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EXHIBIT 2.4
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the "Agreement") is entered into this 1st
day of April 1999 by and between THE TRIZETTO GROUP, INC., a Delaware
corporation (the "Buyer"), and MANAGEMENT AND TECHNOLOGY SOLUTIONS, INC., a
Delaware corporation (the "Seller").
RECITALS
WHEREAS, Seller is engaged in the business of providing (i) strategic
and analytical support services, including information systems and information
management support, and billing and collection services (the "Business"), and
(ii) comprehensive management and administrative services, and
WHEREAS, Seller desires to sell to Buyer and Buyer desires to purchase
from Seller certain of Seller's assets used primarily in or relating to the
Business under the terms and conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the promises contained herein, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. PURCHASE AND SALE OF ASSETS.
1.1 PURCHASE AND SALE OF ASSETS. Subject to the terms and
conditions set forth herein, Seller shall sell, transfer, assign and deliver to
Buyer and Buyer shall purchase, accept and acquire from Seller, all assets,
tangible or intangible, relating to the Business as set forth in Schedule 1.1
attached hereto (collectively, the "Assets").
1.2 INSTRUMENTS OF CONVEYANCE AND TRANSFER. At the Closing,
Seller shall deliver to Buyer such bills of sale, endorsements, assignments,
consents to assignments and other good and sufficient instruments of conveyance
and assignment, in such form as shall be reasonably satisfactory to Buyer and
its counsel, as shall be effective to vest in Buyer all right, title and
interest of Seller in and to the Assets. At and following the Closing, Seller
will take all additional steps as may be reasonably necessary to put Buyer in
possession and operating control of the Assets.
2. CONSIDERATION
2.1 THE PURCHASE PRICE. The total purchase price to be paid
to Seller for the Assets at Closing shall consist of Sixty Thousand (60,000)
shares of Common Stock (the "Shares") of the Buyer and assumption of specified
liabilities set forth in Section 2.2 below (the "Purchase Price"). The Purchase
Price shall be allocated among the Assets as determined by Buyer in its sole
discretion. The Parties acknowledge and agree that the Purchase Price
constitutes fair and adequate consideration for the Assets. The parties hereto
shall report consistent with Buyer's allocation on all income tax returns, and
will comply with, and furnish the information required by Section 1060 of
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the Internal Revenue Code of 1986, as amended (the "Code"), and any regulations
thereunder. At the Closing the Buyer shall deliver to Seller a stock certificate
registered in Seller's name evidencing the shares.
2.2 ASSUMED LIABILITIES. As additional consideration for the
conveyance, transfers and assignments made to Buyer pursuant to Section 1.1,
Buyer, effective with such transfer, shall assume and become responsible for the
Assumed Liabilities. "Assumed Liabilities" means solely (i) those liabilities
set forth, and in the amounts specified, in Schedule 2.2 (the "Assumed
Liabilities Statement") and (ii) the obligations of the Business arising
subsequent to the Closing Date under the agreements, contracts, leases,
licenses, and other arrangements set forth in Schedule l.l. Anything herein to
the contrary notwithstanding, in no event shall Assumed Liabilities include any
liabilities or obligations arising out of any breach or default by Seller or
facts that, with notice or lapse of time or both, would constitute a default on
the part of Seller of the performance of any such agreements, contracts, leases,
licenses or arrangements which occurred prior to the Closing Date. Other than
the Assumed Liabilities, Buyer shall not assume or in any way be liable or
responsible for (and Seller shall retain and remain fully liable and responsible
for) any other liabilities and obligations of Seller of any nature whatsoever,
known or unknown, whether absolute, contingent or otherwise, including without
limitation any sales, use or other term payable in connection with the sale and
transfer of the Assets hereunder. In no event shall Assumed Liabilities include
any contract agreement, the assumption and transfer of which to Buyer would
constitute material breach.
3. REPRESENTATIONS AND WARRANTIES OF SELLER. The Seller
represents and warrants to Buyer as follows:
3.1 ORGANIZATION; AUTHORIZATION. Seller operates the
Business as a Delaware corporation and has full power and authority to carry on
the Business as it is now being conducted. Seller is duly qualified to do
business and is in good standing in every jurisdiction in which the nature of
the Business conducted or property owned by it makes such qualification
necessary. The execution and delivery and performance of this Agreement by
Seller and the performance by Seller of the transactions contemplated hereby
have been duly approved by the Board of Directors of Seller and the stockholders
of Seller in accordance with the Delaware General Corporation Law. This
Agreement has been duly executed and delivered by Seller and constitutes a valid
and binding agreement of Seller enforceable against Seller in accordance with
its terms.
3.2 NO CONSENT. Except as set forth on Schedule 3.2, no
consent, order, license, approval or authorization of, or exemption by, or
registration or filing with, any governmental authority, bureau or agency, and
no consent or approval of any other third person, corporation, partnership,
trust, incorporated or unincorporated association, government (or any agency or
political subdivision thereof) or other entity of any kind (each a "Person"), is
required to be obtained or made by Seller in connection with the execution,
delivery, or performance by Seller of this Agreement or the consummation of the
transactions contemplated by this Agreement.
