EXHIBIT 4.3
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SUBSCRIPTION AGREEMENT
between
CAREINSITE, INC.
and
AMERICA ONLINE, INC.
dated as of September 15, 1999
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TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS
1.01. Certain Defined Terms................................................. 1
ARTICLE II
PURCHASE AND SALE
2.01. Sale of Series A Preferred Stock; Option to Purchase
Series A Preferred Stock.............................................. 4
2.02. Closings.............................................................. 4
2.03. Closing Deliveries by the Company..................................... 5
2.04. Closing Deliveries by the Investor.................................... 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.01. Due Organization and Authority........................................ 6
3.02. Capital Stock of Company.............................................. 7
3.03. No Conflict........................................................... 7
3.04. Governmental Consents and Approvals................................... 8
3.05. Compliance with Laws; Litigation...................................... 8
3.06. SEC Filings; Financial Statements; Absence of Undisclosed Liabilities. 8
3.07. No Material Adverse Change............................................ 9
3.08. Brokers............................................................... 9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE INVESTOR
4.01. Organization and Authority............................................ 9
4.02. No Conflict...........................................................10
4.03. Governmental Consents and Approvals...................................10
4.04. Brokers...............................................................10
ARTICLE V
CONDITIONS TO THE INITIAL CLOSING
5.01. Conditions to the Initial Closing.....................................10
5.02. Conditions to the Subsequent Closing..................................11
ARTICLE VI
TRANSFER OF SHARES
6.01. General Restriction...................................................12
6.02. Private Placement.....................................................12
6.03. Legends...............................................................12
ARTICLE VII
ADDITIONAL AGREEMENTS
7.01. HSR...................................................................13
7.02. Survival; Indemnification.............................................13
7.03. Common Stock Issuable Upon Conversion.................................14
7.04. Certificate of Designation............................................14
7.05. Other Action..........................................................14
ARTICLE VIII
MISCELLANEOUS
8.01. Termination...........................................................15
8.02. Expenses..............................................................15
8.03. Notices...............................................................16
8.04. Public Announcements..................................................16
8.05. Headings; Interpretation..............................................16
8.06. Severability..........................................................16
8.07. Entire Agreement......................................................17
8.08. Assignment............................................................17
8.09. Amendment.............................................................17
8.10. Governing Law.........................................................17
8.11. Counterparts..........................................................17
8.12. Non-Waiver; Cumulative Remedies.......................................17
8.13. Waiver of Jury Trial..................................................18
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SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT, dated as of September 15, 1999,
among CAREINSITE, INC., a Delaware corporation (the "Company") and AMERICA
ONLINE, INC., a Delaware corporation (the "Investor").
W I T N E S S E T H:
WHEREAS, on the terms and conditions set forth herein, the
Investor wishes to subscribe for and purchase for cash from the Company, and the
Company wishes to issue and sell to the Investor, 100 shares of Series A
Convertible Redeemable Preferred Stock, face value $100,000 per share (the
"Series A Preferred Stock");
WHEREAS, on the terms and conditions set forth herein, the
Investor wishes to have the option to subscribe for and purchase for cash from
the Company up to an additional 100 shares of Series A Preferred Stock on the
first anniversary of the date of this Agreement, and the Company wishes to grant
such option;
WHEREAS, the parties hereto believe it is in their mutual best
interest to enter into certain other agreements, as set forth herein; and
WHEREAS, the parties hereto are, contemporaneously with
entering into this Agreement, entering into (a) an Interactive Marketing
Agreement (the "Interactive Marketing Agreement") and (b) a Warrant Agreement
(the "Warrant Agreement") setting forth the terms of certain warrants (the
"Warrants") included in the Conversion Consideration (as defined in the form of
Certificate of Designation for the Series A Preferred Stock attached hereto as
Annex A (the "Certificate of Designation")).
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements hereinafter set forth, the parties hereby agree
as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings:
"Affiliate" means, with respect to any specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
Controls, is Controlled by, or is under common Control with, such specified
Person.
"Agreement" means this Subscription Agreement, dated as of
September 15, 1999.
"Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in the State of New York are authorized or
required by law or executive order to close.
"Capital Stock" means, with respect to any Person at any time,
any and all shares, interests, participations or other equivalents (however
designated, whether voting or non-voting) of capital stock, partnership
interests (whether general or limited) or equivalent ownership interests in such
Person.
"Certificate of Designation" has the meaning specified in the
Recitals.
"Commission" means the Securities and Exchange Commission.
