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EXHIBIT 99.2
COMMON STOCK AND WARRANT AGREEMENT
This COMMON STOCK AND WARRANT AGREEMENT (this "AGREEMENT") is made and
entered into as of March 30, 2000, by and between Xxxxxxxx.xxx, Inc., a Delaware
corporation ("PARENT"), and University HealthSystem Consortium, an Illinois
corporation ("UHC").
RECITALS
A. Parent, UHC, Novation, LLC, a Delaware limited liability company
("NOVATION"), VHA Inc., a Delaware corporation ("VHA"), and Healthcare
Purchasing Partners International, LLC, a Delaware limited liability company
("HPPI") have entered into that certain Outsourcing and Operating Agreement,
dated as of the date of this Agreement (the "OUTSOURCING AGREEMENT").
Capitalized terms in this Agreement which are not otherwise defined in this
Agreement shall have the meanings assigned to them in the Agreement and Plan of
Merger dated as of the date of this Agreement (the "ECLIPSYS MERGER AGREEMENT")
among Parent, a wholly-owned merger subsidiary of Parent and Eclipsys
Corporation ("ECLIPSYS"), or, if not defined herein, in the Outsourcing
Agreement.
B. Pursuant to Section 8 of the Outsourcing Agreement and in partial
consideration for UHC's agreements thereunder, the parties agreed to enter into
this Agreement to provide for the issuance to UHC of 9,222,488 shares of
Parent's common stock, par value $0.001 per share ("COMMON STOCK"), and a
warrant to acquire 1,524,477 shares of Common Stock, exercisable subject to the
continued performance of UHC of the Outsourcing Agreement, and on the terms and
conditions set forth in this Agreement.
In consideration of the foregoing and the representations, warranties,
covenants and agreements set forth in this Agreement and the Outsourcing
Agreement, the parties agree as follows:
ARTICLE I
AGREEMENT TO ISSUE STOCK
1.1 Authorization. As of the Closing (as defined below), Parent will
have authorized the issuance, pursuant to the terms and conditions of this
Agreement, of a total of 9,222,488 shares of Common Stock and of a Common Stock
Warrant in the form attached hereto as Exhibit A (the "WARRANT") to acquire up
to 1,524,477 additional shares of Common Stock (the "WARRANT STOCK") subject to
the conditions set forth in this Agreement and the Warrant.
1.2 Agreement to Issue the Shares. Parent agrees to issue to UHC at the
Closing, subject to approval of Parent's stockholders, 9,222,488 shares of
Common Stock (the "SHARES"), in exchange for UHC's execution and delivery of the
Outsourcing Agreement and the performance on and prior to the Closing of UHC's
obligations therein. No cash or other additional consideration is being paid for
the Shares.
1.3 Agreement to Issue the Warrant. Parent agrees to issue to UHC at
the Closing, subject to approval of Parent's stockholders, the Warrant to
acquire up to 1,524,477 shares (subject to adjustment as provided in the
Warrant) of Warrant Stock at an exercise price
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per share of $30.375 (subject to adjustment as provided in the Warrant), subject
to vesting as set forth therein, in exchange for UHC's execution and delivery of
the Outsourcing Agreement and undertaking to perform its obligations therein. No
cash or other additional consideration is being paid for the Warrant.
1.4 Anti-Dilution Adjustments. The number of shares of Common Stock
represented by the Shares and the number of shares of Common Stock issuable upon
exercise of the Warrant shall be equitably adjusted to reflect appropriately the
effect of any stock split, reverse stock split, stock dividend (including any
dividend or distribution of securities convertible into Common Stock),
reorganization, spin-off, recapitalization, reclassification or other like
change with respect to Common Stock occurring on or after the date hereof and
prior to the Closing. The number of shares of Warrant Stock issuable pursuant to
the Warrant shall be subject to adjustment following the issuance of the Warrant
as set forth in the Warrant.
ARTICLE II
CLOSING
2.1 Closing. The issuance of the Shares and the Warrant will take place
at the offices of Fenwick & West LLP, Two Palo Alto Square, Palo Alto,
California, at a time and date to be specified by the parties, which shall be no
later than the second business day after the satisfaction or waiver of the
conditions set forth in Article VII and Article VIII, or at such other date,
time and location as Parent and UHC mutually agree upon (which time and place
are referred to in this Agreement as the "CLOSING"). At the Closing, Parent will
deliver to UHC a certificate representing the Shares and the Warrant.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
Parent hereby represents and warrants to UHC, subject to the exceptions
specifically disclosed in writing in the disclosure letter delivered by Parent
dated as of the date hereof and certified by a duly authorized officer of Parent
(the "PARENT DISCLOSURE LETTER") (which Parent Disclosure Letter shall be deemed
to be representations and warranties to UHC by Parent under this Section 3), as
follows:
3.1 Organization of Parent.
(a) Parent and each of its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority, and all requisite qualifications to do business as a foreign
corporation, to conduct its business in the manner in which its business is
currently being conducted, except where the failure to be so organized, existing
or in good standing or to have such power, authority or qualifications would
not, individually or in the aggregate, have a Material Adverse Effect on Parent.
(b) Other than the corporations identified in Part 3.1 of the Parent
Disclosure Letter, neither Parent nor any of the other corporations identified
in Part 3.1 of the Parent
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Disclosure Letter owns any capital stock of, or any equity interest of any
nature in, any corporation, partnership, joint venture arrangement or other
business entity, other than the entities identified in Part 3.1 of the Parent
Disclosure Letter, except for passive investments in equity interests of public
companies as part of the cash management program of Parent. Neither Parent nor
any of its subsidiaries is obligated to make any material future investment in
or capital contribution to any other entity. Part 3.1 of the Parent Disclosure
Letter indicates the jurisdiction of organization of each entity listed therein
and Parent's direct or indirect equity interest therein.
(c) Parent has delivered or made available to UHC a true and correct
copy of the Certificate of Incorporation (including any Certificates of
Designation) and Bylaws of Parent and similar governing instruments of each of
its subsidiaries, each as amended to date (collectively, the "PARENT CHARTER
DOCUMENTS"), and each such instrument is in full force and effect. Neither
Parent nor any of its subsidiaries is in violation of any of the provisions of
the Parent Charter Documents.
3.2 Capitalization.
(a) The authorized capital stock of Parent consists solely of
200,000,000 shares of Common Stock, of which there were 64,773,413 shares issued
and outstanding as of the close of business on March 28, 2000, and 5,000,000
shares of Preferred Stock, par value $0.001 per share, of which no shares are
issued or outstanding. All outstanding shares of Common Stock are duly
authorized, validly issued, fully paid and nonassessable and are not subject to
any right of rescission or preemptive rights created by statute, the Parent
Charter Documents or any agreement or document to which Parent is a party or by
which it is bound. As of the date of this Agreement, there are no shares of
Common Stock held in treasury by Parent.
(b) As of the close of business on March 28, 2000, (i) 7,242,904 shares
of Common Stock are subject to issuance pursuant to outstanding options ("PARENT
OPTIONS") to purchase Common Stock under Parent's 1997 Stock Plan and 1999
Equity Incentive Plan ("PARENT STOCK OPTION PLANS") for an aggregate exercise
price of $45,865,480, (ii) 142,551 shares of Common Stock are subject to
issuance pursuant to Parent Options other than pursuant to the Parent Stock
Option Plans for an aggregate exercise price of $512,704, and (iii) 750,000
shares of Common Stock are reserved for future issuance under Parent's 1998
Equity Employee Stock Purchase Plan ("PARENT ESPP"). Parent has made available
to UHC an accurate and complete copy of each of Parent Stock Option Plans and
the form of all stock option agreements evidencing Parent Options. All shares of
Common Stock subject to issuance as aforesaid, upon issuance on the terms and
conditions specified in the instruments pursuant to which they are issuable,
will be duly authorized, validly issued, fully paid and nonassessable. Other
than as set forth on Part 3.2(b) of the Parent Disclosure Letter, there are no
commitments or agreements of any character to which Parent is bound obligating
Parent to accelerate the vesting of any Parent Option as a result of the
consummation of the transactions contemplated by this Agreement, the Eclipsys
Merger Agreement or the Healthvision Merger Agreement.
(c) All outstanding shares of Common Stock, all outstanding Parent
Options, and all outstanding shares of capital stock of each subsidiary of
Parent have been issued and granted in material compliance with (i) all
applicable securities laws and other applicable material Legal Requirements and
(ii) all material requirements set forth in applicable agreements or
instruments. For the purposes of this Agreement, "LEGAL REQUIREMENTS" means any
federal, state, local, municipal, foreign or other law, statute, constitution,
principle of common law,
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resolution, ordinance, code, edict, decree, rule, regulation, ruling or
requirement issued, enacted, adopted, promulgated, implemented or otherwise put
into effect by or under the authority of any Governmental Entity (as defined in
Section 3.4).
(d) The Shares and Warrant, when issued and paid for as provided in
this Agreement, will be duly authorized and validly issued, fully paid and
nonassessable. The Warrant Stock, when issued and paid for as provided in this
Agreement and the Warrant, will be duly authorized and validly issued, fully
paid and nonassessable.
(e) Based in part on the representations made by UHC in Section 4
hereof, the offer and sale of the Shares and the Warrant solely to UHC in
accordance with this Agreement and (assuming no change in currently applicable
law or the Warrant, and no transfer of the Warrant by the holder thereof and no
commission or other remuneration is paid or given, directly or indirectly, for
soliciting the exercise of the Warrant) the issuance of the Warrant Stock is
exempt from the registration and prospectus delivery requirements of the U.S.
Securities Act of 1933, as amended (the "1933 ACT")
3.3 Obligations With Respect to Capital Stock. Except as set forth in
Section 3.2 or Part 3.3 of the Parent Disclosure Letter, there are no equity
securities, partnership interests or similar ownership interests of any class of
Parent equity security, or any securities exchangeable or convertible into or
exercisable for such equity securities, partnership interests or similar
ownership interests, issued, reserved for issuance or outstanding. All stock and
rights to purchase stock of any subsidiary of Parent are owned free and clear of
all Encumbrances. Except as set forth in Section 3.2 or Part 3.2 or Part 3.3 of
the Parent Disclosure Letter, there are no subscriptions, options, warrants,
equity securities, partnership interests or similar ownership interests, calls,
rights (including preemptive rights), commitments or agreements of any character
to which Parent or any of its subsidiaries is a party or by which it is bound
obligating Parent or any of its subsidiaries to issue, deliver or sell, or cause
to be issued, delivered or sold, or repurchase, redeem or otherwise acquire, or
cause the repurchase, redemption or acquisition of, any shares of capital stock,
partnership interests or similar ownership interests of Parent or any of its
subsidiaries or obligating Parent or any of its subsidiaries to grant, extend,
accelerate the vesting of or enter into any such subscription, option, warrant,
equity security, call, right, commitment or agreement. There are no registration
rights, and there is no shareholder agreement, investor agreement, voting trust,
proxy, rights agreement, "poison pill" anti-takeover plan or other agreement or
understanding to which Parent is a party or by which it is bound with respect to
any equity security of any class of Parent or with respect to any equity
security, partnership interest or similar ownership interest of any class of any
of its subsidiaries.
3.4 Due Authorization.
(a) Parent has all requisite corporate power and authority to enter
into this Agreement and the Outsourcing Agreement, to issue the Warrant and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Outsourcing Agreement, the issuance of the
Warrant and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action on the part of
Parent, subject only to the approval by Parent's stockholders of the issuance of
Common Stock pursuant to this Agreement and the Warrant. The affirmative vote of
the holders of a majority in interest of the stock present or represented by
proxy at the Parent stockholders' meeting (the "PARENT STOCKHOLDERS' MEETING")
is sufficient for Parent's stockholders to approve
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the issuance of Common Stock pursuant to this Agreement and the Warrant, and no
other approval of any holder of any securities of Parent is required in
connection with the consummation of the transactions contemplated hereby. This
Agreement and the Outsourcing Agreement have each been duly executed and
delivered by Parent and, subject to approval of Parent stockholders in the case
of this Agreement and the issuance of the Warrant and, assuming the due
authorization, execution and delivery by Novation, HPPI, UHC and VHA, as
applicable, constitute the valid and binding obligations of Parent, enforceable
against Parent in accordance with their terms, except as enforceability may be
limited by bankruptcy and other similar laws affecting the rights of creditors
generally and general principles of equity.
