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EXHIBIT 2.1
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STOCK PURCHASE AGREEMENT
BY AND AMONG
THE TRIZETTO GROUP, INC.,
XXXXXXX CORPORATION
AND
SECURITYHOLDERS OF XXXXXXX CORPORATION
DATED AS OF NOVEMBER 29, 1999
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement"), is made and entered
into as of November 29, 1999, by and among The TriZetto Group, Inc., a Delaware
corporation ("TriZetto"), Xxxxxxx Corporation, a Delaware corporation
("Xxxxxxx"), the holders of the capital stock of Xxxxxxx listed on the signature
page hereto (the "Xxxxxxx Stockholders"), and the holders of certain promissory
notes made by Xxxxxxx listed on the signature page hereto (the "Xxxxxxx
Noteholders," and, together with the Xxxxxxx Stockholders, the "Xxxxxxx
Securityholders"). Certain other capitalized terms used in this Agreement are
defined in Exhibit A attached hereto.
RECITALS
WHEREAS, the Xxxxxxx Securityholders are the record and beneficial
owners of the shares of Xxxxxxx' (a) Series A Convertible Preferred Stock, par
value $1.00 per share (the "Series A Stock"), (b) Series B Convertible Preferred
Stock, par value $1.00 per share (the "Series B Stock"), and (c) common stock,
par value $.01 per share (the "Common Stock");
WHEREAS, certain of the Xxxxxxx Noteholders are the holders of
promissory notes, each dated October 4, 1995, as amended and extended through
January 2, 2000, made by Xxxxxxx and payable to such Xxxxxxx Noteholders (the
"1995 Notes"), and certain of the Xxxxxxx Noteholders are the holders of other
promissory notes, each dated January 19, 1999, as extended through December 31,
1999, made by Xxxxxxx and payable to such Xxxxxxx Noteholders (the "1999 Notes,"
and, together with the 1995 Notes, the "Xxxxxxx Notes");
WHEREAS, prior to the Closing (as defined herein), the Xxxxxxx
Noteholders will exchange the principal amount of the Xxxxxxx Notes (together
with interest accrued thereon) for shares of Series C Preferred Stock, par value
$1.00 per share (the "Series C Stock"), as described in greater detail in
Appendix A hereto;
WHEREAS, at the time of the Closing and after giving effect to the
foregoing transactions, no Xxxxxxx Notes will be outstanding, and the Xxxxxxx
Securityholders will be the record and beneficial owners of the outstanding
shares of Common Stock, Series A Stock, Series B Stock and Series C Stock
(collectively, the "Xxxxxxx Stock"), as set forth on Schedule 1 attached hereto;
WHEREAS, TriZetto desires to purchase from the Xxxxxxx Securityholders,
and the Xxxxxxx Securityholders desire to sell to TriZetto, all of the issued
and outstanding shares of capital stock of Xxxxxxx, which immediately prior to
the Closing, will consist of (i) 1,186,559 shares of Series A Stock, (ii)
235,000 shares of Series B Stock, (iii) 92,749.03 shares of Series C Stock, and
(iv) 938,519 shares of Common Stock; and
WHEREAS, each of TriZetto, Xxxxxxx and the Xxxxxxx Securityholders
desire to make certain representations, warranties, covenants and agreements in
connection with the purchase and sale of the Xxxxxxx Stock and also to prescribe
various conditions to the consummation thereof.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, representations, warranties, covenants and agreements herein
contained, the parties hereto, intending to be legally bound, hereby agree as
follows:
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ARTICLE 1
PURCHASE AND SALE OF SHARES; CONVERSION OF THE XXXXXXX NOTES
1.1 PURCHASE AND SALE.
(a) GENERAL. On the terms and subject to the conditions of
this Agreement, in reliance upon the representations, warranties and agreements
of the parties contained herein, on the Closing Date (as defined in Section 1.2)
the Xxxxxxx Securityholders shall sell, transfer and deliver to TriZetto, and
TriZetto shall purchase from the Xxxxxxx Securityholders, the Xxxxxxx Stock for
an aggregate purchase price equal to the sum of (i) $5,001,515.41 cash (the
"Cash Portion of the Purchase Price"); and (ii) 549,786 validly issued, fully
paid and non-assessable shares of common stock, $.001 par value, of TriZetto
(the "TriZetto Stock") which equals the quotient of (A) $9,000,000 divided by
(B) the average of the closing sales prices of the TriZetto Stock for the five
trading days immediately preceding the earlier of (1) November 22, 1999, (2) the
announcement of the transactions contemplated under this Agreement, or (3) the
execution and delivery of this Agreement, as reported on the Nasdaq National
Market System ("NMS")(the "Stock Portion of the Purchase Price," and together
with the Cash Portion of the Purchase Price, the "Purchase Price").
(b) ALLOCATION OF THE STOCK PORTION OF THE PURCHASE PRICE.
The Stock Portion of the Purchase Price shall be allocated among the Xxxxxxx
Securityholders in accordance with Exhibit B attached hereto. Any additional
shares of TriZetto Stock which are issued pursuant to Section 1.1(e) below shall
be issued to the Xxxxxxx Securityholders in the same proportion as set forth on
Exhibit B, rounded to the nearest whole share. The Stock Portion of the Purchase
Price has been allocated and shall be issued to each Xxxxxxx Securityholder
pursuant to mutual agreement of the Xxxxxxx Securityholders as set forth in
Exhibit B. By executing and delivering this Agreement, each Xxxxxxx
Securityholder agrees to such allocation as set forth on Exhibit B.
(c) ALLOCATION OF THE CASH PORTION OF THE PURCHASE PRICE.
The Cash Portion of the Purchase Price shall be allocated among the Xxxxxxx
Securityholders in accordance with Exhibit C attached hereto. The Cash Portion
of the Purchase Price has been allocated and shall be paid to each Xxxxxxx
Securityholder pursuant to the mutual agreement of the Xxxxxxx Securityholders
as set forth on Exhibit C. By executing and delivering this Agreement, each
Xxxxxxx Securityholder agrees to such allocation as set forth on Exhibit C.
(d) PAYMENT OF PURCHASE PRICE. The Purchase Price shall be
paid as follows:
(i) DELIVERY OF $5,000,000 OF THE CASH PORTION OF
THE PURCHASE PRICE. Pursuant to an escrow agreement to be entered into on or
before the Closing in substantially the form of Exhibit D (the "Warrant Escrow
Agreement"), by and among TriZetto, the Xxxxxxx Securityholders and Xxxxxxxxx
Xxxxx Xxxxxxx & Xxxxx (the "Warrant Escrow Agent"), TriZetto will deposit
$5,000,000 of the Cash Portion of the Purchase Price that would otherwise be
delivered to the Xxxxxxx Securityholders in an escrow pursuant to the Warrant
Escrow Agreement (the "Warrant Escrow") and the Cash Portion of the Purchase
Price shall remain in the Warrant Escrow until such time as the conditions set
forth therein are waived or satisfied.
(ii) DELIVERY OF REMAINING $1,515.41 OF CASH PORTION
OF PURCHASE PRICE TO THE XXXXXXX SECURITYHOLDERS. At the Closing, TriZetto shall
deliver checks for an aggregate of $1,515.41 made payable to the Xxxxxxx
Securityholders in accordance with Exhibit C.
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(iii) DELIVERY OF TRIZETTO STOCK INTO ESCROW. Pursuant
to an escrow agreement to be entered into on or before the Closing in
substantially the form of Exhibit E (the "Offset Escrow Agreement"), by and
among TriZetto, the Xxxxxxx Securityholders and Bankers Trust of California N.A.
(the "Offset Escrow Agent"), TriZetto will deposit stock certificates
representing 366,524 shares of TriZetto Stock that would otherwise be delivered
to the Xxxxxxx Securityholders at the Closing (the "Escrow Shares") in an escrow
pursuant to the Offset Escrow Agreement (the "Offset Escrow") together with
related stock powers. The Escrow Shares and such stock powers, and any other
property with respect thereto delivered to the Offset Escrow Agent as provided
in the Offset Escrow Agreement will be held in escrow to satisfy TriZetto's
offset rights with respect to claims made under Article 8 hereof, Subsection
B.(ii) and Subsection C of the Supplement to Xxxxxxx Disclosure Schedule and in
accordance with the Offset Escrow Agreement. Such delivery of TriZetto Stock
shall take into account the transfers contemplated to Xxxxxxx X. Xxxxxxx under
Section 9.2(k).
(iv) DELIVERY OF TRIZETTO STOCK TO XXXXXXX
SECURITYHOLDERS. Immediately following the Closing, TriZetto and Xxxxxxx shall
submit to TriZetto's registrar and transfer agent, U.S. Stock Transfer
Corporation (the "Transfer Agent"), an instruction letter including a list of
the names, addresses and social security numbers/taxpayer identification numbers
of each Xxxxxxx Securityholder who has delivered the certificate or certificates
representing all shares of Xxxxxxx Stock held by such Xxxxxxx Securityholder. As
soon as reasonably practicable following the Closing, TriZetto shall cause the
Transfer Agent to deliver a certificate to each Xxxxxxx Securityholder
representing that number of shares of TriZetto Stock, which such Xxxxxxx
Securityholder has the right to receive pursuant to the provisions of this
Article 1, subject to the deposit of Escrow Shares in accordance with Section
1.1(d)(iii).
(e) ADJUSTMENT TO TRIZETTO STOCK. In the event that the
average closing sales price of the TriZetto Stock as reported on the NMS (or
other exchange or similar market on which TriZetto Stock is regularly traded if
not then traded on NMS) for the 20 trading days preceding the one-year
anniversary of the Closing Date (the "Adjustment Date") is less than $16.37 (the
"Initial TriZetto Stock Price") TriZetto shall issue or cause to be issued by
submitting an instruction letter to its Transfer Agent instructing the Transfer
Agent to issue an additional number of shares of TriZetto Stock within five
business days after the Adjustment Date (the "Adjusted Shares Closing") to the
Xxxxxxx Securityholders such that the total market value of all the shares of
TriZetto Stock issued and delivered by TriZetto, as required this Section 1.1(e)
as well as by Sections 1.1(a) and 1.1(d)(iii) and (iv) is $9,000,000, based upon
the average closing sales price for the 20 trading days preceding the Adjustment
Date; provided, however, that in no event shall TriZetto be required to issue a
number of additional shares at the Adjustment Shares Closing in excess of
137,447 shares of TriZetto Stock. The adjustment called for by this Section
1.1(e) shall be made before any shares of TriZetto Stock are returned from the
Offset Escrow to TriZetto or otherwise sold in satisfaction of claims under
Article 8 or for any other purpose.
(f) ADJUSTMENT TO CASH PORTION OF THE PURCHASE PRICE. In the
event that the conditions set forth in the Warrant Escrow Agreement in the form
attached hereto as Exhibit F have not been satisfied by November 30, 1999, the
Cash Portion of the Purchase Price shall be reduced by the $5,000,000 held
pursuant to the Warrant Escrow Agreement, the Warrant Escrow Agreement shall be
terminated and the $5,000,000 held pursuant to the Warrant Escrow Agreement
shall be returned to TriZetto.
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(g) STOCK SPLITS, STOCK DIVIDENDS, ETC. Appropriate
adjustments shall be made to the Initial TriZetto Stock Price and the number of
shares of TriZetto Stock to be delivered at the Adjustment Shares Closing to
reflect any stock splits, stock dividends, subdivisions, combinations,
recapitalizations or other events having similar effect after the Closing.
1.2 EXCHANGE OF THE XXXXXXX NOTES. Prior to but subject to the
consummation of the Closing, the Xxxxxxx Noteholders shall exchange all of the
outstanding principal due under the Xxxxxxx Notes (together with the right to
receive accrued but unpaid interest due thereon) for 92,749.03 shares of Series
C Stock, as more particularly described in Appendix A attached hereto, and upon
the consummation of such exchange the Xxxxxxx Notes shall be deemed canceled and
of no force or effect.
1.3 CLOSING. The closing of the purchase and sale of the Xxxxxxx
Stock (the "Closing") shall take place at the offices of Xxxxxxxxx Xxxxx Xxxxxxx
& Xxxxx at 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
or by facsimile, on November 29, 1999, or, if the conditions to Closing set
forth in Section 9 of this Agreement shall not have been satisfied or waived by
the appropriate party by such time of day on such date, at such time of day as
the parties shall agree on the first business day to occur following the date on
which all of the conditions to Closing set forth in Section 9 shall have been
satisfied or waived as provided therein (subject to the provisions of Section 10
hereof, such other date and time as shall be mutually agreed upon by the
parties, but in no event later than November 30, 1999). The date on which the
Closing actually occurs and the transactions contemplated hereby become
effective is hereinafter referred to as the "Closing Date." At the time of the
Closing, TriZetto, Xxxxxxx and the Xxxxxxx Securityholders shall deliver the
certificates and other documents and instruments required to be delivered
hereunder.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF XXXXXXX
Xxxxxxx represents and warrants to TriZetto that, except as set forth in
the Xxxxxxx Disclosure Schedule:
2.1 ORGANIZATION AND GOOD STANDING; AUTHORIZATIONS AND APPROVALS; NO
VIOLATIONS.
(a) Xxxxxxx and each Xxxxxxx Subsidiary is a corporation
duly organized, validly existing and in good standing under the laws of the
state of its incorporation. Xxxxxxx and each Xxxxxxx Subsidiary is duly
qualified to transact business and is in good standing in each jurisdiction in
which the failure to be so qualified would have a Material Adverse Effect on
Xxxxxxx and the Xxxxxxx Subsidiaries, considered as a whole. The state of
incorporation and each jurisdiction in which each of Xxxxxxx and the Xxxxxxx
Subsidiaries is qualified to do business as a foreign corporation is listed in
Section 2.1(a) of the Xxxxxxx Disclosure Schedule. Xxxxxxx and each Xxxxxxx
Subsidiary has all necessary corporate power and authority, and all material
governmental licenses, authorizations, consents, and approvals, to carry on its
business as it is now being conducted, and to own or lease, and operate its
properties and assets. Xxxxxxx has delivered to TriZetto true and complete
copies of Xxxxxxx' and each Xxxxxxx Subsidiary's Certification of Incorporation
and Bylaws as currently in effect.
(b) AUTHORIZATION AND APPROVALS. Xxxxxxx has all requisite
corporate power and authority to enter into this Agreement, and each other
Transaction Document to which it is a
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party and to perform its obligations hereunder and thereunder. This Agreement
has been, and each other Transaction Document on or prior to the Closing Date
will be, duly executed and delivered by Xxxxxxx, as appropriate, and when duly
executed and delivered will constitute the legal, valid and binding obligation
of Xxxxxxx, enforceable in accordance with its terms, except as may be limited
by bankruptcy, reorganization, insolvency, moratorium or other laws relating to
or affecting the enforcement of creditors' rights and remedies generally. This
Agreement, and each other Transaction Document, has been duly and validly
authorized by and approved by all requisite corporate action by the Xxxxxxx'
board of directors and stockholders. Except as set forth in Schedule 2.1(b) of
the Xxxxxxx Disclosure Schedule, no further approvals or consents by, or filings
with, any federal, state, municipal, foreign or other court or governmental or
administrative body, agency or other third party is required in connection with
the execution and delivery by Xxxxxxx or of this Agreement or any other
Transaction Document to which it is a party, or the consummation by Xxxxxxx of
the transactions contemplated hereby and thereby.
(c) NO VIOLATIONS. Except as disclosed in Section 2.1(c) of
the Xxxxxxx Disclosure Schedule, neither the execution and delivery by Xxxxxxx
of this Agreement or any other Transaction Document to which Xxxxxxx is a party
nor the consummation by Xxxxxxx of the transactions contemplated hereby or
thereby will (a) violate any provision of the charter or bylaws of Xxxxxxx, (b)
violate, or be in conflict with, or constitute a default (or other event which,
with the giving of notice or lapse of time or both, would constitute a default)
under, or give rise to any right of termination, cancellation or acceleration
under any of the terms, conditions or provisions of any material lease, license,
promissory note, contract, agreement, mortgage, deed of trust or other
instrument or document to which Xxxxxxx or any Xxxxxxx Subsidiary is a party or
by which Xxxxxxx or any Xxxxxxx Subsidiary or any of their respective properties
or assets may be bound, (c) violate any order, writ, injunction, decree, law,
statute, rule or regulation of any court or governmental authority applicable to
Xxxxxxx or any Xxxxxxx Subsidiary or any of their respective properties or
assets or (d) give rise to a declaration or imposition of any Lien upon any of
the assets of Xxxxxxx or any Xxxxxxx Subsidiary.
2.2 SUBSIDIARIES.
(a) Section 2.2(a) of the Xxxxxxx Disclosure Schedule sets
forth each entity of which at least 50% of the outstanding securities or other
interests having rights to vote or otherwise direct or cause the direction of
management or policies (whether through ownership of voting securities, by
agreement or otherwise) is owned, directly or indirectly, by Xxxxxxx. Except as
disclosed in Sections 2.2(b) and (c) of the Xxxxxxx Disclosure Schedule and
except for the Xxxxxxx Subsidiaries, Xxxxxxx does not own, directly or
indirectly, any ownership, equity, profits or voting interest in, or otherwise
control any corporation, partnership, joint venture or other entity, and has no
agreement or commitment to purchase any such interest.
(b) Except as disclosed in Section 2.2(b) of the Xxxxxxx
Disclosure Schedules, all of the outstanding capital stock of, or other voting
securities or ownership interests in, each Xxxxxxx Subsidiary is owned by
Xxxxxxx, directly or indirectly, free and clear of any Lien and free of any
other limitation or restriction (including any restriction on the right to vote,
sell or otherwise dispose of such capital stock or other voting securities or
ownership interests), other than any restrictions imposed under the 1933 Act.
Except as disclosed in Section 2.2(b) of the Xxxxxxx Disclosure Schedule, there
are no outstanding (i) shares of capital stock or other voting securities or
ownership interests in any Xxxxxxx Subsidiary or (ii) securities of Xxxxxxx or
any Xxxxxxx Subsidiary convertible into or exchangeable for shares of capital
stock, voting securities or other ownership interests in any
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Xxxxxxx Subsidiary or (iii) options or other rights to acquire from Xxxxxxx or
Xxxxxxx Subsidiary, and other obligation of Xxxxxxx or Xxxxxxx Subsidiary to
issue, and capital stock, voting securities or other ownership interests in, or
any securities convertible into or exchangeable for any capital stock, voting
securities or ownership interests in, Xxxxxxx Subsidiary. There are no
outstanding obligations of Xxxxxxx or Xxxxxxx Subsidiary to repurchase, redeem
or otherwise acquire any of the securities referred to in clauses (i), (ii) or
(iii) above.
