EXHIBIT 4.13
ADVANCEPCS
WARRANT AGREEMENT
This Warrant Agreement (this "Agreement") dated as of November 5, 2001
is entered into by and between AdvancePCS, a Delaware corporation (the
"Company") and Arkansas Blue Cross and Blue Shield ("Client").
TERMS OF AGREEMENT
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and Client hereby agree as follows:
Section 1. PHARMACEUTICAL SERVICE AGREEMENT. Reference is made to that
certain Managed Pharmacy Benefit Services Agreement dated October 22, 2001
entered into by and between the Company and Client (the "Service Agreement").
Capitalized terms not otherwise defined herein shall have the meanings given to
them in the Service Agreement.
Section 2. GRANT OF THE RIGHT TO PURCHASE COMMON STOCK. The Company
hereby grants to Client the right, and Client shall be entitled, subject to the
terms and conditions hereinafter set forth, to purchase from the Company 14,500
shares of its common stock, par value $0.01 per share (the "Common Stock")(which
number is referred to herein as the "Total Exercise Number") at a per share
exercise price equal to $30.10 (the "Exercise Price"). The right to purchase
such shares shall be evidenced by five (5) warrant certificates each in the form
of Exhibit A hereto (collectively, the "Warrant Certificates" and each a
"Warrant Certificate"). Subject to Section 3 hereof, each Warrant Certificate
shall be delivered to the Client on the Vesting Date (as defined below) thereof.
The Total Exercise Number and Exercise Price of such shares are subject to
adjustment as provided in Section 4 hereof.
Section 3. EXERCISE OF WARRANT CERTIFICATES. The purchase rights
granted hereunder will be exercisable as to twenty percent (20%) of the Total
Exercise Number on April 1, 2003 and the right to exercise with respect to an
additional twenty percent (20%) of the Total Exercise Number will accrue on each
of the next four anniversaries of such date (each a "Vesting Date") and will be
cumulative; provided, however, that if on any Vesting Date the Company no longer
serves as the exclusive vendor of integrated pharmacy benefit management
services for Client, or, if prior to any Vesting Date the Client exercises its
rights under Section 3(j) of the Service Agreement, then the scheduled vesting
for such date will be forfeited. Except as otherwise provided for herein, the
term of the Warrant Certificates and the right to purchase Common Stock as
described therein shall commence on the Vesting Date of such Warrant Certificate
and will end on the earlier of (i) the third month following termination of the
Service Agreement or (ii) April 1, 2008 (the "Exercise Period"). Shares of
Common Stock purchased upon exercise of each Warrant Certificate shall at the
time of purchase be paid for in full. To the extent that the right to purchase
shares has accrued hereunder, the Warrant Certificates may be exercised by
written notice to the Company in the form attached to the Warrant Certificates,
which specifies an exercise date (the "Date of Exercise"), accompanied by full
payment for the shares by wire
transfer or certified or official bank check or the equivalent thereof
acceptable to Company. Upon the initial exercise of a Warrant Certificate,
Client and the Company shall execute and enter into the Stockholders Agreement
attached hereto as Exhibit B (the "Stockholders Agreement").
At the time of delivery, the Company shall, without stock transfer tax
to the holder of the Warrant Certificate ("Holder"), deliver to the Holder (or
to such other person as the Holder directs) at the principal office of the
Company, or such other place as shall be mutually agreed upon, a certificate or
certificates for such shares, provided, however, that the time of delivery may
be postponed by the Company for such period as may be required for it with
reasonable diligence to comply with any requirements of law. The Company at the
time of exercise will require in addition that the registered owner of the
shares deliver an executed copy of the Stockholder Agreement, an investment
representation in form acceptable to the Company, and the Company will place a
legend on the certificate for such Common Stock restricting the transfer of
same. At no time shall the Company have any obligation or duty to register under
the Securities Act of 1933 (the "1933 Act") the Common Stock issuable upon
exercise of a Warrant Certificate.
