby.
3.5 SEC Filings; Company Financial Statements.
(a) The Company has filed all forms, reports and documents
required to be filed by the Company with the Securities and Exchange
Commission (the "SEC") since the effective date of the Registration
Statement of the Company's initial public offering (the "COMPANY INITIAL
REGISTRATION STATEMENT"), and has made available to VHA such forms, reports
and documents in the form filed with the SEC. All such required forms,
reports and documents (including those that the Company may file subsequent
to the date hereof) and the Company Initial Registration Statement are
referred to herein as the "COMPANY SEC REPORTS." As of their respective
dates, the Company SEC Reports (i) were prepared in accordance with the
requirements of the 1933 Act or the Securities Exchange Act of 1934, as
amended (the "1934 ACT"), as the case may be, and the rules and regulations
of the SEC thereunder applicable to such Company SEC Reports, and (ii) did
not at the time they were filed (or if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such filing)
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, except to the extent corrected prior to the date of
this Agreement by a subsequently filed Company SEC Report. None of the
Company's subsidiaries is required to file any forms, reports or other
documents with the SEC.
(b) Each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the Company SEC Reports
(the "COMPANY FINANCIALS"), including any Company SEC Reports filed after
the date hereof until the Closing, (i) complied as to form in all material
respects with the published rules and regulations of the SEC with respect
thereto, (ii) was prepared in accordance with GAAP applied on a consistent
basis throughout the periods involved (except as may be indicated in the
notes thereto or, in the case of unaudited interim financial statements, as
may be permitted by the SEC on Form 1O-Q, 8-K or any successor form under
the 0000 Xxx) and (iii) fairly presented the consolidated financial
position of the Company and its subsidiaries as at the respective dates
thereof and the consolidated results of the Company's operations and cash
flows for the periods indicated, except that the unaudited interim
financial statements may not contain footnotes and were or are subject to
normal and recurring year-end adjustments. The balance sheet of the Company
contained in the Company SEC Reports as of September 30, 2000 is
hereinafter referred to as the "COMPANY BALANCE SHEET." Except as disclosed
in the Company Financials, since the date of the Company Balance Sheet
neither the Company nor any of its subsidiaries has any liabilities
required under GAAP to be set forth on a balance sheet (absolute, accrued,
contingent or otherwise) which are, individually or in the aggregate,
material to the business, results of operations or financial condition of
the Company and its subsidiaries taken as a whole, except for liabilities
incurred since the date of the Company Balance Sheet in the ordinary course
of business consistent with past practices and liabilities incurred in
connection with this Agreement.
3.6 Absence of Certain Changes or Events. Since the date of the
Company Balance Sheet there has not been (i) any Material Adverse Effect
with respect to the Company, (ii) any declaration, setting aside or payment
of any dividend on, or other distribution (whether in cash, stock or
property) in respect of, any of the Company's or any of its subsidiaries'
capital stock, or any purchase, redemption or other acquisition by the
Company of any of the Company's capital stock or any other securities of
the Company or its subsidiaries or any options, warrants, calls or rights
to acquire any such shares or other securities except for repurchases from
employees following their termination pursuant to the terms of their
pre-existing stock option or purchase agreements, (iii) any split,
combination or reclassification of any of the Company's or any of its
subsidiaries' capital stock, (iv) any material change or alteration in the
policy of the Company relating to the granting of stock options or other
equity compensation to its employees and consultants other than in the
ordinary course of business consistent with past practice, or (v) entry by
the Company or any of its subsidiaries into, or material modification,
amendment or cancellation of, any licensing or other agreement with regard
to the acquisition, distribution or licensing of any material Intellectual
Property other than licenses, distribution agreements, advertising
agreements, or other similar agreements entered into in the ordinary course
of business consistent with past practice.
3.7 Tax Returns and Payments. The Company has timely filed all tax
returns and reports required by law. All tax returns and reports of the
Company are true and correct in all material respects. The Company has paid
all taxes and other assessments due, except those, if any, currently being
contested by it in good faith, which are listed in the Company Disclosure
Schedule.
3.8 Title to Properties.
(a) All real property leases to which the Company is a party and
each amendment thereto that is in effect as of the date of this Agreement
that provide for annual payments in excess of $250,000 are in full force
and effect and are valid and enforceable in accordance with their
respective terms, and there is not, under any of such leases, any existing
default or event of default (or event which with notice or lapse of time,
or both, would constitute a default) that would give rise to a material
claim against the Company which could reasonably be expected to have a
Material Adverse Effect on the Company.
(b) The Company has good and valid title to, or, in the case of
leased properties and assets, valid leasehold interests in, all of its
tangible properties and assets, real, personal and mixed, used or held for
use in its business, free and clear of any Encumbrances, except as
reflected in the Company Financials and except where the failure to have
valid title or a valid leasehold interest would not have a Material Adverse
Effect on the Company.
3.9 Intellectual Property. For the purposes of this Agreement, the
following terms have the following definitions:
"INTELLECTUAL PROPERTY" means any or all of the following and all
rights in, arising out of, or associated therewith: (i) all United States,
international and foreign patents and applications therefor and all
reissues, divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof; (ii) all inventions (whether patentable or
not), invention disclosures, improvements, trade secrets, proprietary
information, know how, technology, technical data and customer lists, and
all documentation relating to any of the foregoing; (iii) all copyrights,
copyrights registrations and applications therefor, and all other rights
corresponding thereto throughout the world; (iv) all industrial designs and
any registrations and applications therefor throughout the world; (v) all
trade names, URLs, logos, common law trademarks and service marks,
trademark and service xxxx registrations and applications therefor
throughout the world; (vi) all databases and data collections and all
rights therein throughout the world; (vii) all moral and economic rights of
authors and inventors, however denominated, throughout the world, and
(viii) any similar or equivalent rights to any of the foregoing anywhere in
the world.
