EXHIBIT 10.28
EXCHANGE AGREEMENT
EXCHANGE AGREEMENT (the "Agreement"), dated as of April 24,
2001, by and among ProxyMed, Inc., a Florida corporation, with headquarters
located at 0000 Xxxxx Xxxx, Xxxxx 000, Xxxx Xxxxxxxxxx, Xxxxxxx 00000 (the
"Company"), and the investors listed on the Schedule of Investors attached
hereto (individually, a "Investor" and collectively, the "Investors").
WHEREAS:
A. The Company and certain investors, including the Investors, have
entered into that certain Securities Purchase Agreement, dated as of December
23, 1999 (the "Securities Purchase Agreement"), pursuant to which certain
investors, including the Investors, purchased from the Company (I) shares of the
Company's Series B Convertible Preferred Stock (the "Preferred Stock"), which
are convertible into shares of the Company's common stock, par value $0.001 per
share (the "Common Stock"), in accordance with the terms of the Company's
Articles of Amendment to the Company's Articles of Incorporation filed with the
Secretary of State of the State of Florida on December 23, 1999 (the "Articles
of Amendment") and (II) warrants (the "Series B Warrants") to purchase shares of
Common Stock;
B. The Company and certain investors, including the Investors, have
entered into that certain Redemption and Exchange Agreement, dated as of May 4,
2000 (the "Redemption Agreement"), pursuant to which the Company (I) issued to
each Investor a new warrant (the "Exchanged Warrants") to purchase shares of
Common Stock (as exercised, the "Exchanged Warrant Shares") in exchange for each
such Investor's Series B Warrant and (II) issued to each Investor a new warrant
(the "New Warrants" and, collectively with the Exchanged Warrants, the
"Warrants") to purchase shares of Common Stock (as exercised, the "New Warrant
Shares" and, collectively with the Exchanged Warrant Shares, the "Warrant
Shares");
C. Each Investor is the holder of an Exchanged Warrant to purchase that
number of Exchanged Warrant Shares set forth opposite its name on the Schedule
of Investors and is the holder of a New Warrant to purchase that number of New
Warrant Shares set forth opposite its name on the Schedule of Investors;
D. The Company wishes to exchange, and each Investor wishes to allow
the Company to exchange, upon the terms and conditions stated in this Agreement,
(I) the Exchanged Warrants issued to such Investor pursuant to the Redemption
Agreement for that number of shares of Common Stock (the "Exchanged Warrant
Common Shares") set forth opposite its name on the Schedule of Investors and
(II) the New Warrants issued to such Investor pursuant to the Redemption
Agreement for that number of shares of Common Stock (the "New Warrant Common
Shares" and, collectively with the Exchanged Warrant Common Shares, the "Common
Shares") set forth opposite its name on the Schedule of Investors;
E. The exchange of the Warrants for the Common Shares is being made in
reliance upon the exemption from registration provided by Section 3(a)(9) of the
Securities Act of 1933, as amended (the "1933 Act"); and
F. Contemporaneously with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement
substantially in the form attached hereto as Exhibit A (the "Registration Rights
Agreement") pursuant to which the Company has agreed to provide certain
registration rights under the 1933 Act and the rules and regulations promulgated
thereunder, and applicable state securities laws.
NOW THEREFORE, the Company and the Investor hereby agree as follows:
1. EXCHANGE OF WARRANTS.
a. Exchange of the Warrants for the Common Shares. Subject to
satisfaction (or waiver) of the conditions set forth in Sections 5 and 6, the
Company shall issue to each Investor (i) that number of Exchanged Warrant Common
Shares set forth opposite its name on the Schedule of Investors in exchange for
the surrender and cancellation of the Exchanged Warrants held by such Investor
(which Exchanged Warrants represent the right to purchase that number of
Exchanged Warrant Shares set forth opposite its name on the Schedule of
Investors) and (ii) that number of New Warrant Common Shares set forth opposite
its name on the Schedule of Investors in exchange for the surrender and
cancellation of the New Warrants held by such Investor (which New Warrants
represent the right to purchase that number of New Warrant Shares set forth
opposite its name on the Schedule of Investors) (the "Closing"). The date of the
Closing (the "Closing Date") shall be the date of this Agreement, or such later
date as the Company and each Investor may agree. "Business Day" means any day
other than Saturday, Sunday or other day on which commercial banks in the city
of New York are authorized or required by law to remain closed.
b. The Closing Date. The time of the Closing shall be 10:00
a.m., Eastern Time, on the Closing Date, subject to satisfaction (or waiver) of
the conditions to the Closing set forth in Sections 5 and 6 (or such later date
as is mutually agreed to by the Company and each of the Investors). The Closing
shall occur on the Closing Date by facsimile (except for the delivery of the
Common Shares, which shall be physically delivered to each Investor, and for the
Warrants, which shall be physically delivered to the Company or its
representative), courier and wire transfer. In the event any of the parties to
the Closing send the other parties written notice that a physical closing is
desired, at least one (1) Business Days prior to the Closing Date, then the
Closing shall occur on the Closing Date at the offices of Xxxxxx Xxxxxx & Xxxxx,
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000-0000.
