EXHIBIT 10.1
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STOCK AND WARRANT PURCHASE AGREEMENT
by and among
PROXYMED, INC.,
GENERAL ATLANTIC PARTNERS 74, L.P.,
GAP COINVESTMENT PARTNERS II, L.P.
GAPSTAR, LLC
and
GAPCO GMBH & CO. KG
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Dated: March 26, 2002
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS............................................................................1
1.1 Definitions............................................................................1
ARTICLE II PURCHASE AND SALE OF COMMON STOCK......................................................7
2.1 Purchase and Sale of Common Stock......................................................7
2.2 Purchase and Sale of Warrants..........................................................7
2.3 Use of Proceeds........................................................................7
2.4 Closing................................................................................7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........................................8
3.1 Corporate Existence and Power..........................................................8
3.2 Authorization; No Contravention; FBCA Sections 607.0901 and 607.0902...................8
3.3 Governmental Authorization; Third Party Consents.......................................8
3.4 Binding Effect.........................................................................9
3.5 Litigation.............................................................................9
3.6 Compliance with Laws...................................................................9
3.7 Capitalization.........................................................................9
3.8 No Default or Breach; Contractual Obligations.........................................11
3.9 Title to Properties and Assets........................................................11
3.10 Reports; Financial Statements.........................................................11
3.11 Taxes.................................................................................12
3.12 No Material Adverse Change; Ordinary Course of Business...............................12
3.13 Private Offering......................................................................12
3.14 Labor Relations.......................................................................13
3.15 Employee Benefit Plans................................................................13
3.16 Liabilities...........................................................................13
3.17 Intellectual Property.................................................................14
3.18 Network Redundancy and Computer Back-up...............................................15
3.19 Privacy of Customer Information.......................................................15
3.20 Potential Conflicts of Interest.......................................................15
3.21 Trade Relations.......................................................................16
3.22 Broker's, Finder's or Similar Fees....................................................16
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS......................................16
4.1 Existence and Power...................................................................16
4.2 Authorization; No Contravention.......................................................16
4.3 Governmental Authorization; Third Party Consents......................................16
4.4 Binding Effect........................................................................17
4.5 Purchase for Own Account..............................................................17
4.6 Restricted Securities.................................................................17
4.7 Broker's, Finder's or Similar Fees....................................................17
4.8 Accredited Investor...................................................................18
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ARTICLE V CONDITIONS TO THE OBLIGATION OF THE PURCHASERS TO CLOSE...............................18
5.1 Representations and Warranties........................................................18
5.2 Compliance with this Agreement........................................................18
5.3 Officer's Certificate.................................................................18
5.4 Secretary's Certificate...............................................................18
5.5 Purchased Securities..................................................................19
5.6 Registration Rights Agreement.........................................................19
5.7 Opinion of Counsel....................................................................19
5.8 Board of Directors....................................................................19
ARTICLE VI CONDITIONS TO THE OBLIGATION OF THE COMPANY AND THE SELLING STOCKHOLDERS TO CLOSE.....19
6.1 Payment of Purchase Price.............................................................19
6.2 Registration Rights Agreement.........................................................19
ARTICLE VII INDEMNIFICATION.......................................................................20
7.1 Indemnification.......................................................................20
7.2 Notification..........................................................................20
7.3 Contribution..........................................................................21
ARTICLE VIII AFFIRMATIVE COVENANTS OF THE COMPANY..................................................22
8.1 Financial Statements and Other Information............................................22
8.2 Books and Records.....................................................................22
8.3 Inspection. .........................................................................23
8.4 Board Representation..................................................................23
8.5 Offering Notice; Preemptive Rights; Exercise; Closing.................................24
ARTICLE IX TERMINATION OF AGREEMENT..............................................................26
9.1 Termination...........................................................................26
9.2 Survival..............................................................................26
ARTICLE X MISCELLANEOUS.........................................................................27
10.1 Survival of Representations and Warranties............................................27
10.2 Notices...............................................................................27
10.3 Successors and Assigns; Third Party Beneficiaries.....................................29
10.4 Amendment and Waiver..................................................................29
10.5 Counterparts..........................................................................30
10.6 Headings..............................................................................30
10.7 GOVERNING LAW ........................................................................30
10.8 Severability..........................................................................30
10.9 Rules of Construction.................................................................30
10.10 Entire Agreement......................................................................30
10.11 Fees..................................................................................30
10.12 Public Announcements. ...............................................................31
10.13 Further Assurances....................................................................31
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EXHIBITS
A Form of Registration Rights Agreement
B Form of Warrant
C Form of Holland & Knight LLP Opinion
SCHEDULES
2.1 Purchased Shares and Purchase Price
2.2 Warrants and Purchase Price
3.5 Litigation
3.7(b) List of Subsidiaries and their Equity Holders
3.8 No Default or Breach; Contractual Obligations
3.9 Title to Properties and Assets
3.11 Taxes
3.17 Intellectual Property
3.21 Trade Relations
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STOCK AND WARRANT PURCHASE AGREEMENT
STOCK AND WARRANT PURCHASE AGREEMENT, dated March 26, 2002
(this "AGREEMENT"), by and among ProxyMed, Inc., a Florida corporation (the
"COMPANY"), General Atlantic Partners 74, L.P., a Delaware limited partnership
("GAP LP"), GAP Coinvestment Partners II, L.P., a Delaware limited partnership
("GAP COINVESTMENT"), GAPCO GmbH & Co. KG, a German limited partnership ("GMBH
COINVESTMENT"), and GapStar, LLC, a Delaware limited liability company
("GAPSTAR" and, collectively with GAP LP, GAP Coinvestment and GmbH
Coinvestment, the "PURCHASERS").
WHEREAS, upon the terms and conditions set forth in this
Agreement, the Company proposes to issue and sell to each of the Purchasers for
the aggregate purchase price set forth opposite such Purchaser's name on
Schedule 2.1 or SCHEDULE 2.2 hereto, as applicable (a) the aggregate number of
shares, par value $0.001 per share, of common stock of the Company (the "COMMON
STOCK"), determined by dividing the aggregate purchase price set forth opposite
such Purchaser's name on SCHEDULE 2.1 hereto by the Price Per Share (as defined
below) and (b) a warrant in the form attached hereto as EXHIBIT B (the
"WARRANTS") to purchase the aggregate number of shares of Common Stock equal to
35% of the shares of Common Stock purchased by such Purchaser pursuant to
Section 2.1.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"AFFILIATE" shall mean any Person who is an "affiliate" as
defined in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act.
"AGREEMENT" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"ARTICLES OF INCORPORATION" means the Restated Articles of
Incorporation, as amended, of the Company, as in effect on the date hereof.
"ASSETS" has the meaning set forth in Section 3.9 of this
Agreement.
"AUDITED FINANCIAL STATEMENTS" has the meaning set forth in
Section 3.10 of this Agreement.
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"BOARD OF DIRECTORS" means the Board of Directors of the
Company.
"BUSINESS DAY" means any day other than 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.
"BY-LAWS" means the By-laws of the Company as in effect on the
date hereof.
"CLAIMS" has the meaning set forth in Section 3.5 of this
Agreement.
"CLOSING" has the meaning set forth in Section 2.4 of this
Agreement.
"CLOSING DATE" has the meaning set forth in Section 2.4 of
this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended, or
any successor statute thereto.
"COMMISSION" means the United States Securities and Exchange
Commission or any similar agency then having jurisdiction to enforce the
Securities Act.
"COMMON STOCK" has the meaning set forth in the recitals to
this Agreement.
"COMMONLY CONTROLLED ENTITY" means any entity which is under
common control with the Company within the meaning of Code Section 414(b), (c),
(m), (o) or (t).
"COMPANY" has the meaning set forth in the preamble to this
Agreement.
"COMPANY PLANS" means each Plan that the Company and each of
its Subsidiaries maintains or to which the Company and each of its Subsidiaries
contributes.
"CONDITION OF THE COMPANY" means the assets, business,
properties, prospects, operations or condition (financial or otherwise) of the
Company and its Subsidiaries, taken as a whole.
"CONTRACTUAL OBLIGATIONS" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other instrument to
which such Person is a party or by which it or any of its property is bound.
"COPYRIGHTS" means any foreign or United States copyright
registrations and applications for registration thereof, and any non-registered
copyrights.
"ENVIRONMENTAL LAWS" means federal, state, local and foreign
laws, principles of common laws, civil laws, regulations, and codes, as well as
orders, decrees, judgments or injunctions, issued, promulgated, approved or
entered thereunder relating to pollution, protection of the environment or
public health and safety.
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"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"EXCESS NEW SECURITIES" has the meaning set forth in Section
8.5 of this Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
"EXEMPT ISSUANCES" has the meaning set forth in Section 8.5 of
this Agreement.
"FINANCIAL STATEMENTS" has the meaning set forth in Section
3.10 of this Agreement.
"GAAP" means United States generally accepted accounting
principles in effect from time to time.
"GAP COINVESTMENT" has the meaning set forth in the preamble
to this Agreement.
"GAP LLC" means General Atlantic Partners, LLC, a Delaware
limited liability company and the general partner of GAP LP and the managing
member of GapStar, and any successor to such entity.