Section 4. ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SHARES. The
Exercise Price and number of shares of Common Stock purchasable pursuant to the
exercise of the Warrant Certificates shall be subject to adjustment from time to
time as follows:
(a) Adjustment for Combinations or Consolidations of Common Stock. In
the event the Company, at any time or from time to time after the date hereof,
effects a subdivision or capital reorganization of its outstanding Common Stock
for a greater or lesser number of shares, then and in each such event the Total
Exercise Number and the Exercise Price shall be adjusted proportionately such
that Client is entitled to purchase the same percentage of all shares of the
Company's outstanding capital stock then issued and issuable for the same
aggregate consideration as such Holder was entitled to purchase immediately
prior to such event.
(b) Adjustment for Certain Dividends and Distributions. In the event
the Company at any time or from time to time after the date hereof shall pay a
dividend payable in Common Stock of the Company, or otherwise make a
distribution of Common Stock to its stockholders, then the Exercise Price shall
be adjusted, from and after the record date of such dividend or the date of such
distribution, to that price determined by multiplying the Exercise Price by a
fraction,
(i) the numerator of which shall be the total number of shares
of capital stock issued and outstanding or deemed to be issued
and outstanding immediately prior to the time of such issuance
or the close of business on such record date; and
(ii) the denominator of which shall be the number of shares of
capital stock issued and outstanding or deemed to be issued
and outstanding immediately prior to the time of such issuance
or the close of business on such record date plus the number
of shares of capital stock to be issued;
provided, however, that if such record date shall have been fixed and
such dividend is not fully paid or if such distribution is not fully made on the
date fixed therefor, the Exercise Price shall be recomputed accordingly as of
the close of business on such record date and thereafter the Exercise Price
shall be adjusted pursuant to this Section 4(b) as of the time of actual payment
of
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such dividend or distribution. Client shall thereafter be entitled to purchase,
at the Exercise Price resulting from such adjustment, the number of shares of
Common Stock (calculated to the nearest whole share) obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of
shares of Common Stock issuable upon the exercise hereof immediately prior to
such adjustment and dividing the product thereof by the Exercise Price resulting
from such adjustment.
(c) Number of Shares. Upon any adjustment of the Exercise Price
pursuant to Section 4(b) hereof, Client shall thereafter (until another such
adjustment) be entitled to purchase, at the new Exercise Price, the number of
shares, calculated to the nearest full share, obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of
shares purchasable pursuant hereto immediately prior to such adjustment and
dividing the product thereof by the new Exercise Price resulting from such
adjustment.
Section 5. RESERVATION AND AUTHORIZATION OF COMMON STOCK. The Company
shall at all times reserve and keep available, free from preemptive rights, out
of its authorized but unissued Common Stock, solely for the purposes of
effecting the exercise of all outstanding Warrant Certificates, the full number
of shares of Common Stock issuable upon the exercise of all outstanding Warrant
Certificates. For the purpose of this Section 5, the full number of shares of
Common Stock issuable upon the exercise of all outstanding Warrant Certificates
shall be computed as if at the time of computation of such number of shares of
Common Stock all outstanding Warrant Certificates were held by a single holder.
The Company shall from time to time, in accordance with applicable law, increase
the authorized amount of its Common Stock if at any time the authorized amount
of its Common Stock remaining unissued shall not be sufficient to permit the
exercise of all Warrant Certificates at the time outstanding.
Section 6. TRANSFERABILITY.
(a) The Warrant Certificates are not transferable by Client except to
the Company or affiliates of Client. The foregoing notwithstanding, Client shall
not, without the prior written consent of the Company, transfer any Warrant
Certificate to any affiliate that is primarily engaged in the business of
pharmacy benefit management services, pharmacy network management, pharmacy
claims adjudication, mail service pharmacy, pharmacy clinical services, and/or
pharmacy outcomes management, or the manufacture of drugs, biotech products or
biologicals. Any permitted transfer of a Warrant Certificate shall be recorded
on the books of the Company upon receipt by the Company of a notice of transfer
in the form attached hereto as Exhibit B, at its principal offices and the
payment to the Company of all transfer taxes and other governmental charges
imposed on such transfer. The shares of Common Stock purchased by Client are not
transferable except as provided in the Stockholders Agreement.