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2. INVESTOR'S REPRESENTATIONS AND WARRANTIES.
Each Investor represents and warrants with respect to only
itself that:
a. Reliance on Exemptions. Such Investor understands that the
Common Shares are being issued to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying in part upon the truth and accuracy of, and such
Investor's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Investor set forth herein in order to
determine the availability of such exemptions and the eligibility of such
Investor to acquire such Common Shares.
b. No Governmental Review. Such Investor understands that no
United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Common
Shares or the fairness or suitability of the investment in the Common Shares nor
have such authorities passed upon or endorsed the merits of the offering of the
Common Shares.
c. Transfer or Resale. Such Investor understands that except
as provided in the Registration Rights Agreement: (i) the Common Shares have not
been and are not being registered under the 1933 Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (A)
subsequently registered thereunder, (B) such Investor shall have delivered to
the Company an opinion of counsel, in a form reasonably satisfactory to the
Company, to the effect that such Common Shares to be sold, assigned or
transferred may be sold, assigned or transferred pursuant to an exemption from
such registration, or (C) such Investor provides the Company with reasonable
assurance that such Common Shares can be sold, assigned or transferred pursuant
to Rule 144 promulgated under the 1933 Act (or a successor rule thereto) ("Rule
144"); (ii) any sale of the Common Shares made in reliance on Rule 144 may be
made only in accordance with the terms of Rule 144 and further, if Rule 144 is
not applicable, any resale of the Common Shares under circumstances in which the
seller (or the person through whom the sale is made) may be deemed to be an
underwriter (as that term is defined in the 0000 Xxx) may require compliance
with some other exemption under the 1933 Act or the rules and regulations of the
Securities and Exchange Commission (the "SEC") thereunder; and (iii) neither the
Company nor any other person is under any obligation to register such Common
Shares under the 1933 Act or any state securities laws or to comply with the
terms and conditions of any exemption thereunder. Notwithstanding the foregoing,
the Common Shares may be pledged in connection with a bona fide margin account
or other loan secured by the Common Shares.
d. Legends. Such Investor understands that, until such time as
the sale of the Common Shares have been registered under the 1933 Act as
contemplated by the Registration Rights Agreement, the stock certificates
representing the Common Shares, except as set forth below, shall bear a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS
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AMENDED, OR APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL,
IN A FORM REASONABLY SATISFACTORY TO THE ISSUER, THAT REGISTRATION IS
NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR
UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, SUCH SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Common Shares upon which it
is stamped, if (i) such Common Shares are registered for sale under the 1933
Act, (ii) in connection with a sale transaction, such holder provides the
Company with an opinion of counsel, in a form reasonably satisfactory to the
Company, to the effect that a public sale, assignment or transfer of such Common
Shares may be made without registration under the 1933 Act, or (iii) such holder
provides the Company with reasonable assurances that such Common Shares can be
sold pursuant to Rule 144. Such Investor acknowledges, covenants and agrees to
sell Common Shares represented by a certificate(s) from which the legend has
been removed, only pursuant to (i) a registration statement effective under the
1933 Act, or (ii) advice of counsel to such holder that such sale is exempt from
the registration requirements of Section 5 of the 1933 Act.
e. Authorization; Enforcement. This Agreement and the
Registration Rights Agreement have been duly and validly authorized, executed
and delivered on behalf of such Investor and are valid and binding agreements of
such Investor enforceable against such Investor in accordance with their terms,
subject as to enforceability to general principles of equity and to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement of applicable
creditors' rights and remedies.
f. Residency. Such Investor is a resident of that jurisdiction
specified on the Schedule of Investors.
g. Free of Liens. Assuming that pursuant to the Redemption
Agreement the Company issued such Investor the Warrants held by such Investor
free and clear of any taxes, security interest, liens, encumbrances, claims and
demands of any kind whatsoever, at the time of the Closing such Investor shall
hold such Warrants, and shall transfer such Warrants to the Company, free and
clear of any restrictions on transfer, taxes, security interest, liens,
encumbrances and demands of any kind whatsoever.