3.3 NO BREACH. Except as set forth on Schedule 3.3, neither
the authorization, execution, delivery or performance of this Agreement by
Seller nor the consummation of any transactions contemplated by this Agreement
will (i) violate, conflict with or result in the material breach or termination
of, or otherwise give any Person the right to terminate, or constitute (or with
notice or lapse of time or both would constitute) a default (by way of
substitution, novation or
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otherwise) under the terms of, any contract, lease, bond, agreement, franchise
or other instrument to which Seller is a party relating to the Business or any
of the Assets, including without limitation any contract or agreement which is
included in the Assumed Liabilities, or (ii) result in the creation of any
Encumbrance (as defined below) upon the Business or any of the Assets.
3.4 COMPLIANCE WITH LAWS. Except as disclosed on Schedule
3.4, the operation of the Business and the ownership and use of the Assets are
in compliance in all material respects with all applicable judgments, orders,
injunctions, awards or decrees and all federal, state or local laws, rules or
regulations, codes or ordinances. Seller has duly obtained and holds all
consents, authorizations, permits, licenses, orders or approvals of all Federal,
state or local governmental or regulatory bodies that are material to the
conduct of the Business or the ownership or use of the Assets (collectively, the
"Permits"); no violations are or have been recorded in respect of any such
Permit and no proceeding is pending or threatened to revoke, deny or limit any
such Permit; and the Permits will be transferred to Buyer without the consent of
any governmental agency or authority.
3.5 FINANCIAL STATEMENTS. Attached hereto as Schedule 3.5
are (i) the balance sheets dated December 31, 1997 and December 31, 1998 and the
income statements for the twelve months ended December 31, 1998 and (ii) a
balance sheet and income statement as of the two month period ended February 28,
1999 (hereinafter collectively referred to as the "Financial Statements").
Except as disclosed therein, the Financial Statements (i) have been prepared on
an accrual basis, (ii) are consistent with the books and records of Seller,
(iii) have been prepared on a consistent basis for all periods covered thereby
except as disclosed therein, and (iv) present fairly the assets and liabilities
and financial condition and results of operations of the Business as at the
dates thereof, and for the periods stated therein.
The Business has no liabilities or obligations (absolute, accrued,
contingent, direct or indirect, matured or unmatured or otherwise) except (i)
liabilities that are disclosed on any schedule to this Agreement, (ii)
liabilities which are reflected or reserved against or are disclosed on the
Balance Sheet as of February 28, 1998, attached as part of Schedule 3.5 hereto
(the "1999 Balance Sheet"), and (iii) liabilities incurred in the ordinary
course of business and consistent with past practice since February 28, 1999
which do not exceed One Thousand Dollars ($1000) in the aggregate.
All accounts receivable reflected in the 1999 Balance Sheet arose from
bona fide transactions in the ordinary course of business and represent bona
fide claims against debtors for services rendered by Seller and the accounts
receivable do not include any amounts reflecting discounts, allowances, trade or
barter.
3.6 ABSENCE OF CERTAIN CHANGES. Except as set forth in
Schedule 3.6, from February 28, 1999 to the Closing Date, there has not been:
(a) any material change in the business, operations,
assets or liabilities of the Business except for such changes in the ordinary
course of business;
(b) any material change in the manner of conducting
the Business or using the Assets, which has had a material adverse effect on the
business, assets, operations or condition (financial or otherwise) of the
Business;
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(c) any damage, destruction or other casualty loss
(whether or not covered by insurance) which has had or would reasonably be
expected to have a material adverse effect on the business, assets, operations
or condition (financial or otherwise) of the Business;
(d) except in the ordinary course of business, any
amendment, modification or termination of any existing, or entering into any
new, contract, agreement, plan, license or permit which is material to the
Business;
(e) any sale, transfer, assignment or disposition of
any asset which is material to the Business;
(f) the incurrence of any material liability except
for liabilities incurred in the ordinary course of business;
(g) any failure to pay when due any material
obligations or amounts relating to the Business, except where Seller is in good
faith disputing such obligations or amounts; or
(h) any change in sales policies regarding credit
terms, approval of credit or the acceptability of advertising categories.
3.7 TITLE TO ASSETS. Seller has good and marketable title
to, or valid leasehold interests in, the Assets free and clear of all liens,
pledges, claims, charges, easements, security interests, encumbrances or other
rights of any third party ("Encumbrances"). No other Person has any right, title
or interest in the Assets or Business. Seller has performed all material
obligations required to be performed by it with respect to all Assets leased by
it. Seller enjoys peaceful and undisturbed possession of all premises it
presently occupies in connection with the Business and the Assets, and Seller's
leasehold interests in such premises are not subject to any Encumbrances,
encroachments, building or use restrictions or limitation which in any material
respect interfere with or impair Seller's present and continued use for the
stated term thereof in the usual and normal conduct of its business.
3.8 INTELLECTUAL PROPERTY; SOFTWARE; AND YEAR 2000
COMPLIANCE.