"GAP LP" has the meaning set forth in the preamble to this
Agreement.
"GENERAL ATLANTIC DESIGNEE" has the meaning set forth in
Section 8.4 of this Agreement.
"GMBH COINVESTMENT" has the meaning set forth in the preamble
to this Agreement.
"GAPSTAR" has the meaning set forth in the preamble to this
Agreement.
"GOVERNMENTAL AUTHORITY" means the government of any nation,
state, city, locality or other political subdivision thereof, any entity,
including, without limitation, the Nasdaq Stock Market, Inc., exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"INDEMNIFIED PARTY" has the meaning set forth in Section 7.1
of this Agreement.
"INDEMNIFYING PARTY" has the meaning set forth in Section 7.1
of this Agreement.
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"INTELLECTUAL PROPERTY" has the meaning set forth in Section
3.17 of this Agreement.
"INTERNET ASSETS" means any Internet domain names and other
computer user identifiers and any rights in and to sites on the worldwide web,
including rights in and to any text, graphics, audio and video files and html or
other code incorporated in such sites.
"LIABILITIES" has the meaning set forth in Section 3.16 of
this Agreement.
"LIEN" means any mortgage, deed of trust, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other) or preference,
preemptive right, priority, right or other security interest or preferential
arrangement of any kind or nature whatsoever (excluding preferred stock and
equity related preferences).
"LOSSES" has the meaning set forth in Section 7.1 of this
Agreement.
"MATERIAL CONTRACTUAL OBLIGATIONS" has the meaning set forth
in Section 3.8 of this Agreement.
"MINIMUM OWNERSHIP PERCENTAGE" has the meaning set forth in
Section 8.1 of this Agreement.
"NEW ISSUANCE NOTICE" has the meaning set forth in Section 8.5
of this Agreement.
"NEW SECURITIES" has the meaning set forth in Section 8.5 of
this Agreement.
"ORDERS" has the meaning set forth in Section 3.2 of this
Agreement.
"PATENTS" means any foreign or United States patents and
patent applications, including any divisions, continuations,
continuations-in-part, substitutions or reissues thereof, whether or not patents
are issued on such applications and whether or not such applications are
modified, withdrawn or resubmitted.
"PERMITS" has the meaning set forth in Section 3.6 of this
Agreement.
"PERSON" means any individual, firm, corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company, Governmental Authority or other entity of
any kind, and shall include any successor (by merger or otherwise) of such
entity.
"PLAN" means any employee benefit plan, arrangement, policy,
program, agreement or commitment (whether or not an employee plan within the
meaning of section 3(3) of ERISA), including, without limitation, any
employment, consulting or deferred compensation agreement, executive
compensation, bonus, incentive, pension, profit-sharing, savings, retirement,
stock option, stock purchase or severance pay plan,
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any life, health, disability or accident insurance plan, whether oral or
written, whether or not subject to ERISA, as to which the Company or any
Commonly Controlled Entity has or in the future could have any direct or
indirect, actual or contingent liability.
"PRICE PER SHARE" means $15.93.
"PROPORTIONATE PERCENTAGE" has the meaning set forth in
Section 8.5 of this Agreement.
"PROPOSED PRICE" has the meaning set forth in Section 8.5 of
this Agreement.
"PURCHASED SECURITIES" has the meaning set forth in Section
2.2 of this Agreement.
"PURCHASED SHARES" has the meaning set forth in Section 2.1 of
this Agreement.
"PURCHASED WARRANTS" has the meaning set forth in Section 2.2
of this Agreement.
"PURCHASERS" has the meaning set forth in the preamble to this
Agreement.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement substantially in the form attached hereto as EXHIBIT A.
"REQUIREMENT OF LAW" means, as to any Person, any law,
Environmental Law, statute, treaty, rule, regulation, right, privilege,
qualification, license or franchise or determination of an arbitrator or a court
or other Governmental Authority or stock exchange, in each case applicable or
binding upon such Person or any of its property or to which such Person or any
of its property is subject or pertaining to any or all of the transactions
contemplated or referred to herein.
"SEC REPORTS" has the meaning set forth in Section 3.10 of
this Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder.
"SECRETARY" has the meaning set forth in the Company's
By-laws.
"SOFTWARE" means any computer software programs, source code,
object code, data and documentation, including, without limitation, any computer
software programs that incorporate and run the Company's pricing models,
formulae and algorithms.
"STOCK EQUIVALENTS" means any security or obligation which is
by its terms convertible into or exchangeable or exercisable for shares of
Common Stock or other
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capital stock of the Company, and any option, warrant or other subscription or
purchase right with respect to common stock or such other capital stock.
"STOCK OPTION PLANS" means collectively, the Company's 2001
Stock Option Plan, 2001 Stock Option Plan, Amended 2000 1/2 Stock Option Plan,
2000 Stock Option Plan, 1999 Stock Option Plan, 1997 Stock Option Plan, 1995
Stock Option Plan, 1995 Outside Directors Stock Option Plan, 1993 Stock Option
Plan and ProxyMed Employee Non-Qualified Stock Option Agreement.
"SUBJECT PURCHASER" has the meaning set forth in Section 8.5
of this Agreement.
"SUBSIDIARIES" means, as of the relevant date of
determination, with respect to any Person, a corporation or other Person of
which 50% or more of the voting power of the outstanding voting equity
securities or 50% or more of the outstanding economic equity interest is held,
directly or indirectly, by such Person. Unless otherwise qualified, or the
context otherwise requires, all references to a "SUBSIDIARY" or to
"SUBSIDIARIES" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Company.
"TAXES" means any federal, state, provincial, county, local,
foreign and other taxes (including, without limitation, income, profits,
windfall profits, alternative, minimum, accumulated earnings, personal holding
company, capital stock, premium, estimated, excise, sales, use, occupancy, gross
receipts, franchise, ad valorem, severance, capital levy, production, transfer,
withholding, employment, unemployment compensation, payroll and property taxes,
import duties and other governmental charges and assessments), whether or not
measured in whole or in part by net income, and including deficiencies,
interest, additions to tax or interest, and penalties with respect thereto, and
including expenses associated with contesting any proposed adjustments related
to any of the foregoing.
"TRADE SECRETS" means any trade secrets, research records,
processes, procedures, manufacturing formulae, technical know-how, technology,
blue prints, designs, plans, inventions (whether patentable and whether reduced
to practice), invention disclosures and improvements thereto.
"TRADEMARKS" means any foreign or United States trademarks,
service marks, trade dress, trade names, brand names, designs and logos,
corporate names, product or service identifiers, whether registered or
unregistered, and all registrations and applications for registration thereof.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement,
the Warrants and the Registration Rights Agreement.
"UNAUDITED FINANCIAL STATEMENTS" has the meaning set forth in
Section 3.11 of this Agreement.
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"WARRANTS" has the meaning set forth in the recitals to this
Agreement.
ARTICLE II
PURCHASE AND SALE OF COMMON STOCK
2.1 PURCHASE AND SALE OF COMMON STOCK. Subject to the terms
and conditions herein set forth, the Company agrees to issue and sell to each
Purchaser, and each Purchaser, severally and not jointly, agrees to purchase
from the Company, on the Closing Date the aggregate number of shares of Common
Stock determined by dividing (x) the aggregate purchase price set forth opposite
such Purchaser's name on SCHEDULE 2.1 hereto by (y) the Price Per Share (rounded
up to the nearest share), for the aggregate purchase price set forth opposite
such Purchaser's name on SCHEDULE 2.1 hereto (all of the shares of Common Stock
being purchased pursuant to this Section 2.1 being referred to herein as the
"PURCHASED SHARES").
2.2 PURCHASE AND SALE OF WARRANTS. Subject to the terms and
conditions herein set forth, the Company agrees to issue and sell to each
Purchaser, and each Purchaser, severally and not jointly, agrees to purchase
from the Company, on the Closing Date a Warrant exercisable for the aggregate
number of shares of Common Stock determined by multiplying (x) the number of
Purchased Shares being purchased by such Purchaser pursuant to Section 2.1 by
(y) .35 (rounded up to the nearest share), for the aggregate purchase price set
forth opposite such Purchaser's name on SCHEDULE 2.2 hereto (all of the Warrants
being purchased pursuant to Section 2.2 being referred to herein as the
"PURCHASED WARRANTS"; and together with the Purchased Shares, the "PURCHASED
SECURITIES").
2.3 USE OF PROCEEDS. The Company shall use the proceeds from
the sale of the Purchased Securities to fund the Company's working capital.