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each of the Investors
that:
a. Organization and Qualification. The Company is a
corporation duly organized and validly existing in good standing under the laws
of the State of Florida, and has the requisite corporate power and authorization
to own properties and to carry on its business as now being conducted. The
Company is duly qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which its ownership of property or the nature
of the business conducted by it makes such qualification necessary, except to
the extent that the failure to be so qualified or be in good standing would not
have a Material Adverse Effect. As used in this Agreement, "Material Adverse
Effect" means any material adverse effect on the business, properties, assets,
operations, results of operations or financial condition of the Company and its
subsidiaries taken as a whole, or on the transactions contemplated hereby or by
the agreements and instruments to be entered into in connection herewith, or on
the authority or ability of the Company to perform its obligations under the
Transaction Documents (as defined below).
b. Authorization; Enforcement; Compliance with Other
Instruments. (i) The Company has the requisite corporate power and authority to
enter into and perform its obligations under this Agreement, the Registration
Rights Agreement and each of the other agreements entered into by the parties
hereto in connection with the transactions contemplated by this Agreement
(collectively, the "Transaction Documents"), and to issue the Common Shares in
accordance with the terms hereof and thereof, (ii) the execution and delivery of
the Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby, including without limitation the
issuance of the Common Shares, have been duly authorized by the Company's Board
of Directors and no further consent or authorization is required by the Company,
its Board of Directors or its stockholders, (iii) the Transaction Documents have
been duly executed and delivered by the Company, and (iv) this Agreement and the
other Transaction Documents, constitute the valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of creditors'
rights and remedies.
c. Capitalization. The authorized capital stock of the Company
consists of (i) 100,000,000 shares of Common Stock, of which as of the date
hereof 21,475,565 shares are issued and outstanding, 11,634,661 shares are
issuable and reserved for issuance pursuant to the Company's stock option and
purchase plans and 22,475,565 shares are issuable and reserved for issuance
pursuant to securities (other than the Warrants and the warrants issued by the
Company pursuant to the Securities Purchase Agreement) exercisable or
exchangeable for, or convertible into, shares of Common Stock and (ii) 2,000,000
shares of preferred stock, of which as of the date hereof, (A) 15,000 shares are
designated as Series B Convertible Preferred Stock, of which 110 shares remain
outstanding and (B) 300,000 shares are designated as 7% Series C Convertible
Preferred Stock, of which 253,265 shares remain outstanding. All of such
outstanding shares have been and are, or upon issuance will be, validly issued,
fully paid and nonassessable. No
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shares of the Company's capital stock are subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by the
Company. There are no outstanding securities of the Company which contain any
redemption or similar provisions that will be triggered by the issuance of the
Common Shares as described in this Agreement, and there are no contracts,
commitments, understandings or arrangements by which the Company is or may
become bound to redeem a security of the Company as a result of the issuance of
the Common Shares as described in this Agreement. There are no securities or
instruments containing anti-dilution or similar provisions that will be
triggered by the issuance of the Common Shares as described in this Agreement
(other than warrants issued pursuant to the Securities Purchase Agreement or the
Redemption Agreement). The Company has furnished to the Investor true and
correct copies of the Company's Articles of Incorporation, as amended and as in
effect on the date hereof (the "Articles of Incorporation"), and the Company's
By-laws, as in effect on the date hereof (the "By-laws").
d. Issuance of Common Shares. Upon issuance in accordance with
the terms of this Agreement, the Common Shares will be validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issuance thereof, with the holders being entitled to all rights accorded
to a holder of Common Stock. The issuance by the Company of the Common Shares is
exempt from registration under the 1933 Act and applicable state securities
laws. The issuance by the Company of the Common Shares is being made in reliance
upon the exemption from registration set forth in Section 3(a)(9) of the 1933
Act and similar exemptions under state law.
e. No Conflicts. The execution, delivery and performance of
the Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated hereby and thereby (including, without limitation,
the reservation for issuance and issuance of the Common Shares) will not (i)
result in a violation of the Articles of Incorporation, any articles of
amendment of any outstanding series of preferred stock of the Company or the
By-laws; (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of its
Subsidiaries is a party; or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations and the rules and regulations of the principal market or
exchange on which the Common Stock is traded or listed) applicable to the
Company or by which any property or asset of the Company or any of its
subsidiaries is bound or affected. The Company is not in violation of any term
of its Articles of Incorporation, any articles of amendment of any outstanding
series of preferred stock or its By-laws or their organizational charter or
by-laws, respectively. The Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency or any regulatory or self-regulatory agency in order for it
to execute, deliver or perform any of its obligations under or contemplated by
the Transaction Documents in accordance with the terms hereof or thereof. The
Company is not in violation of the listing requirements of the Nasdaq National
Market as in effect on the date hereof.
f. No Material Nonpublic Information; S-3 Eligibility. Neither
the Company nor any of its subsidiaries nor any of their officers, directors,
employees or agents have provided
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the Investors with any material, nonpublic information. The Company meets the
requirements for the use of Form S-3 for registration of the resale of the
Registrable Securities (as defined in the Registration Rights Agreement) by each
Investor.