2.3 CAPITAL STRUCTURE OF XXXXXXX. The authorized capital stock of
Xxxxxxx consists of 18,000,000 shares, of which, as of the date of this
Agreement, (i) 16,000,000 are classified as shares of Common Stock, $.01 par
value per share, and (ii) 2,000,000 are classified as shares of preferred stock,
$1.00 par value per share, of which (x) 1,186,559 have been designated as Series
A Convertible Preferred Stock, (y) 235,000 shares have been designated as Series
B Convertible Preferred Stock and 93,000 shares have been designated as Series C
Convertible Preferred Stock. As of the date hereof, Xxxxxxx has issued and
outstanding 938,519 shares of Common Stock, 1,186,559 shares of Series A Stock,
235,000 shares of Series B Stock and no shares of Series C Stock. As of the date
of this Agreement, there are options to purchase 700,100 shares of the Common
Stock outstanding (the "Options") and 263,649 shares available for future grants
under Xxxxxxx' 1995 Stock Option Plan. As of the Closing Date, there will be no
outstanding Options. Except as provided in this Agreement and the Stockholders
Agreement, dated as of October 4, 1995, by and among Xxxxxxx and the
Stockholders named as such therein, as amended (the "Xxxxxxx Stockholders
Agreement"), the 1,186,559 shares of Series A Stock, 235,000 shares of Series B
Stock and 92,749.03 shares of Series C Stock issued and outstanding as of the
date hereof, there are no outstanding rights of first refusal, preemptive rights
or other rights, options, stock appreciation rights, redemption rights,
subscriptions, warrants, options, convertible securities or other agreements,
arrangements or commitments either directly or indirectly for the purchase or
acquisition from Xxxxxxx or the Xxxxxxx Subsidiaries of any shares of capital
stock of Xxxxxxx or the Xxxxxxx Subsidiaries to purchase or otherwise acquire
equity securities of Xxxxxxx. Except as set forth in Section 2.3 of the Xxxxxxx
Disclosure Schedule, Xxxxxxx does not have outstanding any bonds, debentures,
notes or other obligations, the holders of which have the right to vote (or
which are convertible into or exercisable for securities having the right to
vote) with the stockholders of Xxxxxxx or the Xxxxxxx Subsidiaries on any
matter. All of the outstanding shares of capital stock of Xxxxxxx and each of
the Xxxxxxx Subsidiaries have been validly issued and are fully paid and
nonassessable. All of such shares and the Options have been issued in
transactions exempt from registration under the 1933 Act. Each Xxxxxxx
Stockholder owns, and has good, valid and marketable title to the Xxxxxxx Stock
free and clear of all Liens, charges, options, rights of first refusal or
limitations or other restrictions on transfer, except as imposed under the 1933
Act and the Xxxxxxx Stockholders Agreement.
2.4 TAXES.
(a) Except as disclosed in Section 2.4(a) of the Xxxxxxx
Disclosure Schedule, Xxxxxxx and the Xxxxxxx Subsidiaries have timely filed or
been included in all Tax Returns that were required to be filed prior to the
date hereof by or with respect to the activities of Xxxxxxx and the Xxxxxxx
Subsidiaries, which Tax Returns are true, correct and complete in all material
respects, and Xxxxxxx has paid all Taxes shown thereon to be due. Neither
Xxxxxxx nor any Xxxxxxx Subsidiary currently is the beneficiary of any extension
of time within which to file any Tax Return.
(b) Xxxxxxx and the Xxxxxxx Subsidiaries have paid or caused
to be paid within the time and in the manner prescribed by law all Taxes that
were required to be paid by Xxxxxxx and the Xxxxxxx Subsidiaries prior to the
date hereof. All Taxes attributable to all taxable periods ending
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on or before the last day covered by the Financial Statements, to the extent not
required to be previously paid, have been fully and adequately reserved for (as
taxes payable) on said Financial Statements. Each of Xxxxxxx and the Xxxxxxx
Subsidiaries has withheld and paid all taxes required to have been withheld and
paid.
(c) Except with respect to any accounting change required by
Section 448 of the Internal Revenue Code of 1986, as amended (the "Code"), and
any similar state or local provision, that will occur as a result of the
consummation of the transactions contemplated herein, Xxxxxxx has not taken any
action that would require an adjustment pursuant to Section 481 of the Code, by
reason of a change in accounting method or otherwise. Xxxxxxx has not filed a
consent under Section 341(f)(1) of the Code or agreed to have the provisions of
Section 341(f)(2) of the Code apply to any disposition of "subsection (f)
assets" as such term is defined in Section 341(f)(4) of the Code.
(d) No Tax assessment or deficiency which has not been paid
or for which an adequate reserve has not been set aside, has been made or
proposed against Xxxxxxx or any Xxxxxxx Subsidiary, nor are any of the Tax
Returns now being or, to the Knowledge of Xxxxxxx, threatened to be examined or
audited, and no consents waiving or extending any applicable statutes of
limitations for the Tax Returns, or any Taxes required to be paid thereunder,
have been filed. Xxxxxxx shall promptly notify TriZetto of any notice of pending
action or proceeding involving Taxes relating to Xxxxxxx or any Xxxxxxx
Subsidiary between the date of this Agreement and the Closing Date. All Tax
deficiencies determined as a result of any past completed audit have been
satisfied. Xxxxxxx has delivered or made available to TriZetto complete and
correct copies of all audit reports and statements of deficiencies that were
issued after January 1, 1996 with respect to any tax assessed against or agreed
to by Xxxxxxx or any Xxxxxxx Subsidiary.
(e) Prior to the date hereof, Xxxxxxx has made available to
TriZetto complete, current and correct copies of the Tax Returns for the years
ended in 1996, 1997 and 1998.
(f) None of the assets of Xxxxxxx or any Xxxxxxx Subsidiary
are subject to any liens in respect of Taxes (other than for current Taxes not
yet due and payable).
(g) Neither Xxxxxxx nor any Xxxxxxx Subsidiary is a party to
or bound by any Tax sharing, Tax indemnity or Tax allocation agreement or other
similar arrangement. Neither Xxxxxxx nor any Xxxxxxx Subsidiary has any
liability for Taxes of any person (other than any of Xxxxxxx and the Xxxxxxx
Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign law), as a transferee or successor, by
contract, or otherwise.
(h) Neither Xxxxxxx nor any Xxxxxxx Subsidiary has made any
payments, is obligated to make any payments or is a party to any agreement that
under the circumstances or the transactions contemplated hereunder could
obligate it to make any payments that will not be deductible under Section 280G
of the Code.
(i) With respect to tax years ended in 1996, 1997 and 1998,
neither Xxxxxxx nor any Xxxxxxx Subsidiary is subject to any Tax in any
jurisdiction or by any Taxing Authority with respect to which it has not filed a
Tax Return required by law.
(j) Neither Xxxxxxx nor any Xxxxxxx Subsidiary has executed
or entered into any closing agreement pursuant to Section 7121 of the Code, or
any predecessor provisions thereof or any similar provision of state or other
law.
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2.5 TRANSACTIONS WITH AFFILIATES; AFFILIATES.
(a) Except as set forth in Section 2.5 of the Xxxxxxx
Disclosure Schedule, neither the Xxxxxxx Securityholders nor any of their
Affiliates, have any interest, in any lease, lien, contract, license,
encumbrance, loan or other agreement to which Xxxxxxx or any Xxxxxxx Subsidiary
is a party or any interest (other than as a shareholder or noteholder) in any
properties or assets of Xxxxxxx or any Xxxxxxx Subsidiary.
(b) Xxxxxxx has no Affiliates other than the Xxxxxxx
Securityholders and their Affiliates and PHN.
2.6 FINANCIAL STATEMENTS. True and complete copies of (i) the
unaudited consolidated balance sheet of Xxxxxxx and the Xxxxxxx Subsidiaries as
of October 31, 1999 (the "Balance Sheet"), and the related consolidated
statement of income, consolidated statement of shareholders' equity and
consolidated statement of cash flows for the ten months then ended (the "Interim
Financial Statements"), and (ii) the audited consolidated financial statements
of Xxxxxxx and Xxxxxxx Subsidiaries as of and for the fiscal year ended December
31, 1996 and the unaudited consolidated financial statements of Xxxxxxx and
Xxxxxxx Subsidiaries as of and for the fiscal years ended December 31, 1997 and
1998 (including, without limitation, the related consolidated balance sheets,
consolidated statements of income, consolidated statements of shareholders'
equity, consolidated statements of cash flows and all notes, schedules and
exhibits thereto) (collectively with the Interim Financial Statements, the
"Financial Statements"), are included in Section 2.6 of the Xxxxxxx Disclosure
Schedule, and no changes have been made thereto since the date hereof. Except as
expressly set forth or disclosed in the notes, exhibits or schedules thereto or
in Section 2.6 of the Xxxxxxx Disclosure Schedule, the Financial Statements (i)
have been prepared in conformity with generally accepted accounting principles
("GAAP") consistently applied throughout the periods covered, except, in the
case of the Interim Financial Statements, for the lack of footnote disclosure
and year-end adjustments which will not be material individually or in the
aggregate and except as may be indicated in the notes thereto, (ii) present
fairly the financial position, results of operations and cash flows of Xxxxxxx
on a consolidated basis as of and for the periods then ended, (iii) disclose all
liabilities, including contingent and/or unmatured liabilities as of the dates
thereof, whether or not required by GAAP to be disclosed thereon, and (iv)
reflect that Xxxxxxx and Xxxxxxx Subsidiaries have set aside adequate reserves
for all taxes with respect to the period then ended and all prior periods, and
with respect to receivables, for all reasonably anticipated uncollectible
amounts, losses, costs and expenses. Except as set forth in Section 2.6 of the
Xxxxxxx Disclosure Schedule, neither Xxxxxxx nor any Xxxxxxx Subsidiary has any
liabilities or obligations of any nature (absolute, accrued or contingent) that
are not fully reflected or reserved against in the Balance Sheet, as prescribed
by GAAP and the Financial Accounting Standards Board, except liabilities or
obligations incurred since the date of the Balance Sheet in the ordinary course
of business and consistent with past practice that are not in excess of $100,000
in the aggregate or $25,000 individually.
2.7 TITLE TO PROPERTIES. Xxxxxxx and each Xxxxxxx Subsidiary has
good, valid and marketable title to all of the properties and assets which it
purports to own (personal and mixed, tangible and intangible, including, without
limitation, all the properties and assets listed in Sections 2.10 and 2.11 of
the Xxxxxxx Disclosure Schedule which it purports to own and all property
reflected on the Balance Sheet other than property that is leased and so
reflected in the Balance Sheet (the "Assets"). Except as set forth in Section
2.7 of the Xxxxxxx Disclosure Schedule, all such properties and assets are free
and clear of all title defects or objections or Liens except for Liens that
would not have a Material Adverse Effect on Xxxxxxx and the Xxxxxxx Subsidiaries
taken as a whole. At the
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Closing Date, Xxxxxxx and each Xxxxxxx Subsidiary will possess all of the
personal property wherever located used to conduct its business as used prior to
the Closing.
2.8 REAL PROPERTY. Neither Xxxxxxx nor any Xxxxxxx Subsidiary owns
any real property.
2.9 LEASES. Section 2.9(a) of the Xxxxxxx Disclosure Schedule
contains a complete and correct list of all leases pursuant to which Xxxxxxx or
any Xxxxxxx Subsidiary leases real property, including all amendments thereto
(collectively, the "Real Property Leases"). Section 2.9(b) of the Xxxxxxx
Disclosure Schedule contains a complete and correct list of all material leases
pursuant to which Xxxxxxx or any Xxxxxxx Subsidiary leases personal property,
including all amendments thereto (collectively, the "Personal Property Leases,"
and, together with the Real Property Leases, the "Leases"). Prior to the date
hereof, Xxxxxxx has delivered or made available to TriZetto complete, current
and correct copies of the Leases, and no changes have been made thereto since
the date of delivery. Each of the Leases is the legal, valid and binding
obligation of Xxxxxxx or the Xxxxxxx Subsidiary which is a party thereto,
enforceable in accordance with its terms, subject to judicial discretion
regarding specific performance or other equitable remedies, and except as may be
limited by bankruptcy, reorganization, insolvency, moratorium or other laws
relating to or affecting the enforcement of creditors' rights and remedies
generally. There are no existing material defaults by Xxxxxxx or any Xxxxxxx
Subsidiary under any of the Leases and to the Knowledge of Xxxxxxx, no event has
occurred which would constitute a material default (or any event which, with the
giving of notice or lapse of time or both, would constitute a material default)
thereunder by Xxxxxxx or any Xxxxxxx Subsidiary.
2.10 FIXED ASSETS. Section 2.10 of the Xxxxxxx Disclosure Schedule
sets forth a list of all material fixtures, furniture and equipment owned,
leased or used by Xxxxxxx or any Xxxxxxx Subsidiary as of October 31, 1999 (the
"Fixed Assets"). The Fixed Assets (a) are in good operating condition and
repair, normal wear and tear excepted, (b) are adequate to conduct the business
of Xxxxxxx and the Xxxxxxx Subsidiaries substantially in the manner in which
such businesses have been conducted since January 1, 1999, and (c) have been
maintained consistent with the standards generally followed in the industry.
2.11 INTANGIBLE PERSONAL PROPERTY. Section 2.11 of the Xxxxxxx
Disclosure Schedule sets forth a complete and correct list for Xxxxxxx and for
each Xxxxxxx Subsidiary of material domestic and foreign patent, patent
application, invention disclosure, copyright, trademark, trademark registration,
trade name, service xxxx and applications for any of the foregoing, and any
material software titles, owned by Xxxxxxx or such Xxxxxxx Subsidiary or used in
the conduct of its respective businesses (such intangible personal property in
addition to any material trade secrets and proprietary know-how owned by Xxxxxxx
or any Xxxxxxx Subsidiary or used in the conduct of its respective businesses,
the "Intangible Personal Property"). Except as set forth in Section 2.11 of the
Xxxxxxx Disclosure Schedules, (a) Xxxxxxx and Xxxxxxx Subsidiaries have the
right and authority to use all Intangible Personal Property required for the
conduct of their respective businesses in the manner presently conducted, and
(b) to the Knowledge of Xxxxxxx, such use does not conflict with, infringe upon
or violate any trademark, trade name, copyright, patent or patent rights of any
other person or entity. Except as disclosed in Section 2.11 of the Xxxxxxx
Disclosure Schedule, there have not been any actions or other judicial or
adversary proceedings to which Xxxxxxx or any Xxxxxxx Subsidiary is a party
concerning the validity of the Intangible Personal Property, nor has Xxxxxxx
received any notice that any such action or proceeding is threatened.
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2.12 ACCOUNTS RECEIVABLE. A complete and correct list of all accounts
receivable of Xxxxxxx as of October 31, 1999 ("Accounts Receivable") has been
delivered to TriZetto prior to the date hereof, and sets forth the aging of such
Accounts Receivable. The Accounts Receivable represent bona fide sales actually
made or services actually performed on or prior to such date in the ordinary
course of business of Xxxxxxx and Xxxxxxx Subsidiaries and consistent with past
practices. Except as set forth in Section 2.12 of the Xxxxxxx Disclosure
Schedule, to the Knowledge of Xxxxxxx, there is no contest, claim or right of
set-off contained in any oral or written agreement with any account debtor
relating to the amount or validity of any Account Receivable, or any other
account receivable created after October 31, 1999, nor are there any facts or
circumstances that could reasonably be expected to give rise to any such claim
or right of offset. The reserves reflected in the Financial Statements have been
established in the ordinary course of business, in accordance with GAAP, and the
Accounts Receivable will be collected in full within 180 days after the Closing
Date in the ordinary course of business, net of such reserves.
2.13 LICENSES AND PERMITS. Section 2.13 of the Xxxxxxx Disclosure
Schedule contains a list of all material governmental licenses, permits,
franchises, rights and privileges necessary for the present conduct of Xxxxxxx'
business, each Xxxxxxx Subsidiary's business, and, to the Knowledge of Xxxxxxx,
PHN's business (the "Licenses"). Xxxxxxx, each Xxxxxxx Subsidiary, and, to the
Knowledge of Xxxxxxx, PHN, possesses, as appropriate, all such Licenses. Each of
the Licenses is in full force and effect, Xxxxxxx and each Xxxxxxx Subsidiary
has complied in all material respects with all conditions, requirements and
terms thereof and there are no pending or threatened claims or proceedings
challenging the validity of or seeking to revoke or discontinue, any of the
Licenses. Prior to the date hereof, Xxxxxxx has delivered or made available to
TriZetto a complete, current and correct copy of each of the Licenses.
2.14 INSURANCE. Section 2.14(a) of the Xxxxxxx Disclosure Schedule
contains a description of all existing policies of fire, liability, workers'
compensation and all other forms of insurance maintained by Xxxxxxx or any
Xxxxxxx Subsidiary. Except as set forth in Section 2.14(b) of the Xxxxxxx
Disclosure Schedule, all such policies are in full force and effect, all
premiums with respect thereto covering all periods up to and including the date
hereof, or the Closing Date, as appropriate, have been paid, and no notice of
cancellation, termination or denial of coverage has been received with respect
to any such policy. Except as set forth in Section 2.14(c) of the Xxxxxxx
Disclosure Schedule such policies (a) are adequate for compliance with all
agreements or instruments to which Xxxxxxx or any Xxxxxxx Subsidiary is a party,
or to which its business, properties or assets may be subject, (b) are valid,
outstanding and enforceable policies, (c) provide insurance coverage in the
amounts indicated in such policies, which are adequate for Xxxxxxx' and each
Xxxxxxx Subsidiary's businesses, properties, assets and operations as presently
conducted, and (d) all premiums due and owing thereon have been paid. Section
2.14(c) of the Xxxxxxx Disclosure Schedule also describes all claims of Xxxxxxx
or any Xxxxxxx Subsidiary which are pending under such insurance policies or
have been paid to Xxxxxxx or any Xxxxxxx Subsidiary since January 1, 1998. Since
January 1, 1998, neither Xxxxxxx nor any Xxxxxxx Subsidiary has been refused
coverage by any insurance carrier with respect to its properties, assets or
operations, nor has its coverage been limited, by any insurance carrier to which
it has applied for any such insurance or with which it has carried insurance.