2.4 CLOSING. Unless this Agreement shall have been terminated
pursuant to Article IX, and subject to the satisfaction or waiver of the
conditions set forth in Articles V and VI, the closing of the sale and purchase
of the Purchased Securities (the "Closing") shall take place at the offices of
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, at 10:00 a.m., local time, on April 5,
2002, or at such other time, place and date that the Company and the Purchasers
may agree in writing (the "Closing Date"). On the Closing Date, the Company
shall deliver to each of the Purchasers (a) a certificate or certificates in
definitive form and registered in the name of each such Purchaser, representing
its Purchased Shares and (b) its Warrant against delivery by each of the
Purchasers to the Company of the aggregate purchase price therefor by wire
transfer of immediately available funds.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to each of the Purchasers
on and as of the date hereof as follows:
3.1 CORPORATE EXISTENCE AND POWER. The Company and each of its
Subsidiaries (a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation; (b) has all
requisite power and authority to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently, or is proposed to be, engaged; and (c) is duly qualified as a foreign
corporation, licensed and in good standing under the laws of each jurisdiction
in which its ownership, lease or operation of property or the conduct of its
business requires such qualification, except where the failure to be so
qualified could not reasonably be expected to have a material adverse effect on
the Condition of the Company. The Company has the corporate power and authority
to execute, deliver and perform its obligations under this Agreement and each of
the other Transaction Documents.
3.2 AUTHORIZATION; NO CONTRAVENTION; FBCA SECTIONS 607.0901
AND 607.0902. The execution, delivery and performance by the Company of this
Agreement and each of the other Transaction Documents and the transactions
contemplated hereby and thereby (a) have been duly authorized by all necessary
corporate action of the Company, including all actions, consents and approvals,
if any, required by the Company's Board of Directors and/or stockholders; (b) do
not contravene the terms of the Certificate of Incorporation or the By-laws or
the organizational documents of any of the Subsidiaries; (c) do not violate,
conflict with or result in any breach, default or contravention of (or with due
notice or lapse of time or both would result in any breach, default or
contravention of), or the creation of any Lien under, any Contractual Obligation
of the Company or any of its Subsidiaries or any Requirement of Law applicable
to the Company or any of its Subsidiaries; and (d) do not violate any judgment,
injunction, writ, award, decree or order of any nature (collectively, "ORDERS")
of any Governmental Authority against, or binding upon, the Company or any of
its Subsidiaries. Section 607.0901 and Section 607.0902 of the Florida Business
Corporation Act are not applicable to the Company or to any of the transactions
contemplated by the Transaction Documents. The Board of Directors of the Company
approved the Transaction Documents and the transactions contemplated hereby and
thereby at a meeting of the Board of Directors duly convened on March 25, 2002.
3.3 GOVERNMENTAL AUTHORIZATION; THIRD PARTY CONSENTS. No
approval, consent, compliance, exemption, authorization or other action by, or
notice to, or filing with, any Governmental Authority or any other Person, and
no lapse of a waiting period under a Requirement of Law, is necessary or
required in connection with the execution, delivery or performance (including,
without limitation, the sale, issuance and delivery of the Purchased Securities)
by, or enforcement against, the Company of this Agreement
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and the other Transaction Documents or the transactions contemplated hereby and
thereby.
3.4 BINDING EFFECT. This Agreement and each of the other
Transaction Documents have been duly executed and delivered by the Company, and
constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity relating to
enforceability (regardless of whether considered in a proceeding at law or in
equity).
3.5 LITIGATION. Except as set forth on SCHEDULE 3.5, there are
no actions, suits, proceedings, claims (including, without limitation, claims
involving the prior employment of any of the Company's or any of its
Subsidiaries' employees, their use in connection with the Company's or any of
its Subsidiaries' business of any information or techniques allegedly
proprietary to any of their former employers or their obligations under any
agreements with prior employers), complaints, disputes, arbitrations or
investigations (collectively, "CLAIMS") pending or, to the knowledge of the
Company, threatened, at law, in equity, in arbitration or before any
Governmental Authority against the Company or any of its Subsidiaries nor is the
Company or any of its Subsidiaries aware that there is any basis for any of the
foregoing that could reasonably be expected to have a material adverse effect on
the Condition of the Company. No Order has been issued by any court or other
Governmental Authority against the Company or any of its Subsidiaries purporting
to enjoin or restrain the execution, delivery or performance of this Agreement
or any of the other Transaction Documents.
3.6 COMPLIANCE WITH LAWS.
(a) The Company and each of its Subsidiaries is in compliance
in all material respects with all Requirements of Law and all Orders issued by
any court or Governmental Authority against the Company and each of its
Subsidiaries. To the knowledge of the Company, there is no Requirement of Law
which could reasonably be expected to prohibit or restrict the Company or any of
its Subsidiaries from, or otherwise materially adversely effect the Company or
any of its Subsidiaries in, conducting its business in any jurisdiction in which
it now conducts its business.
(b) The Company and each of its Subsidiaries 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 and
each of its Subsidiaries; (ii) such Permits are in full force and effect; and
(iii) no violations are or have been recorded in respect of any Permit.
3.7 CAPITALIZATION.
(a) As of the date hereof, after giving effect to the
transactions contemplated by this Agreement, the authorized capital stock of the
Company shall
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consist of (i) 13,333,333 shares of Common Stock, of which 5,141,181 shares are
issued and outstanding and (ii) 2,000,000 shares of preferred stock, par value
$0.01 per share, 268,265 of which are designated as Series C Preferred Stock of
which 3,000 are issued and outstanding and convertible into 20,000 shares of
Common Stock and (iv) 1,731,735 shares of which are undesignated "blank check"
preferred stock. As of the date of this Agreement, the aggregate number of
options to purchase shares of Common Stock which may be issued under the Stock
Option Plans is 1,062,260 of which 776,550 are outstanding. The Company has
reserved a sufficient number of shares of Common Stock for issuance upon
exercise of the Warrants. Except for the Warrants, the Series B Warrants
exercisable for 98,493 shares of Common Stock, the Series C Warrants exercisable
for 46,167 shares of Common Stock and 39,282 shares of Common Stock, there are
no options (other than options granted under the Stock Option Plans), warrants,
conversion privileges, subscription or purchase rights or other rights currently
outstanding to purchase or otherwise acquire (i) any authorized but unissued,
unauthorized or treasury shares of the Company's capital stock, (ii) any Stock
Equivalents or (iii) any other securities of the Company and there are no
commitments, contracts, agreements, arrangements or understandings by the
Company to issue any shares of the Company's capital stock or any Stock
Equivalents or other securities of the Company. No anti-dilution rights of any
capital stock or other securities issued by the Company shall be triggered as a
result of the transactions contemplated hereby. The Purchased Securities are
duly authorized, and when issued and sold to the Purchasers after payment
therefor, will be validly issued, fully paid and non-assessable, will be issued
in compliance with the registration and qualification requirements of all
applicable federal, state and foreign securities laws and will be free and clear
of all other Liens. The shares of Common Stock issuable upon exercise of the
Warrants have been duly reserved for issuance upon exercise of the Warrants and,
when issued in compliance with the provisions of the Warrants, will be validly
issued, fully paid and non-assessable and not subject to any preemptive rights
or similar rights and will be free and clear of all other Liens. All of the
issued and outstanding shares of Common Stock are duly authorized, validly
issued, fully paid and non-assessable, and were issued in compliance with the
registration and qualification requirements of all applicable federal, state and
foreign securities laws.
(b) SCHEDULE 3.7(B) sets forth, as of the Closing Date, a true
and complete list of (x) each of the Subsidiaries of the Company and (y) the
aggregate number of authorized and issued shares of capital stock of such
Subsidiary. The Company owns all of the issued and outstanding capital stock of
the Subsidiaries, free and clear of all Liens. All of such shares of capital
stock are duly authorized, validly issued, fully paid and non-assessable, and
were issued in compliance with the registration and qualification requirements
of all applicable federal, state and foreign securities laws. There are no
options, warrants, conversion privileges, subscription or purchase rights or
other rights currently outstanding to purchase or otherwise acquire any
authorized but unissued, unauthorized or treasury shares of capital stock or
other securities of, or any proprietary interest in, any of the Subsidiaries,
and there is no outstanding security of any kind convertible into or
exchangeable for such shares or proprietary interest.
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3.8 NO DEFAULT OR BREACH; CONTRACTUAL OBLIGATIONS. Except as
set forth on SCHEDULE 3.8, all of the Contractual Obligations filed as exhibits
or described in the SEC Reports or which are otherwise material to the Condition
of the Company (collectively, the "MATERIAL CONTRACTUAL OBLIGATIONS") are valid,
subsisting, in full force and effect and binding upon the Company or its
Subsidiaries, as the case may be, and, to the knowledge of the Company, the
other parties thereto, and the Company and each of its Subsidiaries has paid in
full or accrued all amounts due thereunder and has satisfied in full or provided
for all of its liabilities and obligations thereunder. Neither the Company nor
any of its Subsidiaries has received notice of a default or is in default under,
or with respect to, any Material Contractual Obligation nor does any condition
exist that with notice or lapse of time or both would constitute a default
thereunder. No other party to any such Material Contractual Obligation is in
default thereunder, nor does any condition exist that with notice or lapse of
time or both would constitute a default by such other party thereunder.
3.9 TITLE TO PROPERTIES AND ASSETS. Except as set forth in
Schedule 3.9, the Company and each of its Subsidiaries holds interests as lessee
under leases in full force and effect in, all real property used in connection
with its business or otherwise owned or leased by it. The Company and each of
its Subsidiaries owns and has good, valid, and marketable title to all of the
material properties and assets used in its business and reflected as owned on
the Financial Statements or so described in any Schedule hereto (collectively,
the "ASSETS"), in each case free and clear of all Liens, except for Liens
specifically described on the notes to the Financial Statements.