(b) Unless and until otherwise permitted by this Section and the
Stockholders Agreement, each certificate representing Common Stock initially
issued upon the exercise of each Warrant Certificate (a "Stock Certificate"),
and each certificate for Common Stock issued to any subsequent transferee of any
such certificate, shall be stamped or otherwise imprinted with a legend in
substantially the following form:
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"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY BE
REOFFERED AND SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER, CERTAIN REPURCHASE OPTIONS AND
CERTAIN OTHER AGREEMENTS SET FORTH IN A STOCKHOLDERS AGREEMENT
BETWEEN THE COMPANY AND ARKANSAS BLUE CROSS AND BLUE SHIELD,
DATED AS OF ______________, A COPY OF WHICH MAY BE OBTAINED BY
THE HOLDER HEREOF AT THE COMPANY'S PRINCIPAL PLACE OF BUSINESS
WITHOUT CHARGE."
Prior to any permitted transfer of a Warrant Certificate or
any Stock Certificate, the holder thereof shall furnish, at the expense of such
holder, to the Company an opinion of counsel, reasonably satisfactory in form
and substance to the Company, to the effect that such transfer is exempt from
registration under the Securities Act. Upon any exercise of any Warrant
Certificate for shares of Common Stock to be registered in the name of a person
other than Client, Client shall furnish, at the expense of Client, to the
Company an opinion of the General Counsel of Client, reasonably satisfactory in
form and substance to the Company, to the effect that the issuance of the shares
of Common Stock to such other person upon exercise of the Warrant is exempt from
registration under the Securities Act.
Section 7. FRACTIONAL SHARES. The Company shall not be required to
issue a fractional share of stock upon any exercise of a Warrant Certificate. As
to any final fraction of a share that Client would otherwise be entitled to
purchase upon exercise of a Warrant Certificate, the Company shall, if it does
not issue a fractional share, pay a cash adjustment in respect of such final
fraction in an amount equal to the same fraction of the Exercise Price per share
of Common Stock.
Section 8. EXCHANGE AND REPLACEMENT OF WARRANT CERTIFICATES. In the
event of loss, theft or destruction of a Warrant Certificate, the Company will
make and deliver a new Warrant Certificate of like tenor, in lieu of such
Warrant Certificate, upon receipt by the Company of evidence reasonably
satisfactory to it of such loss, theft, or destruction and indemnity or security
reasonably satisfactory to it, and reimbursement to the Company of all
reasonable expense incidental thereto. In the case of mutilation of a Warrant
Certificate and upon surrender and cancellation of such Warrant Certificate, the
Company will make and deliver a new Warrant Certificate of like tenor, in lieu
of such Warrant Certificate.
Section 9. RIGHTS PRIOR TO EXERCISE OF WARRANT CERTIFICATES. Prior to
the exercise of a Warrant Certificate, Client shall not be entitled to any
rights of a stockholder of the Company with respect to the Common Stock for
which such Warrant Certificate may then be exercisable, including without
limitation the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights and shall not be entitled to receive any notice
of any proceedings of the Company except as provided herein.
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Section 10. AUTHORIZATION AND ISSUANCE. The Company represents and
warrants to Client that it has the corporate power and authority to issue the
Warrant Certificates; this Warrant Agreement has been duly authorized, executed
and delivered and the Warrant Certificates, when delivered, will be duly and
validly issued, fully paid and nonassessable; the issuance of the Warrant
Certificates, and the shares of Common Stock issuable upon their exercise, are
not prohibited or restricted by the Certificate of Incorporation or Bylaws of
the Company or any material agreement to which the Company is a party; except
for those agreements for which the Company has received the requisite consents
or waivers; and the shares of Common Stock issuable upon exercise of the Warrant
Certificates, when issued upon exercise of the Warrant Certificates pursuant to
the terms hereof, will be duly and validly issued, fully paid and nonassessable.
Section 11. REPRESENTATIONS AND COVENANTS OF CLIENT. This Warrant
Agreement has been entered into by the Company in reliance upon the following
representations and covenants of Client:
(a) Investment Purpose. The right to acquire the Common Stock issuable
upon exercise of Client's rights contained herein will be acquired for
investment and not with a view to the sale or distribution of any part thereof,
and Client has no present intention of selling or engaging in any public
distribution of the same except pursuant to a registration or exemption.