g. Acknowledgment Regarding the Transactions. The Company
acknowledges and agrees that each of the Investors is acting solely in the
capacity of arm's length purchaser with respect to the Transaction Documents and
the transactions contemplated thereby. The Company further acknowledges that
none of the Investors is acting as a financial advisor or fiduciary of the
Company (or in any similar capacity) with respect to the Transaction Documents
and the transactions contemplated thereby and any advice given by any of the
Investors or any of their respective representatives or agents in connection
with the Transaction Documents and the transactions contemplated thereby is
merely incidental to such Investor's entering into this Agreement. The Company
further represents to each Investor that the Company's decision to enter into
the Transaction Documents has been based solely on the independent evaluation by
the Company and its representatives.
h. No Solicitation. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has paid or given,
either directly or indirectly, any commission or other remuneration to any
person for soliciting the exchange of the Warrants for the Common Shares or for
any other transaction contemplated by this Agreement.
i. No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of the
Company's issuance of the Common Shares under the 1933 Act or cause this
offering of the Common Shares to be integrated with prior offerings by the
Company for purposes of the 1933 Act or any applicable stockholder approval
provisions, including, without limitation, under the rules and regulations of
the Nasdaq National Market, nor will the Company or any of its subsidiaries take
any action or steps that would require registration of the Company's issuance of
the Common Shares under the 1933 Act or cause the offering of the Common Shares
to be integrated with other offerings.
j. Application of Takeover Protections. The Company and its
board of directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Articles of Incorporation or the laws of the
state of its incorporation which is or could become applicable to the Investors
as a result of the Investors and the Company fulfilling their obligations under
the Transaction Documents and the Articles of Amendment, including, without
limitation, the Company's issuance of the Common Shares and the Investors'
ownership of the Common Shares.
k. Rights Agreement. As of the date hereof, the Company has
not adopted a shareholder rights plan or similar arrangement relating to
accumulation of beneficial ownership of Common Stock or a change in control of
the Company.
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4. COVENANTS.
a. Best Efforts. Each party shall use its best efforts to
satisfy timely each of the conditions to be satisfied by it as provided in
Sections 5 and 6 of this Agreement.
b. Reporting Status. Until the earlier of (i) the date which
is one year after the date on which the Investors may sell all of the Common
Shares without restriction pursuant to Rule 144(k) promulgated under the 1933
Act (or successor thereto) and (ii) the date on which the Investors shall have
sold all the Common Shares (the "Reporting Period"), the Company shall file all
reports required to be filed with the SEC pursuant to the 1934 Act, and the
Company shall not terminate its status as an issuer required to file reports
under the 1934 Act even if the 1934 Act or the rules and regulations thereunder
would otherwise permit such termination.
c. Rule 144. The Company shall not, directly or indirectly,
dispute or otherwise interfere with any claim by a holder of the Exchanged
Warrants that (i) such holder's holding period of any Exchanged Warrants Common
Shares for purposes of Rule 144 promulgated under the 1933 Act (or a successor
rule thereto) ("Rule 144") relates back (i.e., tacks) to the holding period for
the Exchanged Warrants and the Series B Warrants and (ii) such holder's holding
period of any New Warrant Common Shares for purposes of Rule 144 relates back
(i.e., tacks) to the holding period for the New Warrants.
d. Financial Information. The Company agrees to send the
following to each Investor during the Reporting Period: (i) unless filed and
available through the SEC's XXXXX system, within two (2) Business Days after the
filing thereof with the SEC, a copy of its Annual Reports on Form 10-K, its
Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K and any
registration statements (other than on Form S-8) or amendments thereto filed
pursuant to the 1933 Act; (ii) on the same day as the release thereof, facsimile
copies of all press releases issued by the Company or any of its Subsidiaries
(or the day after, if released through a recognized wire service) and (iii)
copies of any notices and other information made available or given to the
stockholders of the Company generally, contemporaneously with the making
available or giving thereof to the stockholders.
e. Intentionally Omitted.
f. Listing. The Company shall promptly secure the listing of
all of the Registrable Securities (as defined in the Registration Rights
Agreement) upon each national securities exchange and automated quotation system
(including the Nasdaq National Market), if any, upon which shares of Common
Stock are then listed (subject to official notice of issuance) and shall
maintain, so long as any other shares of Common Stock shall be so listed, such
listing of all Registrable Securities from time to time issuable under the terms
of the Transaction Documents. The Company shall maintain the Common Stock's
authorization for listing on the Nasdaq National Market, the Nasdaq SmallCap
Market, The American Stock Exchange, Inc. or any national securities exchange
(collectively, the "Exchanges" and each an "Exchange"). Neither the Company nor
any of its Subsidiaries shall take any action which may result in the delisting
or suspension of the Common Stock on an Exchange (other than to switch listings
from
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one Exchange to another Exchange). The Company shall pay all fees and expenses
in connection with satisfying its obligations under this Section 4(f).
g. Disclosure of Transaction and Other Material Information.