3.10 REPORTS; FINANCIAL STATEMENTS. (A) (a) As of the
respective dates of their filing with the Commission, all reports, registration
statements and other filings, together with any amendments thereto, filed by the
Company with the Commission since January 1, 1999 (the "SEC REPORTS"), complied
in all material respects with the applicable requirements of the Securities Act,
the Exchange Act, and the rules and regulations of the Commission promulgated
thereunder. The SEC Reports did not at the time they were filed with the
Commission 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.
(b) The audited consolidated financial statements of the
Company and its Subsidiaries (balance sheet and statements of operations, cash
flow and stockholders' equity, together with the notes thereto) for the fiscal
year ended December 31, 2000 which contains the unqualified report of
PricewaterhouseCoopers LLP (the "AUDITED FINANCIAL STATEMENTS") and the
unaudited consolidated financial statements of the Company and its Subsidiaries
(balance sheet and statements of operations) for the fiscal quarter ended
September 30, 2001 (the "UNAUDITED FINANCIAL STATEMENTS" and, together with the
Audited Financial Statements, the "FINANCIAL STATEMENTS") set forth in the SEC
Reports are complete and correct in all material respects and have been prepared
in accordance with GAAP applied on a consistent basis throughout the periods
indicated and with each other, except that the Unaudited Financial Statements do
not contain footnotes or normal year-end adjustments. The Financial Statements
fairly present in all
12
material respects the financial condition, operating results and cash flows of
the Company and its Subsidiaries as of the respective dates and for the
respective periods indicated in accordance with GAAP, except that the Unaudited
Financial Statements do not contain footnotes or normal year-end adjustments.
3.11 TAXES. Except as set forth in Schedule 3.11, (a) The
Company and each of its Subsidiaries has paid all material Taxes which have come
due and are required to be paid by it through the date hereof, and all
deficiencies or other additions to Tax, interest and penalties owed by it in
connection with any such Taxes, other than Taxes being disputed by the Company
and each of its Subsidiaries in good faith for which adequate reserves have been
made in accordance with GAAP; (b) the Company and each of its Subsidiaries has
timely filed or caused to be filed all returns for Taxes that it is required to
file on and through the date hereof (including all applicable extensions), and
all such Tax returns are accurate and complete in all material respects; (c)
with respect to all Tax returns of the Company and each of its Subsidiaries, (i)
to the knowledge of the Company, there is no unassessed Tax deficiency proposed
or, to the knowledge of the Company or any of its Subsidiaries, threatened
against the Company or any of its Subsidiaries and (ii) no audit is in progress
with respect to any return for Taxes, no extension of time is in force with
respect to any date on which any return for Taxes was or is to be filed and no
waiver or agreement is in force for the extension of time for the assessment or
payment of any Tax; (d) all provisions for Tax liabilities of the Company and
each of its Subsidiaries with respect to the Financial Statements have been made
in accordance with GAAP consistently applied; and (e) there are no Liens for
Taxes on the assets of either the Company or any of its Subsidiaries.
3.12 NO MATERIAL ADVERSE CHANGE; ORDINARY COURSE OF BUSINESS.
Except as set forth in the SEC Reports filed prior to the date hereof, since
December 31, 2000, (a) there has not been any material adverse change in the
Condition of the Company, (b) the Company and each of its Subsidiaries has not
participated in any transaction material to the Condition of the Company which
is outside the ordinary course of business, (c) the Company and each of its
Subsidiaries has not increased the compensation of any of its officers or the
rate of pay of any of its employees, except as part of regular compensation
increases in the ordinary course of business, (d) the Company and each of its
Subsidiaries has not created or assumed any Lien on a material asset of the
Company or any of its Subsidiaries, and (e) there has not occurred a material
change in the Company's or any of its Subsidiaries' accounting principles or
practice except as required by reason of a change in GAAP.
3.13 PRIVATE OFFERING. No form of general solicitation or
general advertising was used by the Company or its representatives in connection
with the offer or sale of the Purchased Securities. Assuming the accuracy of the
representations and warranties of the Purchasers set forth in Article IV, no
registration of the Purchased Securities, pursuant to the provisions of the
Securities Act or any state securities or "blue sky" laws, will be required by
the offer, sale or issuance of the Purchased Securities. The Company agrees that
neither it, nor anyone acting on its behalf, shall offer to sell the Purchased
Securities or any other securities of the Company so as to require the
registration of the Purchased Securities pursuant to the provisions of the
Securities Act or
13
any state securities or "blue sky" laws, unless such Purchased Securities or
other securities are so registered.
3.14 LABOR RELATIONS. Except as could not reasonably be
expected to have a material adverse effect on the Condition of the Company, (a)
neither the Company nor any of its Subsidiaries is engaged in any unfair labor
practice; (b) there is no strike, labor dispute, slowdown or stoppage pending
or, to the knowledge of the Company, threatened against the Company or any of
its Subsidiaries; and (c) neither the Company nor any of its Subsidiaries is a
party to any collective bargaining agreement or contract.
3.15 EMPLOYEE BENEFIT PLANS.
(a) The SEC Reports disclose or describe each Company Plan
that is required to be disclosed or described in such SEC Reports pursuant to
the Exchange Act and the Securities Act. The Company and each of its
Subsidiaries has no liability under any Plans other than the Company Plans.
Except as disclosed in the SEC Reports, neither the Company, its Subsidiaries
nor any Commonly Controlled Entity maintains or contributes to, or has within
the preceding six years maintained or contributed to, or may have any liability
with respect to any Plan subject to Title IV of ERISA or Section 412 of the Code
or any "multiple employer plan" within the meaning of the Code or ERISA. Each
Company Plan (and related trust, insurance contract or fund) has been
established and administered in all material respects in accordance with its
terms, and complies in form and in operation in all material respects with the
applicable requirements of ERISA and the Code and other applicable Requirements
of Law.
(b) No Claim with respect to the administration or the
investment of the assets of any Company Plan (other than routine claims for
benefits) is pending.
(c) Each Company Plan that is intended to be qualified under
Section 401(a) of the Code is so qualified and has been so qualified during the
period since its adoption; and each trust created under any such Plan is exempt
from tax under Section 501(a) of the Code and has been so exempt since its
creation.
(d) The consummation of the transactions contemplated by this
Agreement will not accelerate the time of the payment or vesting of, or increase
the amount of, compensation due to any employee or former employee whether or
not such payment would constitute an "excess parachute payment" under section
280G of the Code.
(e) All material unfunded obligations under any Company Plan
which are required to be reflected on the Financial Statements in accordance
with GAAP have been reflected on the Financial Statements.
3.16 LIABILITIES. The Company and each of its Subsidiaries do
not have any direct or indirect obligation or liability (the "LIABILITIES")
other than (a) Liabilities fully and adequately reflected or reserved against on
the Financial Statements and (b) Liabilities incurred since December 31, 2000 in
the ordinary course of business.
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3.17 INTELLECTUAL PROPERTY.
(a) (i) Except as set forth in Schedule 3.17(a), the Company
and each of its Subsidiaries is the owner of all, or has a license under all of,
the material Copyrights, Patents, Trade Secrets, Trademarks, Internet Assets,
Software and other proprietary rights (collectively, "INTELLECTUAL PROPERTY")
that are used in connection with its business as presently conducted, free and
clear of all Liens.
(ii) None of the Intellectual Property owned by the
Company or any of its Subsidiaries is subject to any outstanding Order, and no
action, suit, proceeding, hearing, investigation, charge, complaint, claim or
demand is pending or, to the knowledge of the Company, threatened, which
challenges the validity, enforceability, use or ownership of the item.
(iii) The Company and each of its Subsidiaries has
substantially performed all material obligations imposed upon it under any
material license, material sublicenses, material distribution agreement or other
material agreement relating to any Intellectual Property not owned by the
Company or any of its Subsidiaries, and is not, nor to the knowledge of the
Company, is any other party thereto, in material breach of any material terms or
default of any material terms thereunder in any respect, nor is there any event
which with notice or lapse of time or both would constitute a default
thereunder. All such Intellectual Property licenses are valid, enforceable and
in full force and effect, and will continue to be so on identical terms
immediately following the Closing except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity relating to enforceability
(regardless of whether considered in a proceeding at law or in equity).
(iv) Except as set forth in Schedule 3.17(a) and
except as disclosed in the SEC Reports, none of the Intellectual Property
currently sold or licensed by the Company or any of its Subsidiaries to any
Person, or, to the knowledge of the Company, used by or licensed to the Company
or any of its Subsidiaries by any Person, infringes in any material respect upon
or otherwise violates in any material respect any Intellectual Property rights
of others.
(v) Except as disclosed in the SEC Reports, no
litigation is pending and no Claim has been made against the Company or any of
its Subsidiaries or, to the knowledge of the Company, is threatened, contesting
the right of the Company or any of its Subsidiaries to sell or license to any
Person or use the Intellectual Property presently sold or licensed to such
Person or used by the Company or any of its Subsidiaries.
(b) Except as disclosed in the SEC Reports, to the knowledge
of the Company, no Person is infringing upon or otherwise violating the
Intellectual Property rights of the Company or any of its Subsidiaries.