"Common Stock" has the meaning specified in the Preamble.
"Company" has the meaning specified in the Preamble.
"Company Disclosure Schedule" means a confidential disclosure
schedule to be delivered by the Company to the Investor at least three Business
Days prior to the Subsequent Closing in order to supplement and modify the
representations and warranties of the Company contained in Article III in
connection with the Subsequent Closing.
"Control" (including the terms "Controlled by" and "under
common Control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, as
trustee or executor, by contract or credit arrangement or otherwise.
"Exchange Act" means the United States Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"Indemnifiable Losses" has the meaning specified in Section
7.02(d)(i).
"Initial Closing" has the meaning specified in Section
2.02(a).
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"Initial Closing Representations" means the representations
and warranties of the Company contained in Article III of this Agreement.
"Interactive Marketing Agreement" has the meaning specified in
the Recitals.
"Investor" has the meaning specified in the Preamble.
"Losses" has the meaning specified in Section 7.02(d)(ii).
"Material Adverse Effect" has the meaning specified in Section
3.01.
"NASDAQ" has the meaning specified in Section 3.05(a).
"Permits" has the meaning specified in Section 3.05(b)(i).
"Person" means any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as any
syndicate or group that would be deemed to be a Person under Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended.
"SEC Reports" has the meaning specified in Section 3.06(a).
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Series A Preferred Stock" has the meaning specified in the
Recitals.
"Subsequent Closing" has the meaning specified in Section
2.02(b).
"Subsequent Closing Representations" means the representations
and warranties of the Company contained in Article III of this Agreement, as
modified and supplemented by the Company Disclosure Schedule.
"Subsidiary" means any and all corporations, partnerships,
joint ventures, associations and other entities Controlled by the Company
directly or indirectly through one or more intermediaries.
"Termination Date" has the meaning specified in Section
8.01(a)(ii).
"Warrant Agreement" has the meaning specified in the Recitals.
"Warrants" has the meaning specified in the Recitals.
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ARTICLE II
PURCHASE AND SALE
SECTION 2.01. Sale of Series A Preferred Stock; Option to
Purchase Series A Preferred Stock. (a) Upon the terms and subject to the
conditions set forth in this Agreement, the Company shall issue and deliver to
the Investor, and the Investor shall accept from the Company, 100 shares of
Series A Preferred Stock. In consideration for the issuance of the Series A
Preferred Stock pursuant to this Section 2.01(a), the Investor shall pay to the
Company a purchase price of $100,000 per share.
(b) Upon the terms and subject to the conditions set forth in
this Agreement, the Investor shall have the option to purchase additional shares
of Series A Preferred Stock on the first anniversary of the date of this
Agreement, up to a maximum of 100 additional shares of Series A Preferred Stock;
provided, however, that such option shall be exercisable by the Investor only if
the Company receives, no later than the 30 days prior to the first anniversary
of the date of this Agreement, a written notice from the Investor stating its
intention to exercise the option to purchase additional shares pursuant to this
Section 2.01(b) and the number of shares to be purchased by the Investor
pursuant hereto; provided that the Investor shall have the right to rescind such
notice until 5:00 p.m. New Jersey time on the second Business Day following
receipt by the Investor of the Company Disclosure Schedule. In consideration for
the issuance of the Series A Preferred Stock pursuant to this Section 2.01(b),
the Investor shall pay to the Company a purchase price of $100,000 per share.
SECTION 2.02. Closings. (a) Upon the terms and subject to the
conditions set forth in this Agreement, the transactions provided for in Section
2.01(a) shall take place at a closing (the "Initial Closing") to be held at
10:00 a.m. New Jersey time on the later of September 16, 1999 or the Business
Day following the satisfaction or waiver of all conditions to the obligations of
the parties set forth in Article V, or at such other time or on such other date
as the parties may mutually agree upon.
(b) Upon the terms and subject to the conditions set forth in
this Agreement, the transactions provided for in Section 2.01(b) shall, if the
Investor exercises the option provided therein, take place at a closing (the
"Subsequent Closing") to be held at 10:00 A.M. New Jersey time on the first
anniversary of the date of this Agreement or at such other time or on such other
date as the parties may mutually agree upon.
