TERMINATION AGREEMENT
TERMINATION AGREEMENT (the "Agreement") made as of this ___
day of July, 1999, by and among HealthCore Medical Solutions, Inc., a Delaware
corporation ("HealthCore"), and those shareholders of HealthCore who have
executed this Agreement on the signature page hereof (each a "Participating
Escrow Shareholder", and collectively, the "Participating Escrow Shareholders").
W I T N E S S E T H:
WHEREAS, HealthCore and the Participating Escrow Shareholders
are parties to that certain Amended and Restated Escrow Agreement (the "Escrow
Agreement"), dated as of July 31, 1997, among HealthCore, the Participating
Escrow Shareholders, the other stockholders of HealthCore who are signatories to
the Escrow Agreement (collectively, the "Non-Participating Escrow Shareholders"
and, together with the Participating Escrow Shareholders, collectively, the
"Escrow Shareholders") and American Stock Transfer & Trust Company (the "Escrow
Agent"), pursuant to which certain of the shares of Common Stock of HealthCore
(collectively, the "HealthCore Common Stock") owned beneficially and of record
by the Escrow Shareholders (such shares being collectively referred to as the
"Escrow Shares") are held in escrow; and
WHEREAS, HealthCore is a party to that certain Agreement and
Plan of Merger, dated July 1, 1999, between HealthCore and Adatom, Inc.
("Adatom"), a California corporation, which contemplates, among other things,
the merger of Adatom with and into HealthCore (the "Merger"); and
WHEREAS, in connection with the Merger, and subject to the
terms and conditions of this Agreement, HealthCore and the Participating Escrow
Shareholders desire to terminate the Escrow Agreement as to each Participating
Escrow Shareholder, and, in connection therewith, cancel four (4) Escrow Shares
for every five (5) Escrow Shares (i.e., eighty (80%) percent of the Escrow
Shares) owned beneficially and of record by each of the Participating Escrow
Shareholders (the remaining shares held by the Participating Escrow Shareholders
following such cancellation being collectively referred to as the "Released
Shares"); and
WHEREAS, the affirmative vote of the holders of two-thirds
(2/3) of the outstanding shares of HealthCore Common Stock entitled to vote with
respect to the adoption and approval of this Agreement and the transactions
contemplated hereby, excluding the vote of the shares of HealthCore Common Stock
held by the Participating Escrow Shareholders (such vote being the "Required
Stockholder Vote") is required to, among other things, terminate the Escrow
Agreement.
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NOW, THEREFORE, HealthCore and the Participating Escrow
Shareholders hereby agree as follows:
ARTICLE 1
SURRENDER OF SHARES;
TERMINATION OF ESCROW AGREEMENT; GRANT OF PROXIES
1.1 Surrender of Shares. Subject to the terms and conditions
of this Agreement, and in reliance upon the representations, warranties and
covenants contained herein, on the Termination Closing Date (as defined in
Section 5.1 hereof), the number of Escrow Shares set forth opposite each
Participating Escrow Shareholder's name on Schedule 1.1 hereto, constituting
eighty (80%) percent of the Escrow Shares owned beneficially and of record by
such Participating Escrow Shareholder, shall be and be deemed cancelled, without
the necessity of any further action on the part of the Participating Escrow
Shareholder, and such Participating Escrow Shareholders shall have no rights of
any kind or nature in or to such Escrow Shares.
1.2 Termination of Escrow Agreement.
(a) Notwithstanding anything in the Escrow Agreement to
the contrary, and subject to HealthCore's receipt of the Required Stockholder
Vote, on the Termination Closing Date the Escrow Agreement shall be deemed
terminated, and of no further force or effect, with respect to the Participating
Escrow Shareholders, only, and all of the Released Shares shall be distributed
to
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the Participating Escrow Shareholders, without the restrictive legend described
in Section 9(a) of the Escrow Agreement that is currently contained on the
certificates representing the Escrow Shares shall be deleted. By the execution
of this Agreement, each Participating Escrow Shareholder authorizes and directs
the Escrow Agent under the Escrow Agreement to deliver all certificates for the
Escrow Shares to HealthCore, at a location in New York City specified by
HealthCore upon receipt from HealthCore of a letter verifying that the Required
Stockholder Vote has been obtained. Upon its receipt thereof, HealthCore shall,
within ten (10) business days thereafter, deliver to each Participating Escrow
Shareholders the number of Released Shares to which such Participating Escrow
Shareholder is entitled as more particularly set forth on Schedule 1.1 hereto.