15
(c) No former employer of any employee of the Company or any
of its Subsidiaries, and no client of any consultant of the Company or any of
its Subsidiaries, has made a claim against the Company or any of its
Subsidiaries or, to the knowledge of the Company, against any other Person, that
such employee or such consultant is utilizing Intellectual Property of such
former employer or client.
(d) To the knowledge of the Company, no employee of the
Company or any of its Subsidiaries is in violation of any employment agreement,
patent or invention disclosure agreement or other contract or agreement setting
forth the terms of employment of such employee with the Company or any of its
Subsidiaries or any prior employer.
(e) To the knowledge of the Company, none of the material
Trade Secrets of the Company, wherever located, the value of which is contingent
upon maintenance of confidentiality thereof, has been disclosed to any Person
other than employees, representatives and agents of the Company or any of its
Subsidiaries or to other Persons who have executed appropriate nondisclosure
agreements, except as required pursuant to the filing of a patent application by
the Company or any of its Subsidiaries.
(f) All present key employees of the Company and each of its
Subsidiaries have executed and delivered invention agreements with the Company
and each of its Subsidiaries, and are obligated under the terms thereof to
assign all inventions made by them during the course of employment to the
Company and each of its Subsidiaries. No such employee or present consultant of
the Company or any of its Subsidiaries has excluded works or inventions used by
the Company but made prior to his employment with, or work for, the Company or
any of its Subsidiaries from his assignment of inventions pursuant to such
proprietary invention agreements.
3.18 NETWORK REDUNDANCY AND COMPUTER BACK-UP. Except as could
not reasonably be expected to have a material adverse effect on the Condition of
the Company, the Company and each of its Subsidiaries has made back-ups of all
material computer Software and databases utilized by it and maintain such
Software and databases at a secure off-site location.
3.19 PRIVACY OF CUSTOMER INFORMATION. Neither the Company nor
any of its Subsidiaries uses any of the customer information it receives through
its website or otherwise in a manner violative in any material respect of the
Company's or any of its Subsidiaries' privacy policy or the privacy rights of
its customers under applicable law.
3.20 POTENTIAL CONFLICTS OF INTEREST. Except as disclosed in
the SEC Reports, to the knowledge of the Company, no officer or director of the
Company, no stockholder beneficially owning in excess of five percent of the
outstanding Common Stock, and no spouse of any such officer or director (a)
owns, directly or indirectly, any interest in (excepting less than one percent
(1%) stock holdings for investment purposes in securities of publicly held and
traded companies), or is an officer, director, employee or consultant of, any
Person which is, or is engaged in business as, a competitor, lessor,
16
lessee, supplier, distributor, sales agent or customer of, or lender to or
borrower from, the Company or any of its Subsidiaries; or (b) owns, directly or
indirectly, in whole or in part, any tangible or intangible property material to
the conduct of the business of the Company or its Subsidiaries.
3.21 TRADE RELATIONS. Except as set forth in Schedule 3.21,
there exists no actual or, to the knowledge of the Company or any of its
Subsidiaries, threatened termination, cancellation or limitation of, or any
adverse change in, the business relationship of the Company or any of its
Subsidiaries with any customer or supplier or any group of customers or
suppliers whose purchases or inventories provided to the Company's and each of
its Subsidiaries' business are individually or in the aggregate material to the
Condition of the Company.
3.22 BROKER'S, FINDER'S OR SIMILAR FEES. There are no
brokerage commissions, finder's fees or similar fees or commissions payable by
the Company or any of its Subsidiaries in connection with the transactions
contemplated hereby based on any agreement, arrangement or understanding with
the Company or any of its Subsidiaries or any action taken by any such Person.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each of the Purchasers hereby represents and warrants,
severally and not jointly, to the Company as follows:
4.1 EXISTENCE AND POWER. Such Purchaser (a) is a limited
partnership or limited liability company, as the case may be, duly organized and
validly existing under the laws of the jurisdiction of its formation and (b) has
the requisite partnership or limited liability company, as the case may be,
power and authority to execute, deliver and perform its obligations under this
Agreement and each of the other Transaction Documents.
4.2 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery
and performance by such Purchaser of this Agreement and each of the other
Transaction Documents and the transactions contemplated hereby and thereby, (a)
have been duly authorized by all necessary partnership or limited liability
company, as the case may be, action, (b) do not contravene the terms of such
Purchaser's organizational documents, or any amendment thereof, and (c) do not
violate, conflict with or result in any breach or contravention of, or the
creation of any Lien under, any Contractual Obligation of such Purchaser or any
Requirement of Law applicable to such Purchaser (except for the Lien created on
the Purchased Shares purchased by GapStar to secure its obligations under a bona
fide loan made to acquire such Purchased Shares), and (d) do not violate any
Orders of any Governmental Authority against, or binding upon, such Purchaser.
4.3 GOVERNMENTAL AUTHORIZATION; THIRD PARTY CONSENTS. No
approval, consent, compliance, exemption, authorization or other action by, or
notice to, or filing
17
with, any Governmental Authority or any other Person, and
no lapse of a waiting period under any Requirement of Law, is necessary or
required in connection with the execution, delivery or performance (including,
without limitation, the purchase of the Purchased Shares) by, or enforcement
against, such Purchaser of this Agreement and each of the other Transaction
Documents to which it is a party or the transactions contemplated hereby and
thereby.
4.4 BINDING EFFECT. This Agreement and each of the other
Transaction Documents have been duly executed and delivered by such Purchaser
and constitutes the legal, valid and binding obligations of such Purchaser,
enforceable against it in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting the enforcement of
creditors' rights generally or by equitable principles relating to
enforceability (regardless of whether considered in a proceeding at law or in
equity).
4.5 PURCHASE FOR OWN ACCOUNT. The Purchased Securities to be
acquired by such Purchaser pursuant to this Agreement are being acquired for its
own account for investment only, and not with a view to, or for sale in
connection with, any distribution of such Purchased Shares or any part thereof
in any transaction that would be in violation of the securities laws of the
United States of America, any state of the United States or any foreign
jurisdiction. Such Purchaser understands and agrees that such Purchased
Securities have not been registered under the Securities Act and are "restricted
securities" within the meaning of Rule 144 under the Securities Act; and that
the Purchased Securities cannot be sold, transferred or otherwise disposed of
except in compliance with the Securities Act and applicable state and foreign
securities laws, as then in effect. Such Purchaser agrees to the imprinting of a
legend on certificates representing all of its Purchased Securities to the
following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY FOREIGN JURISDICTION.
THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT
REQUIRED.
4.6 RESTRICTED SECURITIES. Such Purchaser understands that the
Purchased Securities will not be registered at the time of their issuance under
the Securities Act for the reason that the sale provided for in this Agreement
is exempt pursuant to Section 4(2) of the Securities Act and that the reliance
of the Company on such exemption is predicated in part on such Purchaser's
representations set forth herein.
4.7 BROKER'S, FINDER'S OR SIMILAR FEES. There are no brokerage
commissions, finder's fees or similar fees or commissions payable by such
Purchaser in
18
connection with the transactions contemplated hereby based on any agreement,
arrangement or understanding with such Purchaser or any action taken by such
Purchaser.
4.8 ACCREDITED INVESTOR. Such Purchaser is an "Accredited
Investor" within the meaning of Rule 501 of Regulation D under the Securities
Act, as presently in effect.
ARTICLE V
CONDITIONS TO THE OBLIGATION
OF THE PURCHASERS TO CLOSE
The obligation of the Purchasers to purchase the Purchased
Securities, to pay the purchase price therefor at the Closing and to perform any
obligations hereunder shall be subject to the satisfaction as determined by, or
waiver by, the Purchasers of the following conditions on or before the Closing
Date.
5.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Article III hereof shall be true and
correct in all material respects (except for any such representations and
warranties which are qualified by their terms by a reference to materiality or
material adverse effect, which representation as so qualified shall be true and
correct in all respects) at and on the Closing Date as if made at and on such
date.
5.2 COMPLIANCE WITH THIS AGREEMENT. The Company shall have
performed and complied in all material respects with all of its agreements set
forth herein that are required to be performed by the Company on or before the
Closing Date.
5.3 OFFICER'S CERTIFICATE. The Purchasers shall have received
a certificate from the Company, in form and substance satisfactory to the
Purchaser, dated the Closing Date, and signed by the Chief Executive Officer and
Chief Financial Officer of the Company, certifying as to the matters set forth
in Section 5.1 and 5.2.
5.4 SECRETARY'S CERTIFICATE. The Purchasers shall have
received a certificate from the Company, in form and substance satisfactory to
the Purchasers, dated the Closing Date and signed by the Secretary of the
Company, certifying (a) that the Company is in good standing with the Secretary
of State of the State of Florida, (b) that the attached copies of the Articles
of Incorporation, the By-laws, resolutions of the Board of Directors approving
this Agreement and each of the other Transaction Documents and the transactions
contemplated hereby and thereby, are all true, complete and correct and remain
unamended and in full force and effect and (c) as to the incumbency and specimen
signature of each officer of the Company executing this Agreement, each other
Transaction Document and any other document delivered in connection herewith on
behalf of the Company.