"COMPANY INTELLECTUAL PROPERTY" shall mean any Intellectual
Property that is owned by, or exclusively licensed to, the Company or one
of its subsidiaries.
"COMPANY REGISTERED INTELLECTUAL PROPERTY" means all of the
Registered Intellectual Property owned by, or filed in the name of, the
Company or one of its subsidiaries.
"REGISTERED INTELLECTUAL PROPERTY" means all United States,
international and foreign: (i) patents and patent applications (including
provisional applications); (ii) registered trademarks, applications to
register trademarks, intent-to-use applications, or other registrations or
applications related to trademarks; (iii) registered copyrights and
applications for copyright registration; and (iv) any other Intellectual
Property that is the subject of an application, certificate, filing,
registration or other document issued, filed with, or recorded by any
Governmental Entity.
(a) No material Company Intellectual Property or product or
service of the Company is subject to any proceeding, agreement, or
stipulation to which the Company is a party, or any outstanding decree,
order or judgment, which arose out of any proceeding to which the Company
was either a party or of which the Company has knowledge, restricting in
any manner the use, transfer, or licensing thereof by the Company, or which
may affect the validity, use or enforceability of such Company Intellectual
Property.
(b) Each material item of Company Registered Intellectual Property
is valid and subsisting, all necessary registration, maintenance and
renewal fees currently due in connection with such Company Registered
Intellectual Property have been made and all necessary documents,
recordations and certificates in connection with such Company Registered
Intellectual Property have been filed with the relevant patent, copyright,
trademark or other authorities in the United States or foreign
jurisdictions, as the case may be, for the purposes of maintaining such
Company Registered Intellectual Property, except, in each case, as would
not materially adversely affect such item of Company Registered
Intellectual Property.
(c) The Company or one of its subsidiaries owns and has good and
exclusive title to, or has license sufficient for the conduct of its
business as currently conducted to, each material item of Company
Intellectual Property free and clear of any Encumbrance (excluding licenses
and related restrictions).
(d) Neither the Company nor any of its subsidiaries has
transferred ownership of, or granted any exclusive license with respect to,
any Intellectual Property that is or was material Company Intellectual
Property, to any third party.
(e) The operation of the business of the Company as such business
currently is conducted, including the Company's design, development,
marketing and sale of the products or services of the Company (including
with respect to products currently under development) has not, does not and
will not materially infringe or materially misappropriate the Intellectual
Property of any third party or, to its knowledge, constitute unfair
competition or trade practices under the laws of any jurisdiction.
(f) The Company has not received written notice from any third
party that the operation of the business of the Company or any act, product
or service of the Company, infringes or misappropriates the Intellectual
Property of any third party or constitutes unfair competition or trade
practices under the laws of any jurisdiction, which allegation, if true,
would have a Material Adverse Effect on the Company.
(g) To the knowledge of the Company, no person has or is
infringing or misappropriating any Company Intellectual Property, which
infringement or misappropriation, individually or in the aggregate, would
have a Material Adverse Effect on the Company.
(h) The Company and its subsidiaries have taken reasonable steps
to protect the Company's and its subsidiaries' rights in the Company's and
such subsidiaries' confidential information and trade secrets, except where
the failure to do so would not have a Material Adverse Effect on the
Company.
3.10 Compliance with Laws; Certain Agreements.
(a) Neither the Company nor any of its subsidiaries is in conflict
with, or in default or in violation of (i) any law, rule, regulation,
order, judgment or decree applicable to the Company or any of its
subsidiaries or by which the Company or any of its subsidiaries or any of
their respective properties is bound or affected, or (ii) any note, bond,
mortgage, indenture, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries or its or any of
their respective properties is bound or affected, except for conflicts,
violations and defaults that, individually or in the aggregate, would not
have a Material Adverse Effect on the Company. To the Company's knowledge,
no investigation or review by any Governmental Entity is pending or has
been threatened in a writing delivered to the Company against the Company
or any of its subsidiaries. There is no agreement with any Governmental
Entity, judgment, injunction, order or decree binding upon the Company or
any of its subsidiaries which has or could reasonably be expected to have
the effect of prohibiting or materially impairing any material business
practice of the Company or any of its subsidiaries, or any acquisition of
material property by the Company or any of its subsidiaries.
(b) The Company and its subsidiaries hold all permits, licenses,
exemptions, orders and approvals from governmental authorities that are
material to or required for the operation of the business of the Company as
currently conducted (collectively, the "COMPANY PERMITS"), and are in
compliance with the terms of the Company Permits, except where the failure
to hold such Company Permits, or be in such compliance, would not,
individually or in the aggregate, have a Material Adverse Effect on the
Company.
3.11 Litigation. There are no claims, suits, actions or
proceedings pending or, to the knowledge of the Company, threatened
against, relating to or affecting the Company or any of its subsidiaries,
before any Governmental Entity or any arbitrator that seeks to restrain or
enjoin the consummation of the transactions contemplated by this Agreement
or which could reasonably be expected, either singularly or in the
aggregate with all such claims, actions or proceedings, to have a Material
Adverse Effect on the Company following the transactions contemplated
hereby or have a material adverse effect on the ability of the parties
hereto to consummate the transactions contemplated hereby.
3.12 Employee Benefit Plans.
(a) Definitions. With the exception of the definition of
"Affiliate" set forth in Section 3.12(a)(i) below (which definition shall
apply only to this Section 3.12), for purposes of this Agreement, the
following terms shall have the meanings set forth below:
(i) "AFFILIATE" shall mean any other person or entity under
common control with the Company within the meaning of Section 414(b), (c),
(m) or (o) of the Code and the regulations issued thereunder;
(ii) "COMPANY EMPLOYEE PLAN" shall mean any plan, program,
policy, practice, contract, agreement or other arrangement providing for
compensation, severance, termination pay, performance awards, stock or
stock-related awards, fringe benefits or other employee benefits or
remuneration of any kind, whether written or unwritten or otherwise, funded
or unfunded, including without limitation, each "EMPLOYEE BENEFIT PLAN,"
within the meaning of Section 3(3) of ERISA which is maintained,
contributed to, or required to be contributed to, by the Company or any
Affiliate for the benefit of any Company Employee; and
(iii) "COMPANY EMPLOYEE" shall mean any current, former, or
retired employee, officer, or director of the Company or any Affiliate.