3.8.1 INTELLECTUAL PROPERTY, SOFTWARE AND PRODUCTS
(a) Schedule 3.8.1(a) contains a complete and
correct list of all patents, patent applications, patent licenses, copyrights,
copyright licenses, trademarks, trademark applications and trademark licenses,
trade names, service marks, service names, licenses, trade secrets, and any
other know-how or intellectual property rights, and rights in any thereof
("Intellectual Property") and software programs and rights in any thereof
("Software") relating to or used in the business or operations of the Business
("Intellectual Property" and "Software shall collectively be referred to as the
"Technology"). Except as disclosed in Schedule 3.8.1(a), no employee of Seller
has any right, title or interest or to any Technology used in the Business.
(b) Except as disclosed in Schedule 3.8.1(b), Seller
owns all right, title and interest in and to all the Technology used in or
necessary for the conduct of the Business, free and clear of all liens,
mortgages, charges, pledges, claims and encumbrances (including without
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limitation any distribution rights and royalty rights). Such Technology
constitutes all the Technology necessary for the conduct of the Business in the
manner conducted immediately prior to the Closing. Seller has not infringed nor
is infringing upon any intellectual property rights of others.
(c) Except as disclosed in Schedule 3.8.1(c), no
claims have been asserted against Seller by any person challenging Seller's use
or distribution (including manufacture, marketing license, or sale) of any
products utilized by Seller, or challenging or questioning the validity or
effectiveness of any license or agreement relating thereto. To the best
knowledge of Seller, there is no valid basis for any claim of the type specified
in this Section 3.8.1(c).
(d) Except as disclosed in Schedule 3.8.1(d), the
Technology complies in all material respects with all specifications set forth
therefor in any contract, agreement, advertisement or other promotional material
for such products and with all other warranty requirements, other than bugs or
fixes required or expected in the ordinary course of business and not otherwise
material to the Business.
(e) Seller has furnished Buyer with all end user
documentation relating to the use, maintenance or operation of the Technology,
all of which is true and accurate in all material respects.
(f) Except as disclosed in Schedule 3.8.1(f), to the
best of Seller's knowledge, no employee of the Seller is in violation of any
term of any employment contract, patent disclosure agreement or any other
contract or agreement relating to the relationship of any such employee with the
Seller or any other party because of the nature of the business conducted by the
Seller or proposed to be conducted by the Seller.
3.8.2 YEAR 2000 COMPLIANCE. Except as disclosed in
Schedule 3.8.2, all of Seller's products and services are Year 2000 Compliant in
all material respects. Except as disclosed in Schedule 3.8.2, if Seller is
obligated to repair or replace products or services previously provided by the
Seller that are not Year 2000 Compliant in order to meet Seller's contractual
obligations, to avoid personal injury or other liability, to avoid
misrepresentation claims, or to satisfy any other obligations or requirements,
Seller has repaired or replaced those products and services to make them Year
2000 Compliant in all material respects. Except as disclosed in Schedule 3.8.2,
Seller has furnished the Buyer with true, correct and complete copies of any
customer agreements and other materials and correspondence in which Seller has
furnished (or could be deemed to have furnished) assurances as to the
performance and/or functionality of Seller's products or services on or after
January 1, 2000.
3.9 LITIGATION. There are no actions, suits, or any
administrative inquiries, arbitration, proceedings or investigations by any
person, entity or agency, pending or threatened against the Business or the
Assets (or against Seller or any of its affiliates pertaining to the Business or
the Assets). To the best of Seller's knowledge, there are no claims by any
person, entity or agency, pending or threatened against the Business or the
Assets (or against Seller or any of its affiliates pertaining to the Business or
the Assets).
3.10 TAX MATTERS. Seller has duly filed, or has obtained a
filing extension from the appropriate governmental agencies with respect to, all
federal, state and local tax returns required
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to be filed by Seller on or prior to the Closing Date and has paid or provided
for any Taxes shown as due on such returns relating to the Business or the
Assets. Seller is not a party to any proceeding or inquiry by any governmental
agency for the assessment or the proposed assessment or for the collection of
Taxes which if unpaid might result in an Encumbrance upon the Assets as of the
Closing Date, nor to Seller's knowledge has any claim for such assessment been
asserted against Seller.
As used in this agreement, "Taxes" shall mean all income, gross
receipts, sales, transfer, use, employment, franchise, profits, property and
other taxes, fees, stamp taxes and duties, assessments, and charges of any kind
whatsoever (whether payable directly or by withholding), together with any
interest hereof and any penalties, additions to tax or additional amounts
imposed by any governmental authority responsible for the imposition of Taxes.
3.11 ERISA. Seller does not maintain or have any liability
with respect to any employee benefit, bonus, fringe benefit or other
compensatory plan, policy or arrangement (whether or not an employee benefit
plan, (as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")) with respect to employees, consultants,
contractors or subcontractors of the Business. Seller does not have any
obligation to contribute to, or other liability with respect to, any
multiemployer plan, as defined in Section 3(37) of ERISA in connection with the
Business or any defined benefit plan. The Seller's 401(k), if any, has received
a determination letter from the Internal Revenue Service that the plan meets, in
form, the requirements of Sections 401(a) and 401(k) of the Internal Revenue
Code of 1986, as amended (the "Code") and Seller has not materially amended such
plan in any manner since the date of such letter. The Seller agrees to terminate
the 401(k) simultaneously with the Closing.