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5.5 PURCHASED SECURITIES. The Company shall have delivered to
each of the Purchasers (i) certificates in definitive form representing the
number of Purchased Shares set forth opposite such Purchaser's name on SCHEDULE
2.1 hereto, registered in the name of such Purchaser and (ii) a Warrant, duly
executed by the Company, exercisable for the aggregate number of shares of
Common Stock set forth opposite such Purchaser's name on SCHEDULE 2.2 hereto.
5.6 REGISTRATION RIGHTS AGREEMENT. The Company shall have duly
executed and delivered the Registration Rights Agreement.
5.7 OPINION OF COUNSEL. The Purchasers shall have received an
opinion of Holland & Knight LLP, dated the Closing Date, relating to the
transactions contemplated by or referred to herein, substantially in the form
attached hereto as EXHIBIT C.
5.8 BOARD OF DIRECTORS. The Board of Directors shall have
filled the existing vacancy on the Board of Directors with an individual
designated by the Purchasers and shall have used its best efforts to cause
another vacancy to be created on the Board of Directors, which shall be filled
with the second GAP Designee, as contemplated by Section 8.4.
5.9 NASD. The Purchased Shares and shares of Common Stock
issuable upon exercise of the Warrants shall have been approved for quotation on
the Nasdaq Stock Market, Inc.
ARTICLE VI
CONDITIONS TO THE OBLIGATION
OF THE COMPANY AND THE SELLING STOCKHOLDERS TO CLOSE
The obligation of the Company to issue and sell the Purchased
Securities and the obligations of the Company to perform its other obligations
hereunder shall be subject to the satisfaction as determined by, or waiver by,
the Company of the following conditions on or before the Closing Date:
6.1 PAYMENT OF PURCHASE PRICE. Each Purchaser shall be
prepared to pay, by wire transfer, the aggregate purchase price for the
Purchased Securities to be purchased by such Purchaser.
6.2 REGISTRATION RIGHTS AGREEMENT. Each Purchaser shall have
duly executed and delivered the Registration Rights Agreement.
6.3 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Purchasers contained in Article IV hereof shall be true and
correct in all material respects (except for any such representations and
warranties which are qualified by their terms by a reference to materiality or
material adverse effect, which
20
representation as so qualified shall be true and correct in all respects) at and
on the Closing Date as if made at and on such date.
ARTICLE VII
INDEMNIFICATION
7.1 INDEMNIFICATION. Subject to the limitations set forth in
Section 7.4, the Company (the "INDEMNIFYING PARTY") agrees to indemnify, defend
and hold harmless each of the Purchasers and its Affiliates and their respective
officers, managers, directors, agents, employees, subsidiaries, partners,
members and controlling persons (each, an "INDEMNIFIED PARTY") to the fullest
extent permitted by law from and against any and all losses, Claims, or written
threats thereof (including, without limitation, any Claim by a third party),
damages, expenses (including reasonable fees, disbursements and other charges of
counsel incurred by the Indemnified Party in any action between the Company
Indemnifying Party and the Indemnified Party or between the Indemnified Party
and any third party (other than a third party who is an Affiliate of such
Indemnified Party) or otherwise in the manner described in Section 7.2 below) or
other liabilities (collectively, "Losses") resulting from or arising out of any
breach of any representation or warranty, covenant or agreement by the Company
in this Agreement. In connection with the obligation of the Indemnifying Party
to indemnify for expenses as set forth above, the Indemnifying Party shall, upon
presentation of appropriate invoices containing reasonable detail, reimburse
each Indemnified Party for all such expenses (including reasonable fees,
disbursements and other charges of counsel incurred by the Indemnified Party in
any action between the Indemnifying Party and the Indemnified Party or between
the Indemnified Party and any third party (other than a third party who is an
Affiliate of such Indemnified Party) as they are incurred by such Indemnified
Party; PROVIDED, HOWEVER, that if an Indemnified Party is reimbursed under this
Article VII for any expenses, such reimbursement of expenses shall be refunded
to the extent it is finally judicially determined that such expenses resulted
solely from the gross negligence or willful misconduct of such Indemnified
Party.
7.2 NOTIFICATION. Each Indemnified Party under this Article
VII shall, promptly after the receipt of notice of the commencement of any Claim
against such Indemnified Party in respect of which indemnity may be sought from
the Indemnifying Party under this Article VII, notify the Indemnifying Party in
writing of the commencement thereof. The omission of any Indemnified Party to so
notify the Indemnifying Party of any such action shall not relieve the
Indemnifying Parties from any liability which it may have to such Indemnified
Party (a) other than pursuant to this Article VII or (b) under this Article VII
unless, and only to the extent that, such omission results in such Indemnifying
Party's forfeiture of substantive rights or defenses. In case any such Claim
shall be brought against any Indemnified Party, and it shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party shall be
entitled to assume the defense thereof at their own expense, with counsel
satisfactory to such Indemnified Party in its reasonable judgment; provided that
any Indemnified Party may, at its own expense, retain separate counsel to
participate in such defense at its own expense. Notwithstanding the foregoing,
in any Claim in which both the Indemnifying
21
Party, on the one hand, and an Indemnified Party, on the other hand, are, or are
reasonably likely to become, a party, such Indemnified Party shall have the
right to employ separate counsel and to control its own defense of such Claim
if, in the reasonable opinion of counsel to such Indemnified Party, either (x)
one or more defenses are available to the Indemnified Party that are not
available to the Indemnifying Parties or (y) a conflict or potential conflict
exists between the Indemnifying Party, on the one hand, and such Indemnified
Party, on the other hand, that would make such separate representation
advisable; PROVIDED, HOWEVER, that the Indemnifying Party (i) shall not be
liable for the fees and expenses of more than one counsel to all Indemnified
Parties and (ii) shall reimburse the Indemnified Parties for all of such fees
and expenses of such counsel, as such fees and expenses are incurred. The
Indemnifying Party agrees that it will not, without the prior written consent of
the Purchasers, settle, compromise or consent to the entry of any judgment in
any pending or threatened Claim relating to the matters contemplated hereby (if
any Indemnified Party is a party thereto or has been actually threatened to be
made a party thereto) unless such settlement, compromise or consent includes an
unconditional release of each Indemnified Party from all liability arising or
that may arise out of such Claim. The Indemnifying Party shall not be liable for
any settlement of any Claim effected against an Indemnified Party without its
written consent, which consent shall not be unreasonably withheld. The rights
accorded to an Indemnified Party hereunder shall be in addition to any rights
that any Indemnified Party may have at common law, by separate agreement or
otherwise; PROVIDED, HOWEVER, that notwithstanding the foregoing or anything to
the contrary contained in this Agreement, nothing in this Article VII shall
restrict or limit any rights that any Indemnified Party may have to seek
equitable relief.
7.3 CONTRIBUTION. If the indemnification provided for in this
Article VII from an Indemnifying Party is unavailable to an Indemnified Party
hereunder in respect of any Losses for which such Indemnified Party would
otherwise be required to indemnify the Indemnified Party under this Article VII,
then such Indemnifying Party, in lieu of indemnifying such Indemnified Party,
shall contribute to the amount paid or payable by such Indemnified Party as a
result of such Losses in such proportion as is appropriate to reflect the
relative fault of such Indemnifying Party and Indemnified Party in connection
with the actions which resulted in such Losses, as well as any other relevant
equitable considerations. The relative faults of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the Losses referred to above shall be
deemed to include any legal or other fees, charges or expenses reasonably
incurred by such party in connection with any investigation or proceeding.
7.4 CAP ON INDEMNIFICATION. The amount of any payment by the
Indemnifying Party to the Indemnified Parties under this Article VII in respect
of Losses resulting from or arising out of any indemnification claim made
pursuant to Section 7.1
22
shall in no event exceed the aggregate purchase price paid to the Company in
consideration of the Purchased Securities.
ARTICLE VIII
AFFIRMATIVE COVENANTS OF THE COMPANY
The Company hereby covenants and agrees with the Purchasers as
follows:
8.1 FINANCIAL STATEMENTS AND OTHER INFORMATION. If at any
time, the Company is not subject to Section 13 or 15(d) of the Exchange Act, and
for so long as the Purchasers or Affiliates thereof beneficially own in the
aggregate not less than 5% of the shares of Common Stock outstanding as of any
date (assuming the exercise of all of the Warrants) (such lesser amount, the
"MINIMUM OWNERSHIP PERCENTAGE"), the Company shall deliver to such Purchaser, in
form and substance satisfactory to such Purchaser:
(a) as soon as available, but not later than ninety (90) days
after the end of each fiscal year of the Company, a copy of the audited
consolidated balance sheet of the Company and its Subsidiaries as of the end of
such fiscal year and the related statements of operations and cash flows for
such fiscal year, setting forth in each case in comparative form the figures for
the previous year, all in reasonable detail and accompanied by a management
summary and analysis of the operations of the Company for such fiscal year and
by the opinion of a nationally recognized independent certified public
accounting firm which report shall state without qualification that such
financial statements present fairly the financial condition as of such date and
results of operations and cash flows for the periods indicated in conformity
with GAAP applied on a consistent basis;
(b) as soon as available, but in any event not later than
forty-five (45) days after the end of each of the first three fiscal quarters of
each fiscal year, the unaudited consolidated balance sheet of the Company and
its Subsidiaries, and the related statements of operations and cash flows for
such quarter and for the period commencing on the first day of the fiscal year
and ending on the last day of such quarter, all certified by an appropriate
officer of the Company as presenting fairly the consolidated financial condition
as of such date and results of operations and cash flows for the periods
indicated in conformity with GAAP applied on a consistent basis, subject to
normal year-end adjustments and the absence of footnotes required by GAAP; and
(c) such other information of the type that would satisfy Rule
144A(d)(4)(i).