(b) The execution and delivery of this Agreement and the Outsourcing
Agreement by Parent does not, and the performance of this Agreement and the
Outsourcing Agreement by Parent will not, (i) conflict with or violate the
Parent Charter Documents, (ii) subject to obtaining the Parent Stockholder
Approvals and compliance with the requirements set forth in Section 3.4(c),
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to Parent or by which any of its properties is bound or affected, or
(iii) result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or impair
Parent's rights or alter the rights or obligations of any third party under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of an Encumbrance on any of the
properties or assets of Parent pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Parent is a party or by which Parent or any of its
properties are bound or affected, except, in the case of clauses (ii) and (iii),
for such conflicts, violations, breaches, defaults, impairments, or rights
which, individually or in the aggregate, would not have a Material Adverse
Effect on Parent. Part 3.4(b) of the Parent Disclosure Letter lists all
consents, waivers and approvals under any of Parent's agreements, contracts,
licenses or leases required to be obtained in connection with the consummation
of the transactions contemplated hereby, which, if individually or in the
aggregate not obtained, would have a Material Adverse Effect on Parent.
(c) No consent, approval, order or authorization of, or registration,
declaration or filing with any court, administrative agency or commission or
other governmental entity or instrumentality, foreign or domestic ("GOVERNMENTAL
ENTITY") is required to be obtained or made by Parent in connection with the
execution, delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby, except for (i) such consents, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under applicable federal, foreign and state securities (or related)
laws and the HSR Act and the securities or antitrust laws of any foreign
country, and (ii) such other consents, authorizations, filings, approvals and
registrations which if not obtained or made would not have a Material Adverse
Effect on Parent or have a material adverse effect on the ability of the parties
hereto to consummate the transactions contemplated hereby.
3.5 SEC Filings; Parent Financial Statements.
(a) Parent has filed all forms, reports and documents required to be
filed by Parent with the SEC since the effective date of the Registration
Statement of Parent's initial public offering, and has made available to Parent
such forms, reports and documents in the form filed with the SEC. All such
required forms, reports and documents (including those that Parent may file
subsequent to the date hereof) and the Parent Initial Registration Statement are
referred
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to herein as the "PARENT SEC REPORTS." As of their respective dates, the Parent
SEC Reports (i) were prepared in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC thereunder applicable to such Parent SEC Reports, and
(ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except to the extent corrected prior to the date of this Agreement
by a subsequently filed Parent SEC Report. None of Parent's subsidiaries is
required to file any forms, reports or other documents with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Parent SEC Reports (the
"PARENT FINANCIALS"), including any Parent SEC Reports filed after the date
hereof until the Closing, (i) complied as to form in all material respects with
the published rules and regulations of the SEC with respect thereto, (ii) was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited interim financial statements, as may be permitted by the SEC
on Form 10-Q, 8-K or any successor form under the Exchange Act) and (iii) fairly
presented the consolidated financial position of Parent and its subsidiaries as
at the respective dates thereof and the consolidated results of Parent's
operations and cash flows for the periods indicated, except that the unaudited
interim financial statements may not contain footnotes and were or are subject
to normal and recurring year-end adjustments. The balance sheet of Parent
contained in Parent SEC Reports as of September 30, 1999 is hereinafter referred
to as the "PARENT BALANCE SHEET." Except as disclosed in the Parent Financials,
since the date of the Parent Balance Sheet neither Parent nor any of its
subsidiaries has any liabilities required under GAAP to be set forth on a
balance sheet (absolute, accrued, contingent or otherwise) which are,
individually or in the aggregate, material to the business, results of
operations or financial condition of Parent and its subsidiaries taken as a
whole, except for liabilities incurred since the date of the Parent Balance
Sheet in the ordinary course of business consistent with past practices and
liabilities incurred in connection with this Agreement.
3.6 Absence of Certain Changes or Events. Since the date of the Parent
Balance Sheet there has not been (i) any Material Adverse Effect with respect to
Parent, (ii) any declaration, setting aside or payment of any dividend on, or
other distribution (whether in cash, stock or property) in respect of, any of
Parent's or any of its subsidiaries' capital stock, or any purchase, redemption
or other acquisition by Parent of any of Parent's capital stock or any other
securities of Parent or its subsidiaries or any options, warrants, calls or
rights to acquire any such shares or other securities except for repurchases
from employees following their termination pursuant to the terms of their
pre-existing stock option or purchase agreements, (iii) any split, combination
or reclassification of any of Parent's or any of its subsidiaries' capital
stock, (iv) any granting by Parent or any of its subsidiaries of any increase in
compensation or fringe benefits to any of their officers or employees, or any
payment by Parent or any of its subsidiaries of any bonus to any of their
officers or employees, or any granting by Parent or any of its subsidiaries of
any increase in severance or termination pay or any entry by Parent or any of
its subsidiaries into, or material modification or amendment of, any currently
effective employment, severance, termination or indemnification agreement or any
agreement the benefits of which are contingent or the terms of which are
materially altered upon the occurrence of a transaction involving Parent of the
nature contemplated hereby, in each case, other than in the ordinary course of
business consistent with past practice, (v) any material change or alteration in
the policy of Parent relating
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to the granting of stock options or other equity compensation to its employees
and consultants other than in the ordinary course of business consistent with
past practice, (vi) entry by Parent or any of its subsidiaries into, or material
modification, amendment or cancellation of, any licensing or other agreement
with regard to the acquisition, distribution or licensing of any material
Intellectual Property other than licenses, distribution agreements, advertising
agreements, or other similar agreements entered into in the ordinary course of
business consistent with past practice, (vii) any material change by Parent in
its accounting methods, principles or practices, except as required by
concurrent changes in GAAP, or (viii) any material revaluation by Parent of any
of its material assets, including writing off notes or accounts receivable other
than in the ordinary course of business.
3.7 Taxes.
(a) Parent and each of its subsidiaries have timely filed all material
Returns relating to Taxes required to be filed by or on behalf of Parent and
each of its subsidiaries with any Tax authority, such Returns are true, correct
and complete in all material respects, and Parent and each of its subsidiaries
have paid all Taxes shown to be due on such Returns.
(b) Parent and each of its subsidiaries have withheld with respect to
its employees all federal and state income taxes, Taxes pursuant to FICA, Taxes
pursuant to FUTA and other Taxes required to be withheld, except such Taxes
which are not material to Parent.
(c) Neither Parent nor any of its subsidiaries has been delinquent in
the payment of any material Tax nor is there any material Tax deficiency
outstanding, proposed or assessed against Parent or any of its subsidiaries, nor
has Parent or any of its subsidiaries executed any unexpired waiver of any
statute of limitations on or extending the period for the assessment or
collection of any Tax.
(d) No audit or other examination of any Return of Parent or any of its
subsidiaries by any Tax authority is presently in progress, nor has Parent or
any of its subsidiaries been notified of any request for such an audit or other
examination.
(e) No adjustment relating to any Returns filed by Parent or any of its
subsidiaries has been proposed in writing formally or informally by any Tax
authority to Parent or any of its subsidiaries or any Tax or financial
representative thereof.
(f) Neither Parent nor any of its subsidiaries has any liability for
unpaid Taxes which has not been accrued for or reserved on the Parent Balance
Sheet in accordance with GAAP, whether asserted or unasserted, contingent or
otherwise, which is material to Parent, other than any liability for unpaid
Taxes that may have accrued since the date of the Parent Balance Sheet in
connection with the operation of the business of Parent and its subsidiaries in
the ordinary course.
(g) There is no agreement, plan or arrangement to which Parent or any
of its subsidiaries is a party, including this Agreement and the agreements
entered into in connection with this Agreement, covering any employee or former
employee of Parent or any of its subsidiaries that, individually or
collectively, would be reasonably likely to give rise to the payment of any
amount that would not be deductible pursuant to Sections 280G, 404 or 162(m) of
the Code. There is no contract, agreement, plan or arrangement to which the
Parent is a party
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or by which it is bound to compensate any individual for excise taxes paid
pursuant to Section 4999 of the Code.
(h) Neither Parent nor any of its subsidiaries has filed any consent
agreement under Section 341(f) of the Code or agreed to have Section 341(f)(2)
of the Code apply to any disposition of a subsection (f) asset (as defined in
Section 341(f)(4) of the Code) owned by Parent.
(i) Neither Parent nor any of its subsidiaries is party to or has any
obligation under any tax-sharing, tax indemnity or tax allocation agreement or
arrangement.
(j) Except as may be required as a result of the transactions
contemplated hereby, Parent and its subsidiaries have not been and will not be
required to include any adjustment in Taxable income for any Tax period (or
portion thereof) pursuant to Section 481 of the Code or any comparable provision
under state or foreign Tax laws as a result of transactions, events or
accounting methods employed prior to the Closing.
(k) None of Parent's or its subsidiaries' assets are tax exempt use
property within the meaning of Section 168(h) of the Code.
(l) Parent has not been distributed in a transaction qualifying under
Section 355 of the Code within the last two years, nor has Parent distributed
any corporation in a transaction qualifying under Section 355 of the Code within
the last two years.
For the purposes of this Agreement, "TAX" or "TAXES" refers to (i) any
and all federal, state, local and foreign taxes, assessments and other
governmental charges, duties, impositions and liabilities relating to taxes,
including taxes based upon or measured by gross receipts, income, profits,
sales, use and occupation, and value added, ad valorem, transfer, franchise,
withholding, payroll, recapture, employment, excise and property taxes, together
with all interest, penalties and additions imposed with respect to such amounts,
(ii) any liability for payment of any amounts of the type described in clause
(i) as a result of being a member of an affiliated consolidated, combined or
unitary group, and (iii) any liability for amounts of the type described in
clauses (i) and (ii) as a result of any express or implied obligation to
indemnify another person or as a result of any obligations under any agreements
or arrangements with any other person with respect to such amounts and including
any liability for taxes of a predecessor entity.
3.8 Title to Properties.
(a) All real property leases to which Parent is a party and each
amendment thereto that is in effect as of the date of this Agreement that
provide for annual payments in excess of $250,000 are in full force and effect
and are valid and enforceable in accordance with their respective terms, and
there is not, under any of such leases, any existing default or event of default
(or event which with notice or lapse of time, or both, would constitute a
default) that would give rise to a material claim against Parent which could
reasonably be expected to have a Material Adverse Effect on Parent.
(b) Parent has good and valid title to, or, in the case of leased
properties and assets, valid leasehold interests in, all of its tangible
properties and assets, real, personal and mixed, used or held for use in its
business, free and clear of any Encumbrances, except as
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reflected in Parent Financials and except where the failure to have valid title
or a valid leasehold interest would not have a Material Adverse Effect on
Parent.
3.9 Intellectual Property. For the purposes of this Agreement, the
following terms have the following definitions:
"PARENT INTELLECTUAL PROPERTY" shall mean any Intellectual Property
that is owned by, or exclusively licensed to, Parent or one of its subsidiaries.
"PARENT REGISTERED INTELLECTUAL PROPERTY" means all of the Registered
Intellectual Property owned by, or filed in the name of, Parent or one of its
subsidiaries.
(a) No material Parent Intellectual Property or product or service of
Parent is subject to any proceeding, agreement, or stipulation to which Parent
is a party, or any outstanding decree, order or judgment, which arose out of any
proceeding to which Parent was either a party or of which Parent has knowledge,
restricting in any manner the use, transfer, or licensing thereof by Parent, or
which may affect the validity, use or enforceability of such Parent Intellectual
Property.
(b) Each material item of Parent Registered Intellectual Property is
valid and subsisting, all necessary registration, maintenance and renewal fees
currently due in connection with such Parent Registered Intellectual Property
have been made and all necessary documents, recordations and certificates in
connection with such Parent Registered Intellectual Property have been filed
with the relevant patent, copyright, trademark or other authorities in the
United States or foreign jurisdictions, as the case may be, for the purposes of
maintaining such Parent Registered Intellectual Property, except, in each case,
as would not materially adversely affect such item of Parent Registered
Intellectual Property.
(c) Parent or one of its subsidiaries owns and has good and exclusive
title to, or has license sufficient for the conduct of its business as currently
conducted to, each material item of Parent Intellectual Property free and clear
of any Encumbrance (excluding licenses and related restrictions).