(b) Employee Plan Compliance. Except, in each case, as would not,
individually or in the aggregate, have a Material Adverse Effect on the
Company (i) the Company has performed in all material respects all
obligations required to be performed by it under, is not in default or
violation of, and has no knowledge of any default or violation by any other
party to, each Company Employee Plan, and each Company Employee Plan has
been established and maintained in all material respects in accordance with
its terms and in compliance with all applicable laws, statutes, orders,
rules and regulations, including but not limited to ERISA or the Code; (ii)
each Company Employee Plan intended to qualify under Section 401(a) of the
Code and each trust intended to qualify under Section 501(a) of the Code
has either received a favorable determination letter from the IRS with
respect to each such Plan as to its qualified status under the Code or has
remaining a period of time under applicable Treasury regulations or IRS
pronouncements in which to apply for such a determination letter and make
any amendments necessary to obtain a favorable determination and no event
has occurred which would adversely affect the status of such determination
letter or the qualified status of such Plan; (iii) no "prohibited
transaction," within the meaning of Section 4975 of the Code or Sections
406 and 407 of ERISA, and not otherwise exempt under Section 408 of ERISA,
has occurred with respect to any Company Employee Plan; (iv) there are no
actions, suits or claims pending, or, to the knowledge of the Company,
threatened or reasonably anticipated (other than routine claims for
benefits) against any Company Employee Plan or against the assets of any
Company Employee Plan; (v) each Company Employee Plan can be amended,
terminated or otherwise discontinued after the Closing in accordance with
its terms, without liability to the Company or any of its Affiliates (other
than ordinary administration expenses typically incurred in a termination
event); (vi) there are no audits, inquiries or proceedings pending or, to
the knowledge of the Company, threatened by the IRS or DOL with respect to
any Company Employee Plan; (vii) neither the Company nor any Affiliate is
subject to any material penalty or tax with respect to any Company Employee
Plan under Section 402(i) of ERISA or Sections 4975 through 4980 of the
Code; and (viii) all contributions due from the Company or any Affiliate
with respect to any of the Company Employee Plans have been made as
required under ERISA or have been accrued on the Company Balance Sheet.
(c) Employment Matters. Except, in each case, as would not,
individually or in the aggregate, have a Material Adverse Effect on the
Company, the Company and each of its subsidiaries: (i) is in compliance in
all material respects with all applicable foreign, federal, state and local
laws, rules and regulations respecting employment, employment practices,
terms and conditions of employment and wages and hours, in each case, with
respect to Company Employees; (ii) has withheld all amounts required by law
or by agreement to be withheld from the wages, salaries and other payments
to Company Employees; (iii) has properly classified independent contractors
for purposes of federal and applicable state tax laws, laws applicable to
employee benefits and other applicable laws; (iv) is not liable for any
arrears of wages or any taxes or any penalty for failure to comply with any
of the foregoing; and (v) is not liable for any material payment to any
trust or other fund or to any governmental or administrative authority,
with respect to unemployment compensation benefits, social security or
other benefits or obligations for Company Employees (other than routine
payments to be made in the normal course of business and consistent with
past practice). There are no pending, or, to the Company's knowledge,
threatened material claims or actions against the Company under any
worker's compensation policy or long-term disability policy. To the
Company's knowledge, no Company Employee has violated in any material
manner any employment contract, nondisclosure agreement or noncompetition
agreement by which such Company Employee is bound due to such Company
Employee being employed by the Company and disclosing to the Company or
using trade secrets or proprietary information of any other person or
entity.
(d) Labor. No work stoppage or labor strike against the Company is
pending, threatened or reasonably anticipated. The Company does not know of
any activities or proceedings of any labor union to organize any Company
Employees. There are no actions, suits, claims, labor disputes or
grievances pending, or, to the knowledge of the Company, threatened or
reasonably anticipated relating to any labor, safety or discrimination
matters involving any Company Employee, including charges of unfair labor
practices or discrimination complaints, which, if adversely determined,
would, individually or in the aggregate, result in any material liability
to the Company. Neither the Company nor any of its subsidiaries has engaged
in any unfair labor practices within the meaning of the National Labor
Relations Act. The Company is not presently, nor has it been in the past, a
party to, or bound by, any collective bargaining agreement or union
contract with respect to Employees and no collective bargaining agreement
is being negotiated by the Company.
3.13 Environmental Matters. To the Company's knowledge, the
Company is not in violation of any applicable statute, law or regulation
relating to the environment or occupational health and safety, and to the
Company's knowledge, no material expenditures are or will be required in
order to comply with any such statute, law or regulation.
3.14 Certain Agreements. Other than this Agreement, and except as
otherwise set forth in Part 3.14 of the Company Disclosure Letter, neither
the Company nor any of its subsidiaries is a party to or is bound by:
(a) any material agreement of indemnification, any material
guaranty or any material instrument evidencing indebtedness for borrowed
money by way of direct loan, sale of debt securities or purchase money
obligation;
(b) any agreement or obligation currently in force relating to the
disposition or acquisition by the Company or any of its subsidiaries after
the date of this Agreement of a material amount of assets not in the
ordinary course of business, or pursuant to which the Company has any
material ownership or participation interest in any corporation,
partnership, joint venture, strategic alliance or other business enterprise
other than the Company's subsidiaries;
(c) any agreement or obligation currently in force to provide
source code to any third party for any product or technology;
(d) any agreement or obligation with any affiliate of the Company;
or
(e) any agreement or commitment currently in force providing for
capital expenditures by the Company or its subsidiaries in excess of
$1,000,000.