On or before the second (2nd) Business Day following the Closing Date, the
Company shall file a Form 8-K with the SEC describing the terms of the
transaction contemplated by the Transaction Documents and consummated at the
Closing, in the form required by the 1934 Act, and attaching as exhibits to such
Form 8-K copies of this Agreement (including the Schedule of Investors) and the
Registration Rights Agreement (the "8-K Filing"). From and after the 8-K Filing,
no Investor shall be in possession of any material nonpublic information
received from the Company, any of its subsidiaries or any of its respective
officers, directors, employees or agents, that is not disclosed in the 8-K
Filing. The Company shall not, and shall cause each of its subsidiaries and its
and each of their respective officers, directors, employees and agents, not to,
provide any Investor with any material nonpublic information regarding the
Company or any of its subsidiaries from and after the filing of the 8-K Filing
with the SEC without the express written consent of such Investor. In the event
of a breach of the foregoing covenant by the Company, any of its subsidiaries,
or any of its or their respective officers, directors, employees and agents, in
addition to any other remedy provided herein or in the Registration Rights
Agreement, an Investor shall have the right to make a public disclosure, in the
form of a press release, public advertisement or otherwise, of such material
nonpublic information without the prior approval by the Company, its
subsidiaries, or any of its or their respective officers, directors, employees
or agents. No Investor shall have any liability to the Company, its
subsidiaries, or any of its or their respective officers, directors, employees,
shareholders or agents for any such disclosure.
h. Corporate Existence. Until such time as the Registration
Statement (as defined in the Registration Rights Agreement) has been declared
effective by the SEC and has been available for the sale of all the Registrable
Securities (as defined in the Registration Rights Agreement) for 180 consecutive
Business Days, the Company shall maintain its corporate existence and shall not
sell all or substantially all of the Company's assets, except in the event of a
merger or consolidation or sale of all or substantially all of the Company's
assets, where the surviving or successor entity in such transaction (i) assumes
the Company's obligations hereunder and under the agreements and instruments
entered into in connection herewith and (ii) is a publicly traded corporation
whose common stock is listed for trading on an Exchange.
5. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING. The obligation
of the Company hereunder to issue the Common Shares to each Investor at the
Closing in exchange for such Investor's Warrants is subject to the satisfaction,
at or before the Closing Date, of each of the following conditions, provided
that these conditions are for the Company's sole benefit and may be waived by
the Company at any time in its sole discretion by providing each Investor with
prior written notice thereof:
(i) Such Investor shall have executed each of this Agreement
and the Registration Rights Agreement and delivered the same to the
Company.
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(ii) Such Investor shall have delivered to the Company or its
representative for surrender and cancellation the original Exchanged
Warrant and the original New Warrant issued to such Investor pursuant
to the Redemption Agreement.
(iii) With respect to each holder of the Warrants issued
pursuant to the Redemption Agreement or the Series B Warrants issued
pursuant to the Securities Purchase Agreement, the Company shall have
either (A) entered into an agreement with such holder to exchange such
Warrants or Series B Warrants, as applicable, for shares of Common
Stock and the exchange contemplated by such agreement is consummated
prior to or concurrently with the Closing or (B) received a written
waiver from such holder waiving any antidilution adjustment to the
exercise price of the Warrants or the Series B Warrants, as applicable,
held by such Investor which would otherwise result from the issuance of
the Common Shares pursuant to this Agreement.
(iv) The representations and warranties of such Investor
contained herein shall be true and correct as of the date when made and
as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date), and
such Investor shall have performed, satisfied and complied with the
covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by such Investor
at or prior to the Closing Date.
6. CONDITIONS TO EACH INVESTOR'S OBLIGATIONS AT CLOSING. The obligation
of each Investor hereunder to exchange such Investor's Warrants for the Common
Shares at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions, provided that these conditions are
for such Investor's sole benefit and may be waived by such Investor at any time
in its sole discretion by providing the Company and each Investor with prior
written notice thereof:
(i) The Company shall have executed each of the Transaction
Documents, and delivered the same to such Investor.
(ii) The Common Stock shall be designated for quotation on or
listed on an Exchange and shall not have been suspended from trading on
or delisted from such Exchange nor shall delisting or suspension by
such exchanges have been threatened by falling below the minimum
listing maintenance requirements of such Exchange. The Company shall
have complied with the listing requirements of the Nasdaq National
Market for the Common Shares.