(d) Neither Parent nor any of its subsidiaries has transferred
ownership of, or granted any exclusive license with respect to, any Intellectual
Property that is or was material Parent Intellectual Property, to any third
party.
(e) Part 3.9(e) of the Parent Disclosure Letter lists all material
contracts, licenses and agreements to which Parent is a party (i) pursuant to
which any exclusive rights with respect to Parent Intellectual Property are
licensed, granted or transferred to any third party; or (ii) pursuant to which a
third party has licensed, transferred, sold or distributed any material
Intellectual Property to Parent.
(f) The operation of the business of Parent as such business currently
is conducted, including Parent's design, development, marketing and sale of the
products or services of Parent (including with respect to products currently
under development) has not, does not and will not materially infringe or
materially misappropriate the Intellectual Property of any third party or, to
its knowledge, constitute unfair competition or trade practices under the laws
of any jurisdiction.
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(g) Parent has not received written notice from any third party that
the operation of the business of Parent or any act, product or service of
Parent, infringes or misappropriates the Intellectual Property of any third
party or constitutes unfair competition or trade practices under the laws of any
jurisdiction, which allegation, if true, would have a Material Adverse Effect on
Parent.
(h) To the knowledge of Parent, no person has or is infringing or
misappropriating any Parent Intellectual Property, which infringement or
misappropriation, individually or in the aggregate, would have a Material
Adverse Effect on Parent.
(i) Parent and its subsidiaries have taken reasonable steps to protect
Parent's and its subsidiaries' rights in Parent's and such subsidiaries'
confidential information and trade secrets, except where the failure to do so
would not have a Material Adverse Effect on Parent.
(j) None of the Parent Intellectual Property or product or service of
Parent contains any defect in connection with processing data containing dates
in leap years or in the year 2000 or any preceding or following years, which
defects, individually or in the aggregate, would have a Material Adverse Effect
on Parent.
3.10 Compliance with Laws.
(a) Neither Parent nor any of its subsidiaries is in conflict with, or
in default or in violation of (i) any law, rule, regulation, order, judgment or
decree applicable to Parent or any of its subsidiaries or by which Parent or any
of its subsidiaries or any of their respective properties is bound or affected,
or (ii) any note, bond, mortgage, indenture, agreement, lease, license, permit,
franchise or other instrument or obligation to which Parent or any of its
subsidiaries is a party or by which Parent or any of its subsidiaries or its or
any of their respective properties is bound or affected, except for conflicts,
violations and defaults that, individually or in the aggregate, would not have a
Material Adverse Effect on Parent. To Parent's knowledge, no investigation or
review by any Governmental Entity is pending or has been threatened in a writing
delivered to Parent against Parent or any of its subsidiaries. There is no
agreement with any Governmental Entity, judgment, injunction, order or decree
binding upon Parent or any of its subsidiaries which has or could reasonably be
expected to have the effect of prohibiting or materially impairing any material
business practice of Parent or any of its subsidiaries, or any acquisition of
material property by Parent or any of its subsidiaries.
(b) Parent and its subsidiaries hold all permits, licenses, exemptions,
orders and approvals from governmental authorities that are material to or
required for the operation of the business of Parent as currently conducted
(collectively, the "PARENT PERMITS"), and are in compliance with the terms of
the Parent Permits, except where the failure to hold such Parent Permits, or be
in such compliance, would not, individually or in the aggregate, have a Material
Adverse Effect on Parent.
3.11 Litigation. There are no claims, suits, actions or proceedings
pending or, to the knowledge of Parent, threatened against, relating to or
affecting Parent or any of its subsidiaries, before any Governmental Entity or
any arbitrator that seeks to restrain or enjoin the consummation of the
transactions contemplated by this Agreement or which could reasonably be
expected, either singularly or in the aggregate with all such claims, actions or
proceedings, to have a Material Adverse Effect on Parent following the
transactions contemplated hereby or have
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a material adverse effect on the ability of the parties hereto to consummate the
transactions contemplated hereby.
3.12 Employee Benefit Plans.
(a) Definitions. With the exception of the definition of "Affiliate"
set forth in Section 3.12(a)(i) below (which definition shall apply only to this
Section 3.12), for purposes of this Agreement, the following terms shall have
the meanings set forth below:
(i) "AFFILIATE" shall mean any other person or entity under common
control with Parent within the meaning of Section 414(b), (c), (m) or (o) of the
Code and the regulations issued thereunder;
(ii) "PARENT EMPLOYEE PLAN" shall mean any plan, program, policy,
practice, contract, agreement or other arrangement providing for compensation,
severance, termination pay, performance awards, stock or stock-related awards,
fringe benefits or other employee benefits or remuneration of any kind, whether
written or unwritten or otherwise, funded or unfunded, including without
limitation, each "EMPLOYEE BENEFIT PLAN," within the meaning of Section 3(3) of
ERISA which is maintained, contributed to, or required to be contributed to, by
Parent or any Affiliate for the benefit of any Parent Employee;
(iii) "PARENT EMPLOYEE" shall mean any current, former, or retired
employee, officer, or director of Parent or any Affiliate;
(iv) "PARENT EMPLOYEE AGREEMENT" shall mean each management,
employment, severance, consulting, relocation, repatriation, expatriation,
visas, work permit or similar agreement or contract between Parent or any
Affiliate and any Parent Employee or consultant (excluding any offer letter or
other agreement that does not subject Parent to any potential liability in
excess of $200,000);
(v) "INTERNATIONAL PARENT EMPLOYEE PLAN" shall mean each Parent
Employee Plan that has been adopted or maintained by Parent, whether informally
or formally, for the benefit of Parent Employees outside the United States; and
(vi) "PENSION PLAN" shall mean each Parent Employee Plan which is
an "employee pension benefit plan," within the meaning of Section 3(2) of ERISA.
(b) Schedule. Part 3.12 of the Parent Disclosure Letter contains an
accurate and complete list of each Parent Employee Plan. Parent does not have
any plan or commitment to establish any new Parent Employee Plan, to modify any
Parent Employee Plan (except to the extent required by law or to conform any
such Parent Employee Plan to the requirements of any applicable law, or as
required by this Agreement), or to enter into any Parent Employee Plan, nor does
it have any intention or commitment to do any of the foregoing.
(c) Documents. Parent has provided or has made available to UHC: (i)
correct and complete copies of all documents embodying each Parent Employee Plan
(including all amendments thereto and written interpretations thereof); (ii) the
most recent annual actuarial valuations, if any, prepared for each Parent
Employee Plan; (iii) the three most recent annual reports (Form Series 5500 and
all schedules and financial statements attached thereto), if any, required under
ERISA or the Code in connection with each Parent Employee Plan or related
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trust; (iv) if the Parent Employee Plan is funded, the most recent annual and
periodic accounting of Parent Employee Plan assets; (v) the most recent summary
plan description together with the summary of material modifications thereto, if
any, required under ERISA with respect to each Parent Employee Plan; (vi) all
IRS determination, opinion, notification and advisory letters, and rulings
relating to Parent Employee Plans and copies of all applications and
correspondence to or from the IRS or the DOL with respect to any Parent Employee
Plan; (vii) all material written agreements and contracts relating to each
Parent Employee Plan, including, but not limited to, administrative service
agreements, group annuity contracts and group insurance contracts; (viii) all
communications material to any Parent Employee or Parent Employees relating to
any Parent Employee Plan and any proposed Parent Employee Plans, in each case,
relating to any amendments, terminations, establishments, increases or decreases
in benefits, acceleration of payments or vesting schedules or other events which
would result in any material liability to Parent; (ix) all COBRA forms and
related notices; and (x) all registration statements and prospectuses prepared
in connection with each Parent Employee Plan.
(d) Employee Plan Compliance. Except, in each case, as would not,
individually or in the aggregate, have a Material Adverse Effect on Parent (i)
Parent has performed in all material respects all obligations required to be
performed by it under, is not in default or violation of, and has no knowledge
of any default or violation by any other party to, each Parent Employee Plan,
and each Parent Employee Plan has been established and maintained in all
material respects in accordance with its terms and in compliance with all
applicable laws, statutes, orders, rules and regulations, including but not
limited to ERISA or the Code; (ii) each Parent Employee Plan intended to qualify
under Section 401(a) of the Code and each trust intended to qualify under
Section 501(a) of the Code has either received a favorable determination letter
from the IRS with respect to each such Plan as to its qualified status under the
Code or has remaining a period of time under applicable Treasury regulations or
IRS pronouncements in which to apply for such a determination letter and make
any amendments necessary to obtain a favorable determination and no event has
occurred which would adversely affect the status of such determination letter or
the qualified status of such Plan; (iii) no "prohibited transaction," within the
meaning of Section 4975 of the Code or Sections 406 and 407 of ERISA, and not
otherwise exempt under Section 408 of ERISA, has occurred with respect to any
Parent Employee Plan; (iv) there are no actions, suits or claims pending, or, to
the knowledge of Parent, threatened or reasonably anticipated (other than
routine claims for benefits) against any Parent Employee Plan or against the
assets of any Parent Employee Plan; (v) each Parent Employee Plan can be
amended, terminated or otherwise discontinued after the Closing in accordance
with its terms, without liability to Parent or any of its Affiliates (other than
ordinary administration expenses typically incurred in a termination event);
(vi) there are no audits, inquiries or proceedings pending or, to the knowledge
of Parent, threatened by the IRS or DOL with respect to any Parent Employee
Plan; (vii) neither Parent nor any Affiliate is subject to any material penalty
or tax with respect to any Parent Employee Plan under Section 402(i) of ERISA or
Sections 4975 through 4980 of the Code; and (viii) all contributions due from
the Parent or any Affiliate with respect to any of the Parent Employee Plans
have been made as required under ERISA or have been accrued on the Parent
Balance Sheet.
(e) Pension Plans. Parent does not now, nor has it ever, maintained,
established, sponsored, participated in, or contributed to, any Pension Plan
which is subject to Title IV of ERISA or Section 412 of the Code.
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(f) Multiemployer Plans. At no time has Parent contributed to or been
required to contribute to any Multiemployer Plan.
(g) No Post-Employment Obligations. No Parent Employee Plan provides,
or has any liability to provide, retiree life insurance, retiree health or other
retiree employee welfare benefits to any person for any reason, except as may be
required by COBRA or other applicable statute, and Parent has never represented,
promised or contracted (whether in oral or written form) to any Parent Employee
(either individually or to Parent Employees as a group) or any other person that
such Parent Employee(s) or other person would be provided with retiree life
insurance, retiree health or other retiree employee welfare benefits, except to
the extent required by statute.
(h) COBRA; FMLA. Except as would not have a Material Adverse Effect on
Parent, neither Parent nor any Affiliate has, prior to the Closing violated any
of the health care continuation requirements of COBRA, the requirements of FMLA
or any similar provisions of state law applicable to its Employees.
(i) Effect of Transaction. The execution of this Agreement and the
consummation of the transactions contemplated hereby will not (either alone or
upon the occurrence of any additional or subsequent events) constitute an event
under any Parent Employee Plan, Parent Employee Agreement, trust or loan that
will or may result in any payment (whether of severance pay or otherwise),
acceleration, forgiveness of indebtedness, vesting, distribution, increase in
benefits or obligation to fund benefits with respect to any Parent Employee. No
payment or benefit which will or may be made by Parent or its Affiliates with
respect to any Parent Employee as a result of the transactions contemplated by
this Agreement will be characterized as an "excess parachute payment," within
the meaning of Section 280G(b)(1) of the Code or will be treated as a
nondeductible expense within the meaning of Section 162 of the Code.
(j) Employment Matters. Except, in each case, as would not,
individually or in the aggregate, have a Material Adverse Effect on Parent,
Parent and each of its subsidiaries: (i) is in compliance in all material
respects with all applicable foreign, federal, state and local laws, rules and
regulations respecting employment, employment practices, terms and conditions of
employment and wages and hours, in each case, with respect to Parent Employees;
(ii) has withheld all amounts required by law or by agreement to be withheld
from the wages, salaries and other payments to Parent Employees; (iii) has
properly classified independent contractors for purposes of federal and
applicable state tax laws, laws applicable to employee benefits and other
applicable laws; (iv) is not liable for any arrears of wages or any taxes or any
penalty for failure to comply with any of the foregoing; and (v) is not liable
for any material payment to any trust or other fund or to any governmental or
administrative authority, with respect to unemployment compensation benefits,
social security or other benefits or obligations for Parent Employees (other
than routine payments to be made in the normal course of business and consistent
with past practice). There are no pending, or, to Parent's knowledge, threatened
material claims or actions against Parent under any worker's compensation policy
or long-term disability policy. To Parent's knowledge, no Parent Employee has
violated in any material manner any employment contract, nondisclosure agreement
or noncompetition agreement by which such Parent Employee is bound due to such
Parent Employee being employed by Parent and disclosing to Parent or using trade
secrets or proprietary information of any other person or entity.