3.12 NO DEFAULT. Seller is not in, and has not received or
given notice of, any material default or claimed, purported or alleged material
default of any material contract or agreement with respect to the Business or
the Assets, including without limitation, any contract or agreement which is
included in the Assumed Liabilities. Seller has not given or received notice of
any facts that, with notice or lapse of time, or both, would constitute a
material default on the part of any party in the performance of any material
contract or agreement with respect to the Business or the Assets, including
without limitation, any contract or agreement which is included in the Assumed
Liabilities.
3.13 COMPLIANCE WITH ENVIRONMENTAL LAWS. The Business and the
Assets (i) are and have been in compliance in all material respects with all
applicable Environmental Laws (as hereafter defined). There is no civil,
criminal or administrative judgment, action, suit, demand, claim, hearing,
notice of violation, investigation, proceeding, notice or demand letter pending
or threatened against Seller or concerning the Business or the Assets pursuant
to Environmental Laws or principles of common law relating to pollution,
protection of the environment or health and safety which would reasonably be
expected to result in a fine, penalty or other obligation, cost or expense.
There are and have been no past or present conditions, acts or omissions by
Seller or events occurring in connection with the Business or the Assets which
would reasonably be expected to prevent compliance in any material respect with
Environmental Laws, or which have given rise to or will give rise to material
liability under Environmental Laws or principles of common law relating to
pollution, protection of the environment or health and safety. As used in this
Agreement the term "Environmental Laws" shall mean federal, state, local and
foreign laws, regulations and codes now
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or hereafter in effect, as well as orders, decrees, judgments or injunctions
issued, promulgated, approved or entered thereunder relating to pollution,
protection of the environment or health and safety.
3.14 SOLVENCY. Except as set forth on Schedule 3.14, the
Seller and its subsidiaries taken as whole, are and will continue to be Solvent
after giving effect to the transactions contemplated hereby. As used herein,
"Solvent" means that on a particular day, the Seller and its subsidiaries, taken
as a whole, (a) have a fair value and present fair saleable value of their
assets that exceeds their stated liabilities and identified contingent
liabilities, (b) are able to pay their debts as such debts become absolute and
mature, and (c) have, and expect to continue to have, access to capital that
would not be unreasonably small for the conduct of their business as now
conducted and as proposed to be conducted.
3.15 INVESTMENT REPRESENTATION.
(a) Seller is acquiring the Shares for its own
account, not as nominee or agent, for investment and not with a view to, or for
resale in connection with, any distribution or public offering thereof within
the meaning of the 1933 Act.
(b) Seller understands that (i) the Shares have not
been registered under the 1933 Act by reason of a specific exemption therefrom,
that they must be held by it indefinitely, and that it must, therefore, bear the
economic risk of such investment indefinitely, unless a subsequent disposition
thereof is registered under the 1933 Act or is exempt from such registration;
(ii) each certificate representing the Series E Preferred Stock will be endorsed
with the legend in substantially the following form:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE
"1933 ACT") AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE 1933 ACT COVERING SUCH SECURITIES OR IF THE
COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT
SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE
1933 ACT."
and (iii) the Buyer will instruct any transfer agent not to register the
transfer of any of the Shares unless the conditions specified in the foregoing
legend are satisfied; provided, however, that no such opinion of counsel shall
be necessary if the sale, transfer or assignment is made pursuant to Securities
and Exchange Commission ("SEC") Rule 144 and the Seller provides the Buyer with
evidence reasonably satisfactory to the Buyer and its counsel that the proposed
transaction satisfies the requirements of Rule 144. The Buyer agrees to remove
the foregoing legend from any securities if the requirements of SEC Rule 144(k)
(or any successor rule or regulation) apply with respect to
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such securities and the Company and its counsel are provided with reasonably
satisfactory evidence that the requirements of Rule 144(k) apply.
(c) Seller can bear the economic risk of its
investment and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Shares.
(d) Seller has not been offered the Shares by any
form of advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by such media.
(e) Seller is an "accredited investor" within the
meaning of SEC Rule 501 of Regulation D, as presently in effect.
(f) The Seller was not formed for the specific
purpose of acquiring the Shares offered hereunder. Seller shall not liquidate
and dissolve whereby the Shares will be distributed to the stockholders of
Seller except in compliance with the terms of this Section 3.15.
3.16 FULL DISCLOSURE. Except as otherwise disclosed in the
Schedules or Exhibits hereto or the other representations and warranties made by
Seller in this Section 3, neither Seller or any of the employees of Seller has
actual knowledge of any fact as of the date hereof that materially adversely
affects or will materially adversely affect, the operations or condition of the
Business or the ability of Seller to perform its obligations under this
Agreement or the agreements referred to herein and the transactions contemplated
hereby or thereby.
3.17 BROKERS AND FINDERS. Neither Seller nor any of its
affiliates, employees or agents has employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated hereby.
4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller as follows:
4.1 ORGANIZATION; AUTHORIZATION. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full power and authority to carry on its business as it is now
being conducted. The execution, delivery and performance of this Agreement by
Buyer and the performance by Buyer of the transactions contemplated hereby have
been duly authorized and approved by all necessary corporate proceedings of
Buyer. This Agreement has been duly executed and delivered by Buyer and
constitutes a valid and binding agreement of Buyer enforceable against Buyer in
accordance with its terms.