(b) Notwithstanding anything contained herein to the
contrary, this Agreement shall be binding upon, and shall inure to the benefit
of only those parties who have executed this Agreement. The Non-Participating
Escrow Shareholders shall have no rights, of any kind or nature, under this
Agreement, and such Non-Participating Escrow Shareholders and the shares of
HealthCore Common Stock owned by the Non-Participating Escrow Shareholders that
are held in escrow, shall remain subject to the all of terms and conditions of
the Escrow Agreement.
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1.3 Grant of Proxies. Contemporaneously with the execution
hereof, each of the Participating Escrow Shareholders shall execute and deliver
to HealthCore an irrevocable proxy (collectively, the "Voting Proxies")
appointing ▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇"), the Chairman of the Board and Chief
Executive Officer of HealthCore, as proxy to vote all of the shares of
HealthCore Common Stock owned beneficially and of record by such Participating
Escrow Shareholder, including, without limitation, the Released Shares, for a
period expiring on the earliest of (a) the first date by which both (i) the
closing of the transactions contemplated by the Merger Agreement shall have
occurred ("Merger Closing"), and (ii) HealthCore shall have received the
Required Stockholder Vote, (b) the termination of the agreements contained in
the Merger Agreement, and (c) with respect to those shares of HealthCore Common
Stock other than the Escrow Shares sold by the Participating Escrow
Shareholders, HealthCore's receipt of notice of the consummation of the sale of
such shares of HealthCore Common Stock.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
OF PARTICIPATING ESCROW SHAREHOLDERS
Each Participating Escrow Shareholder represents and warrants
to HealthCore as follows:
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2.1 Authority. Such Participating Escrow Shareholder has the
right, power, authority and legal capacity to enter into and perform such
Participating Escrow Shareholder's obligations under this Agreement and to
consummate the transactions contemplated hereby to be performed by such
Participating Escrow Shareholder, and this Agreement has been duly executed and
delivered by such Participating Escrow Shareholder and is a valid and binding
agreement of such Participating Escrow Shareholder enforceable against such
Participating Escrow Shareholder in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies.
2.2 Title to the Escrow Shares. Such Participating Escrow
Shareholder owns, beneficially and of record, the number of Escrow Shares set
opposite the name of such Participating Escrow Shareholder on Schedule 1.1, free
and clear of any and all liens, claims or encumbrances, of any kind or nature,
and upon delivery to HealthCore of the certificate or certificates evidencing
such Escrow Shares, duly endorsed for transfer to HealthCore, HealthCore will
acquire good, valid, indefeasible and marketable title thereto, free and clear
of any and all liens, claims or encumbrances, of any kind or nature.
2.3 Examination of Documents. HealthCore has delivered to such
Participating Escrow Shareholder, and such Participating Escrow Shareholder has
examined, the Annual Report of Form 10-KSB of HealthCore for the fiscal year
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ended September 30, 1998 (the "1998 Form 10-KSB"), HealthCore's Quarterly Report
on Form 10-QSB for each of the quarters ended December 31, 1998 and March 31,
1999, including the financial statements contained therein, and HealthCore's
Current Report on Form 8-K, filed with SEC on July 9, together with the exhibits
thereto, and has had the opportunity to discuss HealthCore's operations with
HealthCore's officers and employees.
2.4 Acknowledgment. Each of the Participating Escrow
Shareholders acknowledges that in the event the Merger is not consummated, and
HealthCore continued its current business activities as more particularly
described in HealthCore's most recent 10QSB, it is highly unlikely as of the
date hereof that the conditions in the Escrow Agreement for release of the
Escrow Shares would be satisfied prior to the last possible date for the
attainment thereof, and thus each Participating Escrow Shareholder may be
required to forfeit all of his or her Escrow Shares pursuant to the terms of the
Escrow Agreement. Each Participating Escrow Shareholder further acknowledges
that, in light of the foregoing, he or she carefully considered whether or not
to enter into this Agreement and has concluded that to do so is prudent and
provides the best opportunity at this time to realize ownership of even a
portion of the Escrow Shares.
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ARTICLE 3
REPRESENTATIONS AND
WARRANTIES OF HEALTHCORE
HealthCore represents and warrants to the Participating Escrow
Shareholders as follows:
3.1 Authority. The Board of Directors of HealthCore has
unanimously approved this Agreement and the transactions contemplated hereby.
The Required Stockholder Vote is the only vote of the holders of any class or
series of the capital stock of HealthCore necessary to approve this Agreement
and the transactions contemplated hereby, and HealthCore has all other requisite
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by HealthCore
and constitutes a valid and binding obligation of HealthCore enforceable against
HealthCore in accordance with its terms, subject to HealthCore's receipt of the
Required Stockholder Vote.