Prior to the date hereof, Xxxxxxx has delivered or made available to TriZetto
complete, current and correct copies of all insurance policies and binders for
the insurance policies which are maintained by Xxxxxxx or any Xxxxxxx
Subsidiary.
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2.15 ABSENCE OF CERTAIN CHANGES. Except as set forth in Section 2.15
of the Xxxxxxx Disclosure Schedule, and except for the transactions specifically
contemplated by this Agreement, since October 31, 1999, there has not been:
(a) Any declaration or payment of dividends by Xxxxxxx or
any repurchase, redemption or other acquisition by Xxxxxxx or any Xxxxxxx
Subsidiary of any outstanding shares of capital stock or other securities of
Xxxxxxx or any Xxxxxxx Subsidiary or, except in the ordinary course of business,
any transfer of properties or assets of any kind whatsoever by Xxxxxxx to its
shareholders;
(b) Any transaction or commitment made, or any contract or
agreement entered into, by Xxxxxxx or any Xxxxxxx Subsidiary relating to its
assets or business (including the acquisition or disposition of any assets) or
any relinquishment by Xxxxxxx or any Xxxxxxx Subsidiary of any contract or other
right, in either case, material to Xxxxxxx or any Xxxxxxx Subsidiary, taken as a
whole, other than transactions and commitments in the ordinary course consistent
with past practices and those contemplated by this Agreement;
(c) Any loan, advance or capital contribution by Xxxxxxx or
any Xxxxxxx Subsidiary to any person, except a normal travel advance or other
reasonable expense advance to an officer or employee of Xxxxxxx or any Xxxxxxx
Subsidiary and normal trade terms extended to customers;
(d) Any damage, destruction or loss, whether or not covered
by insurance, which has had or is reasonably likely to have a Material Adverse
Effect;
(e) Any sale or transfer of any properties or assets not in
the ordinary course of business or any cancellation of any debts or claims of
Xxxxxxx or any Xxxxxxx Subsidiary;
(f) Any mortgage, pledge or subjection to lien, guaranty of
indebtedness, charge or encumbrance of any kind on any of Xxxxxxx' or any
Xxxxxxx Subsidiary's properties or assets, or any assumption of, or taking any
properties or assets subject to, any liability;
(g) Any amendment, modification or termination of any
material contract or agreement to which Xxxxxxx or any Xxxxxxx Subsidiary is a
party or pursuant to which its properties or assets may be bound;
(h) Any sale or granting to any party or parties of any
license, franchise or option with respect to Xxxxxxx' or any Xxxxxxx
Subsidiary's business or termination of any such rights;
(i) any (i) grant of any severance or termination pay to any
current or former director, officer or employee of Xxxxxxx or any Xxxxxxx
Subsidiary, (ii) entering into of any employment, deferred compensation or other
similar agreement (or any amendment to any such existing agreement) with any
current or former director, officer or employee of Xxxxxxx or any Xxxxxxx
Subsidiary, (iii) increase in benefits payable under any existing severance or
termination pay policies or employment agreements, or (iv) increase in
compensation, bonus or other benefits payable or otherwise made available to
current or former directors, officers or employees of Xxxxxxx (other than in the
ordinary course of business salary increases for employees other than officers
and directors), or (iv) establishment, adoption, or amendment (except as
required by applicable law), of any collective bargaining, bonus, profit
sharing, thrift, pension, retirement, deferred compensation,
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compensation, stock option, restricted stock or other benefit plan or
arrangement covering any current or former director, officer or employee of
Xxxxxxx or any Xxxxxxx Subsidiary;
(j) Any adoption by Xxxxxxx or any Xxxxxxx Subsidiary of any
new Benefit Plan (as that term is defined in Section 2.22(b) of this Agreement),
or amendment to any Benefit Plan to provide any new or additional plans,
programs, contracts or arrangements involving direct or indirect compensation to
any officer, director, employee, former employee, or their dependents or
beneficiaries, of Xxxxxxx or any Xxxxxxx Subsidiary;
(k) Any alteration in the manner of keeping the books,
accounts or records of Xxxxxxx or any Xxxxxxx Subsidiary or in the manner of
preparing the Financial Statements, or in the accounting practices of Xxxxxxx or
any Xxxxxxx Subsidiary, except as may be required by any modification or change
in GAAP; or
(l) Any event, occurrence or development of a state of
circumstances or facts which would, individually or in the aggregate, have a
Material Adverse Effect on Xxxxxxx (other than adverse effects arising from the
execution and performance of this Agreement, changes in general economic
conditions or changes applicable generally to the industry);
(m) any amendment of any term of any outstanding security of
Xxxxxxx or any Xxxxxxx Subsidiary;
(n) any material labor dispute, other than routine
individual grievances, or, to the Knowledge of Xxxxxxx, any activity or
proceeding by a labor union or representative thereof to organize any employees
of Xxxxxxx or any Xxxxxxx Subsidiary, which employees were not subject to a
collective bargaining agreement on the date of the Balance Sheet, or any
material lockouts, strikes, slowdowns, work stoppages or threats thereof by or
with respect to such employees; or
(o) any tax election or any settlement of tax liability, in
either case that is material to Xxxxxxx and the Xxxxxxx Subsidiaries, taken as a
whole.
2.16 COMPLIANCE WITH CONTRACTS. Section 2.16 of the Xxxxxxx
Disclosure Schedule contains a list of all material contracts, commitments,
obligations or agreements of Xxxxxxx or of any Xxxxxxx Subsidiary, whether
written or oral, formal or informal (the "Contracts"). Without limiting the
foregoing all contracts which have a term exceeding one year and have
consideration in excess of $50,000, shall be deemed material. Except as set
forth in Section 2.16 of the Xxxxxxx Disclosure Schedule, no event has occurred
which would constitute a material default or cause the incurrence of a material
penalty on the part of Xxxxxxx or any Xxxxxxx Subsidiary (or any event which,
with the giving of notice or lapse of time or both, would constitute a material
default or cause the incurrence of a material penalty on the part of Xxxxxxx or
any of Xxxxxxx Subsidiaries) under any term or provision of any of the Contracts
and thereby allow another party to terminate and/or claim penalties or damages
therefor and Xxxxxxx and the Xxxxxxx Subsidiaries have no knowledge of defaults
by third parties thereto. Each of the Contracts is in full force and effect and
is the legal, valid and binding obligation of Xxxxxxx or Xxxxxxx Subsidiary
which is a party thereto and, to the Knowledge of Xxxxxxx, of the other parties
thereto, enforceable in accordance with its terms, subject to judicial
discretion regarding specific performance or other equitable remedies, and
except as may be limited by bankruptcy, reorganization, insolvency, moratorium
or other laws relating to or affecting the enforcement of creditors' rights and
remedies generally. Except as set forth in Section 2.16 of the Xxxxxxx
Disclosure Schedule, neither Xxxxxxx nor any Xxxxxxx Subsidiary is a party to
any Contract
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that restricts it from carrying on its business or any part thereof, or from
competing in any line of business with any person, corporation or entity. Prior
to the date hereof, Xxxxxxx has delivered or made available to TriZetto a
complete and correct copy of each of the written Contracts, as well as a written
summary of each of the oral Contracts, including all amendments and
modifications thereto.
2.17 COMPLIANCE WITH LAWS. Except as set forth in Section 2.17 of the
Xxxxxxx Disclosure Schedule, Xxxxxxx', each Xxxxxxx Subsidiary's, and, to the
Knowledge of Xxxxxxx, PHN's, business has been conducted in compliance with, and
is not in violation of, any applicable laws, statutes, ordinances, rules,
regulations, orders, other requirements of national governmental authorities or
of any territories, states, municipalities and other political subdivisions and
agencies thereof, having jurisdiction over Xxxxxxx, any Xxxxxxx Subsidiary or
PHN and their respective business, including without limitation all such laws,
regulations, ordinances and requirements relating to insurance, environmental,
antitrust, consumer protection, labor and employment, zoning and land use,
immigration, health, occupational safety, pension and securities matters, except
where noncompliance or violation would not have a Material Adverse Effect.
Except as set forth in Section 2.17 of the Xxxxxxx Disclosure Schedule, since
January 1, 1996, none of Xxxxxxx, any Xxxxxxx Subsidiary or, to the Knowledge of
Xxxxxxx, PHN, has received any written notification of any asserted present or
past failure by Xxxxxxx, any Xxxxxxx Subsidiary, or PHN to comply with such
laws, statutes, ordinances, rules, regulations, orders or other requirements
that is unresolved as of the date hereof.
2.18 NO UNDISCLOSED LIABILITIES. Except as disclosed in the Interim
Financial Statements, or in Section 2.18 of the Xxxxxxx Disclosure Schedule,
neither Xxxxxxx nor any Xxxxxxx Subsidiary is directly or indirectly (i) liable,
by guaranty, surety or otherwise, upon or with respect to, or (ii) obligated in
any way to provide funds in respect of, or (iii) obligated to guaranty or assume
any debt, dividend or other obligation of any person, corporation, association,
partnership or other entity.
2.19 LABOR RELATIONS. The attachment to Section 2.19(a) of the
Xxxxxxx Disclosure Schedule contains a list as of the date of this Agreement of
all of Xxxxxxx' and each Xxxxxxx Subsidiary's employees ("Employees"), which
includes the job position and compensation payable to each of the Employees.
Except to the extent set forth in Section 2.19(b) of the Xxxxxxx Disclosure
Schedule:
(a) Xxxxxxx and each Xxxxxxx Subsidiary is in compliance in
all material respects with all laws, statutes, ordinances, rules, regulations,
orders and other requirements relating to the employment of labor, including
without limitation Title VII of the federal Civil Rights Act of 1964, the
federal Age Discrimination in Employment Act of 1967, the federal Americans with
Disabilities Act, ERISA, and any and all provisions thereof relating to wages,
hours, collective bargaining and the payment of social security and similar
Taxes;
(b) There is no pending or, to the Knowledge of Xxxxxxx,
threatened charge, complaint, allegation, application or other process or claim
against Xxxxxxx or any Xxxxxxx Subsidiary before any federal, territorial, state
or local or other governmental or administrative agency or other entity;
(c) No Employee is covered by any collective bargaining
agreement, nor, to the Knowledge of Xxxxxxx, is there any effort being made by
any union to organize any of the Employees; and
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(d) Xxxxxxx and each Xxxxxxx Subsidiary has paid and
performed all obligations when due with respect to its employees, consultants,
agents, officers and directors, including without limitation the payment of any
accrued and payable wages, severance pay, vacation pay, benefits and
commissions, except those obligations which are in good faith being challenged
by Xxxxxxx or any Xxxxxxx Subsidiary as not valid obligations of Xxxxxxx or any
Xxxxxxx Subsidiary as more fully described in Section 2.19(d) of the Xxxxxxx
Disclosure Schedule.
(e) None of the persons performing services for Xxxxxxx or
any Xxxxxxx Subsidiary have been improperly classified as independent
contractors or as being exempt from the payment of wages for overtime.
(f) Section 2.19(f) of the Xxxxxxx Disclosure Schedule lists
each individual who is absent from active employment with Xxxxxxx or any Xxxxxxx
Subsidiary by reason of (i) short-term or long term disability, (ii) leave of
absence under the Family and Medical Leave Act of 1993 (or comparable state
statute), (iii) military leave (under conditions that give the employee
re-employment rights), or (iv) other Xxxxxxx-approved or Xxxxxxx
Subsidiary-approved leave of absence.
(g) During the three years immediately preceding the date of
this Agreement, Xxxxxxx and the Xxxxxxx Subsidiaries have not effectuated (i) a
"plant closing" (as defined in the WARN Act) affecting any site of employment or
one or more facilities or operating units within any site of employment or
facility of the Xxxxxxx and the Xxxxxxx Subsidiaries, or (ii) a "mass layoff"
(as defined in the WARN Act) affecting any site of employment or facility of the
Xxxxxxx and the Xxxxxxx Subsidiaries; nor has either Xxxxxxx or the Xxxxxxx
Subsidiaries been affected by any transaction or engaged in layoffs or
employment terminations relating to the Xxxxxxx or the Xxxxxxx Subsidiaries
sufficient in number to trigger application of any similar state or local law.
No individual employed by Xxxxxxx or the Xxxxxxx Subsidiaries has suffered any
form of "employment loss" (as defined in the WARN Act) within ninety days prior
to the Closing Date.
2.20 LITIGATION. Except as set forth in Section 2.20 of the Xxxxxxx
Disclosure Schedule:
(a) There is no pending or, to the Knowledge of Xxxxxxx,
threatened, action, suit, arbitration proceeding, investigation or inquiry
before any court or governmental or administrative body or agency, or any
private arbitration tribunal, (i) against or involving Xxxxxxx or any Xxxxxxx
Subsidiary, (ii) against or involving any director, officer or Employee of
Xxxxxxx or any Xxxxxxx Subsidiary in his or her capacity as such, (iii) to which
Xxxxxxx or any Xxxxxxx Subsidiary is a party, (iv) affecting the assets or
business of Xxxxxxx or any Xxxxxxx Subsidiary or the transactions contemplated
by this Agreement or any other Transaction Document that arises through any
fault of Xxxxxxx or any Xxxxxxx Subsidiary, or (v) affecting the assets or
business of Xxxxxxx or any Xxxxxxx Subsidiary or the transactions contemplated
by this Agreement or any other Transaction Document that arises through no fault
on the part of Xxxxxxx or any Xxxxxxx Subsidiary, which could, in each case,
reasonably be anticipated to have a Material Adverse Effect. To the Knowledge of
Xxxxxxx, there are no facts or circumstances that could reasonably be expected
to give rise to any of the actions set forth in this Section 2.20(a).
(b) There is not in effect any order, judgment or decree of
any court or governmental or administrative body or agency enjoining, barring,
suspending, prohibiting or otherwise limiting Xxxxxxx or any Xxxxxxx Subsidiary
or, to the Knowledge of Xxxxxxx, any officer, director or Employee of Xxxxxxx or
any Xxxxxxx Subsidiary from conducting or engaging in any aspect of Xxxxxxx' or
any Xxxxxxx Subsidiary's business, or requiring Xxxxxxx or any Xxxxxxx
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Subsidiary or any officer, director or Employee of Xxxxxxx or any Xxxxxxx
Subsidiary to take certain action with respect to any aspect of Xxxxxxx' or any
Xxxxxxx Subsidiary's business which could reasonably be anticipated to have a
Material Adverse Effect.
(c) Neither Xxxxxxx nor any Xxxxxxx Subsidiary has received
written notice that it is in violation of or in default under any order,
judgment, writ, injunction or decree of any court or governmental or
administrative body or agency.
2.21 ENVIRONMENTAL COMPLIANCE.
(a) Xxxxxxx and the Xxxxxxx Subsidiaries are in compliance
in all material respects with Environmental Laws and all Environmental Permits.
(b) Since January 1, 1996, neither Xxxxxxx nor the Xxxxxxx
Subsidiaries have received any written notice regarding any violation of any
Environmental Laws, or any Xxxxxxx Environmental Liabilities, including any
investigatory, remedial or corrective obligations, relating to Xxxxxxx or the
Xxxxxxx Subsidiaries or their respective facilities arising under Environmental
Laws, except for any such written notice the subject matter of which has either
been substantially resolved or would otherwise not reasonably be expected to
have a Material Adverse Effect on Xxxxxxx.
(c) Except as set forth in Section 2.21 of the Xxxxxxx
Disclosure Schedule:
(i) Xxxxxxx or the Xxxxxxx Subsidiaries have not
caused, and are not causing or threatening to cause, any disposals or releases
of any Hazardous Material on or under any properties which it (A) leases,
occupies or operates or (B) previously owned, leased, occupied or operated and,
to the Knowledge of Xxxxxxx, no such disposals or releases occurred prior to
Xxxxxxx or the Xxxxxxx Subsidiaries having taken title to, or possession or
operation of, any of such properties; and, to the knowledge of Xxxxxxx, no such
disposals or releases are migrating or have migrated off of such properties in
subsurface soils, groundwater or surface waters after Xxxxxxx or the Xxxxxxx
Subsidiaries have taken title to, or possession or operation of any such
properties and, to the knowledge of Xxxxxxx or the Xxxxxxx Subsidiaries, no such
disposals or releases are migrating or have migrated off of such properties in
subsurface soils, groundwater or surface water prior to such time;
(ii) Neither Xxxxxxx nor the Xxxxxxx Subsidiaries
have (A) arranged for the disposal or treatment of Hazardous Material at any
facility owned or operated by another person, or (B) accepted any Hazardous
Material for transport to disposal or treatment facilities or other sites
selected by Xxxxxxx or the Xxxxxxx Subsidiaries from which facilities or sites
there has been a release or there is a release or threatened release of a
Hazardous Material. Any facility identified in Section 2.21(c)(ii)(A) was duly
licensed in accordance with law and has not been listed in connection with the
Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)
by the United States Environmental Protection Agency on the Comprehensive
Environmental Response, Compensation, and Liability Information System (CERCLIS)
or the National Priorities List (NPL) or any equivalent listing of sites under
state or local law (whether for potential releases of substances listed in
CERCLA or other substances).