(iii) The representations and warranties of the Company
contained herein shall be true and correct as of the date when made and
as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date) and
the Company shall have performed, satisfied and complied with the
covenants, agreements and conditions required by the Transaction
Documents to be performed, satisfied or complied with by the Company at
or prior to the Closing Date. Such Investor shall have received a
certificate, executed by the Chief Executive Officer of the Company,
dated as of the Closing Date, to the foregoing effect and as to such
other
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matters as such Investor may reasonably request, including, without
limitation, an update as of the Closing Date regarding the
representation contained in Section 3(c) above.
(iv) Such Investor shall have received the opinion of Holland
& Knight LLP dated as of the Closing Date, in substantially the form of
Exhibit B, attached hereto.
(v) The Company shall have executed and delivered to such
Investor (A) the stock certificates (in such denominations as such
Investor shall request) representing the Exchanged Warrant Common
Shares to be issued to such Investor (as set forth in Section 1(a)) in
exchange for such Investor's Exchanged Warrants at the Closing and (B)
the stock certificates (in such denominations as such Investor shall
request) representing the New Warrant Common Shares to be issued to
such Investor (as set forth in Section 1(a)) in exchange for such
Investor's New Warrants at the Closing.
(vi) The Board of Directors of the Company shall have adopted
resolutions consistent with Section 3(b)(ii) above and in a form
reasonably acceptable to such Investor (the "Resolutions").
(vii) The Company shall have delivered to such Investor a
secretary's certificate, dated as of the Closing Date, certifying as to
(A) the Resolutions, (B) the Articles of Incorporation and (C) the
By-laws, each as in effect at the Closing.
(viii) The Company shall have delivered to the Investors such
other documents relating to the transactions contemplated by the
Transaction Documents as the Investors or their counsel may reasonably
request.
7. INDEMNIFICATION. In consideration of each Investor's execution and
delivery of the Transaction Documents and in addition to all of the Company's
other obligations under the Transaction Documents, the Company shall defend,
protect, indemnify and hold harmless each Investor and each other holder of the
Common Shares and all of their stockholders, officers, directors, employees and
direct or indirect investors and any of the foregoing persons' agents or other
representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the
"Indemnitees") from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to
the action for which indemnification hereunder is sought), and including
reasonable attorneys' fees and disbursements (the "Indemnified Liabilities"),
incurred by any Indemnitee as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby, (b) any breach of any covenant,
agreement or obligation of the Company contained in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby or
(c) any cause of action, suit or claim brought or made against such Indemnitee
(other than a cause of action, suit or claim which is (x) brought or made by the
Company and (y) is not a shareholder derivative suit) and arising out of or
resulting from (i) the execution, delivery, performance or enforcement of the
Transaction Documents, (ii) any transaction financed or to be financed in whole
or in part,
11
directly or indirectly, with the proceeds of the issuance of the Common Shares
or (iii) solely the status of such Investor or holder of the Common Shares as an
investor in the Company. To the extent that the foregoing undertaking by the
Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
8. GOVERNING LAW; MISCELLANEOUS.
a. Governing Law; Jurisdiction; Jury Trial. The corporate laws
of the State of Florida shall govern all issues concerning the relative rights
of the Company and its stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of New York. Each party hereby
irrevocably submits to the non-exclusive jurisdiction of the state and federal
courts sitting in the City of New York, borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT
OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
b. Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other parties; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.
c. Headings. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.
d. Severability. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
12
e. Entire Agreement; Amendments. This Agreement and the
Registration Rights Agreement supersede all other prior oral or written
agreements between the Investors, the Company, their affiliates and persons
acting on their behalf with respect to the matters discussed herein. This
Agreement and the instruments referenced herein contain the entire understanding
of the parties with respect to the matters covered herein and therein and,
except as specifically set forth herein or therein, neither the Company nor any
Investor makes any representation, warranty, covenant or undertaking with
respect to such matters. Notwithstanding the foregoing and except as otherwise
specifically provided in the Transaction Documents, the Securities Purchase
Agreement, the registration rights agreement, dated as of December 23, 1999,
among the Company and the buyers named therein (the "Series B Registration
Rights Agreement"), the Articles of Amendment, the Redemption Agreement and the
registration rights agreement, dated as of May 4, 2000, among the Company and
the investors named therein, including the Investors (the "Redemption
Registration Rights Agreement") shall remain in full force and effect with
respect to the securities and the transactions contemplated thereby. No
provision of this Agreement may be amended other than by an instrument in
writing signed by the Company and each of the Investors. No provision hereof may
be waived other than by an instrument in writing signed by the party against
whom enforcement is sought. No such amendment shall be effective to the extent
that it applies to less than all of the Investors which hold Common Shares then
outstanding. No consideration shall be offered or paid to any person to amend or
consent to a waiver or modification of any provision of any of the Transaction
Documents unless the same consideration also is offered to all of the parties to
the Transaction Documents.
f. Notices. Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one (1) Business Day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:
If to the Company:
ProxyMed, Inc.