(b) Private Issue. Client understands (i) that the Common Stock
issuable upon exercise of the Warrant Certificates is not registered under the
1933 Act or qualified under applicable state securities laws on the ground that
the issuance contemplated by this Warrant Agreement will be exempt from the
registration and qualifications requirements thereof, and (ii) that the
Company's reliance on such exemption is predicated on the representations set
forth in this Section 11.
(c) Financial Risk. Client has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of its investment, and has the ability to bear the economic risks of its
investment.
(d) Risk of No Registration. Client understands that if the Company
does not register with the Securities and Exchange Commission pursuant to
Section 11 of the 1933 Act, or file reports pursuant to Section 15(d) of the
Securities Exchange Act of 1934 (the "1934 Act"), or if a registration statement
covering the securities under the 1933 Act is not in effect when it desires to
sell the Common Stock issuable upon exercise of the right to purchase, it may be
required to hold such securities for an indefinite period. Client also
understands that any sale of its rights to purchase Common Stock which might be
made by it in reliance upon Rule 144 under the 1933 Act may be made only in
accordance with the terms and conditions of that Rule.
(e) Stockholders Agreement. Prior to the exercise of any Warrant
Certificate, Client agrees to, and to cause any permitted transferee to, enter
into, execute and perform the Stockholders Agreement.
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Section 12. GENERAL.
(a) Expenses. Each party shall bear and pay all costs and expenses
incurred by them respecting the transactions contemplated herein and all
investigations and proceedings in connection therewith, including, without
limitation, fees, commissions or expenses of their respective counsel,
accountants and financial advisors.
(b) Notice. Any notice required to be given pursuant to the terms and
provisions of this Agreement shall be in writing and shall be sent by certified
mail, return receipt requested, or by overnight delivery service, or facsimile
transmission confirmed by telephone and followed by overnight delivery to the
parties at the addresses below or such other address as shall be specified by
the parties by like notice
to the Company at:
AdvancePCS
Attn: Legal Department
0000 Xxxxx X'Xxxxxx Xxxx., Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax No.: 972/000-0000
and to Client at:
Arkansas Blue Cross and Blue Shield
Attn: Legal Department - Xxxx Xxxxxxx
000 X. Xxxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Fax No.: (000) 000-0000
Notice so given shall, in the case of notice so given by mail,
be deemed to be given and received on the fourth calendar day after posting, in
the case of notice so given by express delivery service, on the date of actual
delivery and, in the case of notice so given by facsimile transmission or
personal delivery, on the date of actual transmission or personal delivery, as
the case may be.
(c) Binding Nature and Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their successors and assigns.
Neither party may assign this Agreement without the prior written consent of the
other; provided, however, that either party may transfer or assign its rights
and obligations under this Agreement, to any affiliate, and provided further
that no such assignment shall have the effect of releasing such party from any
of its obligations under this Agreement.
(d) Headings and Interpretation. The headings of the various sections
of this Agreement are inserted for convenience only and do not, expressly or by
implication, limit, define or extend the specific terms of the section so
designated.
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(e) Governing Law. The validity, enforceability, and interpretation of
this Agreement shall be determined and governed by the internal laws of the
State of Texas (and not the law of conflicts).
(f) Entire Agreement. This Agreement contains all the terms and
conditions agreed upon by the parties, and supersedes all prior understandings,
writings, proposals, representations, or communications, oral or written, of the
parties hereto.
(g) Authority. Company and Client warrant that each has full power and
authority to enter into and perform this Agreement, and the person signing this
Agreement on behalf of each party certifies that such person has been properly
authorized and empowered to enter into this Agreement on behalf of such party.
(h) Non-Waiver. The failure of either party to insist, in any one or
more instances, upon performance of any of the terms, covenants or conditions of
this Agreement shall not be construed as a waiver or a relinquishment of any
right or claim granted or arising hereunder or of the future performance of any
such term, covenant, or condition, and such failure shall in no way affect the
validity of this Agreement or the rights and obligations of the parties
hereunder.