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(k) Labor. No work stoppage or labor strike against Parent is pending,
threatened or reasonably anticipated. Parent does not know of any activities or
proceedings of any labor union to organize any Parent Employees. There are no
actions, suits, claims, labor disputes or grievances pending, or, to the
knowledge of Parent, threatened or reasonably anticipated relating to any labor,
safety or discrimination matters involving any Parent Employee, including
charges of unfair labor practices or discrimination complaints, which, if
adversely determined, would, individually or in the aggregate, result in any
material liability to Parent. Neither Parent nor any of its subsidiaries has
engaged in any unfair labor practices within the meaning of the National Labor
Relations Act. Parent is not presently, nor has it been in the past, a party to,
or bound by, any collective bargaining agreement or union contract with respect
to Employees and no collective bargaining agreement is being negotiated by
Parent.
(l) International Employee Plan. Each International Parent Employee
Plan has been established, maintained and administered in material compliance
with its terms and conditions and with the requirements prescribed by any and
all statutory or regulatory laws that are applicable to such International
Parent Employee Plan. Furthermore, no International Parent Employee Plan has
unfunded liabilities, that as of the Closing, will not be offset by insurance or
fully accrued. Except as required by law, no condition exists that would prevent
Parent from terminating or amending any International Parent Employee Plan at
any time for any reason.
3.13 Environmental Matters. During the period that Parent has leased or
owned its properties or leased, owned or operated any facilities, there have
been no disposals, releases or threatened releases of Hazardous Materials (as
defined below) on, from or under any such properties or facilities that would
have a Material Adverse Effect on Parent. Parent has no knowledge of any
presence, disposals, releases or threatened releases of Hazardous Materials on,
from or under any of such properties or facilities, which may have occurred
prior to Parent or any of its subsidiaries having taken possession of any of
such properties or facilities which might reasonably be expected to have a
Material Adverse Effect on Parent. None of the properties or facilities
currently leased or owned by Parent or any of its subsidiaries or any properties
or facilities previously leased or owned by Parent or any of its subsidiaries is
in violation of any federal, state or local law, ordinance, regulation or order
relating to industrial hygiene or to the environmental conditions on, under or
about such properties or facilities, including, but not limited to, soil and
ground water condition which violation would have a Material Adverse Effect on
Parent. During Parent's occupancy of any properties or facilities owned or
leased at any time by Parent, neither Parent, nor to Parent's knowledge, any
third party, has used, generated, manufactured, released or stored on, under or
about such properties and facilities or transported to or from such properties
and facilities any Hazardous Materials that would have or is reasonably likely
to have a Material Adverse Effect on Parent. During the time that Parent or any
of its subsidiaries has owned or leased the properties and facilities currently
occupied by it or any properties and facilities previously occupied by Parent or
any of its subsidiaries, there has been no material litigation, proceeding or
administrative action brought or threatened against Parent or any of its
subsidiaries, or any material settlement reached by Parent or any of its
subsidiaries with, any party or parties alleging the presence, disposal, release
or threatened release of any Hazardous Materials on, from or under any of such
properties or facilities.
3.14 Certain Agreements. Other than (i) the Eclipsys Merger Agreement,
(ii) the Agreement and Plan of Merger dated as of the date of this Agreement
(the "HEALTHVISION MERGER AGREEMENT") between Parent and HEALTHvision, Inc.
("HEALTHVISION"), (iii) the Outsourcing Agreement, and other related agreements,
except as otherwise set forth in Part 3.14
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of the Parent Disclosure Letter, neither Parent nor any of its subsidiaries is a
party to or is bound by:
(a) other than as disclosed in Part 3.12 of the Parent Disclosure
Letter, any employment agreement or commitment with any officer or member of
Parent's Board of Directors, other than those that are terminable by Parent or
any of its subsidiaries on no more than thirty days notice without liability or
financial obligation, except to the extent general principles of wrongful
termination law may limit Parent's or any of its subsidiaries' ability to
terminate employees at will, or any consulting agreement;
(b) any material agreement of indemnification, any material guaranty or
any material instrument evidencing indebtedness for borrowed money by way of
direct loan, sale of debt securities or purchase money obligation;
(c) any agreement or obligation containing covenants purporting to
limit or which effectively limit the Parent's or any of its subsidiaries'
freedom to compete in any line of business or in any geographic area or which
would so limit Parent or any of its subsidiaries after the Closing or granting
any exclusive distribution or other exclusive rights;
(d) any agreement or obligation currently in force relating to the
disposition or acquisition by Parent or any of its subsidiaries after the date
of this Agreement of a material amount of assets not in the ordinary course of
business, or pursuant to which Parent has any material ownership or
participation interest in any corporation, partnership, joint venture, strategic
alliance or other business enterprise other than Parent's subsidiaries;
(e) any agreement or obligation currently in force to provide source
code to any third party for any product or technology;
(f) any agreement or obligation with any affiliate of Parent; or
(g) any agreement or commitment currently in force providing for
capital expenditures by Parent or its subsidiaries in excess of $1,000,000.
The agreements required to be disclosed in the Parent Disclosure Letter
pursuant to clauses (a) through (g) above or pursuant to Section 3.9 or filed
with any Parent SEC Report ("PARENT CONTRACTS") are valid and in full force and
effect, except to the extent that such invalidity would not have a Material
Adverse Effect on Parent. Neither Parent nor any of its subsidiaries, nor to
Parent's knowledge, any other party thereto, is in breach, violation or default
under, and neither Parent nor any of its subsidiaries has received written
notice that it has breached, violated or defaulted, any of the terms or
conditions of any Parent Contract in such a manner as would have a Material
Adverse Effect on Parent.
3.15 Brokers' and Finders' Fees. Except for fees payable to Xxxxxxx
Xxxxx & Co., Parent has not incurred, nor will it incur, directly or indirectly,
any liability for brokerage or finders' fees or agents' commissions or any
similar charges in connection with this Agreement or any transaction
contemplated hereby.
3.16 Insurance. Parent and each of its subsidiaries have policies of
insurance and bonds of the type and in amounts customarily carried by persons
conducting business or owning assets similar to those of the Parent and its
subsidiaries. There is no material claim
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pending under any of such policies or bonds as to which coverage has been
questioned, denied or disputed by the underwriters of such policies or bonds.
All premiums due and payable under all such policies have been paid and the
Parent and its subsidiaries are otherwise in compliance in all material respects
with the terms of such policies and bonds.
3.17 Disclosure. The information supplied by Parent for inclusion in
the Registration Statement shall not at the time the Registration Statement is
filed with the SEC and at the time it becomes effective under the Securities Act
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The information supplied by Parent for inclusion or incorporation by
reference in the Proxy Statement/Prospectus shall not, on the date the Proxy
Statement/Prospectus is mailed to Parent's stockholders, at the time of the
Parent Stockholders' Meeting or as of the Closing, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not false or misleading, or omit to
state any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Parent
Stockholders' Meeting which has become false or misleading. The Registration
Statement and Proxy Statement/Prospectus will comply as to form in all material
respects with the provisions of the Securities Act and the rules and regulations
thereunder. If at any time prior to the Closing, any event relating to Parent or
any of its affiliates, officers or directors should be discovered by Parent
which is required to be set forth in an amendment to the Registration Statement
or a supplement to the Proxy Statement/Prospectus, Parent shall promptly inform
Novation. Notwithstanding the foregoing, Parent makes no representation or
warranty with respect to any information supplied by Novation which is contained
in any of the foregoing documents.
ARTICLE IV
REPRESENTATIONS, WARRANTIES
AND CERTAIN AGREEMENTS OF UHC
UHC hereby represents and warrants to Parent, subject to the exceptions
specifically disclosed in writing in the disclosure letter delivered by UHC
dated as of the date hereof and certified by a duly authorized officer of UHC
(the "UHC DISCLOSURE LETTER") (which UHC Disclosure Letter shall be deemed to be
representations and warranties to Parent by UHC under this Section 4), as
follows:
4.1 Organization, Good Standing and Qualification. UHC represents that
it is an entity duly organized, validly existing and in good standing under the
laws of the state of its formation and has all requisite power and authority,
and all requisite qualifications to do business as a foreign entity, to conduct
its business in the manner in which its business is currently being conducted,
except where the failure to be so organized, existing or in good standing or to
have such power, authority or qualifications would not have a Material Adverse
Effect on UHC.
4.2 Authorization.
(a) UHC has all requisite power and authority to enter into this
Agreement and the Outsourcing Agreement and to consummate the transactions
contemplated hereby and
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thereby. The execution and delivery of this Agreement and the Outsourcing
Agreement and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the part of UHC.
This Agreement and the Outsourcing Agreement have each been duly executed and
delivered by UHC and constitute the valid and binding obligations of UHC,
enforceable against UHC in accordance with their terms, except as enforceability
may be limited by bankruptcy and other similar laws affecting the rights of
creditors generally and general principles of equity.
(b) The execution and delivery of this Agreement and the Outsourcing
Agreement by UHC does not, and the performance of this Agreement and the
Outsourcing Agreement by UHC will not, (i) conflict with or violate the
certificate of incorporation, bylaws, operating agreement or other
organizational documents of UHC, (ii) subject to compliance with the
requirements set forth in Section 4.2(c) with regard to UHC, conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to UHC
or by which any of its properties are bound or affected, or (iii) result in any
breach of or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or impair UHC's rights or alter the
rights or obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of an Encumbrance on any of the properties or assets of UHC pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which UHC is a party or
by which UHC or any of its properties are bound or affected, except, in the case
of clauses (ii) and (iii), for such conflicts, violations, breaches, defaults,
impairments, or rights which, individually or in the aggregate, would not have a
Material Adverse Effect on UHC. Except as set forth in a letter delivered by UHC
to Parent concurrently with the execution of this Agreement, no consents,
waivers and approvals under any of UHC's or any of its subsidiaries' agreements,
contracts, licenses or leases are required to be obtained in connection with the
consummation of the transactions contemplated hereby, which, if individually or
in the aggregate not obtained, would have a Material Adverse Effect on UHC.
(c) No consent, approval, order or authorization of, or registration,
declaration or filing with any Governmental Entity is required to be obtained or
made by UHC in connection with the execution and delivery of this Agreement or
the Outsourcing Agreement or the consummation of the transactions contemplated
hereby or thereby, except for (i) such consents, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal, foreign and state securities (or related) laws and the HSR
Act and the securities or antitrust laws of any foreign country, and (ii) such
other consents, authorizations, filings, approvals and registrations which if
not obtained or made would not have a Material Adverse Effect on UHC or have a
material adverse effect on the ability of the parties hereto to consummate the
transactions contemplated hereby.
4.3 Acquisition for Own Account. The Shares, Warrant and Warrant Stock
to be delivered to UHC hereunder will be acquired for investment for UHC's own
account, not as a nominee or agent, and not with a view to the public resale or
distribution thereof within the meaning of the 1933 Act, and UHC represents that
it has no present intention or agreement to sell, grant any participation in, or
otherwise distribute any of the Shares, Warrant or Warrant Stock to be acquired
by UHC hereunder in any public resale or distribution within the meaning of the
1933 Act. UHC also represents that it has not been formed for the specific
purpose of acquiring the Shares, Warrant or Warrant Stock under this Agreement.
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4.4 Disclosure of Information. UHC believes it has received or has had
full access to all the information it considers necessary or appropriate to make
an informed investment decision with respect to the Shares, Warrant and Warrant
Stock to be issued to UHC under this Agreement. UHC further has had an
opportunity to ask questions and receive answers from Parent regarding the terms
and conditions of the offering of the Shares, Warrant and Warrant Stock and to
obtain additional information (to the extent Parent possessed such information
or could acquire it without unreasonable effort or expense) necessary to verify
any information furnished to UHC or to which UHC had access. The foregoing,
however, does not in any way limit or modify the representations and warranties
made by Parent in Section 3.