8.2 BOOKS AND RECORDS. The Company shall keep proper books of
record and account, in which full and correct entries shall be made of all
financial transactions and the assets and business of the Company and its
Subsidiaries in accordance with GAAP consistently applied.
23
8.3 INSPECTION. As long as the Purchasers or Affiliates
thereof hold in the aggregate not less than the Minimum Ownership Percentage,
the Company shall permit representatives of such Purchasers to visit and inspect
any of its properties and make copies of the Company's corporate and financial
records, and to discuss its affairs, finances and accounts with its directors
and officers, all at such reasonable times during normal business hours and as
often as may be reasonably requested upon reasonable advance notice to the
Company.
8.4 BOARD REPRESENTATION.
(a) The Board of Directors of the Company shall be comprised
of seven members. The Company shall fill the existing vacancy on its Board of
Directors with one person designated by GAP LP, which designee shall initially
be ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, and shall cause another director to resign and cause the
resulting vacancy on the Board of Directors to be filled by one person
designated by GAP LP (collectively, the "GAP DESIGNEES"). The General Atlantic
Designees shall serve in accordance with the Articles of Incorporation and the
Bylaws until the next succeeding annual meeting of stockholders of the Company
to be held after such election for the purpose of electing directors of the
class of which the General Atlantic Designees are members.
(b) As long as the Purchasers or Affiliates thereof continue
to beneficially own in the aggregate not less than the Minimum Ownership
Percentage, commencing with the next succeeding annual meeting of the
stockholders of the Company at which directors of the class of which the General
Atlantic Designees are members are elected, and at each annual meeting of the
stockholders of the Company thereafter held for the purpose of electing
directors of such class, GAP LP shall be entitled to designate to the Board of
Directors the General Atlantic Designees to serve as two of the directors of the
Company. The Company shall cause such General Atlantic Designees to be included
in the slate of nominees recommended by the Board of Directors to the Company's
stockholders for election as directors, and the Company shall use its reasonable
best efforts to cause the election of such General Atlantic Designees, including
using its reasonably best efforts to cause officers of the Company who hold
proxies (unless otherwise directed by the stockholder submitting such proxy) to
vote such proxies in favor of the election of such General Atlantic Designees,
unless the Board of Directors determines in good faith, with the written advice
of outside counsel, that it would be inconsistent with their fiduciary duties to
take such actions. As long as the Purchasers or Affiliates thereof continue to
beneficially own in the aggregate not less than the Minimum Ownership
Percentage, in the event that the General Atlantic Designees shall cease to
serve as directors for any reason, the Company shall use its reasonable best
efforts to cause any vacancy resulting thereby to be filled by another designee
of GAP LP.
(c) Notwithstanding anything to the contrary contained in this
Agreement, the Company shall provide such reimbursement and compensation to the
General Atlantic Designees as is consistent with the reimbursement and
compensation provided to other members of the Board of Directors.
24
(d) Subject to applicable securities laws and Nasdaq
regulations, each committee of the Board of Directors shall include the General
Atlantic Designees.
(e) As long as the Purchasers or Affiliates thereof continue
to beneficially own in the aggregate not less than the Minimum Ownership
Percentage, GAP LP shall have the right to designate one observer who shall have
the right to attend all regular, special and telephonic meetings of the Board of
Directors, except to the extent that such attendance would negate any
attorney-client privilege.
8.5 OFFERING NOTICE; PREEMPTIVE RIGHTS; EXERCISE; CLOSING.
(a) Except for (i) Common Stock or options to acquire Common
Stock issued pursuant to the Stock Option Plans or issued to employees,
directors or officers of, or consultants to, the Company or any of its
Subsidiaries pursuant to any compensatory plan, agreement or arrangement
approved by the Board of Directors and by a majority of the members of the Board
of Directors who are not employees of the Company or a Subsidiary of the
Company, (ii) a subdivision of the outstanding shares of Common Stock into a
larger or smaller number of shares of Common Stock, (iii) capital stock issued
upon exercise, conversion or exchange of any Stock Equivalent (including the
Warrants) previously issued, and (iv) capital stock or securities convertible
into capital stock of the Company issued in consideration of an acquisition of
any Person, approved by the Board of Directors, by the Company of another Person
((i)-(iv) being referred to collectively as "EXEMPT ISSUANCES"), if the Company
wishes to issue any capital stock or any other securities convertible into or
exchangeable for capital stock of the Company pursuant to a private placement
exempt from registration under the Securities Act (collectively, "NEW
SECURITIES") to any Person (the "SUBJECT PURCHASER"), then the Company shall
offer such New Securities first to the Purchasers by sending written notice (the
"NEW ISSUANCE NOTICE") to the Purchasers, which New Issuance Notice shall state
(x) the number of New Securities proposed to be issued and (y) the proposed
purchase price, or mechanism for determining the proposed purchase price, per
security of the New Securities (as calculated, the "PROPOSED PRICE"). Upon
delivery of the New Issuance Notice, such offer shall be irrevocable unless and
until the rights provided for in Section 8.5(b) shall have been waived or shall
have expired.
(b) For a period of five (5) Business Days after the giving of
a New Issuance Notice, each of the Purchasers shall have the right to purchase
up to its Proportionate Percentage (as hereinafter defined) of the New
Securities at a purchase price equal to the Proposed Price and upon the same
terms and conditions set forth in the New Issuance Notice. Each Purchaser shall
have the right to purchase up to that percentage of the New Securities
determined by dividing (x) the total number of shares of Common Stock (assuming
the exercise of all of the Purchased Warrants) beneficially owned by such
Purchaser exercising its rights under this Section 8.5 by (y) the total number
of shares of Common Stock then outstanding (assuming the exercise of all of the
Purchased Warrants) (the "Proportionate Percentage"). If any Purchaser does not
fully subscribe for the number or amount of New Securities that it or he is
entitled to purchase pursuant to the preceding sentence, then each Purchaser
which elected to purchase New
25
Securities shall have the right to purchase that percentage of the remaining New
Securities not so subscribed for (for the purposes of this Section 8.5, the
"Excess New Securities") determined by dividing (x) the total number of shares
of Common Stock (assuming the exercise of all of the Purchased Warrants) then
beneficially owned by such participating Purchaser by (y) the total number of
shares of Common Stock (assuming the exercise of all of the Purchased Warrants)
then beneficially owned by all participating Purchasers who elected to purchase
Excess New Securities. The Purchasers may transfer all or any portion of their
rights pursuant to this Section 8.5 to any Affiliate thereof.
(c) The right of the Purchasers to purchase the New Securities
under subsection (b) above shall be exercisable by delivering written notice of
the exercise thereof, prior to the expiration of the 5 Business Day period
referred to in subsection (b) above, to the Company, which notice shall state
the amount of New Securities that such Purchaser elects to purchase pursuant to
Section 8.5(b). The failure of the Purchasers to respond within such 5 Business
Day period shall be deemed to be a waiver of the Purchasers' rights under
Section 8.5(b), provided that the Purchasers may waive their rights under
Section 8.5(b) prior to the expiration of such 5 Business Day period by giving
written notice to the Company. In the event that the aggregate number of New
Securities elected to be purchased by the Purchasers exceeds the total number of
New Securities, each Purchaser who has elected to purchase New Securities shall
be entitled to purchase only that portion of the New Securities as the number of
New Securities elected to be purchased by such Purchaser bears to the total
number of New Securities elected to be purchased by all Purchasers, subject to
rounding by the Board of Directors to the extent it deems reasonably necessary.
(d) The closing of the purchase of New Securities subscribed
for by the Purchasers under this Section 8.5 shall be held at the executive
office of the Company at 11:00 a.m., local time, on (a) the 15th day after the
giving of the New Issuance Notice pursuant to Section 8.5(a), if the Purchasers
elect to purchase all of the New Securities under this Section 8.5, (b) the date
of the closing of the sale to the Subject Purchaser or Subject Purchasers if the
Purchasers elect to purchase some, but not all, of the New Securities under this
Section 8.5 or (c) at such other time and place as the parties to the
transaction may agree. At such closing, such New Securities shall be issued free
and clear of all Liens (other than those arising hereunder and those
attributable to actions by the purchasers thereof) and the Company shall so
represent and warrant, and further represent and warrant that such New
Securities shall be, upon issuance thereof to the Purchasers and after payment
therefor, duly authorized, validly issued, fully paid and non-assessable. The
Company shall deliver certificates representing the New Securities no later than
five (5) Business Days after such closing. The Purchasers shall deliver at the
closing payment in full in immediately available funds for the New Securities
purchased by them. At such closing, all of the parties to the transaction shall
execute such additional documents as are otherwise necessary or appropriate.