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SECTION 2.03. Closing Deliveries by the Company. (a) At the
Initial Closing, the Company shall deliver to the Investor:
(i) a certificate evidencing 100 shares of Series A
Preferred Stock in definitive form and registered in the name of the
Investor;
(ii) a certificate from the Company, signed by a duly
authorized officer, to the effect that the Company's Initial Closing
Representations are true and correct as of the Initial Closing, with
the same force and effect as if made on the date of the Initial
Closing, and that all covenants and agreements of the Company contained
in this Agreement to be complied with on or prior to the Initial
Closing have been complied with; and
(iii) true and complete copies, certified by the
Secretary of the Company, of the Charter and By-laws of the Company and
of the resolutions duly and validly adopted by its Board of Directors,
evidencing their authorization of the execution and delivery of this
Agreement and the Warrant Agreement and the consummation of the
transactions contemplated hereby and thereby.
(b) At the Subsequent Closing, the Company shall deliver to
the Investor:
(i) a certificate evidencing the number of shares of
Series A Preferred Stock purchased by the Investor pursuant to Section
2.01(b) of this Agreement, such certificate to be in definitive form
and registered in the name of the Investor;
(ii) a certificate from the Company, signed by a duly
authorized officer, to the effect that the Company's Subsequent Closing
Representations are true and correct as of the Subsequent Closing, with
the same force and effect as if made on the date of the Subsequent
Closing, and that all covenants and agreements of the Company contained
in this Agreement to be complied with on or prior to the Subsequent
Closing have been complied with; and
(iii) true and complete copies, certified by the
Secretary of the Company, of the Charter and By-laws of the Company and
of the resolutions duly and validly adopted by its Board of Directors,
evidencing their authorization of the execution and delivery of this
Agreement and the Warrant Agreement and the consummation of the
transactions contemplated hereby and thereby.
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SECTION 2.04. Closing Deliveries by the Investor. (a) At the
Initial Closing:
(i) the Investor shall pay $10,000,000.00 by wire
transfer of immediately available funds to an account designated in
writing by the Company no later than the second Business Day prior to
the date of the Initial Closing; and
(ii) the Investor shall deliver a certificate, signed
by a duly authorized officer, to the effect that the representations
and warranties of such party contained in Article IV this Agreement are
true and correct as of the Initial Closing, with the same force and
effect as if made on the date of the Initial Closing, and that all
covenants and agreements of such party contained in this Agreement to
be complied with on or prior to the Subsequent Closing have been
complied with and confirming, with respect to the shares of Series A
Preferred Stock to be purchased at the Initial Closing, the
understandings and statements contained in Section 6.02.
(b) At the Subsequent Closing:
(i) the Investor shall pay the aggregate purchase
price for the number of additional shares of Series A Preferred Stock
to be purchased at the Subsequent Closing, such payment to be made by
wire transfer of immediately available funds to an account designated
in writing by the Company no later than the second Business Day prior
to the date of the Subsequent Closing; and
(ii) the Investor shall deliver a certificate, signed
by a duly authorized officer, to the effect that the representations
and warranties of such party contained in Article IV of this Agreement
are true and correct as of the Subsequent Closing, with the same force
and effect as if made on the date of the Subsequent Closing, and that
all covenants and agreements of such party contained in this Agreement
to be complied with on or prior to the Initial Closing have been
complied with and confirming, with respect to the shares of Series A
Preferred Stock to be purchased at the Subsequent Closing, the
understandings and statements contained in Section 6.02.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Investor as
follows:
SECTION 3.01. Due Organization and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all necessary power and authority to enter into
this Agreement and the Warrant Agreement, to carry out its obligations hereunder
and thereunder, and to consummate the transactions
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contemplated hereby and thereby. The Company is duly licensed or qualified to do
business and is in good standing in each jurisdiction in which the properties
owned or leased by it or the operation of its business makes such licensing or
qualification necessary, except to the extent that the failure to be so licensed
or qualified would not have a material adverse effect on the financial
condition, business or operations of the Company and its subsidiaries taken as a
whole (a "Material Adverse Effect") or prevent or materially delay the
consummation of the transactions contemplated by this Agreement or the Warrant
Agreement. The execution and delivery of this Agreement and the Warrant
Agreement by the Company, the performance by the Company of its obligations
hereunder and thereunder, and the consummation by the Company of the
transactions contemplated hereby and thereby have been duly authorized by all
requisite action on the part of the Company. This Agreement and the Warrant
Agreement have been duly executed and delivered by the Company, and (assuming
due authorization, execution and delivery by the other parties hereto and
thereto) this Agreement and the Warrant Agreement constitute legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms.