The agreements required to be disclosed in the Company Disclosure
Letter pursuant to clauses (a) through (e) above or pursuant to Section 3.9
or filed with any Company SEC Report (the "COMPANY CONTRACTS") are valid
and in full force and effect, except to the extent that such invalidity
would not have a Material Adverse Effect on the Company. Neither the
Company nor any of its subsidiaries, nor to the Company's knowledge, any
other party thereto, is in breach, violation or default under, and neither
the Company nor any of its subsidiaries has received written notice that it
has breached, violated or defaulted, any of the terms or conditions of any
Company Contract in such a manner as would have a Material Adverse Effect
on the Company.
3.15 Brokers' and Finders' Fees. The Company has not incurred, nor
will it 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.
3.16 Insurance. The Company and each of its subsidiaries have
policies of insurance and bonds of the type and in amounts customarily
carried by persons conducting business or owning assets similar to those of
the Company and its subsidiaries. There is no material claim pending under
any of such policies or bonds as to which coverage has been questioned,
denied or disputed by the underwriters of such policies or bonds. All
premiums due and payable under all such policies have been paid and the
Company and its subsidiaries are otherwise in compliance in all material
respects with the terms of such policies and bonds.
ARTICLE IV
REPRESENTATIONS, WARRANTIES
AND CERTAIN AGREEMENTS OF VHA
VHA hereby represents and warrants to the Company, subject to the
exceptions specifically disclosed in writing in the disclosure letter
delivered by VHA dated as of the date hereof and certified by a duly
authorized officer of VHA (the "VHA DISCLOSURE LETTER") (which VHA
Disclosure Letter shall be deemed to be representations and warranties to
the Company by VHA under this Section 4), as follows:
4.1 Organization, Good Standing and Qualification. VHA represents
that it is an entity duly organized, validly existing and in good standing
under the laws of the state of its formation and has all requisite power
and authority, and all requisite qualifications to do business as a foreign
entity, to conduct its business in the manner in which its business is
currently being conducted, except where the failure to be so organized,
existing or in good standing or to have such power, authority or
qualifications would not have a Material Adverse Effect on VHA.
4.2 Authorization.
(a) VHA has all requisite power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of VHA. This Agreement has been duly executed and
delivered by VHA and constitute the valid and binding obligations of VHA,
enforceable against VHA in accordance with their terms, except as
enforceability may be limited by bankruptcy and other similar laws
affecting the rights of creditors generally and general principles of
equity.
(b) The execution and delivery of this Agreement by VHA does not,
and the performance of this Agreement by VHA will not, (i) conflict with or
violate the certificate of incorporation, bylaws, operating agreement or
other organizational documents of VHA, (ii) subject to compliance with the
requirements set forth in Section 4.2(c) with regard to VHA, conflict with
or violate any law, rule, regulation, order, judgment or decree applicable
to VHA or by which any of its properties are bound or affected, or (iii)
result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or impair
VHA's rights or alter the rights or obligations of any third party under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of an Encumbrance on any of the
properties or assets of VHA pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which VHA is a party or by which VHA or any of
its properties are bound or affected, except, in the case of clauses (ii)
and (iii), for such conflicts, violations, breaches, defaults, impairments,
or rights which, individually or in the aggregate, would not have a
Material Adverse Effect on VHA. Except as set forth in a letter delivered
by VHA to the Company concurrently with the execution of this Agreement, no
consents, waivers and approvals under any of VHA's or any of its
subsidiaries' agreements, contracts, licenses or leases are required to be
obtained in connection with the consummation of the transactions
contemplated hereby, which, if individually or in the aggregate not
obtained, would have a Material Adverse Effect on VHA.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with any Governmental Entity is
required to be obtained or made by VHA in connection with the execution and
delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required
under applicable federal, foreign and state securities (or related) laws
and the securities laws of any foreign country, and (ii) such other
consents, authorizations, filings, approvals and registrations which if not
obtained or made would not have a Material Adverse Effect on VHA or have a
material adverse effect on the ability of the parties hereto to consummate
the transactions contemplated hereby.
4.3 Acquisition for Own Account. The Shares to be purchased by VHA
hereunder will be acquired for investment for VHA's own account, not as a
nominee or agent, and not with a view to the public resale or distribution
thereof within the meaning of the 1933 Act, and VHA represents that it has
no present intention or agreement to sell, grant any participation in, or
otherwise distribute any of the Shares to be purchased by VHA hereunder in
any public resale or distribution within the meaning of the 1933 Act. VHA
also represents that it has not been formed for the specific purpose of
acquiring the Shares under this Agreement.
4.4 Disclosure of Information. VHA believes it has received or has
had full access to all the information it considers necessary or
appropriate to make an informed ownership decision with respect to the
Shares to be purchased by VHA under this Agreement. VHA further has had an
opportunity to ask questions and receive answers from the Company regarding
the terms and conditions of the offering of the Shares and to obtain
additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to VHA or to which VHA had
access. The foregoing, however, does not in any way limit or modify the
representations and warranties made by the Company in Article III.
4.5 Experience. VHA understands that the purchase of the Shares
involves substantial risk. VHA: (i) has experience as an investor in
securities of companies in the development stage and acknowledges that VHA
is able to fend for itself, can bear the economic risk of VHA's investment
in the Shares and has such knowledge and experience in financial or
business matters that VHA is capable of evaluating the merits and risks of
this investment in the Shares and protecting its own interests in
connection with this investment and/or (ii) has a preexisting personal or
business relationship with the Company and certain of its officers,
directors or controlling persons of a nature and duration that enables VHA
to be aware of the character, business acumen and financial circumstances
of such persons.
4.6 Accredited Investor Status. VHA is an "accredited investor"
within the meaning of Regulation D promulgated under the 1933 Act.