(i) Survival. Should any part, term or condition of this Agreement be
declared illegal or unenforceable or in conflict with any other laws, the
remaining provisions shall be valid and not affected thereby.
(j) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute one and the same instrument.
(k) Further Assurances. From time to time upon request and without
further consideration, the parties hereto shall, and shall cause their
subsidiaries and affiliates, to execute, deliver or acknowledge such documents
and do such further acts as the other party hereto may reasonably require to
effectuate its obligations contemplated by this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their proper and duly authorized officers on the date
first above written. By executing the Agreement, the undersigned individuals
hereby warrant and represent that they have read this Agreement in its entirety
and agree to all its terms.
ADVANCEPCS
By:
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Xxxxx X. Xxxxxxx
Chairman of the Board and Chief Executive Officer
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ARKANSAS BLUE CROSS AND BLUE SHIELD
By:
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Name:
-------------------------------------------------
Title:
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EXHIBITS
Exhibit A Warrant Certificate
Exhibit B Stockholders Agreement
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EXHIBIT A
THIS WARRANT AND THE UNDERLYING SHARES HEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES OR THE
COMPANY RECEIVES AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL FOR THE COMPANY)
STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
XXXXXXX XX. 0
Xxx Xxxxxxxx of Shares of Common Stock
of
AdvancePCS
APRIL 1, 2003
THIS CERTIFIES THAT Arkansas Blue Cross and Blue Shield ("Client"), or
registered transferees or assigns, is entitled, subject to the terms and
conditions set forth in this Warrant, to purchase from AdvancePCS, a Delaware
corporation (the "Company"), 2,900 (the "Exercise Number") fully paid and
nonassessable shares of Common Stock, $0.01 par value per share, of the Company
(the "Common Stock"), at any time during the Exercise Period upon payment in
full of the Exercise Price. The Total Exercise Number and Exercise Price shall
be subject to adjustment as set forth in the Warrant Agreement referred to
below. This Warrant is issued pursuant to a Warrant Agreement between Client and
the Company dated as of November 5, 2001 (the "Warrant Agreement"), and is
subject to all the terms thereof, including the limitations on transferability
set forth therein. Capitalized terms used herein as defined terms but not
otherwise defined shall have the meaning assigned to such term in the Warrant
Agreement.
This Warrant may be exercised, by the holder hereof, for all shares of
Common Stock covered hereby, by the presentation and surrender of this Warrant
together with the duly executed Election to Purchase in the form attached as
hereto, at the principal office of the Company (or at such other address as the
Company may designate by notice in writing to the holder hereof at the address
of such holder appearing on the books of the Company), and upon payment to the
Company of the Exercise Price and execution of the Stockholders Agreement as set
forth in the Warrant Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed and delivered by its duly authorized officer as an instrument under
seal as of the date of first above written.
AdvancePCS
By:
----------------------------------------
Xxxxx X. Xxxxxxx
Chairman of the Board and
Chief Executive Officer
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ELECTION TO PURCHASE
TO: AdvancePCS (the "Company")
The undersigned, owner of the accompanying Warrant hereby irrevocably
exercises the option to purchase ____ shares of Common Stock in accordance with
the terms of such Warrant, directs that the shares issuable and deliverable upon
such purchase (together with any check for a fractional interest) be issued in
the name of and delivered to the undersigned, and makes payment in full therefor
at the Exercise Price provided or referenced in such Warrant.
COMPLETE FOR REGISTRATION OF SHARES OF COMMON STOCK ON THE STOCK TRANSFER
RECORDS MAINTAINED BY THE COMPANY:
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Name of Warrant Holder
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Address
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Federal ID Tax Number or Social Security Number
--------------------------------------------------------------------------------
Date of Exercise (must be at least fifteen days after the date of this Notice)
------------------------------------------
Signature
------------------------------------------
Title
------------------------------------------
Date
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EXHIBIT B
STOCKHOLDER AGREEMENT
This Stockholder Agreement dated as of ___________, by and among
Arkansas Blue Cross and Blue Shield (the "STOCKHOLDER"), and AdvancePCS, a
Delaware corporation (the "COMPANY").
