Exhibit 10.14
STOCK RIGHTS AND RESTRICTIONS AGREEMENT
by and between
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.
and
IDX SYSTEMS CORPORATION
Dated as of January 8, 2001
TABLE OF CONTENTS
Page
1. DEFINITIONS..................................................................... 3
2. SHARE RIGHTS AND RESTRICTIONS................................................... 8
2.1 LIMITATION ON CERTAIN TRANSACTIONS....................................... 8
2.2 ALLSCRIPTS BOARD OF DIRECTORS............................................ 9
2.3 LIMITATION ON ACQUISITION OF ADDITIONAL VOTING SHARES BY IDX............. 11
2.4 RESTRICTIONS ON TRANSFER................................................. 12
2.5 VOTING OF IDX SHARES..................................................... 17
2.6 RIGHT TO PARTICIPATE IN CERTAIN ISSUANCES BY ALLSCRIPTS.................. 18
3. RESTRICTIONS ON TRANSFER........................................................ 19
4. STOCK CERTIFICATES AND OTHER RESTRICTIONS....................................... 19
4.1 ENDORSEMENT OF CERTIFICATES.............................................. 19
4.2 IMPROPER TRANSFER........................................................ 19
5. GENERAL PROVISIONS.............................................................. 20
5.1 REPRESENTATIONS AND WARRANTIES........................................... 20
5.2 AMENDMENT AND MODIFICATION; WAIVER OF COMPLIANCE......................... 20
5.3 INJUNCTIVE RELIEF........................................................ 20
5.4 BYLAWS................................................................... 21
5.5 NO ADOPTION OR AMENDMENT OF RIGHTS PLAN.................................. 21
5.6 GOVERNING LAW............................................................ 21
5.7 TERMINATION.............................................................. 21
5.8 NOTICES.................................................................. 21
5.9 SEVERABILITY............................................................. 22
5.10 ENTIRE AGREEMENT......................................................... 22
5.11 PARTIES IN INTEREST...................................................... 23
5.12 HEADINGS................................................................. 23
5.13 COUNTERPARTS............................................................. 23
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TABLE OF CONTENTS
(continued)
Page
SCHEDULES AND EXHIBITS
----------------------
SCHEDULE I - INVESTMENT BANKING FIRMS..................................... 25
SCHEDULE II - LIST OF ACCEPTABLE ALLSCRIPTS MARKET MAKERS................. 26
EXHIBIT A - ALLSCRIPTS RETIREMENT POLICIES................................ 27
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STOCK RIGHTS AND RESTRICTIONS AGREEMENT
STOCK RIGHTS AND RESTRICTIONS AGREEMENT (the "Agreement"), dated as of
January 8, 2001, between Allscripts Healthcare Solutions, Inc., a Delaware
corporation ("Allscripts") and IDX Systems Corporation, a Vermont corporation
("IDX").
RECITALS:
A. After giving effect to the Closing, IDX owns 7,497,838 shares of
Allscripts Common Stock (together with any additional Allscripts Voting Shares
that IDX or any Affiliate of IDX may from time to time own, the "IDX Shares").
B. After giving effect to the Closing, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
("▇.▇.▇."). is the initial IDX Designee.
C. The Boards of Directors of Allscripts and IDX deem it advisable
to establish (i) insofar as concerns IDX, certain rights and restrictions with
respect to Allscripts Business Combination Transactions and the IDX Shares and
(ii) insofar as concerns Allscripts, certain restrictions with respect to IDX
Business Combination Transactions and any securities of IDX having voting power
under ordinary circumstances with respect to the election of directors of IDX
that Allscripts may hold from time to time.
ACCORDINGLY, premises considered, the parties have entered into this
Agreement.
1. DEFINITIONS. For purposes of this Agreement, the following terms have
the meanings indicated:
(a) "Affiliate" shall mean, with respect to any specified Person, any
other Person, directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person. For the purposes
of this definition, "control" (including, with correlative meanings,
"controlling," "controlled by," and "under common control with") means the power
to direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract, or otherwise and, with respect to a corporation or partnership,
control shall mean direct or indirect ownership of more than fifty percent (50%)
of the voting stock or general partnership interest or voting interest in any
such corporation or partnership. Notwithstanding anything to the contrary in
this definition, Affiliates of IDX who were stockholders of Channelhealth
Incorporated ("Channelhealth") immediately prior to the Closing shall not be
considered "Affiliates" for purposes of Recital A (definition of "IDX Shares")
and Sections 2.2, 2.4 (other than Section 2.4(a)), 2.5, 2.6 and 4.2 hereof.
(b) "Acceptance Notice" shall have the meaning set forth in Section
2.6(b).
(c) "Applicable Percentage" shall mean 2%.
(d) "Allscripts" shall have the meaning set forth in the first
paragraph of this Agreement; and the term "Allscripts" shall include Allscripts
and its Affiliates unless the context otherwise requires.
(e) "Allscripts Business Combination Transaction" shall mean a
merger, consolidation, "business combination" as defined in Section 203 of the
DGCL as in effect on the date hereof, compulsory share exchange,
recapitalization or other transaction in which Allscripts is a constituent
corporation or to which Allscripts is a party and pursuant to which the
Allscripts Voting Shares are exchanged for cash, securities or other property or
a sale of all or substantially all of the assets of Allscripts and its
Subsidiaries, taken as a whole; provided, however, that none of the following
shall be deemed an Allscripts Business Combination Transaction for purposes of
this Agreement: (i) a merger, consolidation, compulsory share exchange,
recapitalization or other transaction in which the Beneficial Ownership of the
capital stock of Allscripts or the surviving corporation of the transaction (or
of the ultimate parent of Allscripts or of such surviving corporation)
immediately after the consummation of such transaction is substantially the same
as the ownership of the capital stock of Allscripts immediately prior to the
consummation of the transaction or (ii) a merger (A) in which Allscripts is the
surviving corporation, (B) in which all Allscripts Voting Shares immediately
prior to the consummation of such merger remain outstanding immediately after
the consummation thereof, (C) as a result of the consummation of which no Person
will Beneficially Own a majority of the Allscripts Fully Diluted Shares and (D)
following the consummation of which the Allscripts Continuing Directors (which,
for the purposes of this clause (e), shall include the IDX Designee) will
represent a majority of the Board of Directors of Allscripts.
(f) "Allscripts Common Stock" shall mean Allscripts' common stock,
par value $0.01 per share, and any shares of common stock or similar securities
into which the common stock of Allscripts are hereafter reclassified into or
exchanged for.
(g) "Allscripts Continuing Director" shall mean (i) any member of the
Board of Directors of Allscripts, while such Person is a member of such Board of
Directors, who (A) was a member of the Board of Directors of Allscripts prior to
the date hereof or (B) is recommended or elected to the Board of Directors by a
majority of the Allscripts Continuing Directors to fill a vacancy arising as a
result of an increase in the number of directors of Allscripts occurring after
the date hereof and (ii) any successor of an Allscripts Continuing Director,
while such successor is a member of the Board of Directors of Allscripts, who is
recommended or elected to succeed the Allscripts Continuing Director by a
majority of the Allscripts Continuing Directors. Notwithstanding anything to the
contrary in this definition, for purposes of this Agreement, the IDX Designee
shall not be considered an Allscripts Continuing Director.