4.7 Restricted Securities. VHA understands that the Shares will be
characterized as "restricted securities" under the 1933 Act inasmuch as
they are being acquired from the Company in a transaction not involving a
public offering and that under the 1933 Act and applicable regulations
thereunder such securities may be resold without registration under the
1933 Act only in certain limited circumstances. In this connection, VHA
represents that VHA is familiar with Rule 144 of the SEC, as presently in
effect, and understands the resale limitations imposed thereby and by the
1933 Act.
4.8 No Solicitation. At no time was VHA presented with or
solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general advertising or solicitation in
connection with the issuance or delivery of the Shares.
4.9 Further Limitations on Disposition. Without in any way
limiting the representations set forth above, VHA further agrees not to
make any disposition of all or any portion of the Shares or of any interest
therein to any person or entity unless:
(a) there is then in effect a registration statement
under the 1933 Act covering such proposed disposition of Shares and
such disposition is made in accordance with such registration
statement; or
(b) VHA shall have notified the Company of the proposed
disposition of the Shares and shall have furnished the Company with
a statement of the circumstances surrounding such proposed
disposition, and, at the expense of VHA or its transferee, with an
opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such securities
under the 1933 Act.
4.10 Legends. VHA understands and agrees that the certificates
evidencing the Shares will bear legends substantially similar to those set
forth below, as applicable, in addition to any other legend that may be
required by applicable law, by the Company's Certificate of Incorporation
or Bylaws, or by any agreement between the Company and VHA:
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE
SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED
UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT
TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE
THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE
SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OTHERWISE PERMITTED UNDER CONTRACTUAL RESTRICTIONS ON
RESALE APPLICABLE TO THESE SECURITIES IS IN COMPLIANCE WITH THE
ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
(b) THE SECURITIES REPRESENTED HEREBY MAY BE SUBJECT TO
CERTAIN RESTRICTIONS ON RESALE AND ON VOTING AND THE HOLDERS
HEREOF MAY BE BOUND BY CERTAIN RESTRICTIONS ON ACQUISITION OF THE
ISSUER'S CAPITAL STOCK PURSUANT TO A COMMON STOCK PURCHASE
AGREEMENT BETWEEN THE ORIGINAL HOLDERS OF THESE SECURITES AND THE
ISSUER, A COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER.
The legend set forth in (a) above shall be removed by the Company from any
certificate evidencing Shares upon delivery to the Company of an opinion by
counsel, reasonably satisfactory to the Company, to the effect that a
registration statement under the 1933 Act is at that time in effect with
respect to the legended security or to the effect that such security can be
freely transferred in a public sale without such a registration statement
being in effect and that such transfer will not jeopardize the exemption or
exemptions from registration pursuant to which the Company issued the
Shares.
4.11 Tax Liability. VHA has reviewed with its own tax advisors the
federal, state, local and foreign tax consequences of this investment and
the transactions contemplated by this Agreement. VHA relies solely on such
advisors and not on any statements or representations of the Company, the
Company's counsel, or any of the Company's agents. It understands that it
(and not the Company) shall be responsible for its own tax liability that
may arise as a result of this investment or the transactions contemplated
by this Agreement.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Voting of Common Stock. VHA agrees that from and after the
date of the Closing through the fifth anniversary of the Closing (the
"FIFTH ANNIVERSARY"), and for as long after the Fifth Anniversary as the
outstanding shares of Common Stock (including the Shares and any
outstanding Restricted Shares and Vested Shares (as such terms are defined
in Article II of that certain Amendment to Amended and Restated Common
Stock and Warrant Agreement, dated as of October 18, 2000, by and between
the Company and VHA (the "COMMON STOCK AND WARRANT AGREEMENT")))
beneficially owned by VHA together with all "affiliates" (which for
purposes of this Agreement (other than Section 3.12) shall have the meaning
given such term in Rule 144(a)(1) promulgated under the 0000 Xxx) of VHA is
greater than 49.9% of the then outstanding Common Stock of the Company (the
entire such period, the "RESTRICTED PERIOD"), VHA shall, and shall cause
its affiliates to, vote all Shares it holds or is entitled to vote in
proportion to the votes cast by all other stockholders of the Company in
connection with each matter submitted to the Company's stockholders for
approval. In the event that the outstanding shares of Common Stock
(including the Shares and any outstanding Restricted Shares and Vested
Shares) beneficially owned by VHA and its affiliates exceeds 35% but does
not exceed 49.9% of the then outstanding Common Stock of the Company, the
Shares shall be considered Excess Shares (as such term is defined in
Section 6.1 of the Common Stock and Warrant Agreement).
5.2 Reasonable Efforts. Upon the terms and subject to the
conditions set forth in this Agreement, each of the parties agrees to use
all reasonable efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, and to assist and cooperate with the other party
in doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement, including the taking of all reasonable acts
necessary to cause the conditions precedent set forth in Articles VI and
VII to be satisfied.
5.3 Registration Rights. The Company shall use its reasonable best
efforts to cause the requisite holders of registration rights under the
Amended and Restated Registration Rights Agreement among the Company and
certain of its investors dated June 30, 2000 to amend such agreement in
substantially the form attached hereto as Exhibit A.
5.4 Public Disclosure. The Company and VHA agree that they will
promptly after the date of this Agreement issue a joint press release with
respect to their entry into this Agreement. The Company and VHA will
consult with each other, and to the extent practicable, agree, before
issuing a joint press release or otherwise making any public statement with
respect to their entry into this Agreement and will not issue any such
joint press release or make any such public statement prior to such
consultation, except as may be required by law or any listing agreement
with a national securities exchange.
5.5 Board of Directors. The Board of Directors of the Company will
take all actions necessary such that as soon as practicable following the
Closing, C. Xxx Xxxxx shall be appointed by VHA to the Company's Board of
Directors. For so long as VHA beneficially owns 30% or more of the
outstanding Common Stock of the Company on a fully converted basis, the
Company will take all actions reasonably necessary to have three persons
appointed by VHA be members of the Company's Board of Directors.