4.2 NO CONSENT. No consent, order, license, approval or
authorization of, or exemption by, or registration or filing with, any
governmental authority, bureau or agency, and no consent or approval of any
Person is required to be obtained or made by Buyer in connection with the
execution, delivery, or performance by Buyer of this Agreement or the
consummation of the transactions contemplated by this Agreement.
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4.3 NO BREACH. Neither the authorization, execution,
delivery or performance of this Agreement by Buyer nor the consummation of any
transactions contemplated by this Agreement will (i) violate any provision of
the Certificate of Incorporation or Bylaws of Buyer, (ii) violate, conflict with
or result in the material breach or termination of, or otherwise give any Person
the right to terminate, or constitute (or with notice or lapse of time or both
would constitute) a default (by way of substitution, novation or otherwise)
under the terms of, any material contract, lease, bond, agreement, franchise or
other instrument to which Buyer is a party.
4.4 CAPITALIZATION; VALIDITY OF SHARES. As of the Closing,
the authorized capital stock of the Company will consist of 30,000,000 shares of
Common Stock, $.001 par value, and 10,391,608 shares of Preferred Stock, $.001
par value, of which 4,545,454 shares are designated Series A Preferred Stock and
1,730,770 shares are designated Series B Preferred Stock. Immediately prior to
the Closing, there will be issued and outstanding 9,871,731 shares of Common
Stock, 4,545,454 shares of Series A Preferred Stock, and 1,730,770 shares of
Series B Preferred Stock. As of the Closing, all issued and outstanding shares
of the Company's capital stock, including the Shares, will be duly authorized
and validly issued, and will be fully paid and nonassessable.
4.5 BROKERS AND FINDERS. Neither Buyer nor any of its
affiliates, associates, officers, directors, employees or agents has employed
any broker or finder or incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the transactions contemplated
hereby.
5. OTHER OBLIGATIONS AND COVENANTS OF SELLER.
5.1 RESTRICTIVE COVENANTS. As a covenant ancillary to the
purchase of the Assets, as provided herein and to ensure Buyer receives the full
benefit of the transfer and assignment of such Assets as contemplated by this
Agreement:
(a) Seller agrees that for a period of three (3)
years from the Closing Date, Seller will not, without the prior express written
consent of Buyer enter into or engage in any business or perform any service, or
have any interest whether as a partner, stockholder, principal, agent,
consultant, or in any other capacity or manner whatsoever, in any enterprise,
which directly or indirectly, is involved in providing strategic and analytical
support services, including information systems and information management
support, and billing and collection services to physicians, clinics, and other
medical practitioners in any geographic area of the United States; provided,
however, that Seller shall not be prohibited from owning capital stock of the
Buyer. Seller agrees that, if any portion of this provision is found to be
invalid, illegal, or unenforceable for any reason, such invalidity, illegality
or unenforceability shall not affect the validity, legality, and enforceability
of any other portion of this provision. It is the desire of each Seller and the
Buyer that this entire provision be valid, binding and enforceable to the
maximum extent permitted by law. In the event any term or provision of the
foregoing provision is found to be invalid, illegal or unenforceable for any
reason, then each Seller and the Buyer agree that they will seek to have the
court or arbitrator limit the scope of that subsection to the minimum extent
necessary to make the subsection valid and enforceable.
(b) The Seller recognizes that the provisions
contained in Section 5.1(a) are reasonably necessary for Buyer's protection and
realization of the benefit to Buyer of its bargains
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under this Agreement and that a violation of Section 5.1(a) will cause damage
which will be irreparable or impossible to ascertain, and, accordingly, that
Buyer shall be entitled to an injunction or other similar relief in equity from
a court of competent jurisdiction to enforce these restrictions or restrain a
violation of Section 5.l(a). The right of Buyer to such relief shall be in
addition to any other rights it may have, whether at law or in equity.
(c) If Seller violates the terms of Section 5.1(a)
and Buyer brings legal action for injunctive or other relief, Buyer shall not,
as a result of the time involved in obtaining the relief, be deprived of the
benefit of the full term of the covenants provided herein. In the event a court
of competent jurisdiction would decide that an action of the Seller is
considered to be a violation of Section 5.1(a), the covenants shall be deemed to
have a duration specified in Section 5.1(a), to be increased with the time such
violation lasted.
(d) If Section 5.1(a) is more restrictive than
permitted by the laws of the jurisdiction in which Buyer seeks enforcement
hereof, Section 5.1(a) shall be limited only to the extent required to permit
enforcement under such laws. Except for geographic coverage, each such separate
covenant shall be deemed identical in terms. If, in any proceedings, a court or
arbitrator shall refuse to enforce any of the separate covenants, then such
unenforceable covenant shall be deemed eliminated from this Section 5.1 for the
purpose of those proceedings only to the extent necessary to permit the
remaining separate covenants to be enforced. If the provisions of this Section
5.1 shall ever be deemed to exceed the duration or geographic limitations or
scope permitted by applicable law, then such provisions shall be reformed to the
maximum time or geographic limitations in scope, as the case may be, permitted
by applicable law.