(h) "Allscripts Exchangeable Security" shall mean a security of any
type, including but not limited to debt, equity, warrants or other rights,
issued by Allscripts or representing the right to acquire Allscripts Voting
Shares from Allscripts upon exchange, conversion or exercise thereof.
(i) "Allscripts Fully Diluted Shares" shall mean, at any time, the
sum of (i) the Allscripts Voting Shares then outstanding plus (ii) the number of
Allscripts Voting Shares reserved for issuance or issuable in connection with
the exercise, exchange or conversion of options, warrants or securities of
Allscripts then outstanding that are at such time exercisable or exchangeable
for Allscripts Voting Shares or are convertible into Allscripts Voting Shares.
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(j) "Allscripts Voting Shares" shall mean the Allscripts Common Stock
and any other securities of Allscripts having voting power under ordinary
circumstances with respect to the election of directors of Allscripts.
(k) "Beneficially Own" shall have the meaning assigned to such term
in Rule 13d-3 under the Exchange Act in effect on the date hereof. "Beneficial
Owner" and "Beneficial Ownership" shall have correlative meanings.
(l) "Closing" shall have the meaning assigned to such term in the
Merger Agreement.
(m) "Current Price" shall have the meaning set forth in Section
2.4(i).
(n) "DGCL" shall have the meaning set forth in Section 2.1(c).
(o) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor federal statute as in effect from time to time.
(p) "Expenses" shall have the meaning set forth in Section 2.5(j)(v).
(q) "IDX" shall have the meaning set forth in the first paragraph
hereof; and the term "IDX" shall include IDX and its Affiliates unless the
context otherwise requires or as otherwise specified in the definition of
"Affiliate."
(r) "IDX Business Combination Transaction" shall mean a merger,
consolidation, "business combination" as defined in Section 203 of the DGCL as
in effect on the date hereof, compulsory share exchange, recapitalization or
other transaction in which IDX is a constituent corporation or to which IDX is a
party and pursuant to which the IDX Voting Shares are exchanged for cash,
securities or other property or a sale of all or substantially all of the assets
of IDX and its Subsidiaries, taken as a whole; provided, however, that none of
the following shall be deemed an IDX Business Combination Transaction for
purposes of this Agreement: (i) a merger, consolidation, compulsory share
exchange, recapitalization or other transaction in which the Beneficial
Ownership of the capital stock of IDX or the surviving corporation of the
transaction (or of the ultimate parent of IDX or of such surviving corporation)
immediately after the consummation of such transaction is substantially the same
as the ownership of the capital stock of IDX immediately prior to the
consummation of the transaction or (ii) a merger (A) in which IDX is the
surviving corporation, (B) in which all IDX Voting Shares immediately prior to
the consummation of such merger remain outstanding immediately after the
consummation thereof, (C) as a result of the consummation of which no Person
will Beneficially Own a majority of the IDX Fully Diluted Shares and (D)
following the consummation of which the IDX Continuing Directors will represent
a majority of the Board of Directors of IDX.
(s) "IDX Common Stock" shall mean IDX's common stock, par value $0.01
per share, and any shares of common stock or similar securities into which the
common stock of IDX are hereafter reclassified into or exchanged for.
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(t) "IDX Continuing Director" shall mean (i) any member of the Board
of Directors of IDX, while such Person is a member of such Board of Directors,
who (A) was a member of the Board of Directors of IDX prior to the date hereof
or (B) is recommended or elected to the Board of Directors by a majority of the
IDX Continuing Directors to fill a vacancy arising as a result of an increase in
the number of directors of IDX occurring after the date hereof and (ii) any
successor of an IDX Continuing Director, while such successor is a member of the
Board of Directors of IDX, who is recommended or elected to succeed the IDX
Continuing Director by a majority of the IDX Continuing Directors.
(u) "IDX Designee" shall have the meaning set forth in Section 2.2(a)
hereof.
(v) "IDX Exchangeable Security" shall mean a security of any type,
including but not limited to debt, equity, warrants or other rights, issued by
IDX or representing the right to acquire IDX Voting Shares from IDX upon
exchange, conversion or exercise thereof.
(w) "IDX Fully Diluted Shares" shall mean, at any time, the sum of
(i) the IDX Voting Shares then outstanding plus (ii) the number of IDX Voting
Shares reserved for issuance or issuable in connection with the exercise,
exchange or conversion of options, warrants or securities of IDX then
outstanding that are at such time exercisable or exchangeable for IDX Voting
Shares or are convertible into IDX Voting Shares.
(x) "IDX Shares" shall have the meaning set forth in Recital A.
(y) "IDX Voting Shares" shall mean the IDX Common Stock and any other
securities of IDX having voting power under ordinary circumstances with respect
to the election of directors of IDX.
(z) "Insolvency Laws" shall have the meaning set forth in Section
5.7(a)(ii).
(aa) "Market Price" shall have the meaning set forth in Section
2.4(h).
(bb) "Maximum Number" shall have the meaning set forth in Section
2.4(j)(ii).
(cc) "Merger Agreement" shall mean the Agreement and Plan of Merger,
dated as of July 13, 2000, among Allscripts, Allscripts, Inc., Bursar
Acquisition, Inc., Bursar Acquisition No. 2, Inc., IDX and Channelhealth.
(dd) "Notice of Arranged Transfer" shall have the meaning set forth in
Section 2.4(h)(i).
(ee) "Notice of Block Purchase" shall have the meaning set forth in
Section 2.4(i)(i).
(ff) "Notice of Block Transfer" shall have the meaning set forth in
Section 2.4(i)(i).
(gg) "Notice of Proposed Transfer" shall have the meaning set forth in
Section 2.4(h)(i).
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(hh) "Offer Notice" shall have the meaning set forth in Section
2.6(b).
(ii) "Per Share Market Value" means on any particular date (i) the
last sale price per share of the Allscripts Common Stock on such date on the
principal stock exchange on which the Allscripts Common Stock has been listed
or, if there is no such price on such date, then the last price on such exchange
on the date nearest preceding such date, or (ii) if the Allscripts Common Stock
is not listed on any stock exchange, the final bid price for a share of
Allscripts Common Stock in the over-the-counter market, as reported by The
Nasdaq Stock Market at the close of business on such date, or the last sales
price if such price is reported and final bid prices are not available, or (iii)
if the Allscripts Common Stock is not quoted on The Nasdaq Stock Market, the bid
price for a share of Allscripts Common Stock in the over-the-counter market as
reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding to its functions of reporting prices), or (iv)
if the Allscripts Common Stock is no longer publicly traded, as determined by
one of the investment banking firms listed on Schedule I, as selected by IDX.
(jj) "Person" shall mean any individual, firm, partnership,
association, group (as such term is defined in Section 13(d)(3) of the Exchange
Act, as in effect on the date hereof), corporation, trust, business trust or
other entity, and includes any successor (by merger or otherwise) of any such
entity.
(kk) "Piggyback Registration" shall have the meaning set forth in
Section 2.4(j)(i).
(ll) "Piggyback Registration Request" shall have the meaning set forth
in Section 2.4(j)(i).