0000 Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer and Chief Legal Officer
With a copy to:
Holland & Knight LLP
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxx Xxxxxxx, Esq.
13
If to the Transfer Agent:
North American Transfer Company
000 Xxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Rostolter
If to an Investor, to it at the address and facsimile number set forth
on the Schedule of Investors, with copies to such Investor's representatives as
set forth on the Schedule of Investors, or at such other address and/or
facsimile number and/or to the attention of such other person(s) as the
recipient party has specified by written notice given to each other party five
days prior to the effectiveness of such change. Written confirmation of receipt
(A) given by the recipient of such notice, consent, waiver or other
communications, (B) mechanically or electronically generated by the sender's
facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (C) provided by a nationally
recognized overnight delivery service shall be rebuttable evidence of personal
service, receipt by facsimile or receipt from a nationally recognized overnight
delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.
g. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
assigns. The Company shall not assign this Agreement or any rights or
obligations hereunder (except pursuant to a merger or consolidation with respect
to which the Company is not the surviving entity resulting from such merger or
consolidation), without the prior written consent of each of the Investors, or
their assigns. An Investor or any Permitted Assignee (as defined below) may
assign some or all of its rights under this Agreement (i) to any person with the
consent of the Company, which consent shall not be unreasonably withheld, or
(ii) without the consent of the Company, to any person or entity which or who,
immediately prior to such assignment, is (A) an affiliate of such Investor or
Permitted Assignee, (B) an Investor which has executed this Agreement or (C) an
entity or fund which has the same principal investment adviser or manager as the
Investor or Permitted Assignee (each such person or entity described in the
immediately preceding clauses (A), (B) and (C) is referred to as a "Permitted
Assignee"); provided, however, that any such assignment shall not release such
Investor from its obligations hereunder unless such obligations are assumed by
such assignee and the Company has consented to such assignment and assumption,
which consent shall not be unreasonably withheld. Notwithstanding anything to
the contrary contained in the Transaction Documents, Investors shall be entitled
to pledge the Common Shares in connection with a bona fide margin account or
other loan secured by the Common Shares.
h. No Third Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
14
i. Survival. Unless this Agreement is terminated under Section
8(l), the representations and warranties of the Company and the Investors
contained in Sections 2 and 3, the agreements and covenants set forth in
Sections 4 and 8, and the indemnification provisions set forth in Section 7,
shall survive the Closing. Each Investor shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.
j. Publicity. The Company and each Investor shall have the
right to approve before issuance any press releases or any other public
statements with respect to the transactions contemplated hereby; provided,
however, that the Company shall be entitled, without the prior approval of any
Investor, to make any press release or other public disclosure with respect to
such transactions as the Company reasonably believes, after consulting with its
counsel, to be required by applicable law and regulations (although each
Investor shall be consulted by the Company in connection with any such press
release or other public disclosure prior to its release and shall be provided
with a copy thereof).
k. Further Assurances. Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
l. Termination. In the event that the Closing shall not have
occurred with respect to an Investor on or before one (1) Business Day after the
date hereof due to the Company's or the Investor's failure to satisfy the
conditions set forth in Sections 5 and 6 above (and the non-breaching party's
failure to waive such unsatisfied condition(s)), the non-breaching party shall
have the option to terminate this Agreement with respect to such breaching party
at the close of business on such date without liability of any party to any
other party.
m. Placement Agent. The Company acknowledges that it has not
engaged any placement agent in connection with the issuance of the Common
Shares. The Company shall be responsible for the payment of any placement
agent's fees or brokers' commissions relating to or arising out of the
transactions contemplated hereby. The Company shall pay, and hold each Investor
harmless against, any liability, loss or expense (including, without limitation,
attorneys' fees and out of pocket expenses) arising in connection with any such
claim.
n. No Strict Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
o. Remedies. Each Investor shall have all rights and remedies
set forth in the Transaction Documents and, except as otherwise specifically
provided in the Transaction Documents, all rights and remedies which such
holders have been granted at any time under any other agreement or contract
(including, without limitation, the Securities Purchase Agreement, the Series B
Registration Rights Agreement, the Articles of Amendment, the Redemption
Agreement and the Redemption Registration Rights Agreement) and all of the
rights which such holders have under any law. Any person having any rights under
any provision of this
15
Agreement shall be entitled to enforce such rights specifically (without posting
a bond or other security), to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law.
p. Payment Set Aside. To the extent that the Company makes a
payment or payments to any Investor hereunder or pursuant to the Registration
Rights Agreement or such Investor enforces or exercises its rights hereunder or
thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company or to a
trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then, to the extent of any such restoration, the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.