ARTICLE 4
CONDITIONS TO CLOSING
4.1 Conditions to Obligations of HealthCore. The obligations
of HealthCore hereunder are conditioned upon the following:
(a) HealthCore shall have received the Required
Stockholder Vote;
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(b) The Merger and the transactions contemplated
thereby shall have been consummated by September 30, 1999, or such later date as
HealthCore and Adatom shall have agreed to in writing;
(c) All warranties and representations of the
Participating Escrow Shareholders contained in this Agreement or in any schedule
or instrument delivered hereunder or otherwise made in connection with the
transactions contemplated hereby shall be true and correct, on and as of the
Termination Closing Date, with the same force and effect as if made on and as of
the Termination Closing Date;
(d) The Participating Escrow Shareholders shall have
performed and complied with all of the covenants and agreements required by or
pursuant to this Agreement, and any schedule or instrument delivered hereunder,
to be performed or complied with on or prior to the Termination Closing Date;
and
(e) All documents delivered and action taken pursuant
hereto shall be satisfactory in form and substance to HealthCore and its
counsel.
4.2 Conditions to Obligations of the Participating Escrow
Shareholders. The obligations of the Participating Escrow Shareholders hereunder
are conditioned upon the following:
(a) All warranties and representations of HealthCore
contained in this Agreement shall be true and correct on and as of the
Termination
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Closing Date with the same force and effect as if made on and as of the
Termination Closing Date.
(b) HealthCore shall have performed and complied with
all of the covenants and agreements required by or pursuant to this Agreement,
and any schedule or instrument delivered hereunder, to be performed or complied
with on or prior to the Termination Closing Date.
ARTICLE 5
CLOSING; DELIVERIES
5.1 Closing Date. The closing of the transactions contemplated
by this Agreement (the "Termination Closing") shall be deemed to occur on the
first date by which both (i) the Merger Closing shall have occurred, and (ii)
HealthCore shall have received the Required Stockholder Vote (such date being
the "Termination Closing Date").
5.2 Deliveries by the Participating Escrow Shareholders.
(a) Contemporaneously with the execution hereof, the
Participating Escrow Shareholders shall deliver to HealthCore the Voting Proxies
more particularly described in Section 1.2 hereof.
(b) At the Termination Closing, the Participating
Escrow Shareholders shall deliver to HealthCore, in accordance with terms of
Section 1.2(a) hereof, Certificates representing the Escrow Shares,; and
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5.3 Deliveries of HealthCore. At the Termination Closing,
HealthCore shall have no items to deliver to the Participating Escrow
Shareholders.
ARTICLE 6
SURVIVAL AND INDEMNIFICATION
6.1 Survival. The representations and warranties contained
herein shall survive the Termination Closing for a period six (6) months
following the Termination Closing Date.
6.2 Indemnification of HealthCore and Participating Escrow
Shareholders.
(a) Indemnification by Participating Escrow
Shareholders. The Participating Escrow Shareholders hereby agree to indemnify
and hold harmless HealthCore from and against any and all losses, liabilities,
damages, obligations, costs and expenses, including, without limitation, amounts
paid in settlement and reasonable costs and expenses of investigating, preparing
to defend and defending any claim, action, suit, proceeding, inquiry or
investigation in respect thereof (such losses, liabilities, damages,
obligations, costs and expenses as hereinabove set forth, collectively
"Damages") resulting from, relating to, or arising out of the inaccuracy of any
representation or warranty herein by such Participating Escrow Shareholder or
the breach of any covenant herein by such Participating Escrow Shareholder.
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(b) Indemnification by HealthCore. HealthCore hereby
agrees to indemnify and hold harmless the Participating Escrow Shareholders from
and against any and all Damages incurred by the Participating Escrow
Shareholders resulting from, relating to, or arising out of the inaccuracy of
any representation or warranty herein by HealthCore or the breach of any
covenant contained herein by HealthCore.
(c) Procedure. If any action, suit, proceeding or
claim shall be brought against the party to be indemnified by any third party,
which action, suit, proceeding or claim, if determined adversely to the interest
of the party to be indemnified and which would entitle the party to be
indemnified to indemnity pursuant to this Section 6.2, the party to be
indemnified shall promptly notify the indemnifying party of the same in writing
and, if the indemnifying party so elects, the indemnifying party shall assume
the defense thereof, including the employment of counsel satisfactory to the
party to be indemnified and the payment of all reasonable costs and expenses in
respect thereof. The party to be indemnified shall have the right to employ
counsel separate from any counsel employed by the indemnifying party in any
action, suit, proceeding or claim and to control (or, if the party to be
indemnified has elected to allow the indemnifying party to assume the defense
thereof, participate in) the defense thereof and the fees and expenses of such
counsel employed by the party to be indemnified shall be at the expense of the
party to be indemnified. The indemnifying party shall not
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be liable for any settlement of any such action, suit, proceeding or claim
effected without his or its written consent (which shall not be unreasonably
withheld), but if settled with the written consent of the indemnifying party, or
if there shall be a final judgment for plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless the party to be
indemnified from and against any loss, liability, obligation, damage, cost or
expense by reason of such settlement or judgment.