5.2 EMPLOYEES.
(a) NON-SOLICITATION OF EMPLOYEES. For a period of
three (3) years from the Closing Date, neither Seller nor Xxxxxxx X. Xxxxxxx
("Xxxxxxx"), or their agents or representatives shall, without Buyer's prior
written consent, solicit to employ (or enter into or solicit to enter into any
consulting, contractor or subcontractor arrangement or any work relationship of
any kind with) any employee employed by Buyer or by any of Buyer's affiliates.
In addition, for a period of three (3) years from the Closing Date, neither
Seller nor Xxxxxxx, or their agents or representatives shall, without Buyer's
prior written consent, employ (or enter into or solicit to enter into any
consulting, contractor, or subcontractor arrangement or any work relationship of
any kind with) any employee employed by Buyer or by any of Buyer's affiliates
whose employment with Buyer or any affiliate of Buyer has terminated, unless
such employee's termination of employment was initiated by Buyer, or by Buyer's
affiliate, as applicable, or whose employment has not voluntarily terminated at
least one hundred eighty (180) days prior to the approach by Seller or Xxxxxxx
to such employee.
(b) NO OBLIGATION TO EMPLOY. Buyer may offer
employment to any employee of Seller on such terms as Buyer in its discretion
may deem advisable but shall have no obligation to employ or offer employment to
any such Seller employee. In no event shall Seller have any liability or
obligation relating to the employment of any employee of Seller, including in
that limitation, any severance, accrued vacation, sick pay, or any other
liabilities or obligations whatsoever.
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5.3 MAINTENANCE OF BUSINESS PRIOR TO CLOSING. From February
28, 1999 until the Closing Date, Seller shall have carried on the Business in
the ordinary course consistent with past practice. Without limiting the
generality of the foregoing, during such time period Seller shall operate the
Business in accordance with the following provisions:
(a) Seller shall use its commercially reasonable
best efforts to: (i) make timely payments or accounts payable and other
obligations and liabilities of the Business in accordance with past practice;
(ii) use reasonable efforts to keep available the services of its key employees;
(iii) maintain satisfactory relationships with customers and others having a
relationship with the Business; (iv) maintain the Assets and the properties of
the Business in their current state of repair excepting normal wear and tear;
(v) maintain all policies of insurance in effect on the date hereof (or
comparable replacements thereof); (vi) comply with all laws, ordinances, orders,
injunctions and decrees applicable to it and to the conduct of the Business and
the use of the Assets; (vii) make no changes in policies including credit
approval or credit terms.
(b) Seller shall not, without the prior written
consent of Buyer: (i) mortgage, pledge or otherwise encumber any of the Assets
or sell, transfer, assign or otherwise dispose of any material Asset; (ii) waive
any rights related to the Business; (iii) except in accordance with agreements
entered into prior to the date of this Agreement, grant or agree to grant any
bonuses to any employee which are inconsistent with past practices, any increase
in the rate of salaries or compensation of its employees or any specific
increase to any employee or provide for any new pension, severance, retirement
or other employment benefits to any of its employees or any increase in any
existing benefits other than in the ordinary course of business consistent with
past practice; (iv) collect accounts receivable in a manner inconsistent with
past practice; or (v) do any other act which would cause any representation or
warranty of Seller in this Agreement to be or become untrue.
6. CONDITIONS TO BUYER'S OBLIGATION. The obligation of Buyer to
consummate the transactions provided for hereby are subject to the satisfaction
of the following conditions on or before the Closing Date unless waived in
writing by Buyer:
6.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations and warranties of Seller contained in this Agreement shall be
true and correct at and as of the Closing Date (and such representations and
warranties shall be deemed to be repeated by Seller at and as of the Closing
Date), and Seller shall have performed all agreements and covenants required
hereby to be performed by it prior to or at the Closing.
6.2 NO PROCEEDINGS OR LITIGATION. No action by any
governmental entity or any third party shall have been instituted or threatened
which questions the validity or legality of the transactions contemplated hereby
or which could have a material adverse effect on the business, operating
prospects or financial condition of Seller.
6.3 OPINION OF COUNSEL. Buyer shall have received an opinion
from Seller's outside counsel, dated the Closing Date, addressed to Buyer,
covering such matters as are set forth in Exhibit A.
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6.4 NO MATERIAL ADVERSE CHANGE. There shall not have
occurred after the date of this Agreement any event, circumstance or
development, or any change in or effect on the Company that has or could be
expected to have a material adverse effect on the Business.
6.5 FILINGS; CONSENTS; WAITING PERIODS. All registrations,
filings, applications, notices, transfers, consents, approvals, orders,
qualifications, waivers and other actions of any kind listed on Schedule 3.2
(including, without limitation, the receipt by Seller of consents, if any,
required under the contracts listed in Schedule 3.3) or otherwise required of
any persons or governmental authorities or private agencies in connection with
the consummation of the transactions contemplated by, and the performance by
Seller of its obligations under, this Agreement shall have been made or obtained
and all applicable waiting periods shall have expired or been terminated, in
each case upon terms and conditions reasonably satisfactory to Buyer.
6.6 CERTIFICATES. In the event that the Closing does not
occur simultaneously with the execution of this Agreement, Seller shall have
furnished Buyer with such certificates of Seller to evidence compliance with the
conditions set forth in this Section 6 as may be reasonably requested by Buyer.