(mm) "Private Placement" shall mean a Transfer of IDX Shares pursuant
to a transaction not involving a Pubic Offering; provided, however, that (i) the
sale of IDX Shares pursuant to a tender or exchange offer is not a Private
Placement; (ii) a Private Placement shall not include a Transfer to any Person
who, directly or indirectly, has as one of its material businesses the provision
of healthcare information and/or point of care clinical applications and devices
(a "Allscripts Competitor") if, as a result of such Transfer, such Allscripts
Competitor would Beneficially Own such number of Allscripts Voting Shares as
would constitute 10% or more of the then outstanding Allscripts Voting Shares,
unless any such Allscripts Competitor acquiring such amount of securities enters
into an agreement with Allscripts limiting the Transfer of such shares on
substantially the same terms as this Agreement, except that the term of such
agreement shall be 10 years from the date of such agreement; and (iii) a Private
Placement shall not include a Transfer of IDX Shares to any Person if following
such Transfer such Person Beneficially Owns more than 10% of the then
outstanding Allscripts Voting Shares unless such Person enters into an agreement
with Allscripts with terms and conditions restricting the Transfer of such
shares substantially similar to those contained herein, except that the term of
such agreement shall be for 10 years from the date of such agreement. IDX shall
be entitled to rely on a representation of the proposed recipient in determining
whether a Transfer to such recipient qualifies as a Private Placement under
clauses (ii) and (iii) of the preceding sentence.
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(nn) "Public Offering" shall mean a firm commitment underwritten
public offering pursuant to a registration statement that has been declared
effective by the SEC under the Securities Act.
(oo) "Rule 144" shall mean Rule 144 adopted by the SEC under the
Securities Act, or any successor rule.
(pp) "SEC" shall mean the Securities and Exchange Commission.
(qq) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any successor federal statute as in effect from time to time.
(rr) "Specified Price" shall have the meaning set forth in Section
2.4(i).
(ss) "Subsidiary" shall mean, with respect to any Person, any other
Person of which at least a majority of the voting power of the voting equity
securities or voting equity interest is owned, directly or indirectly, by such
Person.
(tt) "Target Price" shall have the meaning set froth in Section
2.4(h).
(uu) "Trading Day" means (i) a day on which the Allscripts Common
Stock is traded on the principal stock exchange on which the Allscripts Common
Stock has been listed, or (ii) if the Allscripts Common Stock is not listed on
any stock exchange, a day on which the Allscripts Common Stock is quoted in the
over-the-counter market, as reported by The Nasdaq Stock Market, or (iii) if the
Allscripts Common Stock is not quoted on The Nasdaq Stock Market, a day on which
the Allscripts Common Stock is quoted in the over-the-counter market as reported
by the National Quotation Bureau Incorporated (or any similar organization or
agency succeeding to its functions of reporting prices).
(vv) "Transfer" shall have the meaning set forth in Section 2.4
hereof.
2. SHARE RIGHTS AND RESTRICTIONS
2.1 LIMITATION ON CERTAIN TRANSACTIONS
(a) (i) Except as otherwise permitted by this Agreement, IDX agrees
that IDX shall not, during the period from the date of this Agreement until its
termination, (A) engage, or propose to engage, in any Allscripts Business
Combination Transaction with Allscripts, or (B) make any proposal to Allscripts,
the Board of Directors of Allscripts or the stockholders of Allscripts with
respect to a tender offer or exchange offer for Allscripts Voting Shares or a
liquidation of Allscripts, unless either (x) such transaction shall have been
approved by a majority of the Allscripts Continuing Directors or (y) on the date
when such transaction is proposed, no IDX Designee shall be serving on the Board
of Directors of Allscripts and IDX and its Affiliates collectively shall
Beneficially Own less than 5% of the then outstanding Allscripts Voting Shares.
(ii) Except as otherwise permitted by this Agreement,
Allscripts agrees that Allscripts shall not, during the period from the date of
this Agreement until its termination,
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(A) engage, or propose to engage, in any IDX Business Combination Transaction
with IDX, or (B) make any proposal to IDX, the Board of Directors of IDX or the
stockholders of IDX with respect to a tender offer or exchange offer for IDX
Voting Shares or a liquidation of IDX, unless either (x) such transaction shall
have been approved by a majority of the IDX Continuing Directors or (y) on the
date when such transaction is proposed, Allscripts and its Affiliates
collectively shall Beneficially Own less than 5% of the then outstanding IDX
Voting Shares.
(b)(i) Except as otherwise permitted by this Agreement, IDX agrees
that IDX shall not, during the period from the date of this Agreement until its
termination, (i) request or solicit any Person (A) to make a tender or exchange
offer for Allscripts Voting Shares or (B) to make a proposal for an Allscripts
Business Combination Transaction, unless either (x) a majority of the Allscripts
Continuing Directors shall have approved of IDX taking such action or (y) no IDX
Designee shall be serving on the Board of Directors of Allscripts and IDX and
its Affiliates collectively shall Beneficially Own less than 5% of the then
outstanding Allscripts Voting Shares.
(ii) Except as otherwise permitted by this Agreement,
Allscripts agrees that Allscripts shall not, during the period from the date of
this Agreement until its termination, (i) request or solicit any Person (x) to
make a tender or exchange offer for IDX Voting Shares or (y) to make a proposal
for an IDX Business Combination Transaction, unless either (1) a majority of the
IDX Continuing Directors shall have approved of Allscripts taking such action or
(2) Allscripts and its Affiliates collectively shall Beneficially Own less than
5% of the then outstanding IDX Voting Shares.
(c) In connection with the Merger Agreement, Allscripts' Board of
Directors has taken all action to assure that (i) no state takeover statute or
similar statute will apply to the Merger Agreement or to any of the transactions
contemplated in the Merger Agreement or the items referenced in subclauses (A)
or (B) of Section 2.3(a) and (ii) Section 203 of the DGCL will not apply to the
Merger Agreement or any of the transactions contemplated in the Merger Agreement
or the items referenced in subclauses (A) or (B) of Section 2.3(a). Further,
Allscripts has no "poison pill" or takeover defense mechanism other than Article
Twelfth of Allscripts' Certificate of Incorporation. Allscripts shall not amend
or modify any of the foregoing actions nor shall Allscripts implement any new,
additional, amended or modified poison pill or takeover defense mechanism,
unless, in each and every such case, provision shall be made to exclude IDX and
its Affiliates from all effects thereof.
(d) Allscripts and IDX agree that the operative provisions, as
presently in effect, of Section 203 of the DGCL will apply to any Allscripts
Business Combination Transaction and any IDX Business Combination Transaction
covered by Section 203 between IDX and its Affiliates and Allscripts, or
Allscripts and its Affiliates and IDX, for the term of this Agreement,
notwithstanding that the operative provisions of such Section 203 might
otherwise be applicable for a shorter period of time.
2.2 ALLSCRIPTS BOARD OF DIRECTORS
(a) From and after the date hereof and until the earlier of (i)
termination of this Agreement and (ii) the date that IDX and its Affiliates
shall Beneficially Own fewer than
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1,874,459 shares of Allscripts Common Stock (subject to equitable adjustment in
the event of any stock split, stock dividend, reverse stock split or similar
event affecting the Allscripts Common Stock after the date of this Agreement),
then, in connection with each election of directors of Allscripts, whether at an
annual or special meeting, Allscripts will nominate, and, subject to the
fiduciary obligations of the Allscripts directors, solicit proxies for, in
accordance with its procedures for the nomination of, and solicitation of
proxies for, management-slate directors, an individual designated by IDX (such
individual who, at any time, is or was designated by IDX for purposes of this
Agreement is referred to herein as the "IDX Designee"). Upon the earlier of (i)
termination of this Agreement and (ii) the date that IDX and its Affiliates
shall Beneficially Own fewer than 1,874,459 shares of Allscripts Common Stock
(subject to equitable adjustment in the event of any stock split, stock
dividend, reverse stock split or similar event affecting the Allscripts Common
Stock after the date of this Agreement), IDX shall cause any IDX Designee then
serving as a director of Allscripts to resign immediately unless otherwise
requested by Allscripts.