SECTION 3.02. Capital Stock of Company. The Series A Preferred
Stock to be issued by the Company pursuant to this Agreement has been duly
authorized and, when issued and delivered in accordance with the terms of this
Agreement, will have been validly issued and will be fully paid and
nonassessable. No Person has any preemptive or similar rights with respect to
the Series A Preferred Stock, and neither the parties hereto nor subsequent
holders in due course of such Series A Preferred Stock will be entitled to any
such preemptive or similar rights. The authorized capital stock of the Company
consists of: (a) 300,000,000 shares of Common Stock, of which 70,410,134 shares
were issued and outstanding on September 3, 1999; and (b) 30,000,000 shares of
preferred stock, of which none are outstanding as of the date of this Agreement.
SECTION 3.03. No Conflict. Assuming that all consents,
approvals, authorizations and other actions described in Section 3.04 have been
obtained, the execution, delivery and performance of this Agreement and the
Warrant Agreement by the Company do not and will not (a) violate, conflict with
or result in the breach of any provision of its Certificate of Incorporation or
By-laws, (b) conflict with or violate any law, governmental regulation or
governmental order applicable to it or any of its assets, properties or
businesses or (c) conflict with, result in any breach of, constitute a default
(or event which with the giving of notice or lapse of time, or both, would
become a default) under, require any consent under, or give to others any rights
of termination, amendment, acceleration, suspension, revocation or cancellation
of, or result in the creation of any encumbrance on any of the Company's assets
or properties pursuant to, any note, bond, mortgage or indenture, contract,
agreement, lease, sublease, license, permit, franchise or other instrument or
arrangement to which the Company is a party or by which any of its assets or
properties is bound or affected; except to the extent that any conflict under
(b) or (c) above would not have a Material Adverse Effect or prevent or
materially delay the consummation of the transactions contemplated by this
Agreement or the Warrant Agreement.
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SECTION 3.04. Governmental Consents and Approvals. The
execution, delivery and performance of this Agreement and the Warrant Agreement
by the Company do not and will not require any consent, approval, authorization
or other order of, action by, filing with or notification to, any governmental
authority, except such as are required by the HSR Act in connection with the
acquisition of Common Stock prior to exercise of the Warrant.
SECTION 3.05. Compliance with Laws; Litigation. (a) The
Company is in compliance with all requirements of applicable law, all applicable
requirements of The NASDAQ Stock Market, Inc. ("NASDAQ") and all orders issued
by any court or governmental authority against the Company, except to the extent
that any such failure to so comply would not have a Material Adverse Effect or
prevent or materially delay the consummation of the transactions contemplated by
this Agreement or the Warrant Agreement.
(b) (i) The Company has all material licenses, permits and
approvals of any governmental authority (collectively, "Permits") that are
necessary for the conduct of the business of the Company; (ii) such Permits are
in full force and effect; and (iii) no material violations are or have been
recorded in respect of any Permit.
(c) Except as set forth in the SEC Reports filed prior to the
date of this Agreement, there is no pending or, to the knowledge of the Company,
threatened action, suit or proceeding to which the Company or any of its
subsidiaries is a party, before or by any court or governmental agency or body,
that could reasonably be expected to result in a Material Adverse Effect or to
prevent or materially delay the consummation of the transactions contemplated by
this Agreement or the Warrant Agreement.
SECTION 3.06. SEC Filings; Financial Statements; Absence of
Undisclosed Liabilities. (a) The Company has filed all forms, reports and
documents required to be filed by it with the Commission ("SEC Reports") since
its initial public offering, including (but not limited to) its registration
statement on Form S-1. Except as set forth in the SEC Reports filed prior to the
date of this Agreement, as of the respective dates they were filed (or if
amended or superseded by a filing prior to the date of this Agreement, on the
date of such amending or superseding filing), (i) the SEC Reports were prepared
in all material respects in accordance with the requirements of the Securities
Act or the Exchange Act, as the case may be, and (ii) none of the SEC Reports
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not
misleading. No subsidiary of the Company is required to file any form, report or
other document with the Commission.
(b) Each of the consolidated financial statements (including,
in each case, any notes and schedules thereto) contained in the SEC Reports
complied as to form with the applicable accounting requirements and rules and
regulations of the Commission and was prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis
throughout the periods indicated (except as may be indicated in the notes
thereto
8
or, in the case of unaudited financial statements, as permitted by the
rules and regulations of the Commission), and each presented fairly, in all
material respects, the consolidated financial position of the Company and its
consolidated subsidiaries at the respective dates thereof and their results of
operations and cash flows for the respective periods indicated therein, all in
accordance with United States generally accepted accounting principles (subject,
in the case of unaudited statements, to normal and recurring year-end
adjustments which were not and are not expected, individually or in the
aggregate, to be material in amount).