PRELIMINARY STATEMENTS
Pursuant to the terms and conditions of the Warrant Agreement,
dated as of November 5, 2001, by and between the Company and Stockholder, the
Company agreed to issue a warrant to acquire shares of the Company's common
stock, par value $.01 per share (the "COMMON STOCK"). Pursuant to the terms of
the Warrant Agreement, the Stockholder agreed to execute and enter into this
Agreement prior to the issuance of any shares of Common Stock thereunder.
NOW THEREFORE, in consideration of the premises and the mutual
agreements contained herein and for other good, valuable and binding
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
STATEMENT OF AGREEMENT
1. Restricted Stock. The terms and conditions of this Agreement shall
apply to all shares of Common Stock issued to Stockholder pursuant to the
Warrant Agreement and any shares of Common Stock otherwise acquired by
Stockholder (collectively the "STOCK").
2. Restrictions on Transfers.
2.1 Transfers to Affiliate.
(a) Transfers to Affiliates. Stockholder shall be entitled to transfer
the Stock held by it to entities that directly or indirectly control, are
controlled by, or are under common control with Stockholder (each, an
"AFFILIATE"), provided that any such Affiliates first deliver to the Company
their written acknowledgment of, and agreement to be bound by, the terms and
provisions contained in this Agreement; and the Stockholder delivers to the
Company an opinion of counsel, reasonably acceptable in form and substance to
the Company and its counsel, that registration under the Securities Act is not
required in connection with such transfer. The foregoing notwithstanding,
Stockholder shall not, without the prior written consent of the Company,
transfer any shares of Stock to any Affiliate, nor any officer, director,
employee or holder of debt or equity in any Affiliate that is primarily engaged
in the business of pharmacy benefit management services, pharmacy network
management, pharmacy claims adjudication, mail service pharmacy, pharmacy
clinical services, and/or pharmacy outcomes management, or the manufacture of
drugs, biotech products or biologicals.
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(b) Affiliates' Proxy. In the event that Stockholder transfers less
than all of its Stock pursuant to Section 2.1(a), Stockholder shall exercise all
of the rights inuring under this Agreement with respect to such transferred
Stock and the transferees shall grant Stockholder proxies to exercise such
rights. In the event that Stockholder transfers all of its Stock pursuant to
Section 2.1(a), one such transferee reasonably acceptable to the Company shall
be designated by Stockholder to exercise all rights inuring under this Agreement
with respect to such Stock and the other transferees shall grant such designated
transferee proxies to exercise such rights.
2.2 Restrictions on Third Party Transfers of the Stock.
(a) General. During the first two years following the date the Stock is
issued the ("ISSUANCE DATE"), Stockholder agrees that it will not sell, pledge
or otherwise transfer any interest in any shares of the Stock in a private sale
without the prior written consent of the Company. At any time after the second
anniversary of the Issuance Date, the Stockholder may sell, pledge or otherwise
transfer shares of the Stock to any third party. ("THIRD PARTY TRANSFER");
provided that such transfer is in accordance with this Section 2.2, and provided
further that the transferring Stockholder delivers to the Company an opinion of
counsel, reasonably acceptable in form and substance to the Company and its
counsel, that registration under the Securities Act is not required in
connection with such transfer. The foregoing notwithstanding, Stockholder agrees
that it shall not transfer any shares of Stock to any person or entity, nor any
officer, director, employee or holder of debt or equity in any entity that is
engaged in the business, or has an affiliate engaged in the business of pharmacy
benefit management services, pharmacy network management, pharmacy claims
adjudication, mail service pharmacy, pharmacy clinical services, and/or pharmacy
outcomes management, or the manufacture of drugs, biotech products or
biologicals.
(b) Sale Notice. At least 30 days prior to making any Third Party
Transfer under Section 2.2(a), the transferring Stockholder will deliver a
written notice (the "SALE NOTICE") to the Company. The Sale Notice will disclose
in reasonable detail the identity of the prospective transferee(s) and the terms
and conditions of the proposed transfer. Stockholder agrees not to consummate
any such transfer until 30 days after the Sale Notice has been delivered to the
Company.