(b) The director initially designated by IDX as the IDX Designee is
R.E.T. Allscripts shall provide IDX with 30 days' prior written notice of any
intended mailing of a notice to stockholders for a meeting at which directors
are to be elected. IDX shall give written notice to Allscripts, no later than
10 days prior to such mailing, of the Person designated pursuant to Section
2.2(a) as nominee for election as director. Allscripts agrees to nominate and
recommend for election as director the individual designated, or to be
designated, pursuant to Section 2.2(a). If IDX shall fail to give notice to
Allscripts as provided above, it shall be deemed that the IDX Designee then
serving as director shall be the IDX Designee for election.
(c) Except as otherwise provided herein, at all times (i) when there
is an IDX Designee on Allscripts' Board of Directors and IDX and its Affiliates
shall Beneficially Own 5,623,379 or more shares of Common Stock (subject to
equitable adjustment in the event of any stock split, stock dividend, reverse
stock split or similar event affecting the Allscripts Common Stock after the
date of this Agreement), and (ii) such designee is R.E.T., the IDX Designee
shall be elected as the sole Vice Chairman of the Allscripts Board of Directors,
which shall be a non-executive position.
(d) In the event that any IDX Designee shall cease to serve as a
director for any reason (other than as set forth in Section 2.2(a)), the vacancy
resulting thereby shall be filled by the remaining directors of Allscripts in
accordance with its Certificate of Incorporation, Bylaws and applicable law by a
new IDX Designee and such new IDX Designee shall thereafter serve until the
expiration of the term of the IDX Designee replaced by such new IDX Designee.
(e) Notwithstanding anything to the contrary contained herein, no IDX
Designee may be a Person who previously has been a director of Allscripts and
was properly removed for cause from the Board of Directors of Allscripts or a
Person who has been convicted of a felony or a crime involving moral turpitude.
(f) The IDX Designee will be furnished with all information that is
provided to all other directors of Allscripts (in their capacities as such) at
the same time as such information is furnished to such other directors (in their
capacities as such).
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(g) IDX shall cause the IDX Designee serving as a director of
Allscripts to comply with the retirement policies of Allscripts as in effect on
the date hereof (a copy of which is attached as Exhibit A) or as hereafter
amended or modified from time to time by the Board of Directors of Allscripts or
its stockholders; provided, however, that no such amendment or modification to
such policies shall be binding upon IDX or the IDX Designee unless the IDX
Designee shall have voted in favor of such amendment or modification at the
meeting, or in the action in lieu of a meeting, of the Board of Directors of
Allscripts at or in which it is considered.
(h) IDX shall make the initial IDX Designee reasonably available for
initial marketing ("road show") efforts undertaken by Allscripts in connection
with the Merger Agreement and for subsequent meetings with customers of the
Channelhealth business (which shall occur not less frequently than once per
month).
2.3 LIMITATION ON ACQUISITION OF ADDITIONAL VOTING SHARES BY IDX
(a) From and after the date hereof, IDX shall not acquire any
Allscripts Voting Shares, other than the IDX Shares owned by IDX as of the date
hereof and after giving effect to the Closing, (i) without the prior written
consent of a majority of the Allscripts Continuing Directors or (ii) pursuant to
Article III of the Merger Agreement; provided, however, that nothing in this
Section 2.3(a) shall limit IDX's power and right (A) to purchase or acquire
shares as a result of any stock dividend or stock split, reclassification of the
Allscripts Common Stock, or the exercise or conversion of any security received
by IDX from Allscripts in respect of the IDX Shares, or (B) to acquire shares of
Allscripts Common Stock or any Allscripts Exchangeable Security pursuant to
Section 2.6 or to convert, exchange or exercise any such Allscripts Exchangeable
Security.
(b) From and after the date hereof, Allscripts shall not acquire any
IDX Voting Shares without the prior written consent of a majority of the IDX
Continuing Directors; provided, however, that nothing in this Section 2.3(b)
shall limit Allscripts' power and right (i) to purchase or acquire shares as a
result of any stock dividend or stock split, reclassification of the IDX Common
Stock, or the exercises or conversion of any security received by Allscripts
from IDX in respect of any IDX securities that Allscripts may hold or (ii) to
acquire shares of IDX Common Stock, or the exercise or conversion of any
security received by Allscripts in respect of any IDX securities that Allscripts
may hold or any IDX Exchangeable Security pursuant to Section 2.6 or to convert,
exchange or exercise any such IDX Exchangeable Security.
(c) Notwithstanding anything to the contrary contained herein, in the
event IDX shall effect a sale of any IDX Shares, IDX shall be entitled to
acquire additional Voting Shares, without the necessity of obtaining prior
written consent, up to an aggregate amount that would cause IDX to hold the same
amount of Voting Shares as IDX held after giving effect to the Closing, and the
obligations of Allscripts set forth in Section 2.2 shall be reinstated, if
applicable; provided, however, that (i) IDX may not undertake to acquire such
additional Voting Shares until the end of the six month period immediately
following any such sale, (ii) in no event will IDX be entitled to reinstate the
obligations of Allscripts set forth in Section 2.2(b) once such obligations are
terminated and (iii) IDX will be restricted from making any further sales of IDX
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Shares until the end of the thirty day period immediately following the
acquisition of any additional Voting Shares pursuant to this Section 2.3(c).
2.4 RESTRICTIONS ON TRANSFER. From and after the date hereof until the
termination of this Agreement, IDX and its Affiliates shall not sell, transfer,
write options on or otherwise convey (when used as a verb, "Transfer" and, any
sale, transfer, writing of options on or other conveyance, a "Transfer")
Beneficial Ownership of any Allscripts Voting Shares (including Allscripts
Voting Shares subject to Allscripts Exchangeable Securities), without the prior
written consent of a majority of the Allscripts Continuing Directors, except
that, in any event, any and all of the following Transfers shall be permitted:
(a) One or more Transfers to an Affiliate of IDX; provided, however,
that each such Affiliate agrees in writing with Allscripts to be bound by the
same restrictions as are applicable to IDX hereunder.
(b) One or more Transfers to Allscripts or to a Subsidiary of
Allscripts (pursuant to a tender offer or otherwise).
(c) One or more Transfers pursuant to a merger, consolidation or
compulsory share exchange, in which Allscripts is a constituent corporation.
(d) One or more Transfers made as a pro rata dividend or distribution
to the holders of the common stock of IDX or its Affiliates; provided, however,
unless such dividend or distribution is to the public stockholders of IDX, such
holders agree in writing with Allscripts to be bound by the same restrictions as
IDX hereunder.