q. Mutual General Release. (i) In consideration of the release
set forth in Section 8(q)(ii), effective as of the Closing (the "Effective
Time") each Investor, severally and not jointly, on behalf of itself and its
heirs, executors, administrators, devisees, trustees, partners, directors,
officers, shareholders, employees, consultants, representatives, predecessors,
principals, agents, parents, associates, affiliates, subsidiaries, attorneys,
accountants, successors, successors-in-interest and assignees (collectively, the
"Investor Releasing Persons"), hereby waives and releases, to the fullest extent
permitted by law, but subject to Section 8(q)(iii) below, any and all claims,
rights and causes of action, whether known or unknown (collectively, the
"Investor Claims"), that any of the Investor Releasing Persons had or currently
has against (i) the Company, (ii) any of the Company's current or former
parents, shareholders, affiliates, subsidiaries, predecessors or assigns, or
(iii) any of the Company's or such other persons' or entities' current or former
officers, directors, employees, agents, principals, investors, signatories,
advisors, consultants, spouses, heirs, estates, executors, attorneys, auditors
and associates and members of their immediate families (collectively, the
"Company Released Persons"), including, without limitation, Investor Claims
arising out of or relating to the Securities Purchase Agreement, the Articles of
Amendment, the Series B Registration Rights Agreement, the Series B Warrants,
the Redemption Agreement, the Redemption Registration Rights Agreement, the
Exchanged Warrants and the New Warrants (collectively, the "Released Documents")
other than Investor Claims arising after the Effective Time.
(ii) In further consideration of the Investors entering into
this Agreement, effective as of the Effective Time, the Company on behalf of
itself and its heirs, executors, administrators, devisees, trustees, partners,
directors, officers, shareholders, employees, consultants, representatives,
predecessors, principals, agents, parents, associates, affiliates, subsidiaries,
attorneys, accountants, successors, successors-in-interest and assignees
(collectively, the "Company Releasing Persons"), hereby waives and releases, to
the fullest extent permitted by law, but subject to Section 8(q)(iii) below, any
and all claims, rights and causes of action, whether known or unknown
(collectively, the "Company Claims"), that any of the Company Releasing Persons
had or currently has against (i) the Investors, (ii) any of the Investors'
respective current or former parents, shareholders, affiliates, subsidiaries,
predecessors
16
or assigns, or (iii) any of the Investors' or such other persons' or entities'
current or former officers, directors, employees, agents, principals, investors,
signatories, advisors, consultants, spouses, heirs, estates, executors,
attorneys, auditors and associates and members of their immediate families
(collectively, the "Investor Released Persons"), including, without limitation,
any Company Claims arising out of or relating to the Released Documents.
(iii) The Company and each of the Investors acknowledge that
the release set forth in Sections 8(q)(i) and 8(q)(ii) above does not affect any
claim which any Company Releasing Person or Investor Releasing Person may have
under this Agreement, the Registration Rights Agreement, Sections 8, 9(m) or
9(p) of the Securities Purchase Agreement, Section 6 or Section 7 of the Series
B Registration Rights Agreement, Sections 8, 9(m) and 9(p) of the Redemption
Agreement and Section 6 or Section 7 of the Redemption Registration Rights
Agreement.
(iv) It is the intention of each party that this Section 8(o)
shall be effective as a final accord and satisfaction and release of each and
every Investor Claim and Company Claim, except as otherwise specifically
provided in this Section 8(o).
* * * * * *
17
IN WITNESS WHEREOF, the Investors and the Company have caused this
Exchange Agreement to be duly executed as of the date first written above.
COMPANY: INVESTORS:
PROXYMED, INC. ROYAL BANK OF CANADA
By: RBC Dominion Securities Corp.,
its agent
By:__________________________________ By:________________________________
Name: Name:
Title: Title:
By:________________________________
Name:
Title:
18
SCHEDULE OF INVESTORS
Investor's Name Investor Address Number of Number of Number of Number of Investor's
and Facsimile Number Exchanged New Exchanged New Warrant Representatives'
Warrant Shares Warrant Warrant Common Address and Facsimile
Shares Common Shares Number
Shares
---------------------------------------------------- -------------------------------------------------------------------------------
---------------------------------------------------- -------------------------------------------------------------------------------
Royal Bank of Canada Royal Bank of Canada 1,053,997 200,000 854,976 155,000 Royal Bank of Canada
c/o RBC Dominion Securities c/o RBC Dominion
Corporation Securities Corporation
Xxx Xxxxxxx Xxxxx Xxx Xxxxxxx Xxxxx
165 Broadway 000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx Attention: Xxxxx X. Xxxxx
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
19
EXHIBITS
Exhibit A - Form of Registration Rights Agreement
Exhibit B - Form of Company Counsel Opinion