(iii) Neither Xxxxxxx nor the Xxxxxxx Subsidiaries
have actual Knowledge of any release or threatened release of any Hazardous
Material originating from a property other than
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those leased or operated by Xxxxxxx or the Xxxxxxx Subsidiaries have come to be
located on or under properties leased, occupied or operated by Xxxxxxx or the
Xxxxxxx Subsidiaries;
(iv) Xxxxxxx or the Xxxxxxx Subsidiaries have never
installed, used, buried or removed any surface impoundment or underground tank
or vessel on properties owned, leased, occupied or operated by Xxxxxxx or the
Xxxxxxx Subsidiaries;
(v) Xxxxxxx and the Xxxxxxx Subsidiaries are and
have been in compliance in all material respects for the last three years with
all federal, state, local or foreign laws, ordinances, regulations, permits,
approvals and authorizations relating to air, water, industrial hygiene and
worker health and safety, anti-pollution, hazardous or toxic wastes, materials
or substances, pollutants or contaminants, and to the Knowledge of Xxxxxxx, no
condition exists on any of the real property owned by or used in the business of
Xxxxxxx or the Xxxxxxx Subsidiaries that would constitute a material violation
of any such law or that constitutes or threatens to constitute a public or
private nuisance; and
(vi) There has been no litigation, administrative
proceedings or investigations or any other actions, claims, demands notices of
potential responsibility or requests for information brought or, to the
knowledge of Xxxxxxx or the Xxxxxxx Subsidiaries, threatened against Xxxxxxx or
the Xxxxxxx Subsidiaries or any settlement reached by any of them, with, any
person or persons alleging the presence, disposal, release or threatened release
of any Hazardous Material on, from or under any of such properties or as
otherwise relating to potential environmental liabilities.
2.22 EMPLOYEE BENEFITS.
(a) The attachment to Section 2.22(a) of the Xxxxxxx
Disclosure Schedule sets forth a list of all employee benefit plans, as defined
in Section 3(3) of ERISA, of Xxxxxxx or any Xxxxxxx Subsidiary; and
(b) Section 2.22(b) of the Xxxxxxx Disclosure Schedule sets
forth a true and complete list of all other profit-sharing, deferred
compensation, bonus, stock option, stock purchase, stock bonus, phantom stock,
vacation pay, holiday pay, severance, dependent care assistance, excess benefit,
incentive compensation, salary continuation, medical, life or other insurance,
supplemental unemployment and other employee benefit plans, programs, agreements
or arrangements, including all unwritten employee benefit plans, programs,
agreements and arrangements, if any, maintained or contributed to by Xxxxxxx or
any Xxxxxxx Subsidiary for the benefit of its Employees (or former employees)
and/or their beneficiaries. Both of these types of plans shall be collectively
referred to as "Benefit Plans." An arrangement will not fail to be a Benefit
Plan simply because it only covers one individual, or because Xxxxxxx' or any
Xxxxxxx Subsidiary's obligations under the plan arise by reason of its being a
"successor employer" under applicable law.
(c) Xxxxxxx has delivered or made available to TriZetto a
true and complete copy of:
(i) Each Benefit Plan and any related funding
agreements (e.g., trust agreements or insurance contracts), including all
amendments (and Section 2.22(c) of the Xxxxxxx Disclosure Schedule includes a
description of any such amendment that is not in writing);
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(ii) The current draft of the Summary Plan
Description of each Benefit Plan (if applicable); and
(iii) The most recent Internal Revenue Service
determination letter (if applicable) for each Benefit Plan.
(d) Except as set forth in Section 2.22(d) of the Xxxxxxx
Disclosure Schedule, neither Xxxxxxx nor any Xxxxxxx Subsidiary maintains or
contributes to, nor has maintained or contributed to, any Benefit Plan that is
subject to Section 302 of ERISA or Section 412 of the Code.
(e) No Benefit Plan is a "multi-employer plan," as defined
in Section 3(37) of ERISA, nor is a plan described in Section 4063(a) of ERISA.
(f) All costs of administering and contributions required to
be made by Xxxxxxx or any Xxxxxxx Subsidiary to each Benefit Plan under the
terms of that Benefit Plan, ERISA, the Code or any other applicable law have
been timely made, and are fully deductible. All amounts properly accrued to date
as liabilities of Xxxxxxx or any Xxxxxxx Subsidiary under or with respect to
each Benefit Plan (including administrative expenses and incurred but not
reported claims) for the current plan year of the Benefit Plan have been
recorded on the appropriate books, to the extent required by law or GAAP.
(g) Except as set forth in Section 2.22(g)(i) of the Xxxxxxx
Disclosure Schedule, each Benefit Plan has been maintained and operated in
accordance with, and complies currently with, in all material respects, all
applicable laws, including but not limited to ERISA and the Code. Each Benefit
Plan has been operated in all material respects in accordance with its terms.
Furthermore, the Internal Revenue Service has issued a favorable determination
letter with respect to each Benefit Plan that is intended to qualify under
Section 401(a) of the Code, which letter, except as set forth in Section
2.22(g)(ii) of the Xxxxxxx Disclosure Schedule, takes into account any amendment
to each such Benefit Plan, and, no event had occurred (either before or after
the date of the letter) that would disqualify the plan.
(h) No Benefit Plan is intended to provide benefits which
might require compliance with Sections 419 or 419A of the Code.
(i) No prohibited transaction has occurred with respect to
any of the Benefit Plans which is not exempt under Section 4975 of the Code and
Section 406 of ERISA, and neither Xxxxxxx nor any Xxxxxxx Subsidiary has engaged
in any transaction with respect to any Benefit Plan which could subject it to
either a material civil penalty assessed pursuant to Section 409, 502(i) or
502(l) of ERISA, or a material tax imposed pursuant to Section 4975 or 4976 of
the Code.
(j) Except as set forth in Section 2.22(j) of the Xxxxxxx
Disclosure Schedule, neither Xxxxxxx nor any Xxxxxxx Subsidiary maintains any
plan that provides (or will provide) medical or death benefits to one or more,
current or future former employees (including retirees) beyond their retirement
or other termination of service, other than benefits that are required to be
provided pursuant to Section 4980B of the Code or state law continuation
coverage or conversion rights.
(k) Except as set forth in Section 2.22(k) of the Xxxxxxx
Disclosure Schedule, there are no proceedings or lawsuits, pending or, to the
Knowledge of Xxxxxxx, threatened, and, to the
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Knowledge of Xxxxxxx, are no investigations, either currently in progress or
expected to be instituted in the future, relating to any Benefit Plan, by any
administrative agency, whether local, state or federal or by any fiduciary,
participant or beneficiary of such plan.
(l) Except as set forth in Section 2.22(l) of the Xxxxxxx
Disclosure Schedule, none of the Benefit Plans or any other employment agreement
or arrangement entered into by Xxxxxxx or any Xxxxxxx Subsidiary will entitle
any current or former employee to any benefits or other compensation that become
payable solely as a result of the consummation of this transaction.
(m) None of the Benefit Plans are subject to the tax on
unrelated business taxable income or unrelated debt-financed income under
Section 511 of the Code.
(n) Except as set forth in Section 2.22(n) of the Xxxxxxx
Disclosure Schedule, no Benefit Plan has any interest in any annuity contract or
other investment or insurance contract issued by an insurance company that is
the subject of bankruptcy, conservatorship, rehabilitation or similar
proceeding.
(o) Section 2.22(o) of the Xxxxxxx Disclosure Schedule lists
each individual who (i) has elected to continue participating in a group health
plan of Xxxxxxx or any Xxxxxxx Subsidiary pursuant to an election under COBRA,
or (ii) has not made an election under COBRA but who is still eligible to make
such election.
2.23 BANK ACCOUNTS. Section 2.23 of the Xxxxxxx Disclosure Schedule
sets forth the names and locations of all banks, trust companies, savings and
loan associations and other financial institutions at which Xxxxxxx or any
Xxxxxxx Subsidiary maintains safe deposit boxes or accounts of any nature and
sets forth the account number of such accounts and sets forth the names of all
persons authorized to draw on such accounts.
2.24 CORPORATE RECORDS. The minute books of Xxxxxxx and of each
Xxxxxxx Subsidiary reflect all actions taken to date by the shareholders, board
of directors and committees of the board of directors of Xxxxxxx or of any
Xxxxxxx Subsidiary, as appropriate, and contain true and complete copies of
Xxxxxxx' or any Xxxxxxx Subsidiary's charter and Bylaws, and all amendments
thereto.
2.25 ACCOUNTING RECORDS. Xxxxxxx and each Xxxxxxx Subsidiary
maintains accounting records which fairly and validly reflect, in all material
respects, its transactions and maintains accounting controls sufficient to
provide reasonable assurances that such transactions are, in all material
respects, (i) executed in accordance with management's general or specific
authorization, and (ii) recorded as necessary to permit the preparation of
financial statements in conformity with GAAP.
2.26 INTELLECTUAL PROPERTY; YEAR 2000 COMPLIANCE.
(a) INTELLECTUAL PROPERTY, SOFTWARE AND PRODUCTS.
(i) Except as set forth in Section 2.26(a) of the
Xxxxxxx Disclosure Schedule, all non-clerical employees of, or consultants to,
Xxxxxxx have executed a proprietary rights agreement or similar documentation (a
copy of which has been provided to TriZetto) assigning all rights, title and
interest to the Intellectual Property, Software and Products. To the Knowledge
of
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Xxxxxxx, no Xxxxxxx Securityholder, employee or contractor, nor any of their
respective Affiliates, has any right, title or interest in or to any
Intellectual Property, Software or Products.
(ii) Except as disclosed in Section 2.26 of the
Xxxxxxx Disclosure Schedule, Xxxxxxx and the Xxxxxxx Subsidiaries own all right,
title and interest in and to, or have valid licenses to use all Intellectual
Property and Software used in or necessary for the conduct of Xxxxxxx' and the
Xxxxxxx Subsidiaries' businesses as presently conducted, including, without
limitation, all Intellectual Property and Software developed or discovered in
connection with or contained in or related to Xxxxxxx' or the Xxxxxxx
Subsidiaries' Products, free and clear of all Liens, other than licenses and
services provided to customers in the ordinary course of business (including
without limitation any distribution rights and royalty rights). Such
Intellectual Property and Software constitutes all Intellectual Property and
Software necessary for the conduct of its business in the manner conducted
immediately prior to the Closing. To the Knowledge of Xxxxxxx, neither Xxxxxxx
nor the Xxxxxxx Subsidiaries have infringed nor is infringing upon any
Intellectual Property or Software rights of others.
(iii) Except as set forth in Section 2.26 of the
Xxxxxxx Disclosure Schedule, no claims have been asserted against Xxxxxxx or the
Xxxxxxx Subsidiaries by any person challenging Xxxxxxx' or the Xxxxxxx
Subsidiaries' use or distribution (including manufacture, marketing license, or
sale) of any Product, or products utilized by Xxxxxxx or the Xxxxxxx
Subsidiaries (including, without limitation, Third Party Technology), or
challenging or questioning the validity or effectiveness of any license or
agreement relating thereto (including, without limitation, the Third Party
Licenses). To the Knowledge of Xxxxxxx, there is no valid basis for any claim of
the type specified in this Section 2.26(a)(iii).
(iv) Xxxxxxx or the Xxxxxxx Subsidiaries has valid
copyrights in the Products whether or not registered with the U.S. copyright
office, including all copyrights in the Products containing material
copyrightable material. Consummation of the transactions contemplated hereby
will not alter or impair the validity of any copyrights or copyright
registrations.
(v) Except as set forth in Section 2.26 of the
Xxxxxxx Disclosure Schedule, (i) no third party other than TriZetto (including
any OEM or site license customer) has any right to manufacture, reproduce,
distribute, sell, sublicense, market or exploit any of the Products or any
adaptations, translations, or derivative works based on the Products, or any
portion thereof; and (ii) Xxxxxxx or the Xxxxxxx Subsidiaries have not granted
to any third party any exclusive rights of any kind with respect to any of the
Products, including territorial exclusivity or exclusivity with respect to
particular versions, implementations or translations of any of the Products.
Each document or instrument identified pursuant to this Section is listed in
Section 2.26 of the Xxxxxxx Disclosure Schedule and true and correct copies of
such documents or instruments have been furnished to TriZetto
(vi) Each of the Products: (i) complies in all
material respects with all specifications set forth therefor in any contract,
agreement, advertisement or other promotional material for such products and
with all other warranty requirements, other than bugs or fixes required or
expected in the ordinary course of business and not otherwise material to
Xxxxxxx' business; and (ii) can be recreated from its associated source code and
related documentation by reasonably experienced technical personnel without
undue burden.
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(vii) Xxxxxxx has made available to TriZetto all end
user documentation relating to the use, maintenance or operation of each of the
Products, all of which is true and accurate in all material respects.
(viii) To the Knowledge of Xxxxxxx, no employee of
Xxxxxxx is in violation of any term of any employment contract, patent
disclosure agreement or any other contract or agreement relating to the
relationship of any such employee with Xxxxxxx or any other party because of the
nature of the business conducted by Xxxxxxx.
(b) YEAR 2000 COMPLIANCE.
(i) PRODUCTS AND SERVICES.
(A) To the Knowledge of Xxxxxxx, all of
Xxxxxxx' products and services and the Xxxxxxx Subsidiaries' products and
services are Year 2000 Compliant in all material respects, and, except as set
forth in Section 2.26(b) of the Xxxxxxx Disclosure Schedule, Xxxxxxx will not
incur any costs to make such products and services Year 2000 Compliant.
(B) If Xxxxxxx is obligated to repair or
replace products or services previously provided by Xxxxxxx that are not Year
2000 Compliant in order to meet Xxxxxxx' contractual obligations, to avoid
personal injury or other liability, to avoid misrepresentation claims, or to
satisfy any other obligations or requirements, Xxxxxxx has repaired or replaced
those products and services to make them Year 2000 Compliant in all material
respects.
(C) Xxxxxxx has made available to TriZetto
true, correct and complete copies of any customer agreements and other materials
and correspondence in which Xxxxxxx has furnished (or could be deemed to have
furnished) assurances as to the performance and/or functionality of Xxxxxxx' and
the Xxxxxxx Subsidiaries' products or services on or after January 1, 2000.
(ii) COMPUTER SOFTWARE AND SYSTEMS. Except as set
forth in Section 2.26(b) of the Xxxxxxx Disclosure Schedule, all of Xxxxxxx and
the Xxxxxxx Subsidiaries' software and systems and computers are Year 2000
Compliant in all material respects.
(iii) SUPPLIERS. To the Knowledge of Xxxxxxx, all
vendors of products or services to Xxxxxxx and the Xxxxxxx Subsidiaries, and
their respective products, services and operations, are Year 2000 Compliant in
all material respects. To the Knowledge of Xxxxxxx after a reasonably diligent
investigation, each such vendor will continue to furnish its products or
services to Xxxxxxx and the Xxxxxxx Subsidiaries, without interruption or
material delay, on and after January 1, 2000.
2.27 BROKERS AND FINDERS. Except as set forth in Section 2.27 of the
Xxxxxxx Disclosure Schedule, none of Xxxxxxx, any Xxxxxxx Subsidiary or any
Xxxxxxx Securityholder has engaged or authorized any broker, finder, investment
banker or other third party, to act on its behalf, directly or indirectly, as a
broker, finder, investment banker or in any other like capacity in connection
with this Agreement or the transactions contemplated hereby, or has consented to
or acquiesced in anyone so acting, and Xxxxxxx does not know of any claim for
compensation from any such broker, finder, investment banker or other third
party for so acting on behalf of Xxxxxxx, any Xxxxxxx Subsidiary or any Xxxxxxx
Securityholder or of any basis for such a claim.
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2.28 RELATED PARTIES INDEBTEDNESS. Except as set forth in Section
2.28 of the Xxxxxxx Disclosure Schedule; Xxxxxxx has no outstanding indebtedness
owed to any Affiliate of Xxxxxxx or to any Xxxxxxx Stockholder or Affiliate
thereof.
2.29 ACCURACY OF REPRESENTATIONS AND WARRANTIES. No representation or
warranty made in this Agreement or in any other document delivered in connection
herewith, by or on behalf of Xxxxxxx, any Xxxxxxx Subsidiary or the Xxxxxxx
Securityholders to TriZetto, with respect to Xxxxxxx, any Xxxxxxx Subsidiary or
the Xxxxxxx Securityholders, contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements so
made, in light of the circumstances under which they are made, not misleading.
2.30 HEALTH MAINTENANCE ORGANIZATIONS. Xxxxxxx has no reason to
believe that the representations and warranties contained in Section 3.8 of the
Note Purchase Agreement contemplated by the Arkansas Transaction are inaccurate
in any material respect.
ARTICLE 3
INVESTMENT REPRESENTATIONS
3.1 INVESTMENT REPRESENTATIONS. Each Xxxxxxx Securityholder
represents severally, but not jointly, that:
(a) Such Xxxxxxx Securityholder is acquiring the TriZetto
Stock for its own account, not as nominee or agent, for investment and not with
a view to, or for resale in connection with, any distribution or public offering
thereof within the meaning of the Securities Act other than as a liquidating
distribution of a Xxxxxxx Securityholder that is an institution.
(b) Such Xxxxxxx Securityholder understands that (i) the
TriZetto Stock has not been registered under the 1933 Act by reason of a
specific exemption therefrom, and cannot be sold unless a subsequent disposition
thereof is registered under the Securities Act or is exempt from such
registration; (ii) such securities may be resold without registration under the
Securities Act only in certain limited circumstances, and it represents that it
is familiar with SEC Rule 144 and Rule 144A, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities Act;
(iii) each certificate representing the TriZetto Stock will be endorsed with the
following legend:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE 1933 ACT COVERING SUCH SECURITIES OR IF TRIZETTO
RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES
REASONABLY SATISFACTORY TO TRIZETTO, STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF THE 1933 ACT."
and (iv) TriZetto will instruct any transfer agent not to register the transfer
of any of the TriZetto Stock unless the conditions specified in the foregoing
legend are satisfied; provided, however, that no
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such opinion of counsel shall be necessary if the sale, transfer or assignment
is made pursuant to SEC Rule 144 or Rule 144A and the Xxxxxxx Securityholder
provides TriZetto with evidence reasonably satisfactory to TriZetto and its
counsel that the proposed transaction satisfies the requirements of Rule 144 or
Rule 144A.
(c) Such Xxxxxxx Securityholder acknowledges that it is able
to fend for himself, can bear the economic risk of his investment and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in the TriZetto Stock.