(e) One or more Transfers to any Person (other than IDX or any of its
Affiliates) who shall have commenced a tender or exchange offer for shares of
Allscripts Common Stock if, at the time of public announcement of the tender or
exchange offer: (i) IDX and its Affiliates collectively Beneficially Own less
than 5% of the then outstanding Allscripts Voting Shares and no IDX Designee is
serving on the Allscripts Board of Directors, or (ii) IDX and its Affiliates
collectively Beneficially Own more than 5% of the then outstanding Allscripts
Voting Shares and a majority of the Allscripts Continuing Directors recommend to
the holders of the shares of Allscripts Common Stock that such holders accept
such tender or exchange offer.
(f) From and after the following anniversaries of the date of this
Agreement, IDX and its Affiliates may, collectively, Transfer the following
percentages of the IDX Shares in one or more Private Placements and/or
transactions described below in Sections 2.4(g) or 2.4(h):
10
PERCENTAGE OF
IDX SHARES
ANNIVERSARY OF PERMITTED TO TRANSFER*
THIS AGREEMENT INCREMENTAL* AGGREGATE*
-------------- ------------ ----------
First 25% 25%
Second 25% 50%
Third 25% 75%
Fourth 25% 100%
*These time restrictions and percentages will also apply
to any shares of Allscripts Common Stock acquired by IDX
and its Affiliates pursuant to Article III of the Merger
Agreement, which will result in additional IDX Shares that
can be Transferred based on the percentage limitations
being applied to a greater number of IDX Shares.
In any month, no more than 16.6667% of the IDX Shares eligible to be Transferred
during the then current year may be sold by IDX and its Affiliates pursuant to
this Section 2.4(f). IDX and its Affiliates shall not be permitted to cumulate,
or carry forward for Transfer in subsequent periods, either (i) unsold maximum
monthly eligible share Transfer amounts from month to month during any
particular year or (ii) unsold maximum annual eligible share Transfer amounts
from year to year.
(g) Subject to Section 2.4(f), one or more Transfers in accordance
with Rule 144; provided, however, that no Transfers shall be permitted pursuant
to Rule 144 except through one of the market makers in Allscripts' Common Stock
listed on Schedule II or as otherwise previously approved in writing by
Allscripts.
(h)(i) During each of the periods (A) from and after the first
anniversary of the date hereof through the second anniversary of the date hereof
and (B) from and after the third anniversary of the date hereof through the
fourth anniversary of the date hereof, IDX may deliver a written notice to
Allscripts that IDX desires to Transfer in a single transaction either 50% or
100% of the maximum aggregate number of its IDX Shares that it would be
permitted to Transfer in that period, which notice (the "Notice of Proposed
Transfer") must set forth (A) the number of IDX Shares that IDX desires to
Transfer (which number must equal either 50% or 100% of the maximum aggregate
number of shares that it would be permitted to Transfer in that period) and (B)
the price at which IDX would be willing to Transfer such shares (the "Target
Price"). The Notice of Proposed Transfer shall constitute an offer by IDX, which
shall be irrevocable for a period of 10 days following receipt of such notice by
Allscripts, to permit Allscripts to arrange for the purchase of such shares by a
purchaser selected by Allscripts in its sole discretion for cash at a price per
share equal to the average of the Per Share Market Value of such shares for the
five Trading Days immediately preceding (and excluding) the date that Allscripts
delivers a written notice to IDX (the "Notice of Arranged Transfer") that
Allscripts has arranged for such purchase at such price per share (the "Market
Price"); provided, however, that
11
IDX shall have no obligation to Transfer any of its IDX Shares to the proposed
purchaser if the proposed purchase price per share does not equal at least 90%
of the Target Price.
(ii) The consummation of such purchase shall take place on such
date, not later than 10 days after receipt of the Notice of Arranged Transfer by
IDX, as Allscripts and IDX shall select. Upon the consummation of such purchase,
(A) IDX shall deliver the certificate or certificates evidencing the IDX Shares
so purchased duly endorsed in blank for transfer or accompanied by written
instruments of transfer in form satisfactory to the purchaser duly executed by
IDX, free and clear of any liens, encumbrances and claims and (B) the purchaser
shall simultaneously with the delivery of the certificate or certificates
evidencing the IDX Shares so purchased pay to IDX the aggregate Market Price of
such shares.
(iii) Allscripts shall have no obligation to deliver a Notice of
Arranged Transfer in response to any Notice of Proposed Transfer delivered by
IDX, and the decision as to whether to deliver any Notice of Arranged Transfer
shall be made by Allscripts in the exercise of its sole discretion. In the
event that Allscripts shall have received a Notice of Proposed Transfer from IDX
but shall not have given a Notice of Arranged Transfer to IDX with respect
thereto prior to the expiration of the 10-day period following receipt of such
Notice of Proposed Transfer, nothing in this Section 2.4(h) shall limit the
right of IDX to Transfer any IDX Shares that are not to be purchased pursuant to
a Notice of Arranged Transfer, but otherwise subject to and in accordance with
the time, percentage and other restrictions set forth in Section 2.4(f).
(i) (i) From and after the fifth anniversary of the date hereof, IDX
agrees not to effect any Transfer of IDX Shares in any single transaction
involving a number of such shares representing in excess of 2.5% of the then
issued and outstanding shares of Allscripts Common Stock unless and until IDX
delivers a written notice to Allscripts that IDX intends to effect such
Transfer, which notice (a "Notice of Block Transfer") must set forth (A) the
number of IDX Shares that IDX desires to Transfer, or maximum and minimum number
of, such shares and (B) the price per share at which IDX would be willing to
Transfer such shares (the "Specified Price"). The Notice of Block Transfer shall
constitute an offer by IDX, which shall be irrevocable for a period of 10 days
following receipt of such notice by Allscripts, to permit Allscripts to arrange
for the purchase of the maximum number (but not fewer than the minimum number)
of such shares by a purchaser selected by Allscripts in its sole discretion for
cash at a price per share equal to the average of the Per Share Market Value of
such shares for the five Trading Days immediately preceding (and excluding) the
date that Allscripts delivers a written notice to IDX (the "Notice of Block
Purchase") that Allscripts has arranged for such purchase at such price per
share (the "Current Price"); provided, however, that IDX shall have no
obligation to Transfer any of its IDX Shares to the proposed purchaser if the
Current Price does not equal at least 90% of the Specified Price offered in the
Notice of Block Transfer.
(ii) The consummation of such purchase shall take place on such
date, not later than 10 days after receipt of the Notice of Block Purchase by
IDX , as Allscripts and IDX shall select. Upon the consummation of such
purchase, (A) IDX shall deliver the certificate or certificates evidencing the
IDX Shares so purchased duly endorsed in blank for transfer or accompanied by
written instruments of transfer in form satisfactory to the purchaser duly
executed by IDX, free and clear of any liens, encumbrances and claims and (B)
the purchaser
12
shall simultaneously with the delivery of the certificate or certificates
evidencing the IDX Shares so purchased pay to IDX the aggregate Current Price of
such shares.
(iii) Allscripts shall have no obligation to deliver a Notice of
Block Purchase in response to any Notice of Block Transfer delivered by IDX, and
the decision as to whether to deliver any Notice of Block Purchase shall be made
by Allscripts in the exercise of its sole discretion. In the event that
Allscripts shall have received a Notice of Block Transfer from IDX but shall not
have given a Notice of Block Purchase to IDX with respect thereto prior to the
expiration of the 10-day period following receipt of such Notice of Block
Transfer, nothing in this Section 2.4(i) shall limit the right of IDX to
Transfer any IDX Shares that are not to be purchased pursuant to a Notice of
Block Purchase.