(c) First Refusal Rights. The Company may elect to purchase some or all
of the Stock to be transferred upon the same terms and conditions as those set
forth in the Sale Notice by delivering a written notice of such election to
Stockholder within 30 days after the receipt of the Sale Notice by the Company.
If the Company elects to purchase any shares of Stock, the Company shall
consummate such purchase within 45 days of delivery of notice of intent to
purchase. If the Company has not elected to purchase all of the Stock specified
in the Sale Notice, Stockholder may transfer the Stock specified in the Sale
Notice at a price and on terms no more favorable to the transferee(s) thereof
than specified in the Sale Notice during the 60-day period immediately following
notice of the Company's election not to purchase such shares. Any shares of
Stock not transferred within such 60-day period will be subject to the
provisions of this Section 2.2(c) upon subsequent transfer.
(d) Non-Cash Consideration. In the event the consideration for the
Stock as disclosed in the Sale Notice is other than cash, a promissory note or a
combination thereof, the price for the
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Stock shall be the value of that consideration as agreed to by the transferring
Stockholder and the Company, or, if no agreement can be reached as to the
valuation of such consideration, the fair market value of such consideration as
determined by two appraisers (one appointed by the Stockholder and one appointed
by the Company). In the event the two appraisers are unable to agree on a fair
market value within 20 days after they are appointed, the fair market value of
the consideration shall be the average of the appraised values of the two
appraisers; provided, however, that if the appraised values of the two
appraisers differ by more than five percent (5%) of the higher of the two
appraised values, the two respective appointed appraisers shall select a third
appraiser who shall independently, within 20 days after this appointment, make a
determination of the value of the consideration and the average of the appraised
values of the three appraisers shall be the purchase price and shall be binding
on the parties hereto. The transferring Stockholder and the Company shall each
bear the cost of their respective appraisers and shall share the cost equally of
the third appraiser, if any. Notwithstanding anything herein to the contrary, if
an appraisal is used to determine the value of the consideration pursuant to
this Section 2.2(d), the time periods provided for in Sections 2.2(b) and 2.2(c)
shall be tolled from the time of the initial appointment of the two appraisers
until a final appraised value is determined pursuant to this Section 2.2(d).
(e) Public Sale. Notwithstanding the foregoing, the Stockholder may
sell, pledge or otherwise transfer shares of the Stock to the public in a market
transaction in accordance with applicable securities laws without complying with
the restrictions set forth in Section 2.2(b), (c) and (d).
2.3 Legend. The certificates representing the Stock will bear
the following legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY BE
REOFFERED AND SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER, CERTAIN REPURCHASE OPTIONS AND
CERTAIN OTHER AGREEMENTS SET FORTH IN A STOCKHOLDER AGREEMENT
BETWEEN THE COMPANY AND ARKANSAS BLUE CROSS AND BLUE SHIELD,
DATED AS OF ______________, A COPY OF WHICH MAY BE OBTAINED BY
THE HOLDER HEREOF AT THE COMPANY'S PRINCIPAL PLACE OF BUSINESS
WITHOUT CHARGE."
Prior to any permitted transfer of the Stock, the Stockholder shall
furnish, at its expense, a written opinion of counsel, reasonably satisfactory
in form and substance to the Company, to the effect that such transfer is exempt
from registration. Upon receipt of such opinion, any legend endorsed on a
certificate pursuant to Section 2.3 hereof and the stop transfer instructions
and record notations with respect thereto shall be removed and the Company shall
issue a certificate without such legend to the Stockholder.
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2.4 Extraordinary Transaction. In the event of a merger of the Company
with a third party where the Company is not the surviving entity, sale of a
majority of the capital stock of the Company, or the sale of all or
substantially all of its assets ("EXTRAORDINARY TRANSACTION"), the Stock shall
be entitled to receive the same benefits as the holders of the Common Stock will
receive in the Extraordinary Transaction. Upon the request of the Board of
Directors of the Company, the Stockholder agrees to consent to, vote in favor of
and execute all required documents in connection with the Extraordinary
Transaction.
2.5 Limitation on Stock Holdings. The Stockholder agrees that in no
event, shall it, either independently or together with its Affiliates, own
Common Stock or rights to acquire Common Stock, that represent, or if converted
to Common Stock would represent, more than ten percent (10%) of the Company's
issued and outstanding Common Stock, without the Company's prior written
consent.
3. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if delivered personally, mailed by
certified mail (return receipt requested) or sent by express delivery service,
or facsimile transmission (confirmed by telephone conversation and followed by
overnight delivery) to the parties at the following addresses or at such other
addresses as shall be specified by the parties by like notice:
if to the Company:
AdvancePCS
Attn: Legal Department
0000 Xxxxx X'Xxxxxx Xxxx.
Xxxxx 0000
Xxxxxx, XX 00000
Fax No.: (000) 000-0000
if to Stockholder:
Arkansas Blue Cross and Blue Shield
Attn: Legal Department - Xxxx Xxxxxxx
000 X. Xxxxxxx, Xxxxx 000
Xxxxxx Xxxx, XX 00000
Fax No.: (000) 000-0000
Notice so given shall, in the case of notice so given by mail, be
deemed to be given and received on the fourth calendar day after posting, in the
case of notice so given by express delivery service, on the date of actual
delivery and, in the case of notice so given by facsimile transmission or
personal delivery, on the date of actual transmission or personal delivery, as
the case may be.
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4. Severability.
If any provision of this Agreement shall be held to be illegal, invalid
or unenforceable under any applicable law, then such contravention or invalidity
shall not invalidate the entire Agreement. Such provision shall be deemed to be
modified to the extent necessary to render it legal, valid and enforceable, and
if no such modification shall render it legal, valid and enforceable, then this
Agreement shall be construed as if not containing the provision held to be
invalid, and the rights and obligations of the parties shall be construed and
enforced accordingly.
5. Complete Agreement.
This Agreement and those documents expressly referred to herein and of
even date herewith, embody the complete agreement and understanding among the
parties and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
6. Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, with the same effect as if
all parties had signed the same document. All such counterparts shall be deemed
an original, shall be construed together and shall constitute one and the same
instrument.
7. Successors and Assigns.
This Agreement is intended to bind and inure to the benefit of and be
enforceable by and against the Stockholder and the Company, and their respective
heirs, successors and assigns. Stockholder hereby agrees not to transfer or
assign, directly or indirectly, any of the Stock unless such transferee or
assignee agrees in writing (i) to be bound by the provisions of this Agreement
and (ii) not to make subsequent assignments or transfers other than in
accordance with this Agreement. Notwithstanding the foregoing, any holder of the
Stock (other than a holder who purchases the stock through a market sale) shall
be bound by the provisions of this Agreement even if such holder is not a party
hereto or otherwise agreed in writing to be bound by the provisions hereof.
8. CHOICE OF LAW.
THE INTERNAL LAW OF THE STATE OF TEXAS (AND NOT THE LAW OF CONFLICTS)
WILL GOVERN THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT.
9. Remedies.
Each of the parties to this Agreement will be entitled to enforce its
rights under this Agreement specifically, to recover damages by reason of any
breach of any provision of this Agreement and to exercise all other rights
existing in its favor. The parties hereto agree and acknowledge that money
damages may not be an adequate remedy for any breach of the provisions of this
Agreement and that any party may in its sole discretion apply to any court of
law or equity of competent jurisdiction for specific performance and/or
injunctive relief in order to
16
enforce or prevent any violations of the provisions of this Agreement. In the
event a party hereto brings an action under this agreement, the prevailing party
in such dispute shall be entitled to recover from the losing party all fees,
costs and expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including without limitation such reasonable fees and
expenses of attorneys and accountants, which shall include, without limitation,
all fees, costs and expenses of appeals.
10. Amendments and Waivers.
Any provision of this Agreement may be amended or waived only with the
prior written consent of each of the parties hereto.
11. Confidentiality.
Each of the parties hereto agrees to hold in the strictest confidence
the existence of this Agreement and the terms and conditions hereof.
Specifically, but without limiting the generality of the foregoing, each of the
parties hereto agrees not to disclose the existence of this Agreement or any of
its terms to any third party without the prior written consent of every other
party hereto (unless such disclosure is required by law).
[Signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
AdvancePCS
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Arkansas Blue Cross and Blue Shield
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
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