(d) Such Xxxxxxx Securityholder is an "accredited investor"
within the meaning of SEC Rule 501 of Regulation D as presently in effect.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF TRIZETTO
TriZetto represents and warrants to Xxxxxxx and the Xxxxxxx
Securityholders that, except as set forth in the TriZetto Disclosure Schedule or
in TriZetto's SEC Filings, which have been provided to Xxxxxxx and the Xxxxxxx
Securityholders prior to the date hereof:
4.1 CORPORATE EXISTENCE AND POWER. TriZetto and each of the TriZetto
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation. TriZetto and each of
the TriZetto Subsidaries has all requisite corporate powers and authority and
all governmental licenses, authorizations, permits, consents and approvals
required to carry on its business as now conducted, except for those licenses,
authorizations, permits, consents and approvals the absence of which would not,
individually or in the aggregate, have a Material Adverse Effect on TriZetto.
TriZetto is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction where such qualification is necessary, except
for those jurisdictions where the failure to be so qualified would not,
individually or in the aggregate, have a Material Adverse Effect on TriZetto and
each of the TriZetto Subsidiaries, considered as a whole. TriZetto has
heretofore delivered to Xxxxxxx true and complete copies of TriZetto's
Certificate of Incorporation and Bylaws as currently in effect.
4.2 CORPORATE AUTHORIZATION.
(a) The execution, delivery and performance by TriZetto of
this Agreement and the Transaction Documents and the consummation of the
transactions contemplated hereby and thereby are within TriZetto's corporate
powers and have been duly authorized by all necessary corporate action.
(b) TriZetto's board of directors, at a meeting duly called
and held, has (i) determined that this Agreement and the Transaction Documents
and the transactions contemplated hereby and thereby are in the best interests
of TriZetto's stockholders, and (ii) approved and adopted this Agreement and the
transactions contemplated hereby and thereby.
(c) This Agreement has been duly executed and delivered by
TriZetto and is a legal, valid and binding obligation of TriZetto, enforceable
against TriZetto, in accordance with its
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terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(d) No approval of TriZetto's Stockholders is required for
the execution, delivery and performance by TriZetto of this Agreement or of the
other Transaction Documents.
4.3 GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by TriZetto of this Agreement and the consummation by TriZetto of
the transactions contemplated hereby and thereby require no action by or in
respect of, or filing with, any governmental body, agency, official or
authority, other than (a) compliance with the 1933 Act, the 1934 Act, or foreign
or state securities or blue sky laws; and (b) any other filings, approvals or
authorizations which, if not obtained, would, individually or in the aggregate,
have a Material Adverse Effect on TriZetto or materially impair the ability of
TriZetto to consummate the transactions contemplated by this Agreement.
4.4 NON-CONTRAVENTION. The execution, delivery and performance by
TriZetto of this Agreement and the other Transaction Documents and the
consummation by TriZetto of the transactions contemplated hereby do not and will
not (i) contravene or conflict with the Certificate of Incorporation or Bylaws
of TriZetto or the charter documents of the TriZetto Subsidiaries, (ii) assuming
compliance with the matters referred to in Section 4.3, contravene or conflict
with or constitute a violation of any provision of any law, regulation,
judgment, injunction, order or decree binding upon or applicable to TriZetto or
the TriZetto Subsidiaries, (iii) require the consent or other action of any
person under, constitute a default under, or give rise to any right of
termination, cancellation or acceleration of any right or obligation of TriZetto
or the TriZetto Subsidiaries or to a loss of any benefit to which TriZetto or
the TriZetto Subsidiaries is entitled under any provision of any agreement or
other instrument binding upon TriZetto or the TriZetto Subsidiaries or any
license, franchise, permit, certificate, approval or other similar authorization
affecting, or relating in any way to, the assets or business of TriZetto, or
(iv) result in the creation or imposition of any Lien on any asset of TriZetto
or the TriZetto Subsidiaries, except, in the case of clauses (ii) through (iv),
for such matters as would not, individually or in the aggregate, have a Material
Adverse Effect on TriZetto or materially impair the ability of TriZetto to
consummate the transactions contemplated by this Agreement.
4.5 COMPLIANCE WITH LAW AND OTHER INSTRUMENTS. TriZetto and the
TriZetto Subsidiaries hold all licenses, permits and authorizations necessary
for the lawful conduct of its business as now being conducted pursuant to all
applicable statutes, laws, ordinances, rules and regulations of all governmental
bodies, agencies and other authorities having jurisdiction over it or any part
of its respective operations, and there are no violations or claimed violations
by TriZetto of any such license, permit or authorization or any such statute,
law, ordinance, rule or regulation.
4.6 CAPITALIZATION.
(a) The authorized capital stock of TriZetto consists of
40,000,000 shares of TriZetto common stock (the "TriZetto Common Stock") and
5,000,000 shares of TriZetto preferred stock (the "TriZetto Preferred Stock").
As of October 31, 1999, there were outstanding (i) 20,309,014 shares of TriZetto
Common Stock, (ii) zero shares of TriZetto Preferred Stock, (iii) employee stock
options to purchase an aggregate of 2,962,168 shares of TriZetto Common Stock,
(iv) warrants to purchase an aggregate of zero shares of TriZetto Common Stock,
and (v) an aggregate of zero shares of TriZetto Common Stock issued or relating
to restricted stock awards, or
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other stock based compensation arrangements. 4,600,000 shares of TriZetto Common
Stock have been reserved for issuance pursuant to TriZetto's employee stock
purchase plan and TriZetto's stock option plan.
(b) All outstanding shares of capital stock of TriZetto have
been duly authorized and validly issued and are fully paid and nonassessable.
Except as set forth in this Section 4.6, and except for changes since October
31, 1999, resulting from the exercise of stock options outstanding on such date,
there are no outstanding (i) shares of capital stock or other voting securities
of TriZetto, (ii) securities of TriZetto convertible into or exchangeable for
shares of capital stock or voting securities of TriZetto, or (iii) options,
restricted stock, other stock-based compensation awards or other rights to
acquire from TriZetto, or other obligation of TriZetto to issue, any capital
stock, voting securities or securities convertible into or exchangeable for
capital stock or voting securities of TriZetto. There are no outstanding
obligations of TriZetto or its Subsidiaries to repurchase, redeem or otherwise
acquire any securities referred to in clauses (i), (ii) or (iii) above.
(c) As of the date hereof, there are no outstanding bonds,
debentures, notes or other indebtedness of TriZetto having the right to vote (or
convertible into or exercisable for TriZetto Stock having the right to vote) on
any matters on which the TriZetto stockholders may vote.
4.7 SEC FILINGS OF TRIZETTO. TriZetto has furnished Xxxxxxx and the
Xxxxxxx Securityholders copies of the reports and other documents (excluding
exhibits) of TriZetto filed with the Securities and Exchange Commission (the
"SEC") set forth in Section 6.1 ("SEC Filings"). Said reports and other
documents (excluding exhibits) are accurate and complete in all material
respects and do not omit any material information required to be set forth
therein. TriZetto has timely filed with the SEC all reports and other documents
(excluding exhibits) required to be filed by it since its initial public
offering in October 1999.
4.8 TRIZETTO FINANCIAL STATEMENTS. The unaudited consolidated
financial statements for its third quarter ended September 30, 1999 are complete
and correct in all material respects in accordance with the books and records of
TriZetto, and present fairly the financial position of TriZetto, at the dates
indicated and the results of its operations and the changes in stockholders
equity for the period then ended, in accordance with generally accepted
accounting principles, consistently applied.
4.9 ABSENCE OF CERTAIN CHANGES. Since September 30, 1999, there has
been no change in the business or financial condition of TriZetto, except as set
forth in the SEC Filings and changes in the ordinary course of business that in
the aggregate have not been materially adverse to TriZetto. To the knowledge of
TriZetto, except as set forth in the SEC Filings, there are no new developments
in any business conducted by TriZetto, nor any new or improved technologies,
products, processes or services useful in connection with the business of
TriZetto or its customers, which can reasonably be expected to have a Material
Adverse Affect on TriZetto.
4.10 LITIGATION. There is no action, suit, investigation, audit or
proceeding pending against, threatened against or affecting, TriZetto, its
officers or directors, the TriZetto Subsidiaries or any of their respective
properties before any court or arbitrator or any governmental body, agency or
official which, would, individually or in the aggregate, have a Material Adverse
Effect on TriZetto. Neither TriZetto, the TriZetto Subsidiaries or any of their
respective properties, nor to the knowledge of TriZetto, any of its officers or
directors is subject to any order, writ, judgment, decree or injunction of any
court or arbitrator or any governmental body, agency or official.
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4.11 BANKING AND FINDERS' FEES. There is and will be no investment
banker, broker, finder or other intermediary retained by or authorized to act on
behalf of TriZetto or any of the TriZetto Subsidiaries who might be entitled to
any fee or commission from Xxxxxxx or any of the TriZetto Subsidiaries upon
consummation of the transactions contemplated by this Agreement.
4.12 FULL DISCLOSURE. All of the representations and warranties made
by TriZetto in this Agreement, and all statements set forth in the certificates
delivered by TriZetto at the Closing pursuant to this Agreement, are true,
correct and complete in all material respects and do not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make such representations, warranties or statements, in light of the
circumstances under which they were made, misleading.
ARTICLE 5
COVENANTS OF XXXXXXX AND THE XXXXXXX SECURITYHOLDERS
5.1 CONDUCT OF BUSINESS. Xxxxxxx agrees that from the date hereof
until the Closing Date, except with the prior written consent of TriZetto, as
set forth in the Xxxxxxx Disclosure Schedule or as contemplated by this
Agreement, prior to the Closing Date, (a) Xxxxxxx and the Xxxxxxx Subsidiaries,
shall conduct their businesses in the ordinary course consistent with past
practice and shall use their reasonable best efforts to preserve intact their
business organizations and keep available the services of their current officers
and employees and preserve their relationships with third parties and (b)
without limiting the generality of the foregoing, and subject to the exceptions
set forth in the preceding clause, Xxxxxxx and the Xxxxxxx Subsidiaries will
not, except as necessary to facilitate the transaction contemplated by this
Agreement:
(a) (i) declare, set aside or pay any dividends on, or make
any other distributions (whether in cash, stock or property) in respect of, any
of its capital stock, other than dividends and distributions by any direct or
indirect subsidiary of Xxxxxxx, (ii) adjust, split, combine or reclassify any of
its capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock or
(iii) purchase, redeem or otherwise acquire any shares of capital stock of
Xxxxxxx or any of the Xxxxxxx Subsidiaries or any other securities thereof or
any rights, warrants or options to acquire any such shares or other securities
(other than in connection with the exercise of Xxxxxxx Options in accordance
with the terms thereof as in effect on the date hereof or as contemplated by
Section 2.3 hereof);
(b) issue, deliver, sell, pledge or otherwise encumber any
shares of its capital stock, any other voting securities or any securities
convertible into, or any rights, warrants or options, including Xxxxxxx Options,
to acquire, any such shares, voting securities or convertible securities (other
than the issuance of Xxxxxxx Stock upon the exercise of Xxxxxxx Options
outstanding as of the date hereof);
(c) amend their Certificate of Incorporation, Bylaws or
other comparable charter or organizational documents;
(d) sell, lease, license, transfer or otherwise dispose of,
any material properties or assets except (i) pursuant to existing contracts or
commitments, or (ii) in the ordinary course consistent with past practices;
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(e) amend, modify or waive any material term of any
outstanding security of Xxxxxxx or the Xxxxxxx Subsidiaries;
(f) incur, assume, guarantee or become obligated with
respect to any indebtedness other than drawings on existing revolving credit
facilities listed in the Xxxxxxx Disclosure Schedule, or otherwise in the
ordinary course of business, consistent with past practice, or incur, assume,
guarantee or become obligated with respect to any other material obligations
other than in the ordinary course of business and consistent with past practice;
(g) make or agree to make any new capital expenditures or
acquisitions of assets or property or other acquisitions or commitments in
excess of $50,000 individually or $50,000 in the aggregate or otherwise acquire
or agree to acquire any material assets or property;
(h) (i) grant to any current or former director, officer or
employee of Xxxxxxx or any of Xxxxxxx Subsidiaries any material increase in
compensation or benefits, except for cost of living raises in the ordinary
course of business, and except for employees who are not officers or directors
in the ordinary course of business consistent with past practice, (ii) grant to
any such director, officer, or employee any increase in severance or termination
pay (including the acceleration in the exercisability of Options or in the
vesting of shares of Xxxxxxx Stock (or other property) except for acceleration
in accordance with the terms of the Option Plan as contemplated by Section 5.5
hereof, or (iii) enter into any employment, deferred compensation, severance or
termination agreement or arrangement with or for the benefit of any such current
or former director, officer, or employee;
(i) will not knowingly take any actions that would make any
representation and warranty of Xxxxxxx or the Xxxxxxx Subsidiaries hereunder
inaccurate in any material respect at the Closing Date; or
(j) authorize any of, or commit or agree to take any of, the
foregoing actions.
5.2 NO SOLICITATION. Xxxxxxx shall not, directly or indirectly,
through any officer, director, employee, representative or agent of Xxxxxxx or
any of the Xxxxxxx Subsidiaries, (i) solicit, initiate or encourage the
initiation of any inquiries or proposals regarding any merger, sale of
substantial assets, sale of shares of capital stock (including without
limitation by way of a tender offer) or similar transactions involving Xxxxxxx
or any Xxxxxxx Subsidiaries other than the transaction contemplated herein (any
of the foregoing inquiries or proposals being referred to herein as an
"Acquisition Proposal") except to the extent Xxxxxxx determines it is advisable
to engage in discussions in order to resolve the matters referred to in the
Supplement to Xxxxxxx Disclosure Schedule or (ii) agree to approve or recommend
any Acquisition Proposal, except as otherwise required by a director or officer
of Xxxxxxx in the exercise of his fiduciary duty.
5.3 PAYMENT OF BONUS. The Xxxxxxx Securityholders (excluding Xxxxxxx
X. Xxxxxxx and Xxxxxx X. Xxxxx) agree to pay (on a pro rata basis according to
the percentages set forth on Exhibit B) a bonus to Xxxxxxx X. Xxxxxxx in the
amount of $200,000 solely out of the proceeds of their future sale of the
TriZetto Stock in accordance with this Agreement and the Transaction Documents,
which sale for such purpose shall occur no later than 30 days after the
effectiveness of the registration statement contemplated under Section 6.4(g) of
this Agreement, and Xxxxxxx X. Xxxxxxx hereby agrees upon the Closing to release
and discharge Xxxxxxx from any obligation with respect to such bonus.
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5.4 PAYMENT OF BROADVIEW FEE. The Xxxxxxx Securityholders (excluding
Xxxxxxx X. Xxxxxxx and Xxxxxx X. Xxxxx) agree to pay (on a pro rata basis
according to the percentages set forth on Exhibit B) Broadview International,
L.L.C. ("Broadview") an investment banking fee in the amount of $465,000 out of
the proceeds of their future sale of the TriZetto Stock, in accordance with this
Agreement and the Transaction Documents which sale for such purpose shall occur
no later than 30 days after the effectiveness of the registration statement
contemplated under Section 6.4(g) of this Agreement, and the Xxxxxxx
Securityholders shall secure an agreement from Broadview as of the Closing,
releasing and discharging Xxxxxxx from any obligation to pay such fee.
5.5 TERMINATION OF THE XXXXXXX 1995 STOCK OPTION PLAN. Xxxxxxx and
the Xxxxxxx Securityholders acknowledge and agree that the transactions
contemplated by this Agreement will, with the giving of the required notice
(which shall be given by Xxxxxxx no later than one business day prior to the
Closing), automatically cause all of the outstanding Options, whether or not
previously exercisable under the terms of the Option Plan, to become exercisable
and that all of the holders of the outstanding Options shall have the right to
exercise such Options prior to the Closing. Xxxxxxx agrees to cause all
unexercised Options to be terminated prior to the Closing.
5.6 TAX BASIS. The Xxxxxxx Securityholders (to the extent such
information is in their possession) shall cooperate with Xxxxxxx and TriZetto,
as necessary, to prepare the following information with respect to each of
Xxxxxxx and the Xxxxxxx Subsidiaries (or, in the case of clause (ii) below, with
respect to each of the Xxxxxxx Subsidiaries) as of the most recent practicable
date (as well as on an estimated pro forma basis as of the Closing Date giving
effect to the consummation of the transactions contemplated hereby): (i) the
basis of Xxxxxxx or the Xxxxxxx Subsidiaries in its assets; (ii) the basis of
the stockholder(s) of the Xxxxxxx Subsidiaries in its stock (or the amount of
any excess loss account within the meaning of Treasury Regulation Section
1.1562-19); (iii) the amount of any net operating loss, net capital loss, unused
investment or other credit, unused foreign tax, or excess charitable
contribution allocable to Xxxxxxx or the Xxxxxxx Subsidiaries; and (iv) the
amount of any deferred gain or loss allocable to Xxxxxxx or the Xxxxxxx
Subsidiaries arising out of any deferred intercompany transaction.
ARTICLE 6
COVENANTS OF TRIZETTO
6.1 SEC FILINGS. TriZetto will, at least three business days prior
to the Closing, provide Xxxxxxx and each Xxxxxxx Securityholder (by federal
express or other overnight service at the address set forth on Appendix B) with
its prospectus dated October 7, 1999 and all Form 10-Q's and Form 8-K's and all
other items filed by TriZetto under Sections 13(a), 14(a) and (c) and 15(d) of
the 1934 Act since the date of such prospectus.
6.2 EMPLOYEE BENEFIT PLANS. As soon as practicable after the
Closing, TriZetto shall cause Xxxxxxx to terminate all of its Employee Benefit
Plans in accordance with their terms but without any liability to Xxxxxxx or
TriZetto except as required in accordance with applicable law. Concurrently
therewith, TriZetto shall provide, to each person employed after the Closing by
TriZetto or Xxxxxxx, employee benefit plans under which such persons shall
receive benefits comparable to those offered to TriZetto employees.
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6.3 INDEMNIFICATION, DIRECTORS' AND OFFICERS' LIABILITY.
(a) From and after the Closing Date, TriZetto shall cause
Xxxxxxx and the Xxxxxxx Subsidiaries to continue to indemnify, defend and hold
harmless to the fullest extent permitted by law and provided under the Xxxxxxx
certificate of incorporation (or other incorporation documents) and bylaws as in
effect on the date of this Agreement, and Xxxxxxx and the Xxxxxxx Subsidiaries
shall continue to indemnify, defend and hold harmless to the fullest extent
permitted under applicable law and provided under the respective Xxxxxxx and the
Xxxxxxx Subsidiaries' certificates of incorporation (or other incorporation
documents) and bylaws as in effect on the date of this Agreement each person who
is now, or has been at any time prior to the date hereof, an officer or director
of Xxxxxxx or any Xxxxxxx Subsidiary, as the case may be (individually, an
"Indemnified Party" and collectively, the "Indemnified Parties").