(c) Except for liabilities and obligations reflected on the
March 31, 1999 consolidated balance sheet of the Company (including the notes
thereto), liabilities and obligations disclosed in SEC Reports filed prior to
the date of this Agreement and other liabilities and obligations incurred in the
ordinary course of business since March 31, 1999 or that would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect,
neither the Company nor any of its subsidiaries has any material liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise).
SECTION 3.07. No Material Adverse Change. Except as otherwise
disclosed in the SEC Reports filed prior to the date hereof, since March 31,
1999, there has not been a material adverse change in the financial condition,
business or operations of the Company and its subsidiaries taken as a whole.
SECTION 3.08. Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement or the Warrant Agreement
based upon arrangements made by or on behalf of the Company or any of its
Affiliates.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE INVESTOR
The Investor represents and warrants to the Company as
follows:
SECTION 4.01. Organization and Authority. Such party is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation and has all necessary power and authority to
enter into this Agreement and the Warrant Agreement, to carry out its
obligations hereunder and thereunder, and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Warrant Agreement by such party, the performance by it of its
obligations hereunder and thereunder, and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all
requisite action on its part. This Agreement and the Warrant Agreement have been
duly executed and delivered by such party, and (assuming due
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authorization, execution and delivery by the other parties hereto and thereto)
this Agreement and the Warrant Agreement constitute legal, valid and binding
obligations of such party, enforceable against it in accordance with their
respective terms.
SECTION 4.02. No Conflict. Assuming that all consents,
approvals, authorizations and other actions described in Section 4.03 have been
obtained, the execution, delivery and performance of this Agreement and the
Warrant Agreement by such party do not and will not (a) violate, conflict with
or result in the breach of any provision of its Charter or By-laws (or similar
organizational documents), (b) conflict with or violate any law, governmental
regulation or governmental order applicable to such party or any of its assets,
properties or businesses or (c) conflict with, result in any breach of,
constitute a default (or event which with the giving of notice or lapse of time,
or both, would become a default) under, require any consent under, or give to
others any rights pursuant to, any contract, agreement or arrangement by which
such party is bound; except to the extent that any conflict under (b) or (c)
above would not prevent or materially delay the consummation of the transactions
contemplated by this Agreement or the Warrant Agreement.
SECTION 4.03. Governmental Consents and Approvals. The
execution, delivery and performance of this Agreement and the Warrant Agreement
by the Investor does not and will not require any consent, approval,
authorization or other order of, action by, filing with or notification to, any
governmental authority, except such as are required by the HSR Act in connection
with the acquisition of Common Stock prior to exercise of the Warrant.
SECTION 4.04. Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement or the Warrant Agreement
based upon arrangements made by or on behalf of the Investor or any of its
Affiliates.
ARTICLE V
CONDITIONS TO THE INITIAL CLOSING
SECTION 5.01. Conditions to the Initial Closing. The
obligations of each party to this Agreement to consummate the transactions
contemplated by Section 2.01(a) shall be subject to the fulfillment, at or prior
to the Initial Closing, of each of the following conditions:
(a) Representations, Warranties and Covenants. (i) In the case
of the Investor, the Company's Initial Closing Representations shall have been
true and correct when made and shall be true and correct as of the Initial
Closing, with the same force and effect as if made on the date of the Initial
Closing, and all covenants and agreements of the Company contained in this
Agreement to be complied with on or prior to the Initial Closing shall have been
complied with in all material respects.
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(ii) In the case of the Company, the representations and
warranties of the Investor contained in this Agreement shall have been true and
correct when made and shall be true and correct as of the Initial Closing, with
the same force and effect as if made on the date of the Initial Closing, and all
covenants and agreements of the Investor contained in this Agreement to be
complied with on or prior to the Initial Closing shall have been complied with
in all material respects.
(b) No Prohibition. None of the transactions contemplated
hereby or by the Warrant Agreement shall have been prohibited by any applicable
law, court order or governmental regulation.
(c) Warrant Agreement. The Warrant Agreement shall have been
executed and shall remain in full force and effect.
In addition, the obligation of the Investor to consummate the transactions
contemplated by Section 2.01(a) is subject to the filing of the Certificate of
Designation (substantially in the form attached as Annex A hereto) with the
Secretary of State of the State of Delaware.