4.5 Investment Experience. UHC understands that an investment in the
Shares, Warrant and Warrant Stock involves substantial risk. UHC: (i) has
experience as an investor in securities of companies in the development stage
and acknowledges that UHC is able to fend for itself, can bear the economic risk
of UHC's investment in the Shares, Warrant and Warrant Stock and has such
knowledge and experience in financial or business matters that UHC is capable of
evaluating the merits and risks of this investment in the Shares, Warrant and
Warrant Stock and protecting its own interests in connection with this
investment and/or (ii) has a preexisting personal or business relationship with
Parent and certain of its officers, directors or controlling persons of a nature
and duration that enables UHC to be aware of the character, business acumen and
financial circumstances of such persons.
4.6 Accredited Investor Status. UHC is an "accredited investor" within
the meaning of Regulation D promulgated under the 1933 Act.
4.7 Restricted Securities. UHC understands that the Shares and the
Warrant are, and upon issuance under the Warrant, the Warrant Stock will be
characterized as "restricted securities" under the 1933 Act inasmuch as they are
being acquired from Parent in a transaction not involving a public offering and
that under the 1933 Act and applicable regulations thereunder such securities
may be resold without registration under the 1933 Act only in certain limited
circumstances. In this connection, UHC represents that UHC is familiar with Rule
144 of the SEC, as presently in effect, and understands the resale limitations
imposed thereby and by the 1933 Act.
4.8 No Solicitation. At no time was UHC presented with or solicited by
any publicly issued or circulated newspaper, mail, radio, television or other
form of general advertising or solicitation in connection with the issuance or
delivery of the Shares or the Warrant.
4.9 Further Limitations on Disposition. Without in any way limiting the
representations set forth above, UHC further agrees not to make any disposition
of all or any portion of the Shares or Warrant Stock or of any interest therein
to any person or entity unless:
(a) there is then in effect a registration statement under the 1933
Act covering such proposed disposition of Shares or Warrant Stock and such
disposition is made in accordance with such registration statement; or
(b) UHC shall have notified Parent of the proposed disposition of the
Shares or the Warrant Stock and shall have furnished Parent with a
statement of the circumstances surrounding such proposed disposition, and,
at the expense of UHC or its transferee, with
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an opinion of counsel, reasonably satisfactory to Parent, that such
disposition will not require registration of such securities under the 1933
Act.
UHC acknowledges that the Warrant is non-transferable to the extent it has not
vested.
4.10 Legends. UHC understands and agrees that the certificates
evidencing the Shares, the Warrant and the Warrant Stock will bear legends
substantially similar to those set forth below, as applicable, in addition to
any other legend that may be required by applicable law, by Parent's Certificate
of Incorporation or Bylaws, or by any agreement between Parent and UHC:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OTHERWISE PERMITTED UNDER CONTRACTUAL RESTRICTIONS
ON RESALE APPLICABLE TO THESE SECURITIES IS IN COMPLIANCE WITH THE ACT
AND ANY APPLICABLE STATE SECURITIES LAWS.
The legend set forth above shall be removed by Parent from any certificate
evidencing Shares or Warrant Stock upon delivery to Parent of an opinion by
counsel, reasonably satisfactory to Parent, to the effect that a registration
statement under the 1933 Act is at that time in effect with respect to the
legended security or to the effect that such security can be freely transferred
in a public sale without such a registration statement being in effect and that
such transfer will not jeopardize the exemption or exemptions from registration
pursuant to which Parent issued the Shares or Warrant Stock.
4.11 Disclosure. The information supplied by UHC for inclusion in the
Registration Statement shall not at the time the Registration Statement is filed
with the SEC and at the time it becomes effective under the Securities Act
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The information supplied by UHC for inclusion or incorporation by
reference in the Proxy Statement/Prospectus shall not (i) on the date the Proxy
Statement/Prospectus is mailed to Parent's stockholders, and (ii) at the time of
the Parent Stockholders' Meeting to consider the Parent Stockholder Approval or
as of the Closing, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not false or misleading; or omit to state any material fact necessary to
correct any statement in any earlier communication with respect to the
solicitation of proxies for the Parent Stockholders' Meeting which has become
false or misleading. If at any time prior to the Effective Time any event
relating to UHC or any of its affiliates, officers or directors should be
discovered by UHC which is required to be set forth in an amendment to the
Registration Statement or a supplement to the
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Proxy Statement/Prospectus, UHC shall promptly inform Parent. Notwithstanding
the foregoing, UHC makes no representation or warranty with respect to any
information supplied by Parent which is contained in any of the foregoing
documents.
ARTICLE V
CONDUCT PRIOR TO THE CLOSING
5.1 Conduct of Business by Parent. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement pursuant to its terms or the Closing, Parent and each of its
subsidiaries shall, except to the extent that UHC shall otherwise consent in
writing, carry on its business in the usual, regular and ordinary course, in
substantially the same manner as heretofore conducted and in compliance in all
material respects with all applicable material laws and regulations, pay its
debts and taxes when due subject to good faith disputes over such debts or
taxes, pay or perform other material obligations when due, and use its
commercially reasonable efforts consistent with past practices and policies to
(i) preserve intact its present business organization, (ii) keep available the
services of its present officers and employees and (iii) preserve its
relationships with customers, suppliers, licensors, licensees, and others with
which it has business dealings. In addition, Parent will promptly notify UHC of
any material adverse event involving its business or operations.
In addition, except as permitted by the terms of this Agreement, and
except as contemplated by this Agreement or provided in the Parent Disclosure
Letter, without the prior written consent of UHC, during the period from the
date of this Agreement and continuing until the earlier of the termination of
this Agreement pursuant to its terms or the Closing, Parent shall not do any of
the following and shall not permit its subsidiaries to do any of the following:
(a) Waive any stock repurchase rights, accelerate, amend or change the
period of exercisability of options or restricted stock, or reprice options
granted under any employee, consultant, director or other stock plans or
authorize cash payments in exchange for any options granted under any of such
plans;
(b) Grant any severance or termination pay to any officer or employee
except pursuant to written agreements in effect, or policies existing, on the
date hereof and as previously disclosed in writing to UHC, or adopt any new
severance plan;
(c) Transfer or license to any person or entity or otherwise extend,
amend or modify in any material respect any rights to Intellectual Property that
is owned by, or exclusively licensed to, Parent or one of its subsidiaries,
other than non-exclusive licenses in the ordinary course of business and
consistent with past practice. "INTELLECTUAL PROPERTY" means any or all of the
following and all rights in, arising out of, or associated therewith: (i) all
United States, international and foreign patents and applications therefor and
all reissues, divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof; (ii) all inventions (whether patentable or not),
invention disclosures, improvements, trade secrets, proprietary information,
know how, technology, technical data and customer lists, and all documentation
relating to any of the foregoing; (iii) all copyrights, copyrights registrations
and applications therefor, and all other rights corresponding thereto throughout
the world; (iv) all industrial designs and any registrations and applications
therefor throughout the world; (v) all trade names, URLs, logos, common law
trademarks and service marks, trademark and service xxxx
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registrations and applications therefor throughout the world; (vi) all databases
and data collections and all rights therein throughout the world; (vii) all
moral and economic rights of authors and inventors, however denominated,
throughout the world, and (viii) any similar or equivalent rights to any of the
foregoing anywhere in the world;
(d) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, stock, equity securities or property) in respect
of any capital stock or split, combine or reclassify any capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of or
in substitution for any capital stock;
(e) Purchase, redeem or otherwise acquire, directly or indirectly, any
shares of capital stock of Parent or its subsidiaries, except repurchases of
unvested shares at cost in connection with the termination of the employment
relationship with any employee pursuant to stock option or purchase agreements
in effect on the date hereof;
(f) Issue, deliver, sell, authorize, pledge or otherwise encumber any
shares of capital stock or any securities convertible into shares of capital
stock, or subscriptions, rights, warrants or options to acquire any shares of
capital stock or any securities convertible into shares of capital stock, or
enter into other agreements or commitments of any character obligating it to
issue any such shares or convertible securities, other than the grant, issuance,
delivery and/or sale of (i) shares of Common Stock pursuant to the exercise of
Parent Options outstanding on the date of this Agreement, or granted in
accordance with clause (iii) of this Section 5.1(f), (ii) shares of Common Stock
issuable to participants in the Parent ESPP consistent with the terms thereof,
(iii) Parent Options granted to newly-hired employees in the ordinary course of
business in amounts comparable to similarly situated Parent employees, and in an
aggregate amount not to exceed 550,000, none of which Parent Options shall
provide for or permit any acceleration of the exercisability thereof in
connection with any of the transactions contemplated by this Agreement, and (iv)
shares of Common Stock issued in connection with acquisitions and commercial
transactions permitted under Section 5.1(h) below;
(g) Cause, permit or propose any amendments to its Certificate of
Incorporation, Bylaws or other charter documents (or similar governing
instruments of any of its subsidiaries), other than an amendment to its
Certificate of Incorporation to increase the authorized number of shares of
Common Stock;
(h) Acquire or agree to acquire by merging or consolidating with, or by
purchasing any equity interest in or a portion of the assets of, or by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof; or otherwise acquire or agree to
acquire any assets which are material, individually or in the aggregate, to the
business of Parent, or enter into any material joint ventures, strategic
relationships or alliances, or enter into any commercial transaction involving
the issuance or potential issuance of equity securities of Parent; provided,
that Parent shall not be prohibited hereunder from (x) acquiring EquipMD, Inc.
pursuant to the Agreement and Plan of Merger among Parent, Augustacorp, Inc. and
EquipMD, Inc. (a true and complete copy of which has been made available to
Company) or (y) making or agreeing to make acquisitions, or entering into
commercial transactions involving the issuance or potential issuance of Common
Stock, all of which together do not involve the issuance or potential issuance
of more than 825,000 shares of Common Stock in the aggregate, and none of which
acquisitions, agreements or commercial transactions could reasonably be expected
to materially delay the other transactions contemplated
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by this Agreement; provided, further, that Parent shall provide written notice
to UHC prior to signing any agreement regarding any such acquisition or
transaction;
(i) Sell, lease, license, encumber or otherwise dispose of any
properties or assets which are material, individually or in the aggregate, to
the business of Parent;
(j) Incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or options,
warrants, calls or other rights to acquire any debt securities of Parent, enter
into any "keep well" or other agreement to maintain any financial statement
condition or enter into any arrangement having the economic effect of any of the
foregoing other than (i) in connection with the financing of ordinary course
trade payables consistent with past practice, (ii) pursuant to existing credit
facilities in the ordinary course of business, (iii) equipment leasing
arrangements or (iv) in aggregate amount not to exceed $1,000,000;
(k) (i) Adopt or amend any employee benefit plan or employee stock
purchase or employee stock option plan, or enter into any employment contract or
collective bargaining agreement (other than offer letters and letter agreements
entered into in the ordinary course of business consistent with past practice
with employees who are terminable "at will") other than an increase in the
number of shares of Common Stock reserved for issuance under Parent Stock Option
Plans or Parent ESPP, or (ii) pay any special bonus or special remuneration to
any director or employee, or increase the salaries or wage rates or fringe
benefits (including rights to severance or indemnification) of its directors,
officers, employees or consultants other than in the ordinary course of
business, consistent with past practice, or change in any material respect any
management policies or procedures;
(1) Make any capital expenditures outside of the ordinary course of
business or any capital expenditures in excess of $1,000,000, individually, or
$10,000,000, in the aggregate;
(m) Materially modify, amend or terminate any material contract or
agreement to which Parent or any subsidiary thereof is a party, or waive,
release or assign any material rights or claims thereunder, except in the
ordinary course of business;
(n) Enter into any licensing or other agreement with regard to the
acquisition, distribution or licensing of any material Intellectual Property
owned by, or exclusively licensed to, Parent other than licenses, distribution
agreements, advertising agreements, or other similar agreements entered into in
the ordinary course of business consistent with past practice;
(o) Materially revalue any of its assets or, except as required by
GAAP, make any change in accounting methods, principles or practices;
(p) Initiate or settle any material litigation, arbitration, mediation
or other legal proceeding;
(q) Take or permit any action with the intent to directly or indirectly
adversely impact any of the transactions contemplated by this Agreement; or
(r) Agree in writing or otherwise to take any of the actions described
in Section 5.1 (a) through (q) above.