Nothing in this Section 8.5 shall prevent or delay the Company from consummating
the closing of the issuance and sale of the New Securities to any Subject
Purchaser; provided that the Company complies with its obligations under this
Section 8.5.
26
ARTICLE IX
TERMINATION OF AGREEMENT
9.1 TERMINATION. This Agreement may be terminated by written
notice prior to the Closing as follows:
(a) at any time on or prior to the Closing Date, by mutual
written consent of the Company and the Purchasers;
(b) at the election of the Company or the Purchasers by
written notice to the other parties hereto after 5:00 p.m., New York time, on
April 25, 2002, if the Closing shall not have occurred, unless such date is
extended by the mutual written consent of the Company and the Purchasers;
PROVIDED, HOWEVER, that the right to terminate this Agreement under this Section
9.1(b) shall not be available to any party whose breach of any representation,
warranty, covenant or agreement under this Agreement has been the cause of, or
resulted in, the failure of the Closing to occur on or before such date;
(c) at the election of the Purchasers, if there has been a
material breach of any representation, warranty, covenant or agreement on the
part of the Company contained in this Agreement, which breach has not been cured
within fifteen (15) days of written notice to the Company of such breach.
(d) at the election of the Company, if there has been a
material breach of any representation, warranty, covenant or agreement on the
part of any of the Purchasers contained in this Agreement, which breach has not
been cured within fifteen (15) days of written notice to the Purchasers of such
breach.
If this Agreement so terminates, it shall become null and void
and have no further force or effect, except as provided in Section 9.2.
9.2 SURVIVAL. If this Agreement is terminated and the
transactions contemplated hereby are not consummated as described above, this
Agreement shall become void and of no further force and effect, except for the
provisions of Article 1 and this Section 9.2; PROVIDED, HOWEVER, that (a) none
of the parties hereto shall have any liability in respect of a termination of
this Agreement pursuant to Section 9.1(a) or Section 9.1(b) and (b) nothing
shall relieve the Company from liability for actual damages resulting from a
termination of this Agreement pursuant to Section 9.1(c) and nothing shall
relieve the Purchasers from liability for actual damages resulting from a
termination of this Agreement pursuant to Section 9.1(d); and PROVIDED, FURTHER,
that none of the parties hereto shall have any liability for speculative,
indirect, unforeseeable or consequential damages or lost profits resulting from
any legal action relating to any termination of this Agreement.
27
ARTICLE X
MISCELLANEOUS
10.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties made herein shall survive the execution and
delivery of this Agreement until the date that is ninety (90) days after the
receipt by the Purchasers of audited consolidated financial statements of the
Company and its Subsidiaries for the fiscal year ending December 31, 2002 (or,
if such fiscal year changes and no such audited consolidated financial
statements are available, then the successor fiscal year), except for (a)
Sections 3.1, 3.2, 3.4, 3.7, 3.13 and 3.22, which representations and warranties
shall survive indefinitely and (b) Section 3.11, which shall survive until the
later to occur of (i) the lapse of the statute of limitations with respect to
the assessment of any Tax to which such representation and warranty relates
(including any extensions or waivers thereof) and (ii) sixty (60) days after the
final administrative or judicial determination of the Taxes to which such
representation and warranty relates, and no claim with respect to Section 3.11
may be asserted thereafter with the exception of claims arising out of any fact,
circumstance, action or proceeding to which the party asserting such claim shall
have given notice to the other parties to this Agreement prior to the
termination of such period of reasonable belief that a tax liability will
subsequently arise therefrom.
10.2 NOTICES. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, telecopier,
courier service or personal delivery:
28
if to the Company:
ProxyMed, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, In-House Counsel
with a copy to:
Holland & Knight LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
if to GAP LP, GAP Coinvestment or GapStar:
c/o General Atlantic Service Corporation
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
if to GmbH Coinvestment:
c/o General Atlantic Partners GmbH
▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Telecopy: 011-49-211-602-888-89
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
29
with a copy to:
General Atlantic Service Corporation
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and
▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
All such notices, demands and other communications shall be
deemed to have been duly given (i) when delivered by hand, if personally
delivered; (ii) one Business Day after being sent, if sent via a reputable
nationwide overnight courier service guaranteeing next business day delivery;
(iii) five (5) Business Days after being sent, if sent by registered or
certified mail, return receipt requested, postage prepaid; and (iv) when receipt
is mechanically acknowledged, if telecopied. Any party may by notice given in
accordance with this Section 10.2 designate another address or Person for
receipt of notices hereunder. Any party may give any notice, request, consent or
other communication under this Agreement using any other means (including,
without limitation, personal delivery, messenger service, first class mail or
electronic mail), but no such notice, request, consent or other communication
shall be deemed to have been duly given unless and until it is actually received
by the party to whom it is given.
10.3 SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES. This
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the parties hereto. Subject to applicable securities laws
and the terms and conditions thereof, the Purchasers may assign any of their
rights under this Agreement or the other Transaction Documents to any of their
respective Affiliates. The Company may not assign any of its rights under this
Agreement without the written consent of the Purchasers. Except as provided in
Article VII, no Person other than the parties hereto and their successors and
permitted assigns is intended to be a beneficiary of this Agreement.
10.4 AMENDMENT AND WAIVER.
(a) No failure or delay on the part of the Company or the
Purchasers in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy.
30
(b) Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by the Company or the Purchasers from the terms of
any provision of this Agreement, shall be effective (i) only if it is made or
given in writing and signed by the Company and the Purchasers purchasing a
majority of the Purchased Shares, and (ii) only in the specific instance and for
the specific purpose for which made or given. Except where notice is
specifically required by this Agreement, no notice to or demand on the Company
in any case shall entitle the Company to any other or further notice or demand
in similar or other circumstances.
10.5 COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
10.6 HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
10.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
10.8 SEVERABILITY. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair the
benefits of the remaining provisions hereof.
10.9 RULES OF CONSTRUCTION. Unless the context otherwise
requires, references to sections or subsections refer to sections or subsections
of this Agreement.
10.10 ENTIRE AGREEMENT. This Agreement, together with the
exhibits and schedules hereto, and the other Transaction Documents are intended
by the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and therein.
There are no restrictions, promises, representations, warranties or
undertakings, other than those set forth or referred to herein or therein. This
Agreement, together with the exhibits and schedules hereto, and the other
Transaction Documents supersede all prior agreements and understandings between
the parties with respect to such subject matter.
10.11 FEES. Upon the Closing, the Company shall reimburse each
of the Purchasers for their fees, disbursements and other charges of counsel
incurred in connection with the transactions contemplated by this Agreement,
provided that the amount of such reimbursement shall not exceed in the aggregate
$75,000.
31
10.12 PUBLIC ANNOUNCEMENTS. Following the date hereof, the
Company shall be permitted to issue a press release relating to the Transaction
Documents and the transactions contemplated thereby. The Purchasers shall have
the opportunity to review and comment on such press release prior to its
issuance, which review and comment shall be provided as expeditiously as
possible and in any event within 48 hours of delivery of such press release by
the Company to the Purchasers, and such press release shall be in form and
substance reasonably satisfactory to the Purchasers. Except as set forth in the
previous sentence, neither the Company nor the Purchasers will issue any press
release or make any public statements with respect to this Agreement or the
transactions contemplated hereby without the prior written consent of the other
parties hereto, except to the extent such party reasonably believes such press
release or public statement is required by applicable law or stock market
regulations; PROVIDED, HOWEVER, that the Company and the Purchasers may make
reasonable public statements consistent with prior public statements otherwise
permitted under this Section 10.12; and PROVIDED FURTHER, that GAP LLC may
disclose on its worldwide web page, ▇▇▇.▇▇▇▇▇▇▇▇▇▇.▇▇▇, the name of the Company,
the name of the Chief Executive Officer of the Company, a brief description of
the business of the Company, the Company's logo and the aggregate amount of the
Purchasers' investment in the Company. Notwithstanding the foregoing, the
Company will not use or refer to the name of any Purchaser in any public
statement or disclosure without the consent of such Purchaser except to the
extent that such party reasonably believes such statement or disclosure is
required by applicable law or stock market regulations.
10.13 FURTHER ASSURANCES. Each of the parties shall execute
such documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations or other actions by, or
giving any notices to, or making any filings with, any Governmental Authority or
any other Person) as may be reasonably required or desirable to carry out or to
perform the provisions of this Agreement.
[Remainder of page intentionally left blank]
32
IN WITNESS WHEREOF, the undersigned have executed, or have
caused to be executed, this Stock Purchase Agreement on the date first written
above.
PROXYMED, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
GENERAL ATLANTIC PARTNERS 74, L.P.
By: GENERAL ATLANTIC PARTNERS, LLC,
its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: A Managing Member
GAP COINVESTMENT PARTNERS II, L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: A General Partner
GAPSTAR, LLC
By: GENERAL ATLANTIC PARTNERS, LLC,
its Managing Member
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: A Managing Member
GAPCO GMBH & CO. KG
By: GAPCO Management GMBH,
its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: A Managing Director