SECTION 5.02. Conditions to the Subsequent Closing. The
obligations of each party to this Agreement to consummate the transactions
contemplated by Section 2.01(b) shall be subject to the fulfillment, at or prior
to the Subsequent Closing, of each of the following conditions:
(a) Representations, Warranties and Covenants. (i) In the case
of the Investor, the Company's Subsequent Closing Representations shall have
been true and correct when made and shall be true and correct as of the
Subsequent Closing, and all covenants and agreements of the Company contained in
this Agreement to be complied with on or prior to the Subsequent Closing shall
have been complied with in all material respects.
(ii) In the case of the Company, the representations and
warranties of the Investor contained in Article IV of this Agreement are true
and correct as of the Subsequent Closing, with the same force and effect as if
made on the date of the Subsequent Closing, and all covenants and agreements of
the Investor contained in this Agreement to be complied with on or prior to the
Subsequent Closing shall have been complied with in all material respects.
(b) No Prohibition. None of the transactions contemplated
hereby or by the Warrant Agreement shall have been prohibited by any applicable
law, court order or governmental regulation.
(c) Warrant Agreement. The Warrant Agreement shall remain in
full force and effect.
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ARTICLE VI
TRANSFER OF SHARES
SECTION 6.01. General Restriction. Shares of the Series A
Preferred Stock and the certificates evidencing such shares and all rights
thereunder shall be non-transferable, and may not be sold, transferred, pledged,
hypothecated, or assigned without the prior written consent of the Company
(which may be withheld in the Company's sole discretion), except as specified in
the Certificate of Designation. The Investor acknowledges and agrees that any
such prohibited transfer made without the Company's consent shall be void ab
initio.
SECTION 6.02. Private Placement. (a) The Investor understands
that (i) the offering and sale of the Series A Preferred Stock hereunder are
intended to be exempt from registration under the Securities Act pursuant to
Section 4(2) of the Securities Act and (ii) there is no existing public or other
market for the Series A Preferred Stock and there can be no assurance that such
Investor will be able to sell or dispose of the Series A Preferred Stock.
(b) The Investor hereby confirms to the Company that: (i) the
Series A Preferred Stock is being acquired for the Investor's own account and
without a view to the public distribution thereof or of the Common Stock or any
interest therein; (ii) the Investor is an "accredited investor" as such term is
defined in Regulation D, as amended, under the Securities Act; and (iii) the
Investor has sufficient knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks of its investment
in the Series A Preferred Stock, and is capable of bearing the economic risks of
such investment, including a complete loss of its investment in the Series A
Preferred Stock.
SECTION 6.03. Legends. (a) The Company shall affix to each
certificate evidencing shares of Series A Preferred Stock a legend in
substantially the following form:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED UNLESS EITHER (1) SUCH SHARES
ARE REGISTERED UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS OR (2) AN EXEMPTION FROM SUCH REGISTRATION IS
AVAILABLE AND LEGAL COUNSEL OF THE HOLDER OF SUCH SHARES
(WHICH COUNSEL IS REASONABLY SATISFACTORY TO THE COMPANY)
PROVIDES AN OPINION TO SUCH EFFECT TO THE COMPANY.
12
THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH IN A
SUBSCRIPTION AGREEMENT DATED AS OF SEPTEMBER 14, 1999, AS IT
MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH IS ON FILE
AT THE PRINCIPAL EXECUTIVE OFFICES OF THE ISSUER AND IN THE
CERTIFICATE OF DESIGNATION FOR THE SERIES A PREFERRED STOCK
FILED WITH THE SECRETARY OF STATE OF THE STATE OF DELAWARE. NO
REGISTRATION OF TRANSFER OF THESE SHARES WILL BE MADE ON THE
BOOKS OF THE ISSUER UNLESS AND UNTIL SUCH RESTRICTIONS SHALL
HAVE BEEN COMPLIED WITH."
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.01. HSR. Each of the parties hereto shall use
reasonable efforts to cause any waiting period (and any extension thereof) under
the HSR Act, applicable to the conversion of the Series A Preferred Stock or the
exercise of the Warrants to expire or be terminated prior to the time of such
conversion or exercise and shall cooperate in making any filings with the
appropriate governmental entities in connection therewith.
SECTION 7.02. Survival; Indemnification. (a) The Initial
Closing Representations shall survive the Initial Closing for a period of one
year after the date of the Initial Closing.
(b) If the Subsequent Closing occurs, the Subsequent Closing
Representations shall survive the Subsequent Closing for a period of one year
after the date of the Subsequent Closing.