7. CONDITIONS TO SELLER'S OBLIGATIONS. The obligations of Seller to
consummate the transactions provided for hereby are subject to the satisfaction
of the following conditions on or before the Closing Date unless waived in
writing by Seller.
7.1 REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations and warranties of Buyer contained in this Agreement shall be
true and correct in all material respects at and as of the Closing Date (and
such representations and warranties shall be deemed to be repeated by Buyer at
and as of the Closing Date), and Buyer shall have performed in all material
respects all agreements and covenants required hereby to be performed by it
prior to or at the Closing.
7.2 NO PROCEEDINGS OR LITIGATION. No action by any
governmental entity or any third party shall have been instituted or threatened
which questions the validity or legality of the transactions contemplated
hereby.
7.3 CERTIFICATES. In the event the Closing does not occur
simultaneously with the execution of this Agreement, Buyer shall have furnished
Seller with such certificates of Buyer to evidence compliance with the
conditions set forth in this Section 7 as may be reasonably requested by Seller.
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8. CLOSING. The Closing of the sale of the Assets pursuant to this
Agreement (the "Closing") shall take place on April 19, 1999 (the "Closing
Date") at 10:00 a.m. at the offices of Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx, Newport
Beach, California, or at such other time and place as the parties mutually agree
in writing. At the Closing, (i) Buyer shall issue to Seller Sixty Thousand
(60,000) shares of Common Stock of the Buyer and shall execute and deliver to
Seller an instrument of assumption of the Assumed Liabilities, dated as of the
Closing Date and in a form reasonably acceptable to Seller, and (ii) Seller will
deliver to Buyer such bills of sale and other documents and instruments dated as
of the Closing Date as Buyer reasonably deems necessary or appropriate to
transfer the Assets to Buyer and to consummate the transactions contemplated
hereby.
9. CONFIDENTIALITY. Neither Seller nor any of its affiliates,
agents or representatives shall, directly or indirectly, use or disclose to any
Person any confidential or proprietary information of or relating to Buyer, the
Business or the Assets except with Buyer's prior written consent, except as
shall be disclosed to Seller's attorneys and accountants who shall be bound by a
similar obligation of confidentiality, or as may be necessary to assign
contracts of Seller. Neither Buyer nor any or its affiliates, agents or
representatives shall, directly or indirectly, use or disclose to any Person any
confidential or proprietary information of or relating to Seller without
Seller's prior written consent, except as shall be disclosed to Buyer's
attorneys and accountants, or as may be necessary to assign contracts of Seller.
For purposes of this Section, the term "confidential or proprietary information"
shall mean all information that is known to a party or its respective affiliates
or to their employees, consultants or others in a confidential relationship with
such party and relates to such matters as marketing plans, strategies, customer
lists, forecasts, prices of any other party hereto and shall further include all
terms and conditions under this Agreement, provided that any information
relating to the Business or the Assets shall in no event be deemed to be
confidential or proprietary information of Seller; and provided further that the
term "confidential or proprietary information" shall not include information (i)
rightfully received by Seller or Buyer, as the case may be, from parties other
than the parties to this Agreement; (ii) generally available to the public; or
(iii) required to be disclosed by applicable law. If disclosure is required by
law, the party required to make such disclosure shall give notice to the other
party hereto so that such other party may seek a protective order.
10. TERMINATION. This Agreement may be terminated at any time prior
to the Closing Date: (a) by mutual consent of Seller and Buyer; (b) by Buyer or
Seller, if the Closing shall not have occurred on or before April 30, 1999; (c)
by Buyer, if there has been a material violation or breach by Seller of any
covenant, agreement, representation or warranty contained in this Agreement that
has rendered the satisfaction of any condition to the obligation of Buyer
impossible and such violation or breach has not been waived by Buyer; or (d) by
Seller, if there has been a material violation or breach by Buyer of any
covenant, agreement, representation or warranty contained in this Agreement that
has rendered the satisfaction of any condition to the obligation of Seller
impossible and such violation or breach has not been waived by Seller. In the
event of such termination, this Agreement shall become null and void and shall
have no force or effect, with no liability on the part of any party other than
for its breach hereof.
11. MISCELLANEOUS PROVISIONS.
11.1 FURTHER ASSURANCES. From time to time after the Closing
Date, upon Buyer's reasonable request, Seller will (at Seller's cost) execute,
deliver and acknowledge all such
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further instruments of transfer and conveyance and do and perform all such other
acts and things as Buyer may reasonably require to more effectively transfer the
Assets to Buyer and to put Buyer in possession of the Assets.
11.2 AMENDMENT AND MODIFICATION. Subject to applicable law,
this Agreement may be amended, modified or supplemented only by written
agreement of Buyer and Seller.
11.3 WAIVER OF COMPLIANCE; CONSENTS. Any failure of Seller,
on the one hand, or Buyer, on the other hand, to comply with any obligation,
covenant, agreement or condition herein may be waived in writing by the party
entitled to the performance of such obligation, covenant or agreement or who has
the benefit of such condition, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or conditions shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consents by or on behalf of
any party hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth above.
11.4 NOTICES. All notices, requests, demands and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered by hand or three (3) days after
being mailed by certified or registered mail, return receipt requested, with
postage prepaid:
(a) IF TO SELLER TO:
Xxxxxxx X. Xxxxxxx
Management and Technology Solutions, Inc.