(j) (i) During the period from and after the third anniversary of the
date hereof through the fourth anniversary of the date hereof, if Allscripts
proposes to file a registration statement under the Securities Act with respect
to a primary firm commitment underwritten public offering of Allscripts Common
Stock (a "Piggyback Registration"), it shall give written notice of such
proposed filing to IDX as soon as practicable, but in no event fewer than 20
days before the anticipated filing date. Allscripts shall include in such
registration all IDX Shares with respect to which Allscripts has received a
written request for inclusion within 10 days after the giving of Allscripts'
notice (a "Piggyback Registration Request"); provided, however, that Allscripts
may in its sole discretion restrict the number of IDX Shares so requested for
inclusion to the maximum aggregate number of such shares that IDX would be
permitted to sell in such period after the date that Allscripts gives notice of
its intention to effect a Piggyback Registration.
(ii) If the managing underwriters of the Piggyback Registration
advise IDX that, in their opinion, the number of shares requested to be included
in such registration exceeds the maximum number that can be included in such
offering without adversely affecting the marketability of the offering (the
"Maximum Number"), IDX will limit the number of shares included in such
registration to the Maximum Number, and the shares registered shall be selected
in the following order of priority: (A) first, the shares of Allscripts Common
Stock Allscripts proposes to Transfer, and (B) second, the IDX Shares covered by
the Piggyback Registration Request and other shares requested to be included in
such registration based upon rights under agreements outstanding on the date
hereof; provided, however, that if shares of Common Stock are being offered for
the account of Persons other than IDX, the proportion by which the amount of IDX
Shares intended to be offered for the account of IDX is reduced shall not exceed
the proportion by which the amount of shares of Allscripts Common Stock intended
to be offered for the account of such other Persons is reduced.
(iii) IDX may not participate in any Piggyback Registration
unless it (A) agrees to sell its shares of Allscripts Common Stock on the basis
provided in any underwriting arrangements approved by Allscripts, (B) completes
and executes all questionnaires, powers of attorney, custody arrangements,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements and this Agreement, and (C)
furnishes in writing to Allscripts such information regarding IDX and other
information as Allscripts may from time to time request or as may be legally
required in connection with such registration; provided, however, that IDX shall
not be required to make any
13
representations or warranties in connection with any such registration other
than representations and warranties as to (x) its ownership of its IDX Shares to
be Transferred free and clear of all liens, encumbrances and claims, (y) IDX's
power and authority to effect such Transfer, and (z) such matters pertaining to
compliance with securities laws as may be reasonably requested; provided
further, however, that the obligation of IDX to indemnify pursuant to any such
underwriting agreements shall be several, not joint and several, among such
Persons selling securities, and the liability of IDX will be in proportion to,
and provided further that such liability will be limited to, the net amount
received by IDX from the sale of the IDX Shares pursuant to such registration.
(iv) In connection with any Piggyback Registration, Allscripts
will enter into such agreements (including an underwriting agreement) as are
customary in transactions of the kind contemplated by the intended method or
methods of distribution set forth in the Piggyback Registration Statement and
reasonably acceptable to Allscripts, and take such other actions as are
reasonably necessary in connection therewith in order to expedite or facilitate
the Piggyback Registration; and (A) make such representations and warranties
with respect to the Piggyback Registration Statement or any post-effective
amendment or supplement thereto, prospectus or any amendment or supplement
thereto, and documents incorporated by reference, if any, to IDX and the
underwriters of the Piggyback Registration in form, substance, and scope as are
customary in connection with transactions of such kind; (B) if requested by the
managing underwriters of the Piggyback Registration, obtain an opinion of
outside counsel to Allscripts in customary form and covering matters of the type
customarily covered by such an opinion, addressed to such underwriters named in
the underwriting agreement and dated the date of the closing of the sale of the
shares covered by the Piggyback Registration Statement; (C) if requested by the
managing underwriters of the Piggyback Registration, obtain a "comfort" letter
(or, if a "comfort" letter may not be delivered under applicable accounting
pronouncements or standards, a single "procedures" letter) and a single update
thereof from each of the independent certified public accountants who have
certified the most recent audited financial statements that are incorporated by
reference in the Piggyback Registration Statement, which letters shall be
addressed to the underwriters of the Piggyback Registration, such letter or
letters to be in customary form and covering such matters of the type
customarily covered by "comfort" letters of such type; (D) deliver such
documents and certificates as may be reasonably requested by IDX and the
underwriters of the Piggyback Registration to evidence compliance with any
conditions contained in the underwriting agreement or other agreements entered
into by Allscripts; and (E) undertake such obligations relating to expense
reimbursement as provided in Section 2.4(j)(v) and indemnification and
contribution obligations for the benefit of IDX of the type customarily
undertaken by issuers in connection with "piggyback" registrations.
(v) In connection with any Piggyback Registration, Allscripts
agrees to bear and to pay, or cause to be paid, promptly upon request being made
therefor, all expenses incident to Allscripts' performance of, or compliance
with, this Section 2.4(j), including, without limitation: (A) all SEC and any
National Association of Securities Dealers registration and filing fees and
expenses, (B) all fees and expenses in connection with the qualification of the
shares covered by any Piggyback Registration Statement for offering and sale
under state securities or "blue sky" laws, including reasonable fees and
disbursements of counsel for any underwriter in connection with such
qualifications, (C) all expenses relating to the preparation, printing,
distribution and reproduction of any Piggyback Registration Statement, each
prospectus included
14
therein or prepared for distribution pursuant thereto, each amendment or
supplement to the foregoing, the certificates representing the shares covered by
such Piggyback Registration Statement and all other documents relating hereto,
(D) internal expenses of Allscripts, including, without limitation, all salaries
and expenses of Allscripts' officers and employees performing legal or
accounting duties, (E) fees, disbursements and expenses of Allscripts' counsel
and its other advisors and experts and independent certified public accountants
of Allscripts (including the expenses of any opinions or "comfort" letters
required by or incident to such performance and compliance) and (F) the fees and
expenses incurred in connection with the listing of the shares covered by the
Piggyback Registration Statement on the Nasdaq Stock Market, Inc. or any other
stock exchange or dealer quotation system on which the Allscripts Common Stock
shall at such time be listed or traded (collectively, the "Expenses"). To the
extent that any Expenses are incurred, assumed or paid by IDX or any underwriter
of shares covered by the Piggyback Registration Statement, Allscripts shall
reimburse IDX for the full amount of the Expenses so incurred, assumed or paid
promptly after receipt of a written request therefor, which shall specify in
reasonable detail the nature and amount of the Expenses. Notwithstanding the
foregoing, IDX shall pay, or cause to be paid, as appropriate, (A) all
underwriting discounts and commissions attributable to the sale of the shares
covered by the Piggyback Registration Statement by or on behalf of IDX, (B) the
fees, disbursements and expenses of its counsel in connection with the offering
and sale of such shares and (C) all transfer taxes applicable to the sale of
such shares.
2.5 VOTING OF IDX SHARES. Except as provided below, during the term of
this Agreement, IDX and its Affiliates shall be entitled to vote on all matters
all of its or their IDX Shares in its or their complete discretion.