(c) The Company shall indemnify and hold harmless the Investor
from and against any and all Indemnifiable Losses (as defined below); provided,
however, that no claim with respect to Indemnifiable Losses may be asserted
unless written notice of such claim describing in detail the facts and
circumstances with respect to the subject matter of such claim is received by
the Company on or prior to: (i) in the case of Indemnifiable Losses with respect
to the shares of Series A Preferred Stock purchased at the Initial Closing, the
date on which the Initial Closing Representations cease to survive as set forth
in Section 7.02(a); and (ii) in the case of Indemnifiable Losses with respect to
the shares of Series A Preferred Stock purchased at the Subsequent Closing (if
any), the date on which the Subsequent Closing Representations cease to survive
as set forth in Section 7.02(b). The Company is not making any representations
and
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warranties other than the Initial Closing Representations in connection with
the Initial Closing and the Subsequent Closing Representations in connection
with the Subsequent Closing.
(d) For purposes of this Section 7.02: (i) "Indemnifiable
Losses" means (A) with respect to the shares of Series A Preferred Stock
purchased by the Investor at the Initial Closing, Losses arising out of the
failure of the Initial Closing Representations to be true and correct as of the
date of the Initial Closing, provided, however, that in no event shall the
amount of such Indemnifiable Losses exceed the purchase price of such shares of
Series A Preferred Stock and (B) with respect to the shares of Series A
Preferred Stock purchased by the Investor at the Subsequent Closing (if any),
Losses arising out of the failure of the Subsequent Closing Representations to
be true and correct as of the date of the Subsequent Closing, up to a maximum
amount equal to the purchase price for the shares of Series A Preferred Stock
purchased at the Subsequent Closing; and (ii) "Losses" means any and all losses,
liabilities, damages, costs and expenses actually suffered or incurred by the
Investor, but shall not include any consequential damages or any Losses that
could have been avoided if the Investor had taken reasonable steps to mitigate
its Losses.
SECTION 7.03. Common Stock Issuable Upon Conversion. (a) The
Company shall at all times reserve and keep available for issue upon the
conversion of shares of Series A Preferred Stock such number of its authorized
and unissued shares of Common Stock as will be sufficient to permit such
conversion in full. All shares of Common Stock which shall be so issuable, when
issued upon conversion of shares of Series A Preferred Stock in accordance with
the terms of the Series A Preferred Stock, shall be duly and validly issued and
fully paid and nonassessable, and not subject to preemptive rights.
(b) The Company shall use all reasonable efforts to cause the
shares of Common Stock to be issued upon conversion of the Series A Preferred
Stock and upon exercise of Warrants to be approved for listing on NASDAQ prior
to the issuance of such shares.
SECTION 7.04. Certificate of Designation. The Investor
acknowledges and agrees to comply with the terms of the Certificate of
Designation, including, without limitation, Sections 5(b) and 11(b) thereof.
SECTION 7.05. Other Action. Each of the parties hereto shall
use reasonable efforts to take, or cause to be taken, all appropriate action,
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws to consummate and make effective the transactions contemplated
hereunder, including, without limitation, using reasonable efforts to obtain all
licenses, permits, consents, approvals, authorizations, qualifications and
orders of the competent governmental entities.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Termination. (a) This Agreement may be
terminated and the transactions contemplated by this Agreement may be abandoned
at any time prior to the Initial Closing, as follows:
(i) by mutual written consent of each of the
Investor and the Company;
(ii) by either the Investor or the Company if the
Initial Closing shall not have occurred on or before October 15, 1999
(the "Termination Date"); provided, however, that the right to
terminate this Agreement under this Section 8.01(a)(ii) shall not be
available to any party whose failure to fulfill any obligation under
this Agreement has been the cause of, or resulted in, the failure of
the Initial Closing to occur on or before the Termination Date; or
(iii) by either the Investor or the Company, if any
governmental entity (A) shall have issued an order or taken any other
action permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement, and such order or other
action shall have become final and nonappealable, or (B) shall have
failed to issue an order or to take any other action necessary to
fulfill the conditions to the Initial Closing and such denial of a
request to issue such order or take such other action shall have become
final and nonappealable.
(b) In the event of termination of this Agreement pursuant to
Section 8.01, this Agreement and the Warrant Agreement shall forthwith become
void and there shall be no liability under this Agreement or the Warrant
Agreement on the part of the Investor or the Company or any of their respective
officers or directors and all rights and obligations of each party hereto shall
cease, except (a) the provisions of Sections 8.02 and 8.04 shall survive such
termination and (b) nothing herein shall relieve any party from liability for
any willful breach of any representation, warranty, covenant or other agreement
in this Agreement occurring prior to termination.