ARTICLE VI
CONDITIONS TO VHA'S OBLIGATIONS AT CLOSING
The obligations of VHA under Sections 1 and 2 of this Agreement
are subject to the fulfillment or waiver, on or before the Closing, of each
of the following conditions:
6.1 Representations and Warranties. The representations and
warranties of the Company contained in this Agreement shall be true and
correct in all material respects on the date of the Closing with the same
effect as though such representations and warranties had been made on and
as of the Closing (other than representations and warranties that address
matters only as of a particular date, which shall be true and correct as of
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 on the Company. It is understood that, for purposes
of determining the accuracy of such representations and warranties, any
update of or modification to the Company Disclosure Letter made or
purported to have been made after the execution of this Agreement shall be
disregarded. VHA shall have received a certificate with respect to the
foregoing signed on behalf of the Company by the Chief Executive Officer or
the Chief Financial Officer of the Company.
6.2 Performance. The Company shall have performed and complied in
all material respects with all agreements, obligations and conditions
contained in this Agreement that are required to be performed or complied
with by it on or before the Closing.
6.3 Securities Exemptions. The offer and sale of the Shares to VHA
pursuant to this Agreement shall be exempt from the registration
requirements of the 1933 Act, the qualification requirements of the
California Corporate Securities Law of 1968, as amended ("CALIFORNIA LAW")
and the registration and/or qualification requirements of all other
applicable state securities laws.
6.4 Consents. (i) All required approvals or consents of any
Governmental Entity or other person in connection with the consummation of
the transactions contemplated hereby shall have been obtained (and all
relevant statutory, regulatory or other governmental waiting periods, shall
have expired) unless the failure to receive any such approval or consent
would not be reasonably likely, directly or indirectly, to result in a
Material Adverse Effect on the Company and its subsidiaries, taken as a
whole, and (ii) all such approvals and consents which have been obtained
shall be on terms that are not reasonably likely, directly or indirectly,
to result in a Material Adverse Effect on the Company and its subsidiaries,
taken as a whole.
6.5 Nasdaq Listing. If required, the Shares shall have been
approved for listing on the Nasdaq Stock Market, subject to official notice
of issuance.
ARTICLE VII
CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING
The obligations of the Company under this Agreement are subject to
the fulfillment or waiver on or before the Closing of each of the following
conditions:
7.1 Representations and Warranties. The representations and
warranties of VHA contained in Article IV shall be true and correct in all
material respects on the date of the Closing with the same effect as though
such representations and warranties had been made on and as of the Closing.
It is understood that, for purposes of determining the accuracy of such
representations and warranties, any update of or modification to the VHA
Disclosure Letter made or purported to have been made after the execution
of this Agreement shall be disregarded. The Company shall have received a
certificate with respect to the foregoing signed on behalf of VHA by the
Chief Executive Officer or the Chief Financial Officer of VHA.
7.2 Performance. VHA shall have performed and complied in all
material respects with all agreements, obligations and conditions contained
in this Agreement that are required to be performed or complied with by it
on or before the Closing.
7.3 Securities Exemptions. The issuance of the Shares to VHA
pursuant to this Agreement shall be exempt from the registration
requirements of the 1933 Act, the qualifications requirements of California
Law and the registration and/or qualification requirements of all other
applicable state securities laws.
7.4 Consents. (i) All required approvals or consents of any
Governmental Entity or other person in connection with the consummation of
the transactions contemplated hereby shall have been obtained (and all
relevant statutory, regulatory or other governmental waiting periods, shall
have expired) unless the failure to receive any such approval or consent
would not be reasonably likely, directly or indirectly, to result in a
Material Adverse Effect on the Company and its subsidiaries, taken as a
whole, and (ii) all such approvals and consents which have been obtained
shall be on terms that are not reasonably likely, directly or indirectly,
to result in a Material Adverse Effect on the Company and its subsidiaries,
taken as a whole.
ARTICLE VIII
TERMINATION
8.1 Termination. This Agreement may be terminated prior to the
Closing:
(a) by mutual written consent duly authorized by the Boards of
Directors of the Company and VHA;
(b) by either the Company or VHA if the Closing shall not have
occurred by February 15, 2001 for any reason; provided, however, that the
right to terminate this Agreement under this Section 9.1(b) shall not be
available to any party whose action or failure to act has been a principal
cause of or resulted in the failure of the Closing to occur on or before
such date and such action or failure to act constitutes a breach of this
Agreement; or
(c) by either the Company or VHA if a Governmental Entity shall
have issued an order, decree or ruling or taken any other action, in any
case having the effect of permanently restraining, enjoining or otherwise
prohibiting the Closing, which order, decree, ruling or other action is
final and nonappealable.
8.2 Notice of Termination; Effect of Termination. Any proper
termination of this Agreement under Section 8.1 will be effective
immediately upon the delivery of written notice of the terminating party to
the other party hereto. In the event of the termination of this Agreement
as provided in Section 8.1, this Agreement shall be of no further force or
effect, except (i) as set forth in this Section 8.2 and Article IX, each of
which shall survive the termination of this Agreement, and (ii) nothing
herein shall relieve either party from liability for any willful breach of
this Agreement.
ARTICLE IX
GENERAL PROVISIONS
9.1 Survival of Warranties. The representations, warranties and
covenants of VHA (except for any covenant that by its express terms
survives the Closing, and for the representations, warranties and covenants
set forth in Sections 4.3 through 4.10 inclusive, which shall survive the
execution and delivery of this Agreement and the Closing) contained in or
made pursuant to this Agreement shall terminate at the Closing. The
representations, warranties and covenants of the Company (except for any
covenant that by its express terms survives the Closing) contained in or
made pursuant to this Agreement shall terminate at the Closing.
9.2 Assignment. No party may assign either this Agreement or any
of its rights, interests, or obligations hereunder without the prior
written consent of the other party hereto. Subject to the preceding
sentence, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Any purported assignment in violation of this Section shall be
void.