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ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Reasonable Efforts. Upon the terms and subject to the conditions
set forth in this Agreement, each of the parties agrees to use all reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, and to assist and cooperate with the other party in doing, all things
necessary, proper or advisable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement,
including using reasonable efforts to accomplish the following: (i) the taking
of all reasonable acts necessary to cause the conditions precedent set forth in
Articles VII and VIII to be satisfied, (ii) the obtaining of all necessary
actions or nonactions, waivers, consents, approvals, orders and authorizations
from Governmental Entities and the making of all necessary registrations,
declarations and filings (including registrations, declarations and filings with
Governmental Entities, if any) and the taking of all reasonable steps as may be
necessary to avoid any suit, claim, action, investigation or proceeding by any
Governmental Entity, (iii) the obtaining of all necessary consents, approvals or
waivers from third parties, (iv) the defending of any suits, claims, actions,
investigations or proceedings, whether judicial or administrative, challenging
this Agreement or the consummation of the transactions contemplated hereby,
including seeking to have any stay or temporary restraining order entered by any
court or other Governmental Entity vacated or reversed and (v) the execution or
delivery of any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement.
Notwithstanding anything in this Agreement to the contrary, neither Parent nor
any of its affiliates shall be under any obligation to make proposals, execute
or carry out agreements or submit to orders providing for the sale or other
disposition or holding separate (through the establishment of a trust or
otherwise) of any assets or categories of assets of Parent or any of its
affiliates or imposing or seeking to impose any limitation on the ability of
Parent or any of its subsidiaries or affiliates to conduct their business or own
such assets.
6.2 Amendments to Related Transaction Documents Prior to Closing.
Parent will not agree to any material amendment of the Earth Merger Agreement or
the Heaven Merger Agreement, without the prior written consent of UHC (which
consent shall not be unreasonably withheld or delayed).
ARTICLE VII
CONDITIONS TO UHC'S OBLIGATIONS AT CLOSING
The obligations of UHC under Sections 1 and 2 of this Agreement are subject
to the fulfillment or waiver, on or before the Closing, of each of the following
conditions:
7.1 Representations and Warranties. The representations and warranties
of Parent contained in this Agreement, disregarding all qualifications and
exceptions contained therein relating to materiality or Material Adverse Effect
or any similar standard or qualification, shall be true and correct at and as of
the Closing as if made at and as of the Closing (other than representations and
warranties that address matters only as of a particular date, which shall be
true and correct as of such date), except where the failure of such
representations or warranties to be true or correct would not have, individually
or in the aggregate, a Material Adverse Effect on Parent. It is understood that,
for purposes of determining the accuracy of such representations and warranties,
any update of or modification to the Parent Disclosure Letter made or purported
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to have been made after the execution of this Agreement shall be disregarded.
UHC shall have received a certificate with respect to the foregoing signed on
behalf of Parent by the Chief Executive Officer or Chief Financial Officer of
Parent.
7.2 Performance. Parent shall have performed and complied in all
material respects with all agreements, obligations and conditions contained in
this Agreement that are required to be performed or complied with by it on or
before the Closing.
7.3 Securities Exemptions. The offer and sale of the Shares and the
Warrant to UHC pursuant to this Agreement shall be exempt from the registration
requirements of the 1933 Act, the qualification requirements of the California
Corporate Securities Law of 1968, as amended ("CALIFORNIA LAW") and the
securities laws of Illinois ("ILLINOIS LAW") and the registration and/or
qualification requirements of all other applicable state securities laws.
7.4 Consents. (i) All required approvals or consents of any
Governmental Entity or other person in connection with the consummation of the
transactions contemplated hereby shall have been obtained (and all relevant
statutory, regulatory or other governmental waiting periods, shall have expired)
unless the failure to receive any such approval or consent would not be
reasonably likely, directly or indirectly, to result in a Material Adverse
Effect on Parent and its subsidiaries, Eclipsys and its subsidiaries and
Healthvision and its subsidiaries, taken as a whole, and (ii) all such approvals
and consents which have been obtained shall be on terms that are not reasonably
likely, directly or indirectly, to result in a Material Adverse Effect on Parent
and its subsidiaries, Eclipsys and its subsidiaries and Healthvision and its
subsidiaries, taken as a whole.
7.5 Nasdaq Listing. The Shares and the Warrant Stock shall have been
approved for listing on the Nasdaq Stock Market, subject to official notice of
issuance.
7.6 Related Transactions. UHC shall have received certificates executed
by the Chief Executive Officers or Chief Financial Officers of each of Parent,
Healthvision and Eclipsys that each such party is ready, willing and able to
consummate the transactions contemplated by the Eclipsys Merger Agreement and
the Healthvision Merger Agreement, respectively.
7.7 Outsourcing Agreement. (i) Parent shall have executed and delivered
the Outsourcing Agreement, (ii) the Outsourcing Agreement shall be fully
effective in accordance with its terms, and (iii) Parent shall be in compliance
in all material respects with the terms of the Outsourcing Agreement, and UHC
shall have received a certificate with respect to the foregoing clauses (i),
(ii) and (iii) executed by the Chief Executive Officer or Chief Financial
Officer of Parent.
ARTICLE VIII
CONDITIONS TO PARENT'S OBLIGATIONS AT CLOSING
The obligations of Parent under this Agreement are subject to the
fulfillment or waiver on or before the Closing of each of the following
conditions:
8.1 Representations and Warranties. The representations and warranties
of UHC contained in Section 4 shall be true and correct in all material respects
on the date
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of the Closing with the same effect as though such representations and
warranties had been made on and as of the Closing.
8.2 Performance. UHC shall have performed and complied in all material
respects with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing.
8.3 Parent Stockholder Approval. The issuance of the Shares, the
Warrant and the Warrant Stock shall have been approved by the requisite vote of
the stockholders of Parent under applicable law and the Parent Charter
Documents.
8.4 Outsourcing Agreement. (i) Each party to the Outsourcing Agreement
(other than Parent) shall have executed and delivered the Outsourcing Agreement,
(ii) the Outsourcing Agreement shall be fully effective in accordance with its
terms, and (iii) each of the parties thereto (other than Parent) shall be in
compliance in all material respects with the terms of the Outsourcing Agreement,
and Parent shall have received a certificate with respect to the foregoing
clauses (i), (ii) and (iii) executed by the Chief Executive Officers or Chief
Financial Officers of each of Novation, VHA, UHC and HPPI.
8.5 Securities Exemptions. The issuance of the Shares and the Warrant
to UHC pursuant to this Agreement shall be exempt from the registration
requirements of the 1933 Act, the qualifications requirements of California Law
and Illinois Law and the registration and/or qualification requirements of all
other applicable state securities laws.
8.6 Consents. (i) All required approvals or consents of any
Governmental Entity or other person in connection with the consummation of the
transactions contemplated hereby shall have been obtained (and all relevant
statutory, regulatory or other governmental waiting periods, shall have expired)
unless the failure to receive any such approval or consent would not be
reasonably likely, directly or indirectly, to result in a Material Adverse
Effect on Parent and its subsidiaries, Eclipsys and its subsidiaries and
Healthvision and its subsidiaries, taken as a whole, and (ii) all such approvals
and consents which have been obtained shall be on terms that are not reasonably
likely, directly or indirectly, to result in a Material Adverse Effect on Parent
and its subsidiaries, Eclipsys and its subsidiaries and Healthvision and its
subsidiaries, taken as a whole.
ARTICLE IX
TERMINATION
9.1 Termination. This Agreement may be terminated prior to the Closing,
whether before or after the requisite approval of the issuance of the Shares,
the Warrant and the Warrant Stock by Parent's stockholders:
(a) by mutual written consent duly authorized by the Boards of
Directors of Parent and UHC;
(b) by either Parent or UHC if the Closing shall not have occurred by
September 30, 2000 for any reason; provided, however, that the right to
terminate this Agreement under this Section 9.1(b) shall not be available to any
party whose action or failure to act has been a principal cause of or resulted
in the failure of the Closing to occur on or before such date
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and such action or failure to act constitutes a breach of this Agreement or the
Outsourcing Agreement;
(c) by either Parent or UHC if a Governmental Entity shall have issued
an order, decree or ruling or taken any other action, in any case having the
effect of permanently restraining, enjoining or otherwise prohibiting the
Closing, which order, decree, ruling or other action is final and nonappealable;
(d) by either Parent or UHC, if the approval of the issuance of the
Shares, the Warrant and the Warrant Stock by the stockholders of Parent shall
not have been obtained by reason of the failure to obtain the required vote at a
meeting of Parent stockholders duly convened therefor or at any adjournment
thereof; or
(e) by either Parent or UHC, if any of the Outsourcing Agreement, the
Eclipsys Merger Agreement or the Healthvision Merger Agreement is validly
terminated according to its terms by a party thereto.
9.2 Notice of Termination; Effect of Termination. Any proper termination of
this Agreement under Section 9.1 will be effective immediately upon the delivery
of written notice of the terminating party to the other party hereto. In the
event of the termination of this Agreement as provided in Section 9.1, this
Agreement shall be of no further force or effect, except (i) as set forth in
this Section 9.2 and Article X, each of which shall survive the termination of
this Agreement, and (ii) nothing herein shall relieve either party from
liability for any willful breach of this Agreement.
ARTICLE X
GENERAL PROVISIONS
10.1 Survival of Warranties. The representations, warranties and
covenants of UHC (except for any covenant that by its express terms survives the
Closing, and for the representations, warranties and covenants set forth in
Sections 4.3 through 4.10 inclusive, which shall survive the execution and
delivery of this Agreement and the Closing) contained in or made pursuant to
this Agreement shall terminate at the Closing. The representations, warranties
and covenants of Parent (except for any covenant that by its express terms
survives the Closing) contained in or made pursuant to this Agreement shall
terminate at the Closing.
10.2 Assignment. No party may assign either this Agreement or any of
its rights, interests, or obligations hereunder without the prior written
consent of the other party hereto. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Any purported
assignment in violation of this Section shall be void.
10.3 Governing Law. This Agreement shall be governed by and construed
under the internal laws of the State of Delaware as applied to agreements among
Delaware residents entered into and to be performed entirely within Delaware,
without reference to principles of conflict of laws or choice of laws.
10.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
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10.5 Headings. The headings and captions used in this Agreement are
used only for convenience and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to sections,
paragraphs, exhibits and schedules shall, unless otherwise provided, refer to
sections and paragraphs hereof and exhibits and schedules attached hereto, all
of which exhibits and schedules are incorporated herein by this reference.
10.6 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given upon delivery either personally or by
commercial delivery service, or sent via facsimile (receipt confirmed) to the
parties at the following addresses or facsimile numbers (or at such other
address or facsimile number for a party as shall be specified by like notice):
IF TO UHC:
UHC
0000 Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Attn: Executive Vice President
WITH A COPY TO:
XxXxxxxxx, Will & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Attn: Xxxxxxxx X. Xxxxxx
IF TO PARENT:
Xxxxxxxx.xxx, Inc.
0000-0 Xxxxx Xxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
Attn: Chief Financial Officer
WITH A COPY TO:
Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
Attn: Xxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxx
In the event that Parent shall give or receive a notice relating to a
Material Adverse Effect on any of Parent, Eclipsys or Healthvision pursuant to
the Eclipsys Merger Agreement or the Healthvision Merger Agreement, Parent shall
deliver a copy of such notice to UHC.
10.7 Expenses; Finder's Fees. All fees and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such expenses whether or not the Closing occurs. UHC
agrees to indemnify and to hold harmless Parent from any liability for any
commission or compensation in the nature of a finder's or broker's fee (and any
asserted liability) for which UHC or any of its officers, partners, members,
employees, or representatives is responsible. Parent agrees to indemnify and
hold harmless UHC from any liability for any commission or compensation in the
nature of a finder's or broker's fee (and any asserted liability) for which
Parent or any of its officers, employees or representatives is responsible.
10.8 Severability. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision(s) shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision(s) were so excluded and shall be enforceable in accordance with
its terms.
10.9 Entire Agreement. This Agreement, together with all exhibits and
schedules and any disclosure letters delineated pursuant hereto, and the
Outsourcing Agreement constitute the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes any and all
prior negotiations, correspondence, agreements, understandings duties or
obligations between the parties with respect to the subject matter hereof.