(b) TriZetto shall cause Xxxxxxx to keep in effect
provisions in its and each Xxxxxxx Subsidiaries' certificate of incorporation or
other governing instruments with respect to indemnification identical in all
material respects to such provisions contained in the certificate of
incorporation and bylaws of Xxxxxxx and the Xxxxxxx Subsidiaries, as the case
may be, as of the date of this Agreement, which provisions or express assumption
shall not be amended, repealed or otherwise modified for a period of four years
from the Closing Date in any manner that would adversely affect the rights
thereunder of individuals who at any time prior to the Closing Date were
directors or officers of Xxxxxxx or any Xxxxxxx Subsidiary in respect of actions
or omissions at or prior to the Closing Date (including, without limitation, the
transactions contemplated by this Agreement), except as required by applicable
law or except to make changes permitted by law that would not materially
diminish the Indemnified Parties' right of indemnification hereunder, except (i)
with the prior written consent of the Indemnified Parties which shall not be
unreasonably withheld, or (2) if TriZetto or its successor assumes the
indemnification obligations of Xxxxxxx or the Xxxxxxx Subsidiaries.
(c) For a period of four years after the Closing Date,
Xxxxxxx and the Xxxxxxx Subsidiaries shall cause to be maintained in effect the
current officers' and directors' liability insurance maintained by Xxxxxxx and
the Xxxxxxx Subsidiaries with respect to those persons who are currently covered
by Xxxxxxx' and the Xxxxxxx Subsidiaries' directors' and officers' liability
insurance policy (provided that Xxxxxxx and the Xxxxxxx Subsidiaries may
substitute therefore policies of at least the same coverage and amounts
containing terms and conditions which are no less advantageous in all material
respects to such persons than such existing insurance) covering acts or
omissions occurring prior to the Closing Date; provided, however, that Xxxxxxx
and the Xxxxxxx Subsidiaries shall not be required in order to maintain or
procure such coverage to pay an annual premium in excess of 150% of the current
annual premium paid by Xxxxxxx and the Xxxxxxx Subsidiaries for its existing
coverage (the "Cap"); and provided, further, that if existing coverage cannot be
maintained or equivalent coverage cannot be obtained, or can be obtained only by
paying an annual premium in excess of the Cap, Xxxxxxx and the Xxxxxxx
Subsidiaries shall only be required to obtain as much coverage as can be
obtained by paying an annual premium equal to the Cap in accordance with the
terms and provisions that can be so obtained.
(d) This Section 6.3 shall survive the Closing, is intended
to benefit the officers and directors of Xxxxxxx and the Xxxxxxx Subsidiaries at
the Closing Date and each of the Indemnified Parties and their respective heirs
and personal representatives (each of whom shall be entitled to enforce this
Section 6.3 against TriZetto as a third-party beneficiary of this Agreement),
and shall be binding on all successors and assigns of TriZetto.
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6.4 REGISTRATION STATEMENT. TriZetto shall use its commercially
reasonable best efforts to qualify for registration on Form S-3 or, if Form S-3
is not available, then on Form S-1 or such other available form, subject to the
availability of audited consolidated financial statements of Xxxxxxx and the
Xxxxxxx Subsidiaries. Without any request necessary from the Xxxxxxx
Securityholders, TriZetto shall file a registration statement covering the
shares of TriZetto Stock issued pursuant to Section 1.1(d)(iii)-(iv) and Section
1.1(e) hereunder, on or before October 8, 2000. TriZetto shall use its
commercially reasonable best efforts to have such registration statement
declared effective prior to the one-year anniversary of the date hereof.
6.5 NASDAQ ADDITIONAL LISTING APPLICATION. TriZetto shall file an
Additional Listing Application covering the shares of TriZetto Stock issuable to
the Xxxxxxx Securityholders pursuant to this Agreement within one business day
after the Closing. TriZetto shall use its commercially reasonable best efforts
to have such shares approved for listing on the Nasdaq National Market. In the
event that additional shares of TriZetto common stock are issued pursuant to
Section 1.1(e) hereof, TriZetto shall use its commercially reasonable best
efforts to have such Adjusted Shares listed on the NMS.
6.6 COMPLETION OF AUDIT. TriZetto shall use its commercially
reasonable best efforts to complete the financial audit of the financial books
and records of Xxxxxxx and the Xxxxxxx Subsidiaries for the fiscal years ending
December 31, 1997, 1998 and 1999 as soon as practicable.
ARTICLE 7
COVENANTS OF TRIZETTO AND XXXXXXX
7.1 ACCESS TO INFORMATION; CONFIDENTIALITY. Upon reasonable notice
and subject to restrictions contained in confidentiality agreements to which
such party is subject, Xxxxxxx and TriZetto shall each (and shall cause each of
their subsidiaries to) afford to the officers, employees, accountants, counsel
and other representatives of the other, reasonable access, during the period
prior to the Closing, to all its properties, books, contracts, commitments and
records and, during such period, Xxxxxxx and TriZetto each shall (and shall
cause each of their Subsidiaries to) furnish promptly to the other all
information concerning its business, properties and personnel as such other
party may reasonably request, and each shall make available to the other the
appropriate individuals (including attorneys, accountants and other
professionals) for discussions of the other's business, properties and personnel
as either TriZetto or Xxxxxxx may reasonably request.
7.2 CONSENTS; APPROVALS. Prior to the Closing, each of Xxxxxxx and
TriZetto shall use its reasonable best efforts to obtain all consents, waivers,
approvals, authorizations or orders necessary (including, without limitation,
all governmental and regulatory rulings and approvals), such that the
transaction contemplated herein will not constitute a default (or an event which
with notice or lapse of time or both would become a default) under any material
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which it or any of its subsidiaries is a party. Xxxxxxx and
TriZetto shall make all filings (including, without limitation, all filings with
the governmental or regulatory agencies) required in connection with the
authorization, execution and delivery of this Agreement by Xxxxxxx and TriZetto
and the consummation by them of the transactions contemplated hereby.
7.3 NOTICES OF CERTAIN EVENTS. Xxxxxxx and TriZetto shall promptly
notify the other party of:
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(a) any notice or other communication from any Person
alleging that the consent of such Person is or may be required in connection
with the transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental
or regulatory agency in connection with the transactions contemplated by this
Agreement; and
(c) any actions, suits, claims, investigations or
proceedings commenced or, to its knowledge, threatened against, relating to or
involving or otherwise affecting such party that, if pending on the date of this
Agreement, would have been required to be disclosed pursuant to Article 2,
Article 3 or Article 4 or that relate to the consummation of the transactions
contemplated by this Agreement.
7.4 FURTHER ACTION. Upon the terms and subject to the conditions
hereof, each of the parties hereto shall use all reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, all other things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, to obtain in a
timely manner all necessary waivers, consents and approvals and to effect all
necessary registrations and filings, and otherwise to satisfy or cause to be
satisfied all conditions precedent to its obligations under this Agreement.
7.5 PUBLIC ANNOUNCEMENTS. TriZetto and Xxxxxxx shall consult with
each other before issuing any press release with respect to the transaction
contemplated herein or this Agreement, and except as may be required by
applicable law, will not issue any such press release or make any such public
statement without the prior written consent of the other party.
7.6 TRANSFER TAXES. TriZetto and Xxxxxxx shall cooperate in the
preparation, execution and filing of all returns, questionnaires, applications
or other documents regarding transfer, stock transfer and stamp taxes, and any
similar taxes which become payable in connection with the transactions
contemplated hereby that are required or permitted to be filed on or before the
Closing Date. TriZetto and the Xxxxxxx Securityholders agree that the Xxxxxxx
Securityholders will pay transfer tax, stamp tax, stock transfer tax, or other
similar tax imposed on the sale of the Xxxxxxx Stock (collectively, "Transfer
Taxes"), and any penalties or interest with respect to the Transfer Taxes. The
Xxxxxxx Securityholders agree to cooperate with TriZetto in the filing of any
returns with respect to the Transfer Taxes.
ARTICLE 8
OFFSET AND INDEMNIFICATION RIGHTS
8.1 TRIZETTO'S OFFSET RIGHTS.
(a) From and after the Closing Date, TriZetto shall have a
right of offset against the Escrow Shares for TriZetto's Recoverable Losses (as
defined in Section 8.1(b)) in the manner and to the extent set forth in this
Section 8.1.
(b) The term "TriZetto's Recoverable Losses" shall include
all losses, costs, expenses (including reasonable attorneys' fees and expenses
and other costs and expenses incident to any suit, action, investigation, claim
or proceeding), fees, claims, liabilities and damages (which shall
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in no event include punitive damages awarded against TriZetto or consequential
damages suffered or incurred by TriZetto or any losses, costs, expenses, fees,
claims, liabilities or damages which are covered by insurance) incurred by
TriZetto arising from (i) a breach of any representation or warranty contained
in Articles 2 or 3 hereof or (ii) a breach of any agreement or covenant of
Xxxxxxx or the Xxxxxxx Securityholders under or pursuant to this Agreement (in
each case, a "TriZetto Claim"); provided, however, that (A) TriZetto shall not
be entitled to any offset for any TriZetto's Recoverable Losses unless all
claims for TriZetto's Recoverable Losses exceed in the aggregate $100,000, in
which event TriZetto may only offset TriZetto's Recoverable Losses in excess of
$50,000; (B) the threshold set forth in clause (A) of this Section 8.1(b) shall
not apply to any TriZetto Claims resulting from a breach of any representation
or warranty set forth in Sections 2.3 and 2.4 hereof; and (C) TriZetto's maximum
aggregate offset right for TriZetto's Recoverable Losses shall be limited to
Escrow Shares having a maximum value of $3,000,000 (which, for purposes of
resolving claims arising under this Article 8, shall be valued in the manner set
forth in Section 8.3 below), and the liability of each Xxxxxxx Securityholder
shall be limited to such holder's pro rata share of the Escrow Shares, as set
forth in Exhibit A to the Offset Escrow Agreement. TriZetto's right to offset
TriZetto Recoverable Losses against the Escrow Shares shall survive the Closing
until 11:59 p.m. (Washington, D.C. time) on the one year anniversary of the
Closing Date (the "Claims Period"); provided, however, that any Claim for offset
by TriZetto must be made by TriZetto, if at all, by giving the Representative a
written Claim Notice (as defined in Section 8.3) during the Claims Period.
8.2 XXXXXXX SECURITYHOLDERS' INDEMNIFICATION RIGHTS.
(a) From and after the Closing Date, TriZetto will indemnify
and hold harmless each Xxxxxxx Securityholder and its officers, directors,
employees, agents, heirs, personal representatives, successors and assigns from
any and all Xxxxxxx Securityholders' Recoverable Losses (as defined in Section
8.2(b)) in the manner and to the extent set forth in this Section 8.2.
(b) The term "Xxxxxxx Securityholders' Recoverable Losses"
shall include all losses, costs, expenses (including reasonable attorney's fees
and expenses and other costs and expenses incident to any suit, action,
investigation, claim or proceeding), fees, claims, liabilities and damages
(which shall in no event include punitive damages awarded against the Xxxxxxx
Securityholders or consequential damages suffered or incurred by any of the
Xxxxxxx Securityholders or any losses, costs, expenses, fees, claims,
liabilities or damages which are covered by insurance) incurred by the Xxxxxxx
Securityholders arising from (i) a breach by TriZetto of any representation or
warranty contained in Article 4 hereof; or (ii) a breach of any agreement or
covenant of TriZetto under or pursuant to this Agreement (the circumstances in
each of (i) and (ii) in this Section 8.2(b) being referred to herein as a
"Xxxxxxx Securityholders Claim"); provided, however, that (A) TriZetto's
indemnification obligations hereunder shall survive for the Claims Period; (B)
the Xxxxxxx Securityholders' indemnification rights shall only apply to Xxxxxxx
Securityholders' Claims made or asserted during the Claims Period; and (C) any
claims for indemnification must be made by the Xxxxxxx Securityholders by giving
TriZetto a written Claim Notice during the survival period with respect to such
claim. TriZetto's liability hereunder shall be limited to $1,000,000; provided,
however, that (1) this dollar limit shall not apply to Xxxxxxx Securityholders
Claims for failure by TriZetto to perform or comply with its obligations
pursuant to Section 1.1, its covenants pursuant to Section 5.5, Articles 6, 7
and 8, Sections 10.2 and 10.3 or Article 11 of this Agreement or its covenants
in the Transaction Documents and (2) the Claims Period or survival period for
the matters covered by clause (1) in this proviso shall be one year from the
Closing Date, except for Section 6.3 which shall survive for four years.
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8.3 CLAIMS FOR OFFSET RIGHTS AND INDEMNIFICATION; DISPUTES.
(a) CLAIMS FOR OFFSET RIGHTS AND INDEMNIFICATION. Any person
entitled to offset rights or indemnification hereunder (individually or with
others, collectively, the "Claimant") shall give the Xxxxxxx Securityholders or
TriZetto, as the case may, written notice (the "Claim Notice") of any claim
(including the receipt of any demand) or the commencement of any action with
respect to which offset rights or indemnity, as applicable, may be sought by the
Claimant (individually, a "Claim" and collectively, the "Claims"); provided,
however, that if the Claimant fails to give such Claim Notice prior to the
expiration of the applicable survival period, all rights of the Claimant to
assert any such Claims shall terminate and be forever waived. The Claim Notice
shall state (i) the aggregate amount of TriZetto's Recoverable Losses or the
Xxxxxxx Securityholders' Recoverable Losses (in either case, "Recoverable
Losses") as to which offset rights or indemnification, as applicable, are being
sought (which amount may be estimated and updated from time to time); (ii) the
components of the amount of Recoverable Losses for which offset rights or
indemnification, as applicable, are being sought (which components may be
estimated and updated from time to time); and (iii) the specific grounds upon
which the Claim for offset rights or indemnification, as applicable, is being
made. The right of the Claimant to offset rights or indemnification, as
applicable, for a Claim shall be deemed to be accepted by the party against whom
a Claim is asserted unless, within 30 days after such party's receipt of the
Claim Notice, the party against whom a Claim is asserted notifies the Claimant
in writing that it objects in whole or in part to the right of the Claimant to
offset rights or indemnification, as applicable, with respect to the Claim.
(b) CONTROL OF LITIGATION; MUTUAL COOPERATION. If a Claim is
based upon a claim asserted by a third party against the Claimant (a "Third
Party Claim") and the party against whom a Claim is asserted (the "Defending
Party") objects to the right of the Claimant to offset rights or
indemnification, as applicable, with respect to the Claim, the Claimant shall be
entitled to control the defense of the Third Party Claim, including, without
limitation, the employment of counsel reasonably acceptable to the Defending
Party and the right to settle the Third Party Claim with the consent of the
Defending Party, which shall not to be unreasonably withheld or delayed. All
reasonable fees and expenses of counsel retained by the Claimant to defend such
Third Party Claim, expert witness fees and other costs incurred in such action,
shall be payable by the Claimant defending such Third Party Claim; provided,
however, that if such Third Party Claim results in a Recoverable Loss for which
the party against whom a Claim is asserted, notwithstanding any denial of
liability, is found to be liable hereunder, such reasonable fees and expenses of
counsel, expert witness fees and other reasonable costs incurred in such action
shall be deemed to be included in such Recoverable Loss and subject to offset
rights or indemnification, as applicable, by the party against whom the Claim is
asserted to the extent and under the limitations provided in this Article 8. If
the party against whom the Claim is asserted does not object to the right of the
Claimant to offset rights or indemnification, as applicable, with respect to the
Claim, such party shall be entitled, in his, her or its discretion, to assume
the defense of the Third Party Claim, including, without limitation, the
employment of counsel reasonably satisfactory to the Claimant, which consent
shall not be unreasonably withheld. If the party against whom the Claim is
asserted does not object to the right of the Claimant to offset rights or
indemnification, as applicable, with respect to the Claim, but does not elect to
assume the defense of the Third Party Claim, the Claimant shall be entitled to
assume the defense of the Third Party Claim. Regardless of which party is
controlling the defense of the Third Party Claim for which the party against
whom the Claim is asserted admits liability hereunder, (i) such party and the
Claimant shall act in good faith; (ii) no settlement of the Third Party Claim
may be agreed to without the written consents of such party and the Claimant,
which consents shall not be unreasonably withheld or delayed; (iii) the
reasonable fees and expenses of counsel retained to
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defend the Third Party Claim, expert witness fees and other costs incurred in
such action shall be deemed to be included in such Recoverable Losses and shall
be offset or indemnified, as applicable, by the party against whom the Claim is
asserted to the extent and under the limitations provided in this Article 8; and
(iv) the party controlling the defense of the Third Party Claim shall deliver,
or cause to be delivered, to the other party copies of all correspondence,
pleading, motions, briefs, appeals or other written statements relating to or
submitted in connection with the defense of the Third Party Claim, and timely
notices of, and the right to participate in (as an observer and at their own
expense), any hearing or other court proceeding relating to the Third Party
Claim.
(c) RESOLUTION OF DISPUTES; VALUE OF ESCROW SHARES FOR
CLAIMS PURPOSES. The Claimant and the party against whom a Claim is asserted
shall undertake in good faith to or to have their representatives promptly meet
and attempt to resolve all disputes regarding offset rights or indemnification,
as applicable. If the Claimant and the party against whom the Claim is asserted
are unable to resolve such disputes within 30 days after the Claim Notice, the
resolution of the disputes shall be referred to and settled by arbitration in
accordance with Section 11.12 hereof. A Claim under this Agreement shall be
"Resolved" if (a) the parties mutually agree on the resolution of such Claim or
(b) the Claim is settled in accordance with Section 11.12. All TriZetto Claims
under this Agreement and any other TriZetto claims pursuant to Subsection B.(ii)
and Subsection C of the Supplement to Xxxxxxx Disclosure Schedule will be held
until the Adjustment Date. For purposes of the payment of any TriZetto Claims
under this Article or any other TriZetto claims under Subsection B.(ii) and
Subsection C of the Supplement to Xxxxxxx Disclosure Schedule which are Resolved
in TriZetto's favor, the assumed value of the Escrow Shares for such purposes
shall be equal, on a per share basis, to the average closing sales price of the
TriZetto Stock as reported on the NMS (or other exchange or similar market on
which the TriZetto Stock is regularly traded if not then traded on NMS) for the
20 trading days preceding the Adjustment Date.