0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
With a copy to:
Xxxxxxxx X. Xxxxx, Esq.
Xxxxxxxxx, Doll & XxXxxxxx
3300 National City Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
or to such other person or address as Seller shall furnish to Buyer in writing
pursuant to the above.
(b) IF TO BUYER TO:
The TriZetto Group, Inc.
000 Xxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxx Xxxx
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With a copy to:
X.X. Xxxxxx, Esq.
Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000-0000
or to such other person or address as Buyer shall furnish to Seller in writing
pursuant to the above.
11.5 TERMINOLOGY. For purposes of this Agreement, the phrase
"in the ordinary course of business" and the phrase "in accordance with past
practice" shall refer to the customary operations and practices of Seller in the
conduct of the Business, but shall in no event include any acts or failures to
act which would cause Seller to violate or breach any covenant, agreement,
representation or warranty made by Seller under this Agreement. As used herein,
the term "affiliate" shall mean with respect to any Person, any other Person
controlling, controlled by or under common control with, such Person.
11.6 ASSIGNMENT. This Agreement shall not be assigned by
either party hereto without the prior written consent of the other party hereto.
No permitted assignment shall release the assignor from its obligations
hereunder. Subject to the foregoing, this Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respect successors, assigns, heirs, executors and personal representative.
11.7 GOVERNING LAW. ALL MATTERS WITH RESPECT TO THIS
AGREEMENT, INCLUDING BUT NOT LIMITED TO MATTERS OF VALIDITY, CONSTRUCTION,
EFFECT AND PERFORMANCE, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED THEREIN BETWEEN RESIDENTS
THEREOF (REGARDLESS OF THE LAWS THAT MIGHT BE APPLICABLE UNDER PRINCIPLES OF
CONFLICTS OF LAW). ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
AGREEMENT SHALL BE TRIED AND LITIGATED EXCLUSIVELY IN THE STATE AND FEDERAL
COURTS LOCATED IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA.
11.8 COUNTERPARTS. This Agreement may be executed in two or
more fully or partially executed counterparts, each of which shall be deemed an
original, but all counterparts together shall constitute one and the same
instrument.
11.9 HEADINGS. The Section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
11.10 JOINT EFFORT. The provisions of this Agreement have been
examined, negotiated and revised by counsel for each party, and no implication
shall be drawn against any party hereto by virtue of the drafting of this
Agreement.
11.11 ENTIRE AGREEMENT. This Agreement, and the Exhibits and
Schedules hereto and any other document to be furnished pursuant to the
provisions hereof embody the entire Agreement and understanding of the parties
hereto in respect of the subject matter contained herein.
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There are no restrictions, promises, representations, warranties, covenants, or
undertakings, other than those expressly set forth or referred to in such
documents. This Agreement and such documents supersede all prior agreements and
understandings between the parties with respect to such subject matter.
11.12 BULK SALES LAW. Buyer and Seller hereby agree to waive
compliance by the other with the provisions of any applicable Bulk Sales Law of
any jurisdiction. Seller agrees to defend, indemnify and hold Buyer and the
Assets harmless from and against any claim, liability, obligation, cost and
expense, including reasonable attorneys' fees, which arises from or as a result
of such non-compliance by the parties.
11.13 CONFIDENTIALITY. Seller and Buyer agree to keep the
terms of this Agreement confidential unless disclosure is required by law or
authorized in writing by both Buyer and Seller.
11.14 PUBLICITY. Prior to the Closing Date, all press releases
and other publicity and communications relating to the sale of the business will
require the approval of both Seller and Buyer.
11.15 NO THIRD PARTY BENEFICIARIES. The provisions of this
Agreement are intended solely for the benefit of the parties hereto, and no
other party is entitled to any rights, benefits or privileges created hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase
Agreement to be duly executed, all as of the day and year first above written.
THE TRIZETTO GROUP, INC., MANAGEMENT AND TECHNOLOGY
a Delaware corporation SOLUTIONS, INC., a Delaware corporation
By: By: /s/ XXXXXXX X. XXXXXXX
-------------------------------- -------------------------------------
Its: Its: President
------------------------------- ------------------------------------
Name: Name: Xxxxxxx X. Xxxxxxx
------------------------------ -----------------------------------
The undersigned is individually executing this Asset Purchase Agreement as an
individual stockholder and executive of the Seller and is subject only to the
specific provisions of Section 5.2(a).
/s/ XXXXXXX X. XXXXXXX
----------------------------------------
Xxxxxxx X. Xxxxxxx
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IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase
Agreement to be duly executed, all as of the day and year first above written.
THE TRIZETTO GROUP, INC., MANAGEMENT AND TECHNOLOGY
a Delaware corporation SOLUTIONS, INC., a Delaware corporation
By: /s/ XXXXXXX X. XXXXXXXX By:
-------------------------------- -------------------------------------
Its: President Its:
------------------------------- ------------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name:
------------------------------ -----------------------------------
The undersigned is individually executing this Asset Purchase Agreement as an
individual stockholder and executive of the Seller and is subject only to the
specific provisions of Section 5.2(a).
----------------------------------------
Xxxxxxx X. Xxxxxxx
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