9.3 Governing Law. This Agreement shall be governed by and
construed under the internal laws of the State of Delaware as applied to
agreements among Delaware residents entered into and to be performed
entirely within Delaware, without reference to principles of conflict of
laws or choice of laws.
9.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
9.5 Interpretation; Certain Defined Terms.
(a) When a reference is made in this Agreement to Exhibits, such
reference shall be to an Exhibit to this Agreement unless otherwise
indicated. When a reference is made in this Agreement to Sections, such
reference shall be to a Section of this Agreement unless otherwise
indicated. The words "INCLUDE," "INCLUDES" and "INCLUDING" when used herein
shall be deemed in each case to be followed by the words "WITHOUT
LIMITATION." The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of this Agreement. When reference is made herein to "THE BUSINESS OF" an
entity, such reference shall be deemed to include the business of all
direct and indirect subsidiaries of such entity. Reference to the
subsidiaries of an entity shall be deemed to include all direct and
indirect subsidiaries of such entity.
(b) For purposes of this Agreement, "ENCUMBRANCES" means any lien,
pledge, hypothecation, charge, mortgage, security interest, encumbrance,
claim, option, right of first refusal, preemptive right, community property
interest or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or
other asset, any restriction on the receipt of any income derived from any
asset, any restriction on the use of any asset and any restriction on the
possession, exercise or transfer of any other attribute of ownership of any
asset) (other than (i) liens for taxes not yet due and payable; (ii) liens
reflected on the Company Balance Sheet, if applicable; (iii) liens which
are not material in character, amount or extent, and which do not
materially detract from the value or materially interfere with the use of
the property subject thereto or affected thereby; and (iv) contractor's
liens).
(c) For purposes of this Agreement, the term "MATERIAL ADVERSE
EFFECT" when used in connection with an entity means any change, event,
violation, inaccuracy, circumstance or effect that is or is reasonably
likely to be materially adverse to the business, assets (including
intangible assets), capitalization, financial condition, operations or
results of operations of such entity taken as a whole with its
subsidiaries, except to the extent that any such change, event, violation,
inaccuracy, circumstance or effect directly and primarily results from (i)
changes in general economic conditions or changes affecting the industry
generally in which such entity operates (provided that such changes do not
affect such entity in a substantially disproportionate manner) or (ii)
changes in the trading prices for such entity's capital stock.
(d) For purposes of this Agreement, the term "PERSON" shall mean
any individual, corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability partnership, joint
venture, estate, trust, company (including any limited liability company or
joint stock company), firm or other enterprise, association, organization,
entity or Governmental Entity.
9.6 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given upon delivery either personally or
by commercial delivery service, or sent via facsimile (receipt confirmed)
to the parties at the following addresses or facsimile numbers (or at such
other address or facsimile number for a party as shall be specified by like
notice):
IF TO VHA: WITH A COPY TO:
VHA Inc. Skadden, Arps, Slate, Xxxxxxx & Xxxx, LLP
000 Xxxx Xxx Xxxxxxx Xxxxxxxxx Four Times Square
Irving, Texas 75039-5500 Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000 Facsimile: 000-000-0000
Attn: Chief Financial Officer Attn: Xxxxx X. Xxxxxxxxx
IF TO THE COMPANY: WITH A COPY TO:
Xxxxxxxx.xxx, Inc. Fenwick & West LLP
3061 Zanker Road Two Palo Alto Square, Palo Alto,
Xxx Xxxx, Xxxxxxxxxx 00000 California 94306
Facsimile: 000-000-0000 Facsimile: 000-000-0000
Attn: Chief Financial Officer Attn: Xxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxx
9.7 Expenses; Finder's Fees. All fees and expenses incurred in
connection with this Agreement and the transactions contemplated hereby
shall be paid by the party incurring such expenses whether or not the
Closing occurs. VHA agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finder's or broker's fee (and any asserted liability) for which VHA or any
of its officers, partners, members, employees, or representatives is
responsible. The Company agrees to indemnify and hold harmless VHA from any
liability for any commission or compensation in the nature of a finder's or
broker's fee (and any asserted liability) for which the Company or any of
its officers, employees or representatives is responsible.
9.8 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision(s) shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision(s) were so excluded and shall be
enforceable in accordance with its terms.
9.9 Entire Agreement. This Agreement, together with all exhibits
and schedules hereto, constitute the entire agreement and understanding of
the parties with respect to the subject matter hereof and supersedes any
and all prior negotiations, correspondence, agreements, understandings
duties or obligations between the parties with respect to the subject
matter hereof.
9.10 Further Assurances. From and after the date of this
Agreement, upon the request of VHA or the Company, the Company and VHA
shall execute and deliver such instruments, documents or other writings as
may be reasonably necessary or desirable to confirm and carry out and to
effectuate fully the intent and purposes of this Agreement.
9.11 Amendment; Extension; Waiver. Subject to applicable law, this
Agreement may be amended by the parties hereto at any time by execution of
an instrument in writing signed on behalf of the Company and VHA. At any
time prior to the Closing any party hereto may, to the extent legally
allowed, (i) extend the time for the performance of any of the obligations
or other acts of the other party hereto, (ii) waive any inaccuracies in the
representations and warranties made to such party contained herein or in
any document delivered pursuant hereto and (iii) waive compliance with any
of the agreements or conditions for the benefit of such party contained
herein. Any agreement on the part of a party hereto to any such extension
or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. Delay in exercising any right under this
Agreement shall not constitute a waiver of such right.
9.12 Other Remedies; Specific Performance. Except as otherwise
provided herein, any and all remedies herein expressly conferred upon a
party will be deemed cumulative with and not exclusive of any other remedy
conferred hereby, or by law or equity upon such party, and the exercise by
a party of any one remedy will not preclude the exercise of any other
remedy. The parties hereto agree that irreparable damage would occur in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to seek an injunction
or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
9.13 Rules of Construction. The parties hereto agree that they
have been represented by counsel during the negotiation and execution of
this Agreement and, therefore, waive the application of any law,
regulation, holding or rule of construction providing that ambiguities in
an agreement or other document will be construed against the party drafting
such agreement or document.