Notwithstanding the foregoing, IDX and its Affiliates shall vote all such shares
in accordance with the recommendation of the majority of the Allscripts
Continuing Directors on any matter that (i) constitutes an Allscripts Business
Combination Transaction, (ii) would involve a change of control of Allscripts
(for purposes of this section a change in control shall mean the acquisition by
a Person other than IDX or its Affiliates of Beneficial Ownership of more than
50% of the then outstanding Allscripts Voting Shares), (iii) involves the
issuance by Allscripts of securities for its own account for cash, or (iv)
involves any acquisition by Allscripts, whether through merger, share exchange,
purchase of assets or otherwise unless (A) the average of the Per Share Market
Value for Allscripts' Common Stock for the 90 Trading Days immediately preceding
(and excluding) the date on which the matter is voted upon is less than $14.5625
per share (such amount to be appropriately adjusted to give effect to stock
splits, reverse splits, stock dividends, reclassifications and share exchanges
since the date hereof) and (B) there shall exist no continuing and uncured
default by IDX of any of its obligations under this Agreement, the Merger
Agreement, the Strategic Alliance Agreement, the Facilities Lease Agreement or
the Cross License Agreement (as such terms are defined in the Merger Agreement),
which default shall have resulted in a material adverse effect on the business,
properties, results of operations, prospects, condition (financial or otherwise)
or Per Share Market Value of Allscripts' Common Stock in which case, if both
conditions described in subclauses (A) and (B) are satisfied, IDX and its
Affiliates shall be entitled to vote on each matter described in the foregoing
clauses (i) through (iv) all of its or their IDX Shares in its or their complete
discretion.
15
2.6 RIGHT TO PARTICIPATE IN CERTAIN ISSUANCES BY ALLSCRIPTS.
(a) If, when, and for so long as, IDX and its Affiliates Beneficially
Own shares of Allscripts Common Stock that would constitute, after giving effect
to the proposed transaction (but not prior to the proposed transaction), less
than the Applicable Percentage of the then outstanding shares of Allscripts
Common Stock, Allscripts shall not issue any shares of Allscripts Common Stock
or any Allscripts Exchangeable Securities, for any consideration or in any type
of transaction, unless Allscripts shall have first complied with, in the case of
an issuance other than pursuant to a Public Offering, the provisions of Section
2.6(b) or, in the case of a Public Offering, the provisions of Section 2.6(c).
(b) If Allscripts determines to issue any shares of Allscripts Common
Stock or any Allscripts Exchangeable Security, other than in a Public Offering,
then Allscripts shall provide written notice of such determination to IDX, which
notice shall include all the terms of such issuance and shall offer to IDX the
right to purchase, at the same price and on the same terms as Allscripts
proposes to issue such shares of Allscripts Common Stock or Allscripts
Exchangeable Security to others (or, if Allscripts proposes to issue such shares
of Allscripts Common Stock or any Allscripts Exchangeable Security other than
for cash, at a cash price equal to the current market price of the Allscripts
Common Stock or if an Allscripts Exchangeable Security, such value to be
determined by agreement between Allscripts or IDX, or if the parties are unable
to agree, by an investment banking firm or other asset valuation firm of
national reputation selected by IDX from Schedule I attached hereto (as such
Schedule I may be amended in writing from time to time by both Allscripts and
IDX) with the consent of a majority of the Allscripts Continuing Directors,
which consent shall not be unreasonably withheld, the cost of which shall be
borne by Allscripts) a number or amount of the shares of Allscripts Common Stock
or Allscripts Exchangeable Securities proposed to be issued determined by
dividing the aggregate number of outstanding shares of Allscripts Common Stock
then Beneficially Owned by IDX by the total number of shares of Allscripts
Common Stock then outstanding (the "Offer Notice"). If IDX determines to accept
the offer contained in the Offer Notice, IDX shall deliver a written notice to
Allscripts indicating its acceptance within 10 days after its receipt of the
Offer Notice, which notice shall indicate whether IDX has accepted such offer in
whole or in part, and, if accepted in part, the number or amount of shares of
Allscripts Common Stock or Allscripts Exchangeable Securities as to which such
offer has been accepted (an "Acceptance Notice"). Any acceptance of the offer
contained in an Offer Notice by delivery of an Acceptance Notice shall be
irrevocable and shall constitute a commitment by IDX to purchase from
Allscripts, and by Allscripts to sell to IDX, the number or amount of shares of
Allscripts Common Stock or Allscripts Exchangeable Securities covered by such
Acceptance Notice upon the terms contained in the Offer Notice.
1. If at any time and from time to time, (i) Allscripts determines
to issue any Allscripts Voting Shares or any Allscripts Exchangeable
Security in a Public Offering, and (ii) as a result thereof IDX and its
Affiliates would Beneficially Own less than the Applicable Percentage of
the then to be outstanding Allscripts Voting Shares, then (A) Allscripts
shall provide written notice of such determination to IDX, which notice
shall include the proposed size and other terms of such issuance, to the
extent then known, the name or names of any managing underwriter or
placement agent(s) and the date when it is proposed that any such issuance
will be made, and (B) Allscripts shall either sell
16
directly or cause the underwriters or placement agent(s) to offer to IDX
the right to purchase from Allscripts directly or from the underwriters or
placement agent(s), at the applicable offering price, a number or amount of
the Allscripts Voting Shares, Allscripts Exchangeable Securities or other
securities proposed to be issued that, if purchased by IDX, would permit
IDX and its Affiliates to Beneficially Own a number of Voting Shares
determined by dividing the aggregate number of outstanding shares of
Allscripts Common Stock then Beneficially Owned by IDX by the total number
of shares of Allscripts Common Stock then outstanding.
3. RESTRICTIONS ON TRANSFER. From and after the date of Closing and
until the expiration of the six month period following the Closing, R.E.T. shall
not Transfer any shares of Common Stock Beneficially Owned by R.E.T. in his
individual capacity, unless and until such time as ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("G.E.T.")
shall Transfer any shares of Common Stock Beneficially Owned by G.E.T. in his
individual capacity.
4. STOCK CERTIFICATES AND OTHER RESTRICTIONS.
4.1 ENDORSEMENT OF CERTIFICATES.
(a) All certificates representing IDX Shares shall, subject to
Section 4.1(c), bear the following legend:
"THIS CERTIFICATE IS SUBJECT TO THE PROVISIONS OF A STOCK
RIGHTS AND RESTRICTIONS AGREEMENT BETWEEN ALLSCRIPTS
HEALTHCARE SOLUTIONS, INC. AND IDX SYSTEMS CORPORATION
DATED AS OF JANUARY 8, 2001. A COPY OF SUCH AGREEMENT IS
ON FILE AT THE PRINCIPAL BUSINESS OFFICE OF ALLSCRIPTS
HEALTHCARE SOLUTIONS, INC."
(b) After such time as the legend set forth in Section 4.1(a) is no
longer required hereunder (including without limitation as a result of the
termination of this Agreement in accordance with its terms) or if the securities
represented by a certificate have been registered under the Securities Act
pursuant to an effective registration statement or are to be sold pursuant to
Rule 144, or if Allscripts shall have been furnished with an opinion of counsel,
which opinion shall be reasonably satisfactory to counsel for Allscripts, that
registration under the Securities Act is not required, as the case may be, then,
in any such event, upon the request of IDX, Allscripts shall cause such
certificate or certificates to be exchanged for a certificate or certificates
that do not bear any legend.