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10.10 Further Assurances. From and after the date of this Agreement,
upon the request of UHC or Parent, Parent and UHC shall execute and deliver such
instruments, documents or other writings as may be reasonably necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement.
10.11 Amendment; Extension; Waiver. Subject to applicable law, this
Agreement may be amended by the parties hereto at any time by execution of an
instrument in writing signed on behalf of Parent and UHC. At any time prior to
the Closing any party hereto may, to the extent legally allowed, (i) extend the
time for the performance of any of the obligations or other acts of the other
party hereto, (ii) waive any inaccuracies in the representations and warranties
made to such party contained herein or in any document delivered pursuant hereto
and (iii) waive compliance with any of the agreements or conditions for the
benefit of such party contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party. Delay in exercising any
right under this Agreement shall not constitute a waiver of such right.
10.12 Other Remedies; Specific Performance. Except as otherwise
provided herein, any and all remedies herein expressly conferred upon a party
will be deemed cumulative with and not exclusive of any other remedy conferred
hereby, or by law or equity upon such party, and the exercise by a party of any
one remedy will not preclude the exercise of any other remedy. The parties
hereto agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
10.13 Rules of Construction. The parties hereto agree that they have
been represented by counsel during the negotiation and execution of this
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.
10.14 Parent Disclosure Letter. Disclosure made with regard to a
representation or warranty of Parent in the Parent Disclosure Letter shall also
be deemed to qualify other representations and warranties of the party making
such disclosure if it is readily apparent from the language contained in such
disclosure that such disclosure is applicable to such other representation or
warranty.
10.15 Waiver Of Jury Trial. EACH OF PARENT AND UHC HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE ACTIONS PARENT OR UHC IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT HEREOF.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized respective officers as of the
date first written above.
XXXXXXXX.XXX, INC.
By:
Name:
Title:
UNIVERSITY HEALTHSYSTEM CONSORTIUM
By:
Name:
Title:
[SIGNATURE PAGE TO COMMON STOCK AND WARRANT AGREEMENT]
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SCHEDULE OF EXHIBITS
Exhibit A: Form of Warrant
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EXHIBIT A
FORM OF WARRANT
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE ON EXERCISE HEREOF HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT
THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION
OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT
ANY PROPOSED TRANSFER OTHERWISE PERMITTED UNDER ANY CONTRACTUAL RESTRICTIONS ON
RESALE APPLICABLE TO THESE SECURITIES IS IN COMPLIANCE WITH THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.
THE SECURITIES REPRESENTED HEREBY MAY BE SUBJECT TO CERTAIN RESTRICTIONS ON
RESALE AND ON VOTING AND THE HOLDERS HEREOF MAY BE BOUND BY CERTAIN RESTRICTIONS
ON ACQUISITION OF THE ISSUER'S CAPITAL STOCK PURSUANT TO A COMMON STOCK AND
WARRANT PURCHASE AGREEMENT BETWEEN THE ORIGINAL HOLDERS OF THESE SECURITIES AND
THE ISSUER, A COPY OF WHICH MAY BE OBTAINED FROM THE ISSUER.
WARRANT TO PURCHASE COMMON STOCK
OF
XXXXXXXX.XXX, INC.
No. U-1 Void after __________, 2010
THIS CERTIFIES THAT University Healthsystem Consortium, an Illinois
corporation (the "Holder"), or its permitted assigns is entitled to purchase
under this Warrant up to 1,524,477 shares (the "SHARES") of common stock, par
value $0.001 per share ("COMMON STOCK"), of Xxxxxxxx.xxx, Inc., a Delaware
corporation (the "COMPANY") at a per share price of $30.375 (the "EXERCISE
PRICE") subject to the provisions and upon the terms and conditions hereinafter
set forth.
This Warrant is issued this ___ day of __________, 2000 (the "ISSUE
DATE") pursuant to that certain Common Stock and Warrant Agreement dated as of
March 30, 2000 (the "STOCK AND WARRANT AGREEMENT"), by and between the Company
and the Holder.
1. Vesting and Term.
1.1 Vesting. Upon issuance, this Warrant shall not be vested or
exercisable with respect to any Shares. This Warrant shall become exercisable as
to 20% of the aggregate number of Shares (Shares for which this Warrant may be
exercised, "VESTED SHARES") on January
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1 of each of 2001, 2002, 2003, 2004 and 2005 if on each such respective date,
the Outsourcing and Operating Agreement, dated as of March 30, 2000 (the
"OPERATING AGREEMENT"), among the Company, the Holder, VHA Inc., a Delaware
corporation, Novation, LLC, a Delaware limited liability company, and Healthcare
Purchasing Partners International, LLC, remains in full force and effect in
accordance with its terms (unless terminated or suspended by the Company in
breach of the provisions thereof); provided, however, that Warrant Shares shall
nevertheless continue to vest as contemplated herein if the Holder shall be a
party to an agreement with the Company which provides the Company with
substantially the same benefits as the Operating Agreement which, if and as
permitted by the Operating Agreement, has been entered into upon a change in the
Holder's ownership of Novation, LLC and/or Healthcare Purchasing Partners
International, LLC, the Holder is not in material breach or material default
under such agreement, and such agreement is and shall have been since its
inception in full force and effect in accordance with its terms.
1.2 Acceleration of Vesting. In the event of a merger, consolidation,
business combination, recapitalization, liquidation, dissolution or similar
transaction involving the Company in which all shares of Common Stock of the
Company are converted into cash, or a cash tender offer for all shares of Common
Stock is consummated, this Warrant will become fully exercisable as to all of
the Shares effective upon consummation of such transaction, and this Warrant
will expire on the later of the date of such consummation or twenty days after
written notice of such transaction, provided that the Holder may exercise this
Warrant contingent on the consummation of such transaction
1.3 Termination. Unless this Warrant expires pursuant to Section 1.2,
this Warrant shall remain exercisable with respect to Vested Shares, if any,
until 5:00 p.m. California time on the tenth anniversary of the Issue Date at
which time the Warrant shall expire and be of no further force and effect.
2. Exercise or Conversion.
2.1 Method of Exercise; Payment; Issuance of New Warrant. This Warrant
may be exercised by the Holder, in whole or in part and from time to time as to
Vested Shares, by the surrender of this Warrant (with a notice of exercise in
the form attached as Exhibit A and the investment representation certificate in
the form attached as Exhibit B, each duly executed) at the principal office of
the Company and by the payment to the Company by check or wire transfer of an
amount equal to the then current Exercise Price per share multiplied by the
number of Vested Shares then being purchased (the "AGGREGATE EXERCISE Price").
The Holder shall be deemed to have become the holder of record of, and shall be
treated for all purposes as the record holder of the Vested Shares represented
thereby, and such Vested Shares shall be deemed to have been issued, immediately
prior to the close of business on the date or dates upon which this Warrant is
exercised. In the event of any exercise of this Warrant, certificates for the
Vested Shares so purchased shall be delivered to the Holder as soon as possible
and in any event within ten business days of receipt of such notice by the
Company and, unless this Warrant has been fully exercised or expired, a new
Warrant representing the portion of the Shares, if any, with respect to which
this Warrant shall not then have been exercised shall also be issued to the
Holder as soon as possible and in any event within such ten business day period.
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2.2 Right to Convert Warrant into Stock; Net Issuance. In addition to
and without limiting the rights of the Holder under the terms of this Warrant,
the Holder may elect to exercise this Warrant with respect to then Vested Shares
(the "CONVERSION RIGHT"), the aggregate value of which Vested Shares shall be
equal to the "in-the-money" value of this Warrant or the portion thereof being
converted as set forth below. The Conversion Right may be exercised by the
Holder by surrender of this Warrant at the principal office of the Company
together with notice of the Holder's intention to exercise the Conversion Right,
in which event the Company shall issue to the Holder a number of Vested Shares
computed using the following formula:
X= Y (A-B)
----------
A
Where:
X The number of Vested Shares to be issued to the Holder.
Y The number of Vested Shares representing the portion of this
Warrant that is being converted.
A The fair market value of one Share.
B The Exercise Price (as adjusted to the date of such
calculations).
For purposes of this Section 2.2, the "fair market value" per Share shall mean
the market price of one share of Common Stock on the last business day before
the effective date of exercise of the Conversion Right. If the Common Stock is
then traded on a national securities exchange or admitted to unlisted trading
privileges on such an exchange, or is listed on the Nasdaq Stock Market (the
"NASDAQ MARKET"), the market price as of a specified day shall be the last
reported sale price of one share of Common Stock on such exchange or on the
Nasdaq Market on such date or if no such sale is made on such day, the mean of
the closing bid and asked prices for such day on such exchange or on the Nasdaq
Market. If the Common Stock is not so listed or admitted to unlisted trading
privileges, the market price as of a specified day shall be the mean of the last
bid and asked prices for one share of Common Stock reported on such date (x) by
the NASD or (y) if reports are unavailable under clause (x) above by the
National Quotation Bureau Incorporated. If the Common Stock is not so listed or
admitted to unlisted trading privileges and bid and asked prices are not
reported, the market price of one share of Common Stock as of a specified day
shall be determined in good faith by written resolution of the Board of
Directors of the Company.
2.3 Automatic Conversion. In the event of termination of this Warrant
pursuant to Section 1 above, to the extent that this Warrant is then exercisable
and such exercise would result in the issuance of Shares to the Holder, this
Warrant shall be deemed automatically exercised in full under Section 2.2 above
immediately prior to the time at which it would otherwise expire.
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2.4 HSR Compliance. Exercise or conversion of this Warrant is subject
to compliance by the Holder with all applicable filing requirements, and
expiration of all applicable waiting periods, under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR ACT"). The Company will
cooperate with the Holder in making all applicable filings under the HSR Act,
provided, however, that the Holder shall pay all applicable filing fees.
3. Securities Fully Paid; Reservation of Shares. All Shares that may be
issued upon the exercise of the rights represented by this Warrant, upon
issuance, will be fully paid and nonassessable, and free from all taxes, liens
and charges with respect to the issue thereof. During the period within which
the rights represented by the Warrant may be exercised, the Company will at all
times have authorized and reserved for the purpose of issuance upon exercise of
the purchase rights evidenced by this Warrant, a sufficient number of shares of
Common Stock to provide for the exercise of the rights represented by this
Warrant. The Shares to be issued upon exercise or conversion of this Warrant
shall be approved for listing on the Nasdaq Market, subject to official notice
of issuance.
4. Adjustment of Exercise Price and Number of Shares. The Exercise Price
and the number and kind of securities or other property purchasable upon the
exercise of the Warrant shall be subject to adjustment from time to time upon
the occurrence of certain events, as follows:
4.1 Reclassification or Merger. In case of any reclassification, change
or conversion of securities in the class issuable upon exercise of this Warrant
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination), or in
case of any merger of the Company with or into another corporation (other than a
merger with another corporation in which the Company is a continuing corporation
and which does not result in any reclassification or change of outstanding
securities issuable upon exercise of this Warrant), unless this Warrant shall
have been exercised or terminated in accordance with its terms, this Warrant
shall thereafter be exercisable solely for the kind and amount of consideration,
including but not limited to shares of stock, other securities, money and
property, that the Holder would have received upon such reclassification,
change, conversion or merger if the Holder had exercised this Warrant in full
prior to such reclassification, change, conversion or merger. The provisions of
this subparagraph shall similarly apply to successive reclassifications,
changes, conversions or mergers. The Company agrees to make appropriate
provision in any definitive agreements providing for such a transaction in order
to carry out the terms of this Section.
4.2 Subdivisions or Combination of Shares. If at any time while this
Warrant remains outstanding and unexpired the Company shall subdivide or combine
the securities of the class issuable upon exercise of this Warrant, the Exercise
Price and the number of Shares issuable upon exercise hereof shall be
proportionately adjusted.
4.3 Stock Dividends. If, at any time while this Warrant is outstanding
and unexpired, the Company shall pay a dividend payable in securities of the
class issuable upon exercise of this Warrant (except any distribution
specifically provided for in the foregoing subparagraphs 4.1 and 4.2), then the
Exercise Price shall be adjusted, from and after the date of
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35
determination of stockholders entitled to receive such dividend or distribution,
to that price determined by multiplying the Exercise Price in effect immediately
prior to such date of determination by a fraction, the numerator of which shall
be the total number of shares of such class of securities outstanding
immediately prior to such dividend or distribution, and the denominator of which
shall be the total number of shares of such class of securities outstanding
immediately after such dividend or distribution, and the number of Shares
subject to this Warrant shall be proportionately adjusted.