8.4 EXCLUSIVE REMEDY. Each of the parties hereto acknowledges and
agrees that, from and after the Closing Date, its sole and exclusive monetary
remedy with respect to any and all claims relating to the subject matter of this
Agreement shall be pursuant to the offset or indemnification provisions, as the
case may be, set forth in this Article 8 and Subsection B.(ii) and Subsection C
of the Supplement to Xxxxxxx Disclosure Schedule, except that nothing in this
Agreement shall be deemed to constitute a waiver of any injunctive or other
equitable remedies or any tort claims of, or causes of action arising from,
intentionally fraudulent misrepresentation or deceit.
ARTICLE 9
CONDITIONS TO CLOSING
9.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE TRANSACTION
CONTEMPLATED HEREIN. The respective obligations of TriZetto and Xxxxxxx to
consummate the transactions contemplated herein are subject to the satisfaction
at or prior to the Closing of the following conditions:
(a) NO INJUNCTIONS. No temporary restraining order,
preliminary or permanent injunction issued by any court of competent
jurisdiction preventing the consummation of the transactions contemplated herein
shall be in effect; and
9.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF TRIZETTO. The
obligations of TriZetto to purchase and pay for the Xxxxxxx Stock are also
subject to the following conditions:
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(a) CONSENTS OBTAINED. All consents, waivers, approvals,
authorizations or orders required to be obtained, and all filings required to be
made, by Xxxxxxx for the authorization, execution and delivery of this Agreement
and the consummation by it of the transactions contemplated hereby shall have
been obtained and made by Xxxxxxx, or waived by TriZetto;
(b) ESCROW AGREEMENTS. The Warrant Escrow Agreement and the
Offset Escrow Agreement in the form of Exhibit D and Exhibit E shall have been
entered into by TriZetto and each of the Xxxxxxx Securityholders;
(c) NON-COMPETITION AGREEMENT. The Non-Competition Agreement
in the form of Exhibit G shall have been entered into by TriZetto and Xxxxxxx X.
Xxxxxxx;
(d) OPINION OF COUNSEL. TriZetto shall have received the
opinion of Xxxxx & Xxxxxxx, LLP counsel to Xxxxxxx, dated as of the Closing, in
the form attached hereto as Exhibit H;
(e) EMPLOYMENT AGREEMENT. TriZetto shall have offered
employment to Xxxxxxx X. Xxxxxxx on mutually acceptable terms and Xxxxxxx X.
Xxxxxxx shall have accepted such employment effective as of the Closing;
(f) REGISTRATION RIGHTS AGREEMENT. The Registration Rights
Agreement in the form attached hereto as Exhibit I shall have been entered into
by TriZetto and each of the Xxxxxxx Securityholders;
(g) PROMISSORY NOTE AND STOCK PLEDGE AGREEMENTS. The
Promissory Note in the form attached hereto as Exhibit J ("Promissory Note") and
the Stock Pledge Agreement in the form attached hereto as Exhibit K ("Stock
Pledge Agreement") shall have been entered into by Xxxxxxx and each of the
Xxxxxxx Securityholders;
(h) WARRANT. The Warrant and Warrant Assignment in the form
attached hereto as Exhibit F shall have been entered into by TriZetto and the
Xxxxxxx Securityholders or their assigns;
(i) CONVERSION OF NOTES. The 1995 Notes and the 1999 Notes
shall have been converted into shares of Series C Stock in accordance with
Appendix A, and such shares shall be included in the purchase and sale of the
Xxxxxxx Stock hereunder and the 1995 Notes and 1999 Notes shall be stamped
cancelled and delivered to TriZetto at the Closing;
(j) RESIGNATIONS. At the Closing, Xxxxxxx shall cause to be
delivered to TriZetto duly signed resignations, effective immediately after the
Closing, of all directors and officers of Xxxxxxx and the Xxxxxxx Subsidiaries
(other than those directors and officers designated in writing by TriZetto to
Xxxxxxx at least one day before the Closing Date), or shall take such other
action as is necessary to assure that such persons are not directors or officers
of Xxxxxxx or the Xxxxxxx Subsidiaries after the Closing; and
(k) XXXXXXX SHARES. Concurrent with the Closing, the Xxxxxxx
Securityholders receiving TriZetto Stock at the Closing shall agree to transfer
to Xxxxxxx X. Xxxxxxx on the one-year anniversary of the Closing Date, (i) 6% of
the shares of TriZetto Stock received by them at Closing, (ii) 6% of the shares
of TriZetto Stock placed in escrow and releasable to such Xxxxxxx
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Securityholders under the Offset Escrow Agreement, and (iii) 6% of the shares of
TriZetto Stock issued at the Adjustment Shares Closing.
(l) STOCK PURCHASE AGREEMENT. All of the holders of the
issued and outstanding Xxxxxxx Stock shall have entered into this Agreement.
(m) CERTAIN REGULATORY MATTERS. At or prior to the Closing,
Xxxxxxx shall deliver either (i) correspondence from the Maryland Insurance
Commissioner either approving the purchase and sale of Xxxxxxx Stock or
indicating that no such approval is necessary, or (ii) a letter from Xxxx Xxxxx,
special counsel to PHN, satisfactory in form and substance to TriZetto regarding
such matters.
(n) XXXXXXX STOCK OPTIONS. All issued and outstanding
Options under the Xxxxxxx 1995 Stock Option Plan shall be terminated prior to
the Closing.
9.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF XXXXXXX. The obligation
of Xxxxxxx to sell and deliver the Xxxxxxx Stock is also subject to the
following conditions:
(a) CONSENTS OBTAINED. All material consents, waivers,
approvals, authorizations or orders required to be obtained, and all filings
required to be made, by TriZetto for the authorization, execution and delivery
of this Agreement and the consummation by them of the transactions contemplated
hereby shall have been obtained and made by TriZetto, except where the failure
to receive such consents, etc. would not reasonably be expected to have a
Material Adverse Effect on TriZetto; and
(b) OPINION OF COUNSEL. Xxxxxxx shall have received the
opinion of Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx, counsel to TriZetto, dated as of the
Closing Date, in the form attached hereto as Exhibit L.
ARTICLE 10
TERMINATION
10.1 TERMINATION. Notwithstanding anything contained in this
Agreement to the contrary, this Agreement may be terminated at any time prior to
the Closing, (notwithstanding any approval of this Agreement by the board of
directors of TriZetto or Xxxxxxx or Xxxxxxx' Stockholders):
(a) by mutual written agreement duly authorized by the board
of directors of TriZetto and Xxxxxxx;
(b) by the board of directors of TriZetto, if any condition
to the obligation of TriZetto under this Agreement to be complied with or
performed by Xxxxxxx at or before the Closing shall not have been complied with
or performed at the time required for such compliance or performance, and such
noncompliance or nonperformance shall not have been waived by TriZetto or cured
by Xxxxxxx within 10 days of such noncompliance or nonperformance;
(c) by the board of directors of Xxxxxxx, if any condition
to the obligation of Xxxxxxx under this Agreement to be complied with or
performed by TriZetto at or before the Closing shall not have been complied with
or performed at the time required for such compliance or
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performance, and such noncompliance or nonperformance shall not have been waived
by Xxxxxxx or cured by TriZetto within 10 days of such noncompliance or
nonperformance; or
(d) by either TriZetto or Xxxxxxx if the purchase and sale
of the Xxxxxxx Stock shall not have been consummated by December 31, 1999;
provided, however, that the right to terminate this Agreement under this Section
10.1(d) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of or resulted in the failure
of the Closing to occur on or before such date).
10.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to Article 10, this Agreement shall forthwith become void and
there shall be no liability on the part of any party hereto or any of its
directors, officers, stockholders or Affiliates except nothing herein shall
relieve any party from liability for any breach by such party.
10.3 FEES AND EXPENSES. Except as set forth in this Article 10, 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 purchase and sale of Xxxxxxx Stock is consummated.
Without limiting the generality of the foregoing, the Xxxxxxx Securityholders
(excluding Xxxxxxx X. Xxxxxxx and Xxxxxx X. Xxxxx) will pay, on a pro rata basis
according to the percentages set forth in Exhibit B, all of the fees and
expenses incurred in connection with the transactions contemplated by this
Agreement for Xxxxxxx' and the Xxxxxxx Securityholders' legal, financial and
accounting advisors, including, without limitation, Xxxxx & Xxxxxxx L.L.P. and
the payment to Broadview specified in Section 5.4; provided, however, that (i)
Xxxxxxx may pay up to a maximum of $325,000 of legal fees that were not paid
prior to October 29, 1999, if subject to the execution and delivery of the
Promissory Note and Stock Pledge Agreement attached hereto as Exhibit J and
Exhibit K, respectively, by the Xxxxxxx Securityholders (excluding Xxxxxxx X.
Xxxxxxx and Xxxxxx X. Xxxxx) and (ii) subject to the prior approval of TriZetto,
legal fees and expenses related to the Arkansas Transaction or this Agreement
that are incurred by Xxxxxxx after the Closing Date shall be payable by Xxxxxxx
and shall not be the responsibility of the Xxxxxxx Securityholders.
ARTICLE 11
GENERAL PROVISIONS
11.1 EFFECTIVENESS OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Closing and shall continue in full
force and effect for a period of one year following the Closing Date. The
covenants and agreements of the parties contained in this Agreement shall
survive the Closing unless and until they are otherwise terminated pursuant to
their terms as a matter of applicable laws.
11.2 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified; (b) when sent by confirmed facsimile if sent during normal
business hours of the recipient, if not, then on the next business day; (c) five
days after having been sent by registered or certified mail, return receipt
requested, postage prepaid; or (d) two days after deposit with a nationally
recognized overnight courier, specifying two day delivery, with written
verification of receipt. All communications shall be sent to the parties at the
following addresses or facsimile numbers specified below (or at such
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other address or facsimile number for a party as shall be designated by ten days
advance written notice to the other parties hereto):
(a) If to TriZetto:
The TriZetto Group, Inc.
000 Xxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx
Ph: (000) 000-0000
Fax: (000) 000-0000
with a copy to (which shall not constitute notice):
Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: X.X. Xxxxxx, Esq.
Ph: (000) 000-0000
Fax: (000) 000-0000
(b) If to Xxxxxxx:
Xxxxxxx Corporation
0 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attn: President
Ph: (000) 000-0000
Fax: (000) 000-0000
with a copy to (which shall not constitute notice):
Xxxxx & Xxxxxxx, L.L.P.
Columbia Square
000 Xxxxxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Ph: (000) 000-0000
Fax: (000) 000-0000
(c) If to the Xxxxxxx Securityholders:
To the address set forth on Appendix B attached
hereto.
11.3 AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
11.4 WAIVER. At any time prior to the Closing, any party hereto may
with respect to any other party hereto (a) extend the time for performance of
any of the obligations or other acts, (b)
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waive any inaccuracies in the representations and warranties contained herein or
in any document delivered pursuant hereto, or (c) waive compliance with any of
the agreements or conditions contained herein. Any such extension or waiver
shall be valid if set forth in an instrument in writing signed by the party or
parties to be bound thereby.
11.5 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
11.6 HEADINGS. 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.
11.7 SEVERABILITY. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible, in an acceptable manner, to the end that
transactions contemplated hereby are fulfilled to the extent possible.
11.8 ENTIRE AGREEMENT. This Agreement (including the Xxxxxxx
Disclosure Schedule, TriZetto Disclosure Schedule together with the other
Transaction Documents and the exhibits attached hereto and thereto and the
certificates referenced herein) constitutes the entire agreement and supersedes
all prior agreements and undertakings (other than the Confidentiality Letter)
both oral and written, among the parties, or any of them, with respect to the
subject matter hereof and, except as otherwise expressly provided herein.
11.9 ASSIGNMENT. No party may assign this Agreement or assign its
respective rights or delegate their duties (by operation of law or otherwise),
without the prior written consent of the other party.
11.10 PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement, including, without limitation, by way of subrogation, other than
Section 6.4 (which is intended to be for the benefit of the Indemnified Parties
and the others specifically referenced therein as beneficiaries of the
agreements contained in Section 6.4, and may be enforced by such Indemnified
Parties and other persons).
11.11 GOVERNING LAW. This Agreement will be governed by, and construed
and enforced in accordance with the laws of the State of Delaware as applied to
contracts that are executed and performed in Delaware, without regard to the
principles of conflicts of law thereof.
11.12 ARBITRATION. In the event a dispute is initiated by TriZetto,
the Xxxxxxx Securityholders or the Representative which relates to this
Agreement, the negotiations surrounding
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the execution and delivery of this Agreement or the interpretation or
enforcement of this Agreement, the dispute will be decided by arbitration in
Orange County, California in accordance with the commercial arbitration rules of
the American Arbitration Association except as modified by the following terms
and conditions:
(a) An arbitration panel shall be appointed within 30 days
after demand for arbitration is made by either the Representative or TriZetto.
The Representative and TriZetto shall each appoint an arbitrator and the two
arbitrators so appointed shall select a third arbitrator to serve as a panel
member and Chairman thereof.
(b) In the event either party fails or refuses to appoint an
arbitrator within 30 days of demand or should the arbitrators selected by the
Representative and TriZetto be unable to agree on the third arbitrator, then and
in that event, the Presiding Judge of the Supreme Court for Orange County,
California, shall appoint an arbitrator for the party failing to appoint an
arbitrator and shall appoint the third arbitrator in the event the arbitrators
previously appointed are unable to agree on the third arbitrator.
(c) Each of the arbitrators appointed must be a member of
the State Bar of the state in which the arbitration is conducted, having been
continuously engaged in the private practice of law for a period of not less
than 15 years immediately prior to appointment as an arbitrator pursuant to this
Agreement. Each arbitrator appointed shall have significant experience in
transactional matters.
(d) The parties shall be given 60 days advance notice of the
arbitration hearing date.
(e) In the arbitration proceeding, the Representative and
TriZetto shall be entitled to a reasonable time to complete prehearing discovery
procedures. These procedures shall be allowed for a period of not less than 120
days after the matter is at issue. The arbitrator may extend the discovery time
period for good cause on application of either the Representative or TriZetto.
The discovery procedures shall include all methods of discovery authorized by
the Federal Rules of Civil Procedure and the time limits of the Federal Rules of
Civil Procedure shall apply for all types of discovery undertaken by any party.
(f) In addition to any award or other relief granted by the
arbitrators, the substantially prevailing party shall be entitled to an award
for its reasonable attorney's fees actually incurred and paid, together with all
other costs incurred in connection with such arbitration proceeding, including
but not limited to reasonable fees paid to expert witnesses, subpoena fees,
reasonable fees paid to its accountants and other reasonable costs incurred and
paid by the prevailing party in the arbitration proceeding.
(g) The arbitrators shall be bound to follow the laws of the
State of Delaware, both decisional and statutory, in reaching any decision and
making any award.
(h) The decision and any award by the arbitrators shall be
in writing and shall include specific findings of fact and conclusions of law.
11.13 REPRESENTATIVE HELD HARMLESS. Each Xxxxxxx Securityholder agrees
to hold the Representative free and harmless from any and all loss, cost, claim,
expense, damage or liability
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which he, she or it may incur or sustain as a result of any action taken by such
Representative in good faith pursuant to his, her or its appointment as agent
and attorney-in-fact under this Agreement.
11.14 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement. This Agreement shall
become effective when counterparts have been signed by each of the parties and
delivered to the other party.
11.15 ATTORNEYS FEES. If any action or proceeding relating to this
Agreement or the Offset Escrow Agreement, or the enforcement of any provision of
this Agreement or the Offset Escrow Agreement is brought by a party hereto
against any party hereto, the prevailing party shall be entitled to recover
reasonable attorneys' fees, costs and disbursements (in addition to any other
relief to which the prevailing party may be entitled).
11.16 GENDER. For purposes of this Agreement, references to the
masculine gender shall include feminine and neuter genders and entities.
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IN WITNESS WHEREOF, the parties have caused this Stock Purchase
Agreement to be duly executed and delivered as of the date first written above
by their respective officers thereunto duly authorized.
"TRIZETTO"
THE TRIZETTO GROUP, INC., a Delaware
corporation
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
"XXXXXXX"
XXXXXXX CORPORATION
By:
----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chairman, President and
Chief Executive Officer
"XXXXXXX STOCKHOLDERS"
ABS CAPITAL PARTNERS, L.P.
By: ABS Partners, L.P.,
its General Partner
By:
------------------------------
Name: Xxxxxxxxx X. Xxxxxx
Title: General Partner
BANCBOSTON VENTURES INC.
By:
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
43
EDISON VENTURE FUND III, L.P.
By: Edison Partners III, L.P.,
its General Partner
By:
------------------------------
Name: Xxxxxx X. Xxxxx
Title: General Partner
XXXXX EMPLOYEE FUND, L.P.
By:
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: General Partner
XXXXX PARTNERS II, L.P.
By: GWW Partners, L.P.,
its General Partner
By:
------------------------------
Name: Xxxxx X. Xxxxxx
Title: General Partner
XXXXX PARTNERS INTERNATIONAL II, L.P.
By: GWW Partners, L.P.,
its General Partner
By:
------------------------------
Name: Xxxxx X. Xxxxxx
Title: General Partner
ST. XXXX FIRE AND MARINE INSURANCE
COMPANY
By:
----------------------------------
Name: Xxxxxxx X. Xxx
Title: Authorized Representative
X-0
00
XX. XXXX VENTURE CAPITAL IV, L.L.C.
By:
----------------------------------
Name: Xxxxxxx X. Xxx
Title:
----------------------------------
-----------------------------------------
Xxxxxxx X. Xxxxxxx
-----------------------------------------
Xxxxxx X. Xxxxx
"XXXXXXX NOTEHOLDERS"
ABS CAPITAL PARTNERS, L.P.