4.2 IMPROPER TRANSFER. Any attempt by IDX or its Affiliates to Transfer
any IDX Shares other than in accordance with this Agreement shall be null and
void and neither Allscripts nor any transfer agent for such securities shall be
required to give any effect to such attempted Transfer in its stock records.
17
5. GENERAL PROVISIONS.
5.1 REPRESENTATIONS AND WARRANTIES.
(a) Allscripts represents and warrants to IDX that (i) Allscripts is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the corporate power and authority to enter
into this Agreement and to carry out its obligations hereunder, (ii) the
execution and delivery of this Agreement by Allscripts and the consummation by
Allscripts of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of Allscripts and no other corporate
proceedings on the part of Allscripts are necessary to authorize this Agreement
or any of the transactions contemplated hereby, and (iii) this Agreement has
been duly executed and delivered by Allscripts and constitutes a valid and
binding obligation of Allscripts, and, assuming this Agreement constitutes a
valid and binding obligation of IDX, is enforceable against Allscripts in
accordance with its terms, subject to applicable bankruptcy, reorganization,
insolvency, moratorium, fraudulent conveyance and similar laws affecting
creditors' rights generally from time to time and to general principles of
equity.
(b) IDX represents and warrants to Allscripts that (i) IDX is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Vermont and has the corporate power and authority to enter into
this Agreement and to carry out its obligations hereunder, (ii) the execution
and delivery of this Agreement by IDX and the consummation by IDX of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of IDX and no other corporate proceedings on the
part of IDX are necessary to authorize this Agreement or any of the transactions
contemplated hereby, and (iii) this Agreement has been duly executed and
delivered by IDX and constitutes a valid and binding obligation of IDX, and,
assuming this Agreement constitutes a valid and binding obligation of
Allscripts, is enforceable against IDX in accordance with its terms, subject to
applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance and similar laws affecting creditors' rights generally from time to
time and to general principles of equity.
5.2 AMENDMENT AND MODIFICATION; WAIVER OF COMPLIANCE. This Agreement may
be amended or waived only by written instrument duly executed by the parties. In
the event of the amendment or modification of this Agreement in accordance with
its terms, the Board of Directors of Allscripts shall adopt any amendment to the
Bylaws of Allscripts that may be required as a result of such amendment or
modification to this Agreement, and, if required, shall propose any amendment to
its Certificate of Incorporation that may be required as a result of such
amendment or modification to this Agreement to the Allscripts stockholders
entitled to vote thereon at a meeting duly called and held for such purpose, and
shall recommend that the Allscripts stockholders vote in favor of such amendment
to the Certificate of Incorporation.
5.3 INJUNCTIVE RELIEF. Each of the parties hereto hereby acknowledges
that in the event of a breach by any of them of any material provision of this
Agreement, the aggrieved party may be without an adequate remedy of law. Each
of the parties therefore agrees that in the event of a breach of any material
provision of this Agreement the aggrieved party may elect to
18
institute and prosecute proceedings in any court of competent jurisdiction to
enforce specific performance or to enjoin the continuing breach of such
provision, as well as to obtain damages for breach of this Agreement. By seeking
or obtaining any such relief, the aggrieved party will not be precluded from
seeking or obtaining any other relief to which it may be entitled in equity or
at law.
5.4 BYLAWS. At all times while this Agreement shall be in effect,
Allscripts shall cause its Bylaws to conform to the provisions of this
Agreement, including by causing its Bylaws to be amended.
5.5 NO ADOPTION OR AMENDMENT OF RIGHTS PLAN. During the term of this
Agreement, Allscripts' Board of Directors shall not adopt any shareholder rights
plan or amend any rights plan without the approval of the IDX Designee then on
the Board of Directors of Allscripts unless such plan exempts IDX and its
Affiliates from all effects thereof.
5.6 GOVERNING LAW. This Agreement and the legal relations between the
parties shall be governed by and construed in accordance with the laws of the
State of Delaware, without regard to the principles of conflicts of law thereof.
5.7 TERMINATION.
(a) This Agreement may be terminated:
(i) by the mutual written consent of the parties hereto; and
(ii) by IDX if (A) Allscripts shall seek relief under any
bankruptcy, insolvency, receivership, custodianship, trusteeship, liquidation,
reorganization, composition, readjustment, moratorium or similar law (an
"Insolvency Law"); or (B) a proceeding or case shall be commenced under an
Insolvency Law by a third party against Allscripts and such proceeding or case
shall continue undismissed or unstayed for 60 days; or (C) an order for relief
under an Insolvency Law shall be entered against Allscripts.
(b) Unless this Agreement shall have been earlier terminated as
provided in Section 5.7(a), this Agreement shall terminate on the 10th
anniversary of the date of this Agreement.
5.8 NOTICES. All notices, requests, demands or other communications
required or permitted by this Agreement shall be in writing and effective when
received, and delivery shall be made personally or by registered or certified
mail, return receipt requested, postage prepaid, or overnight courier or
confirmed facsimile transmission, addressed as follows:
(a) If to Allscripts:
Allscripts Healthcare Solutions, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
19
Attention: President
with a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to IDX:
IDX Systems Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
with a copy to:
▇▇▇▇ and ▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
5.9 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.
5.10 ENTIRE AGREEMENT. Except as otherwise expressly stated herein, this
Agreement constitutes the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior agreements and undertakings, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof. Except for the Permitted Transfers to IDX and Affiliates of IDX
and except as otherwise expressly permitted or contemplated herein, the rights
and obligations under this Agreement shall not be assigned by operation of law
or otherwise. Nothing in this Agreement shall be construed as prohibiting
Allscripts from effecting a merger, consolidation or other similar transaction
with another entity, provided that (i) the operative terms of this Agreement
shall be applied in respect of any such
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transaction and (ii) under the express terms of such transaction this Agreement
will be continued in effect by Allscripts or any successor thereto.
5.11 PARTIES IN INTEREST. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto and to IDX and the Affiliates of IDX
if they receive permitted Transfers in accordance with this Agreement. Nothing
in this Agreement, express or implied, is intended to or shall confer upon any
other Person any rights, benefits or remedies of any nature whatsoever under or
by reason of this Agreement, except as expressly otherwise contemplated herein.
5.12 HEADINGS. The descriptive headings contained in this Agreement are
included for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
5.13 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
ALLSCRIPTS HEALTHCARE SOLUTIONS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Title: Chief Executive Officer
--------------------------
IDX SYSTEMS CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name:____________________________
Title:___________________________
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (solely with respect to Section 3 of
this Agreement)
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SCHEDULE I
LIST OF ACCEPTABLE INVESTMENT BANKING FIRMS
1. ▇▇▇▇▇▇▇ Sachs & Co.
2. Credit Suisse First Boston Corporation
The above list may be revised from time to time by a written instrument
signed by both Allscripts and IDX.
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SCHEDULE II
LIST OF ACCEPTABLE ALLSCRIPTS MARKET MAKERS
1. ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
2. Bear ▇▇▇▇▇▇▇
3. CIBC World Markets
The above list may be revised from time to time by Allscripts in its sole
discretion by a written instrument signed by Allscripts, a copy of which will be
furnished to IDX.
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EXHIBIT A
ALLSCRIPTS RETIREMENT POLICIES
None.
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