6.3 Hold Harmless; Indemnification of ▇▇▇▇▇. Polan shall have
no liability of any kind or nature to the parties hereto in connection with the
exercise of the rights granted to Polan pursuant to the Voting Proxies, and the
parties hereto, jointly and severally, shall indemnify, defend and hold harmless
Polan from and against any and all Damages arising out of or in connection with
the exercise of the rights granted to Polan pursuant to the Voting Proxies.
ARTICLE 7
TERMINATION
7.1 Termination. Unless otherwise agreed to by HealthCore and
all of the Participating Escrow Shareholders, in writing, this Agreement shall
terminate and be of no further force or effect immediately upon the termination
of the agreements contained in the Merger Agreement.
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ARTICLE 8
MISCELLANEOUS PROVISIONS
8.1 Amendment and Modification. This Agreement may be amended,
modified and supplemented only by a writing signed by HealthCore and the
Participating Escrow Shareholders.
8.2 Waiver of Compliance. Any failure of HealthCore or the
Participating Escrow Shareholders to comply with any obligation, covenant,
agreement or condition herein contained may be expressly waived, in writing
only, by (i) HealthCore in the case of any failure of the Participating Escrow
Shareholders, or (ii) the Participating Escrow Shareholders in the case of any
failure of HealthCore. Such waiver shall be effective only in the specific
instance and for the specific purpose for which made or given.
8.3 Expenses. The parties hereto shall each pay their own
respective expenses incurred in connection with this Agreement and the
transactions contemplated by this Agreement. The foregoing shall not be
construed as limiting any other rights which any party may have as a result of
misrepresentation of or breach by any other party.
8.4 Further Assurance. HealthCore and each Participating
Escrow Shareholder agree to cooperate and execute all documents required to
effectuate the transactions contemplated hereby and to perform all actions as
reasonably may be required thereby. Without limiting the generality of the
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foregoing, HealthCore and each of the Participating Escrow Shareholders agrees
to execute and deliver any and all such documents and instruments as may be
required by the Escrow Agent in connection with the termination of the Escrow
Agreement and the release and delivery of the Escrow Shares.
8.5 Notices. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand, or when mailed by
certified or registered mail (return receipt requested), postage prepaid or when
delivered by fax (evidenced by confirmation of successful transmission), as
follows:
A. If to HealthCore:
HealthCore Medical Solutions, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇ ▇▇▇▇▇, Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
B. If to the Participating Escrow Shareholders,
to the address set forth under each such
Participating Escrow Shareholder's name on
Schedule 1.1 hereto, of, if not included
thereon, the address designated by notice to
HealthCore.
or to such other person or place as the parties may designate by notice in the
manner provided in this Section 8.4.
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8.6 Assignment. This Agreement shall be binding upon and inure
to the benefit of HealthCore and its respective successors and assigns, and to
the Participating Escrow Shareholders and their respective heirs, executors,
administrators and personal representatives, but neither this Agreement nor any
of the rights, interests and obligations hereunder shall be assigned by any of
HealthCore or the Participating Escrow Shareholders without the prior written
consent of the other parties.
8.7 Third Parties.This Agreement is not intended to and shall
not be construed to give any person other than the parties hereto any interest
or rights (including, without limitation, any third party beneficiary rights)
with respect to or in connection with any agreement or provision contained
herein or contemplated hereby.
8.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to principles of conflicts of laws.
8.9 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
8.10 Headings. The headings of the sections, schedules and
articles of this Agreement are inserted for the sake of convenience only and
shall not constitute a part hereof.
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8.11 Entire Agreement. This Agreement, including the schedules
and exhibits, contains the entire understanding of the parties in respect of the
subject matter contained herein and therein and there are no other terms or
conditions, representations or warranties, written or oral, express or implied,
except as set forth herein.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the day and year first above written.
HEALTHCORE MEDICAL
SOLUTIONS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇, Chairman and CEO
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇, as Custodian for
▇▇▇▇▇▇▇ ▇▇▇▇▇
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/s/ ▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇, as Attorney-In-Fact
For ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee under the
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Revocable Trust
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee under the
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Revocable Trust
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Trustee under the
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Revocable Trust
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Trustee under the
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Revocable Trust
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
/s/ 1164 Associates
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1164 Associates
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇
Acknowledged and Agreed
as of the Merger Closing
ADATOM, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Date:
--------------------------------- -----------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
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SCHEDULE 1.1
Intentionally left blank
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