By: ABS Partners, L.P.,
its General Partner
By:
------------------------------
Name: Xxxxxxxxx X. Xxxxxx
Title: General Partner
BANCBOSTON INVESTMENTS INC.
By:
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
EDISON VENTURE FUND III, L.P.
By: Edison Partners III, L.P.,
its General Partner
By:
------------------------------
Name: Xxxxxx X. Xxxxx
Title: General Partner
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XXXXX EMPLOYEE FUND, L.P.
By:
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: General Partner
XXXXX PARTNERS II, L.P.
By: GWW Partners, L.P.,
its General Partner
By:
------------------------------
Name: Xxxxx X. Xxxxxx
Title: General Partner
XXXXX PARTNERS INTERNATIONAL II, L.P.
By: GWW Partners, L.P.,
its General Partner
By:
------------------------------
Name: Xxxxx X. Xxxxxx
Title: General Partner
ST. XXXX FIRE AND MARINE INSURANCE
COMPANY
By:
----------------------------------
Name: Xxxxxxx X. Xxx
Title: Authorized Representative
ST. XXXX VENTURE CAPITAL V, L.L.C.
By:
----------------------------------
Name: Xxxxxxx X. Xxx
Title:
----------------------------------
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46
APPENDIX A
PROCEDURES FOR EXCHANGE OF XXXXXXX NOTES
FOR SERIES C STOCK
[Omitted pursuant to Item 601 of Regulation S-K - information is not material to
an investment decision]
47
APPENDIX B
ADDRESSES OF THE XXXXXXX SECURITYHOLDERS
[Omitted pursuant to Item 601 of Regulation S-K - information is not material to
an investment decision]
48
EXHIBIT A
CERTAIN DEFINITIONS
The following terms, as used in the Stock Purchase Agreement, have the following
meanings:
"1933 ACT" means the Securities Act of 1933, as amended.
"1934 ACT" means the Securities Exchange Act of 1934, as amended.
"1995 NOTES" shall have the meaning as set forth in the Recitals.
"1999 NOTES" shall have the meaning as set forth in the Recitals.
"ACCOUNTS RECEIVABLE" shall have the meaning as set forth in Section
2.12 of the Agreement.
"ACQUISITION PROPOSAL" shall have the meaning as set forth in Section
5.2 of the Agreement.
"ADJUSTMENT DATE" shall have the meaning as set forth in Section 1.1(e)
of the Agreement.
"ADJUSTED SHARES CLOSING" shall have the meaning as set forth in Section
1.1(e) of the Agreement.
"AFFILIATE" shall mean any corporation, partnership, firm, joint
venture, limited liability company, association, joint-stock company, trust,
unincorporated organization or Governmental Entity, or person, the spouse,
brother, sister and direct ascendants and descendents of any individual person,
and any other person controlling, controlled by or under common control with the
subject person, with control being evidenced by ownership of more than 20% of
the capital stock of a person or the ability to direct the management or
policies of another person through any other means; provided, however, that for
purposes of this Agreement the term Affiliate shall not include QCA or its
subsidiaries.
"AGREEMENT" shall have the meaning as set forth in the Preamble.
"ARKANSAS TRANSACTION" shall mean that certain transaction occurring
simultaneously herewith.
"ASSETS" shall have the meaning as set forth in Section 2.7 of the
Agreement.
"BALANCE SHEET" shall have the meaning as set forth in Section 2.6 of
the Agreement.
"BENEFIT PLAN" shall have the meaning as set forth in Section 2.22(b) of
the Agreement.
"BROADVIEW" shall have the meaning as set forth in Section 5.4 of the
Agreement.
"CAP" shall have the meaning as set forth in Section 6.3(c) of the
Agreement.
49
"CASH PORTION OF THE PURCHASE PRICE" shall have the meaning as set forth
in Section 1.1 of the Agreement.
"CLAIMANT" shall have the meaning as set forth in Section 8.3(a) of the
Agreement.
"CLAIM NOTICE" shall have the meaning as set forth in Section 8.3(a) of
the Agreement.
"CLAIMS" shall have the meaning as set forth in Section 8.3(a) of the
Agreement.
"CLAIMS PERIOD" shall have the meaning as set forth in Section 8.1(a) of
the Agreement.
"CLOSING" shall have the meaning as set forth in Section 1.3 of the
Agreement.
"CLOSING DATE" shall have the meaning as set forth in Section 1.3 of the
Agreement.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended.
"CODE" shall have the meaning as set forth in Section 2.4(c) of the
Agreement.
"COMMON STOCK" shall have the meaning as set forth in the Recitals.
"CONTRACTS" shall have the meaning as set forth in Section 2.16 of the
Agreement.
"CONFIDENTIALITY LETTER" means that certain Confidentiality Letter
executed between TriZetto and Xxxxxxx on October 25, 1999.
"DEFENDING PARTY" shall have the meaning set forth in Section 8.3(b) of
the Agreement.
"EMPLOYEES" shall have the meaning as set forth in Section 2.19 of the
Agreement.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and foreign
statutes, laws (including, without limitation, common law), judicial decisions,
regulations, ordinances, rules, judgments, orders, decrees, codes, plans,
injunctions, permits, concessions, grants, franchises, licenses, agreements,
treaties and governmental restrictions, relating to human health, the
environment or to emissions, discharges or releases of pollutants, contaminants
or other Hazardous Substances or wastes into the environment, including without
limitation ambient air, surface water, ground water or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants or other Hazardous
Substances or wastes or the clean-up or other remediation thereof.
"ENVIRONMENTAL PERMITS" means, with respect to any person, all permits,
licenses, franchises, certificates, approvals and other similar authorizations
of governmental authorities relating to or required by Environmental Laws and
affecting, or relating in any way to, the business of such person as currently
conducted.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"ESCROW SHARES" shall have the meaning set forth in Section 1.1(d)(iii)
of the Agreement.
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"FINANCIAL STATEMENTS" shall have the meaning as set forth in Section
2.6 of the Agreement.
"FIXED ASSETS" shall have the meaning as set forth in Section 2.10 of
the Agreement.
"GAAP" shall have the meaning as set forth in Section 2.6 of the
Agreement.
"HAZARDOUS MATERIAL" means any toxic, radioactive, corrosive or
otherwise hazardous substance, including petroleum, its derivatives, by-products
and other hydrocarbons, or any substance having any constituent elements
displaying any of the foregoing characteristics, which is regulated under any
Environmental Law.
"INDEMNIFIED PARTIES" shall have the meaning as set forth in Section 8.4
of the Agreement.
"INITIAL TRIZETTO STOCK PRICE" shall have the meaning as set forth in
Section 1.1(e) of the Agreement.
"INTANGIBLE PERSONAL PROPERTY" shall have the meaning as set forth in
Section 2.11 of the Agreement.
"INTERIM FINANCIAL STATEMENTS" shall have the meaning as set forth in
Section 2.6 of the Agreement.
"INTELLECTUAL PROPERTY" means patents, patent applications, patent
licenses, copyrights, copyright licenses, trademarks, trademark applications and
trademark licenses, trade names, service marks, service names, licenses, trade
secrets and any other know-how or intellectual property rights, and rights in
any thereof, in each case material to the business of Xxxxxxx and the Xxxxxxx
Subsidiaries taken as a whole.
"KNOWLEDGE OF XXXXXXX" means the actual knowledge of the officers of
Xxxxxxx, and knowledge that an officer should have after due inquiry.
"LEASES" shall have the meaning as set forth in Section 2.9 of the
Agreement.
"LICENSES" shall have the meaning as set forth in Section 2.13 of the
Agreement.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect to such asset.
"MATERIAL ADVERSE EFFECT" means, with respect to any Person, a material
adverse effect on the financial condition, business, assets or liabilities of
such Person and its Subsidiaries taken as a whole.
"NMS" shall have the meaning as set forth in Section 1.1 of the
Agreement.
"XXXXXXX" shall have the meaning as set forth in the Preamble.
"XXXXXXX DISCLOSURE SCHEDULE" shall mean the written disclosure schedule
delivered on or prior to the date hereof by Xxxxxxx to TriZetto that is arranged
in paragraphs corresponding to the numbered and lettered paragraphs
corresponding to the numbered and lettered paragraphs contained in the
Agreement.
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"XXXXXXX ENVIRONMENTAL LIABILITIES" mean any and all liabilities of or
relating to Xxxxxxx and any of its Subsidiaries, whether contingent or fixed,
actual or potential, known or unknown, which (i) arise under or relate to
matters covered by Environmental Laws and (ii) relate to actions occurring or
conditions existing on or prior to the Closing Date.
"XXXXXXX NOTEHOLDER" shall have the meaning as set forth in the
Preamble.
"XXXXXXX NOTES" shall have the meaning as set forth in the Recitals.
"XXXXXXX OPTION" means any option granted, whether exercisable or not
exercisable and not exercised or expired, to a current or former employee,
director, consultant, advisor or independent contractor of Xxxxxxx or any of its
Subsidiaries or any predecessor thereof to purchase Xxxxxxx Stock pursuant to
Xxxxxxx' Option Plan (as defined below).
"XXXXXXX SECURITYHOLDER" shall have the meaning as set forth in the
Preamble.
"XXXXXXX SECURITYHOLDERS CLAIM" shall have the meaning set forth in
Section 8.2(b) of the Agreement.
"XXXXXXX SECURITYHOLDERS RECOVERABLE LOSSES" shall have the meaning set
forth in Section 8.2(b) of the Agreement.
"XXXXXXX STOCK" shall have the meaning as set forth in the Recitals.
"XXXXXXX STOCKHOLDER" shall have the meaning as set forth in the
Preamble.
"XXXXXXX STOCKHOLDERS AGREEMENT" shall have the meaning as set forth in
Section 2.3
of the Agreement
"XXXXXXX SUBSIDIARY" means any Subsidiary of Xxxxxxx including, without
limitation, each of the following or any combination thereof: Xxxxxxx
Development and Licensing Corporation, an Indiana corporation (formerly known as
Health Networks of America, Inc.), Xxxxxxx Services Corporation, a Delaware
corporation, Xxxxxxx Development Corporation, a Delaware corporation (formerly
known as Xxxxxxx Corporation), Health Networks of America, Inc., a Maryland
corporation, and Digital Insurance Systems Corporation, an Ohio corporation. For
purposes of this Agreement, Xxxxxxx Subsidiary shall not include PHN and QCA.
"OFFSET ESCROW" shall have the meaning set forth in Section 1.1(d)(iii)
of the Agreement.
"OFFSET ESCROW AGENT" shall have the meaning set forth in Section
1.1(d)(iii) of the Agreement.
"OFFSET ESCROW AGREEMENT" shall have the meaning set forth in Section
1.1(d)(iii) of the Agreement.
"OPTION PLAN" shall refer to Xxxxxxx' 1995 Stock Option Plan, as
amended.
"OPTIONS" shall have the meaning as set forth in Section 2.3 of the
Agreement.
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"PERSON" means an individual, a corporation, a partnership, an
association, a trust, a limited liability company or any other entity or
organization, including a government or political subdivision or any agency or
instrumentality thereof.
"PERSONAL PROPERTY LEASES" shall have the meaning as set forth in
Section 2.9 of the Agreement.
"PHN" means Preferred Health Network of Maryland, Inc. a Maryland
corporation.
"PRODUCTS" means the proprietary software applications developed or
owned by Xxxxxxx and/or the Xxxxxxx Subsidiaries.
"PROMISSORY NOTE" shall have the meaning as set forth in Section 9.2(g)
of the Agreement.
"PURCHASE PRICE" shall have the meaning as set forth in Section 1.1 of
the Agreement.
"QCA" means QualChoice of Arkansas, an Arkansas non-profit corporation.
"RECOVERABLE LOSSES" shall have the meaning set forth in Section 8.3(a)
of the Agreement.
"REAL PROPERTY LEASES" shall have the meaning as set forth in Section
2.9 of the Agreement.
"REPRESENTATIVE" means ABS Capital Partners, L.P.
"SEC" shall have the meaning as set forth in Section 4.7 of the
Agreement.
"SEC FILINGS" shall have the meaning as set forth in Section 4.7 of the
Agreement.
"SERIES A STOCK" shall have the meaning as set forth in the Recitals.
"SERIES B STOCK" shall have the meaning as set forth in the Recitals.
"SERIES C STOCK" shall have the meaning as set forth in the Recitals.
"SOFTWARE" means software programs and rights in any thereof (insofar as
it is practical to list or describe such rights).
"STATE REGULATIONS" shall have the meaning as set forth in Section 2.3
(b) (i).
"STOCK PLEDGE AGREEMENT" shall have the meaning as set forth in Section
9.2(g) of the Agreement.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
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"TAX RETURNS" means any return, report, information return, registration
form or other document (including any related or supporting information) filed
or required to be filed with any Taxing Authority in connection with the
determination of any Tax or the administration of any laws, regulations or
administrative requirements relating to any Tax.
"TAXES" means any net income, alternative or add-on minimum tax, gross
income, gross receipts, sales, use, ad valorem, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
real property, personal property, or windfall profit tax, custom duty or other
tax, governmental fee or other like assessment or charge of any kind whatsoever,
addition to tax or additional amount imposed by any Taxing Authority responsible
for the imposition of any such tax (domestic or foreign).
"TAXING AUTHORITY" shall mean any governmental authority responsible for
the imposition of Taxes.
"THIRD PARTY CLAIM" shall have the meaning set forth in Section 8.3(b)
of the Agreement.
"THIRD PARTY LICENSES" means all licenses and other agreements with
third parties relating to any Intellectual Property or products that Xxxxxxx or
its Subsidiaries are licensed or otherwise authorized by such third parties to
use, market, distribute or incorporate into products marketed and distributed by
Xxxxxxx or its Subsidiaries.
"THIRD PARTY TECHNOLOGY" means all Intellectual Property and products
owned by third parties and licensed pursuant to Third Party Licenses.
"TRANSACTION DOCUMENTS" means the Agreement, the Offset Escrow
Agreement, the Warrant Escrow Agreement, the Non-Competition Agreement, the
Registration Rights Agreement, the Stock Pledge Agreements, the Promissory
Notes, the Warrant, the employment letter agreement dated as of the date of the
Agreement by and between TriZetto and Xxxxxxx X. Xxxxxxx, and any other document
executed and delivered pursuant hereto together with any exhibits or schedules
to such documents.
"TRANSFER AGENT" shall have the meaning as set forth in Section
1.1(d)(iv) of the Agreement.
"TRANSFER TAXES" shall have the meaning as set forth in Section 7.6 of
the Agreement.
"TRIZETTO" shall have the meaning as set forth in the Preamble.
"TRIZETTO CLAIMS" shall have the meaning set forth in Section 8.1(b) of
the Agreement.
"TRIZETTO COMMON STOCK" shall have the meaning set forth in Section
4.6(a) of the Agreement.
"TRIZETTO DISCLOSURE SCHEDULE" shall mean the written disclosure
schedule delivered on or prior to the date hereof by TriZetto to Company that is
arranged in paragraphs corresponding to the numbered and lettered paragraphs
corresponding to the numbered and lettered paragraphs contained in the
Agreement.
"TRIZETTO PREFERRED STOCK" shall have the meaning set forth in Section
4.6(a) of the Agreement.
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54
"TRIZETTO RECOVERABLE LOSSES" shall have the meaning set forth in
Section 8.1(b) of the Agreement.
"TRIZETTO STOCK" shall have the meaning as set forth in Section 1.1 of
the Agreement.
"TRIZETTO SUBSIDIARY" means any Subsidiary of TriZetto including,
without limitation, each of the following or any combination thereof: Xxxxxxx &
Associations, Inc., a Colorado corporation, Xxxxxxxx Health Enterprises, Inc., a
California corporation, and Creative Business Solution, Inc. a Texas
corporation.
"WARN ACT" means the Worker Adjustment and Retraining Notification Act.
"WARRANT ESCROW" shall have the meaning as set forth in Section
1.1(b)(i) of the Agreement.
"WARRANT ESCROW AGENT" shall have the meaning set forth in Section
1.1(b)(i) of the Agreement.
"WARRANT ESCROW AGREEMENT" shall have the meaning as set forth in
Section 1.1(b)(i) of the Agreement.
"YEAR 2000 COMPLIANT" means that the products, services, or other
item(s) at issue accurately process, provide and/or receive all date/time data
(including calculating, comparing, sequencing, processing and outputting)
within, from, into, and between centuries (including the twentieth and
twenty-first centuries and the years 1999 and 2000), including leap year
calculations, to the extent such products, services or other items are not
modified by a third party and such products, services or other items are not
combined with third party products unless otherwise authorized by the vendor
thereof.
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55
EXHIBIT B
ALLOCATION OF THE STOCK PORTION OF THE PURCHASE PRICE
[Omitted pursuant to Item 601 of Regulation S-K - information is not material to
an investment decision]
56
EXHIBIT C
ALLOCATION OF THE CASH PORTION OF THE PURCHASE PRICE
[Omitted pursuant to Item 601 of Regulation S-K - information is not material to
an investment decision]
57
EXHIBIT D
FORM OF WARRANT ESCROW AGREEMENT
See Exhibit 2.7 filed with the Company's Form 8-K
58
EXHIBIT E
FORM OF OFFSET ESCROW AGREEMENT
See Exhibit 2.2 filed with the Company's Form 8-K
59
EXHIBIT F
FORM OF WARRANT AND WARRANT ASSIGNMENT
See Exhibit 2.5 filed with the Company's Form 8-K
60
EXHIBIT G
FORM OF NON-COMPETITION AGREEMENT
See Exhibit 2.6 filed with the Company's Form 8-K
61
EXHIBIT H
FORM OF OPINION OF XXXXXXX' COUNSEL
[Omitted pursuant to Item 601 of Regulation S-K - information is not material to
an investment decision]
62
EXHIBIT I
FORM OF REGISTRATION RIGHTS AGREEMENT
See Exhibit 2.3 filed with the Company's Form 8-K
63
EXHIBIT J
FORM OF PROMISSORY NOTE
See Exhibit 2.4 filed with the Company's Form 8-K
64
EXHIBIT K
FORM OF STOCK PLEDGE AGREEMENT
See Exhibit 2.8 filed with the Company's Form 8-K
65
EXHIBIT L
FORM OF SYCR OPINION
[Omitted pursuant to Item 601 of Regulation S-K - information is not material to
an investment decision]