9.14 Company Disclosure Letter. Disclosure made with regard to a
representation or warranty of the Company in the Company Disclosure Letter
shall also be deemed to qualify other representations and warranties of the
Company if it is readily apparent from the language contained in such
disclosure that such disclosure is applicable to such other representation
or warranty.
9.15 Waiver Of Jury Trial. EACH OF THE COMPANY AND VHA HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE ACTIONS THE COMPANY OR VHA IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their duly authorized respective officers as of the date
first written above.
XXXXXXXX.XXX, INC.
By:__________________________
Name:
Title:
VHA INC.
By: ________________________
Name:
Title:
[SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT]
SCHEDULE OF EXHIBITS
Exhibit A: Registration Rights Agreement Amendment
EXHIBIT A
AMENDMENT NO. 1 TO
REGISTRATION RIGHTS AGREEMENT
This AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT dated
January 25, 2001 (this "AMENDMENT") amends that certain Registration Rights
Agreement, dated as of June 30, 2000, by and among Xxxxxxxx.xxx, Inc., a
Delaware corporation (the "COMPANY"), and the Investors (the "PRIOR RIGHTS
AGREEMENT"). The capitalized terms not otherwise defined herein have the
respective meanings given to them in the Prior Rights Agreement.
RECITALS
WHEREAS, Section 7.1 of the Prior Rights Agreement states in part
that any term or provision of the Prior Rights Agreement may be amended by
a writing signed by the Company and the holders of a majority of the shares
of the Registrable Securities.
WHEREAS, the undersigned parties include the Company and the
holders of a majority of the shares of the Registrable Securities.
NOW, THEREFORE, in consideration of the mutual promises made
herein and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree to amend the
Prior Rights Agreement as follows:
1. Amendment of Section 1.7 of the Prior Rights Agreement. Section
1.7 of the Prior Rights Agreement is amended to add (i) the shares of
Common Stock issued to VHA pursuant to that certain Common Stock Purchase
Agreement, dated as of January 25, 2001, by and between the Company and VHA
and (ii) the shares of Common Stock issued to UHC pursuant to that certain
Common Stock Purchase Agreement, dated as of January 25, 2001, by and
between the Company and UHC to the definition of Registrable Securities.
Section 1.7 shall read in its entirety as follows:
"1.7 "REGISTRABLE SECURITIES" means shares of Common
Stock of the Company (i) issued or issuable upon conversion of the
Preferred Stock (the "CONVERSION STOCK") and (ii) issued or
issuable with respect to, or in exchange for or in replacement of
the Conversion Stock or other Registrable Securities, (iii) issued
or issuable with respect to, or in exchange for or in replacement
of other securities convertible into or exercisable for Preferred
Stock upon any stock split, stock dividend, recapitalization, or
similar event, (iv) issued to the former stockholders of Pharos
Technologies, Inc., (the "PHAROS INVESTORS") in connection with
its acquisition by the Company, (v) issued to the former
stockholders of U.S. LifeLine, Inc. (the "USL INVESTORS") in
connection with its acquisition by the Company, (vi) issued to the
former stockholders of EquipMD, Inc., (the "EMI INVESTORS") in
connection with its acquisition by the Company, (vii) issued to,
or issuable upon exercise of warrants issued to, VHA, Inc., a
Delaware corporation ("VHA") or University Healthsystem
Consortium, an Illinois corporation ("UHC") in connection with the
commercial agreement among Neoforma, Novation, LLC, a Delaware
limited liability company ("NOVATION"), Healthcare Purchasing
Partners International, LLC, a Delaware limited liability company,
VHA and UHC, (viii) issued to VHA pursuant to that certain Common
Stock Purchase Agreement, dated as of January 25, 2001, by and
between the Company and VHA and (ix) issued to UHC pursuant to
that certain Common Stock Purchase Agreement, dated as of January
25, 2001, by and between the Company and UHC (the shares of Common
Stock of the Company (or other securities convertible or
exchangeable therefor) described in clauses (vii), (viii) and
(ix), the "NOVATION REGISTRABLE SECURITIES"), excluding: (A) any
shares of Common Stock that have been sold to or through a broker,
dealer, market maker or underwriter in a public distribution or a
public securities transaction or redeemed by the Company in
accordance with its Certificate of Incorporation, (B) any shares
of Common Stock of the Company (or Preferred Stock or other
securities convertible or exercisable therefor) that have been
sold in violation of this Agreement, and (C) all shares of Common
Stock of the Company (or Preferred Stock or other securities
convertible or exchangeable therefor) described in clause (i),
(ii), (iii), (iv), (v), (vi), (vii), (viii) or (ix) of this
Section 1.7 held by a Holder that can, in the opinion of counsel
to the Company, be sold by such Holder in a three-month period
without registration under the Securities Act pursuant to Rule
144."
2. All Other Terms Unchanged. Except as expressly modified by this
Amendment, all terms of the Prior Rights Agreement shall remain in full
force and effect.
3. Governing Law. This Amendment shall be governed by and
construed under the internal laws of the State of Delaware as applied to
agreements among Delaware residents entered into and to be performed
entirely within Delaware, without reference to principles of conflict of
laws or choice of laws.
4. Counterparts. This Amendment may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Amendment has been executed as of the
date first above written.
COMPANY: INVESTORS (Entity):
XXXXXXXX.XXX, INC.
_____________________________
(Printed Entity Name Here)
By:
Xxxxxx X. Xxxxxxxxxx By:__________________________
Chief Financial Officer
and Secretary
Name:________________________
Title: ______________________
INVESTORS (Individual):
_______________________________
Signature Here
_______________________________
Printed Name Here
[SIGNATURE PAGE TO AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT]