4.4 Common Stock Rights. If, at any time while this Warrant is
outstanding and unexpired, the Company shall pay a dividend or other
distribution on all Common Stock consisting of, or shall otherwise issue to all
holders of Common Stock, rights, warrants or options (not being available on an
equivalent basis to the Holders of this Warrant upon exercise) entitling the
holders of Common Stock to subscribe for or purchase Common Stock at a price per
share less than the current market price (determined as provided in Section 2.2)
of a share of Common Stock on the date fixed for the determination of
stockholders entitled to receive such rights, warrants or options (other than
pursuant to a dividend reinvestment plan), the Exercise Price shall be decreased
by multiplying the then current Exercise Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares of
Common Stock which the aggregate of the offering price of the total number of
shares of Common Stock so offered for subscription or purchase would purchase at
such current market price, and the denominator of which shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock so offered for
subscription or purchase, such decrease to become effective immediately after
the opening of business on the day following the date fixed for such
determination. In the event that such rights or warrants are not so issued, the
Exercise Price shall again be adjusted to be the Exercise Price which would then
be in effect if such date fixed for the determination of stockholders entitled
to receive such rights, warrants or options had not been fixed. Upon adjustment
of the Exercise Price pursuant to this Section 4.4, the number of shares subject
to issuance upon exercise of this Warrant shall be adjusted by multiplying such
number of shares prior to such adjustment by a fraction, the numerator of which
is the Exercise Price in effect immediately prior to such adjustment and the
denominator of which is the Exercise Price in effect immediately after giving
effect to such adjustment. In making any determinations under this Section 4.4,
there shall be taken into account any consideration received for such rights,
warrants or options, the value of which consideration, if other than cash, shall
be fixed in good faith by the Board of Directors of the Company, whose
determination shall be final.
4.5 Distributions of Property. If, at any time while this Warrant is
outstanding and unexpired, the Company shall pay a dividend or other
distribution on all Common Stock consisting of evidences of its indebtedness or
assets (excluding any dividend or distribution paid in cash, or any dividend or
distribution described in Sections 4.2, 4.3 or 4.4 of this Warrant), the
Exercise Price shall be decreased by multiplying the then current Exercise Price
by a fraction, the numerator of which shall be the current market price
(determined as provided in Section 2.2) of a share of Common Stock on the date
fixed for the determination of stockholders entitled to receive such dividend or
distribution less the fair market value (as determined by the Board of Directors
of Company, whose determination shall be final) of the portion of indebtedness
or
5
36
assets so distributed applicable to one share of Common Stock and the
denominator of which shall be such current market price of a share of Common
Stock, such decrease to become effective immediately after the opening of
business on the day following the date fixed for such determination. In the
event that such dividend or distribution is not so made, the Exercise Price
shall again be adjusted to be the Exercise Price which would then be in effect
if such date fixed for the determination of stockholders entitled to receive
such dividend or distribution had not been fixed. Upon adjustment of the
Exercise Price pursuant to this Section 4.5, the number of shares subject to
issuance upon exercise of this Warrant shall be adjusted by multiplying such
number of shares prior to such adjustment by a fraction, the numerator of which
is the Exercise Price in effect immediately prior to such adjustment and the
denominator of which is the Exercise Price in effect immediately after giving
effect to such adjustment.
4.6 Notice of Adjustments. Whenever the Exercise Price shall be
adjusted pursuant to the provisions hereof, the Company shall within thirty days
of such adjustment deliver a certificate to the Holder signed by its chief
financial officer setting forth, in reasonable detail, the event requiring the
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated, and the number of Shares subject to this Warrant and the
Exercise Price therefor, as applicable, after giving effect to such adjustment.
5. Compliance with Securities Laws; Restrictions on Transfer.
5.1 Accredited Investor. This issuance of this Warrant is conditioned
upon, and by its acceptance hereof the Holder hereby confirms, that the Holder
is an "accredited investor" as that term is defined under Regulation D under the
Securities Act of 1933, as amended.
5.2 Legend. Upon issuance, certificates evidencing the Shares shall
bear legends in substantially the form set forth in the Purchase Agreement.
5.3 Transfer Restrictions; Compliance with Securities Laws on Transfer.
This Warrant may not be transferred in whole or in part without the prior
written consent of the Company, except that such consent shall not be required
for the transfer of all or any part of this Warrant covering Vested Shares. Any
purported transfer of this Warrant in violation of the foregoing restriction
shall be void, and the Company shall not recognize any such purported transfer
on the securities ledger of the Company. In addition, no permitted transfer of
this Warrant or the Shares may be made without compliance with applicable
federal and state securities laws by the transferor and the transferee
(including, without limitation, the delivery of investment representation
letters and legal opinions reasonably satisfactory to the Company). The Company
will reasonably cooperate with the Holder in connection with any permitted
transfer of this Warrant, including by issuing new certificates representing the
Warrant and any portion thereof so transferred.
6. Fractional Shares. No fractional Shares will be issued in connection
with any exercise hereunder, but in lieu of such fractional Shares the Company
shall make a cash payment therefor upon the basis of the Exercise Price then in
effect.
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7. Modification and Waiver. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
8. Notices.
8.1 Notice of Certain Events. The Company shall provide the Holder with
at least twenty days notice (or such greater amount of notice as Delaware law
requires to be given to stockholders having the right to vote at a meeting on
any Sale Event, as defined herein) prior to (i) a merger of the Company with or
into, the consolidation of the Company with, or the sale by the Company of all
or substantially all of its assets to, another person or entity (other than such
a transaction wherein the stockholders of the Company prior to such transaction
retain or obtain a majority of the voting capital stock of the surviving,
resulting or purchasing entity) (a "SALE EVENT"), (ii) any liquidation,
dissolution or winding up of the Company or (iii) the record date for any cash
or other dividend or distribution declared on the Shares (each, a "NOTICE
EVENT"). If a notice is provided pursuant to subsection (i) or (ii) of the
previous sentence, the notice will indicate the expected date of the Notice
Event.
8.2 Notice Procedure. All notices and other communications hereunder
shall be in writing and shall be deemed given upon delivery either personally or
by commercial delivery service, or sent via facsimile (receipt confirmed) to the
parties at the following addresses or facsimile numbers (or at such other
address or facsimile numbers for a party as shall be specified by like notice):
If to the Holder:
UHC
0000 Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Executive Vice President
with a copy to:
XxXxxxxxx, Will & Xxxxx
000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
Attn: Xxxxxxxx X. Xxxxxx
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If to the Company:
Xxxxxxxx.xxx, Inc.
0000-0 Xxxxx Xxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: Chief Financial Officer
with a copy to:
Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Facsimile No.: 000-000-0000
Attn: Xxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxx
9. Lost Warrants or Stock Certificates. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant or any stock certificate for Shares and, in the case of any such
loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory
to the Company, or in the case of any such mutilation upon surrender and
cancellation of such Warrant or stock certificate, the Company will make and
deliver a new Warrant or stock certificate, of like tenor, in lieu of the lost,
stolen, destroyed or mutilated Warrant or stock certificate.
10. No Impairment. The Company will not, through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution,
issuance or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Company, but will at all times in good faith assist
in the carrying out of all the provisions of this Warrant and in the taking of
all such action as may be necessary or appropriate in order to protect the
rights of the holder of this Warrant against impairment.
11. Assignment. Neither the Company nor the Holder may assign either this
Warrant or any of its rights, interests, or obligations hereunder without the
prior written consent of the other, except that the Company's consent shall not
be required for the Holder to assign all or any portion of this Warrant covering
Vested Shares. Subject to the preceding sentence and the restrictions on
transfer of this Warrant set forth in Section 5.3, this Warrant shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Any purported assignment in violation of this
Section shall be void.
[THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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12. Governing Law. This Warrant shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Delaware, without regard to the conflict of laws provisions
thereof.
IN WITNESS WHEREOF, this Warrant has been executed as of the Issue Date.
XXXXXXXX.XXX, INC.
By:
Name:
Title:
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40
EXHIBIT A
NOTICE OF EXERCISE FORM
(To be executed only upon partial or full
exercise of the within Warrant)
The undersigned registered Holder of the within Warrant hereby irrevocably
exercises the within Warrant for and purchases _________ shares of Common Stock
of Xxxxxxxx.xxx, Inc. and herewith makes payment therefor in the amount of
$ , all at the price and on the terms and conditions specified in the within
Warrant and requests that a certificate (or ____________ certificates in
denominations of ___________ shares each) for the shares hereby purchased be
issued in the name of and delivered to ___________________________________ whose
address is ____________________________________________________ and, if such
shares shall not include all the shares issuable as provided in the within
Warrant, that a new Warrant of like tenor for the number of shares not being
purchased hereunder be issued in the name of and delivered to the undersigned,
whose address is __________________________.
Date: ______________________
Holder:
UNIVERSITY HEALTHSYSTEM
CONSORTIUM
By:______________________________
Name:
Title:
NOTICE: The signature to this Notice of Exercise must correspond with
the name as written upon the face of the within Warrant in
every particular, without alteration or enlargement or any
change whatever.
41
EXHIBIT B
INVESTMENT REPRESENTATION CERTIFICATE
Holder: UHC
Company: Xxxxxxxx.xxx, Inc.
Security: Common Stock
Amount:
Date:
In connection with the purchase of the above-listed securities (the
"SHARES"), the undersigned (the "HOLDER") represents to the Company as follows:
The Shares to be purchased by or delivered to the Holder hereunder will be
acquired for investment for such Holder's own account, not as a nominee or
agent, and not with a view to the public resale or distribution thereof within
the meaning of the Securities Act of 1933, as amended ("1933 ACT"), and Holder
represents that it has no present intention or agreement to sell, grant any
participation in, or otherwise distribute any of the Shares to be acquired
hereunder in any public resale or distribution within the meaning of the 1933
Act. Holder also represents that it has not been formed for the specific purpose
of acquiring Securities under this Agreement.
Holder has received or has had full access to all the information it
considers necessary or appropriate to make an informed investment decision with
respect to the Shares to be purchased under this Agreement. Holder further has
had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Shares and to obtain
additional information (to the extent the Company possessed such information or
could acquire it without unreasonable effort or expense) necessary to verify any
information furnished to Holder or to which Holder had access.
Holder understands that the purchase of the Shares involves substantial
risk. Holder: (i) has experience as an investor in securities of companies in
the development stage and acknowledges that Holder is able to fend for itself,
can bear the economic risk of Holder's investment in the Shares and has such
knowledge and experience in financial or business matters that Holder is capable
of evaluating the merits and risks of this investment in the Shares and
protecting its own interests in connection with this investment and/or (ii) has
a preexisting personal or business relationship with the Company and certain of
its officers, directors or controlling persons of a nature and duration that
enables Holder to be aware of the character, business acumen and financial
circumstances of such persons. Holder is an "accredited investor" within the
meaning of Regulation D promulgated under the 1933 Act.
Holder understands that the Shares are characterized as "restricted
securities" under the 1933 Act inasmuch as they are being acquired from the
Company in a transaction not involving a public offering and that under the 1933
Act and applicable regulations thereunder such securities may be resold without
registration under the 1933 Act only in certain limited circumstances. In this
connection, such Holder represents that Holder is familiar with Rule 144 of the
Securities
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42
and Exchange Commission, as presently in effect, and understands the resale
limitations imposed thereby and by the 1933 Act.
At no time was Holder presented with or solicited by any publicly issued or
circulated newspaper, mail, radio, television or other form of general
advertising or solicitation in connection with the offer, sale and purchase of
the Shares.
Without in any way limiting the representations set forth above, Holder
further acknowledges that the Shares are subject to limitations on disposition
thereof set forth in the Warrant and in that certain Common Stock and Warrant
Agreement, dated as of March 30, 2000 by and between the Company and Holder, and
acknowledges that Holder is bound by such restrictions.
Date: ______________________
Holder:
UNIVERSITY HEALTHSYSTEM
CONSORTIUM
By:______________________
Name:
Title:
12