SECTION 8.02. Expenses. Except as otherwise specified in this
Agreement or the Warrant Agreement, all costs and expenses, including, without
limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with this Agreement and the Warrant
Agreement and the transactions contemplated hereby and thereby shall be paid by
the party incurring such costs and expenses, whether or not the Initial Closing
shall have occurred.
15
SECTION 8.03. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by courier service, by telecopy or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 8.03):
(a) if to the Company:
CareInsite, Inc.
River Drive Center 2
000 Xxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000-0000
Telecopy No.: (000) 000-0000
Attention: Senior Vice President - General Counsel
(b) if to the Investor:
America Online, Inc.
00000 XXX Xxx
Xxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: General Counsel
SECTION 8.04. Public Announcements. Except as required by law,
governmental regulation or by the requirements of any securities exchange on
which the securities of a party hereto are listed, no party to this Agreement
shall make, or cause to be made, any press release or public announcement in
respect of this Agreement or the Warrant Agreement or the transactions
contemplated hereby or thereby or otherwise communicate with any news media
without the prior written consent of the other party, and the parties shall
cooperate as to the timing and contents of any such press release or public
announcement.
SECTION 8.05. Headings; Interpretation. (a) The descriptive
headings contained in this Agreement are for convenience of reference only and
shall not affect in any way the meaning or interpretation of this Agreement.
(b) Whenever used in this Agreement, any noun or pronoun shall
be deemed to include both the singular and plural and to cover all genders; and
the words "herein," "hereof" and "hereunder" and words of similar import shall
refer to this Agreement as a whole.
SECTION 8.06. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any law,
governmental regulation or public policy, all other terms and provisions of this
Agreement shall nevertheless remain in full force
16
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby be consummated as originally contemplated to
the greatest possible extent.
SECTION 8.07. Entire Agreement. This Agreement, together with
the Warrant Agreement and the Interactive Marketing Agreement, constitutes the
entire agreement of the parties hereto with respect to the subject matter hereof
and thereof and supersedes all prior agreements and undertakings, both written
and oral, with respect to the subject matter hereof.
SECTION 8.08. Assignment. This Agreement shall not be assigned
by either party without the express written consent of the other party hereto
(which consent may be granted or withheld in the sole discretion of any party);
provided, however, that the Investor may, without the consent of the Company,
assign all or a portion of its rights hereunder to any Person to whom the
Investor would be permitted, pursuant to the Certificate of Designation, to
transfer shares of Series A Preferred Stock without the consent of the Company.
In the event that the Company shall be a party to a merger, consolidation or
similar transaction that is consummated prior to the first anniversary of the
date of this Agreement and in which the Company is not the surviving
corporation, the Company's successor shall expressly assume the obligations of
the Company under this Agreement with respect to the option contained in Section
2.01(b), subject to such modifications as may be deemed appropriate (as
determined in good faith by the Board of Directors of the Company) in order to
provide to the Investor, as nearly as practicable, the rights that the Investor
would have had if such transaction had not occurred.
SECTION 8.09. Amendment. This Agreement may not be amended or
modified except by an instrument in writing signed by, or on behalf of, each of
the parties.
SECTION 8.10. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware.
SECTION 8.11. Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of this Agreement by telecopier shall be
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 8.12. Non-Waiver; Cumulative Remedies. No course of
dealing or any delay or failure to exercise any right hereunder on the part of
the Investor or the Company shall operate as a waiver of such right or otherwise
prejudice the rights, powers or remedies of the Investor or the Company. No
single or partial waiver by the Investor or the Company of any provision of this
Agreement or of any breach or default hereunder or of any right or remedy shall
17
operate as a waiver of any other provision, breach, default right or remedy or
of the same provision, breach, default right or remedy on a future occasion. The
rights and remedies provided in this Agreement are cumulative and are in
addition to all rights and remedies which the Investor or the Company may have
in law or in equity or by statute or otherwise.
SECTION 8.13. Waiver of Jury Trial. Each of the parties hereto
irrevocably and unconditionally waives trial by jury in any legal action or
proceeding relating to this Agreement or the transactions contemplated hereby
and for any counterclaim therein.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized signatories
hereunto duly authorized as of the date first above written.
CAREINSITE, INC.
By:/s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President
General Counsel
AMERICA ONLINE, INC.
By:/s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President-Business Affairs
ANNEX A TO THE SUBSCRIPTION AGREEMENT
SEE EXHIBIT 4.1
