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EXHIBIT 10.2
COMMON STOCK PURCHASE AGREEMENT
This COMMON STOCK PURCHASE AGREEMENT (this "AGREEMENT") is made and
entered into as of January 25, 2001 by and between ▇▇▇▇▇▇▇▇.▇▇▇, Inc., a
Delaware corporation (the "COMPANY"), and University HealthSystem Consortium, an
Illinois corporation ("UHC").
RECITALS
WHEREAS, the Company desires to sell to UHC, and UHC desires to purchase
from the Company, shares of the Company's common stock, par value $0.001 per
share (the "COMMON STOCK") on the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements set forth in this Agreement, the parties
agree as follows:
ARTICLE I
AGREEMENT TO SELL AND PURCHASE STOCK
1.1 Agreement to Sell and Purchase the Shares. The Company agrees
to sell to UHC at the Closing, and UHC agrees to purchase from the Company at
the Closing, 3,254,438 shares of Common Stock (the "SHARES") at a purchase price
of $1.69 per share.
ARTICLE II
CLOSING
2.1 Closing. The purchase and sale of the Shares will take place
at the offices of Fenwick & West LLP, Two Palo Alto Square, Palo Alto,
California, at 10 a.m. Pacific Time on January 25, 2001, or at such other date,
time and location as the Company and UHC mutually agree upon (which time and
place are referred to in this Agreement as the "CLOSING"). At the Closing, the
Company will deliver to UHC a certificate representing the Shares against
delivery to the Company by UHC of the purchase price paid by (i) a check payable
to the Company's order or (ii) wire transfer of immediately available funds to
the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to UHC, subject to the
exceptions specifically disclosed in writing in the disclosure letter delivered
by the Company dated as of the date hereof and certified by a duly authorized
officer of the Company (the "COMPANY DISCLOSURE LETTER") (which Company
Disclosure Letter shall be deemed to be representations and warranties to UHC by
the Company under this Article III), as follows:
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3.1 Organization of the Company.
(a) The Company and each of its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority, and all requisite qualifications to do business as a foreign
corporation, to conduct its business in the manner in which its business is
currently being conducted, except where the failure to be so organized, existing
or in good standing or to have such power, authority or qualifications would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company.
(b) The Company has delivered or made available to UHC a true and
correct copy of the Certificate of Incorporation (including any Certificates of
Designation) and Bylaws of the Company and similar governing instruments of each
of its subsidiaries, each as amended to date (collectively, the "COMPANY CHARTER
DOCUMENTS"), and each such instrument is in full force and effect. Neither the
Company nor any of its subsidiaries is in violation of any of the provisions of
the Company Charter Documents.
3.2 Capitalization.
(a) The authorized capital stock of the Company consists solely of
300,000,000 shares of Common Stock, of which there were 158,593,007 shares
issued and outstanding as of the close of business on December 29, 2000, and
5,000,000 shares of Preferred Stock, par value $0.001 per share, of which no
shares are issued or outstanding. All outstanding shares of Common Stock are
duly authorized, validly issued, fully paid and nonassessable and are not
subject to any right of rescission or preemptive rights created by statute, the
Company Charter Documents or any agreement or document to which the Company is a
party or by which it is bound. As of the date of this Agreement, there are no
shares of Common Stock held in treasury by the Company.
(b) As of the close of business on December 29, 2000, (i)
12,093,686 shares of Common Stock are subject to issuance pursuant to
outstanding options (the "COMPANY OPTIONS") to purchase Common Stock under the
Company's 1997 Stock Plan and 1999 Equity Incentive Plan ("COMPANY STOCK OPTION
PLANS") for an aggregate exercise price of $54,922,563, (ii) 90,000 shares of
Common Stock are subject to issuance pursuant to Company Options other than
pursuant to Company Stock Option Plans for an aggregate exercise price of
$996,891, (iii) 1,081,792 shares of Common Stock are subject to issuance
pursuant to Company Options other than pursuant to the Company Stock Option
Plans from the Pharos and EquipMD acquisitions for an aggregate exercise price
of $3,384,412 and (iv) 572,635 shares of Company Common Stock are reserved for
future issuance under the Company's 1999 Employee Stock Purchase Plan (the
"COMPANY ESPP"). All shares of Common Stock subject to issuance as aforesaid,
upon issuance on the terms and conditions specified in the instruments pursuant
to which they are issuable, will be duly authorized, validly issued, fully paid
and nonassessable. Other than as set forth on Part 3.2(b) of the Company
Disclosure Letter, there are no commitments or agreements of any character to
which the Company is bound obligating the Company to accelerate the vesting of
any Company Option as a result of the consummation of the transactions
contemplated by this Agreement.
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(c) All outstanding shares of Company Common Stock, all
outstanding Company Options, and all outstanding shares of capital stock of each
subsidiary of the Company have been issued and granted in material compliance
with (i) all applicable securities laws and other applicable material Legal
Requirements and (ii) all material requirements set forth in applicable
agreements or instruments. For the purposes of this Agreement, "LEGAL
REQUIREMENTS" means any federal, state, local, municipal, foreign or other law,
statute, constitution, principle of common law, resolution, ordinance, code,
edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted,
promulgated, implemented or otherwise put into effect by or under the authority
of any Governmental Entity (as defined in Section 3.4).
(d) The Shares, when issued and paid for as provided in this
Agreement, will be duly authorized and validly issued, fully paid and
nonassessable.
(e) Based in part on the representations made by UHC in Article IV
hereof, the offer and sale of the Shares in accordance with this Agreement
(assuming no change in currently applicable law) is exempt from the registration
and prospectus delivery requirements of the Securities Act of 1933, as amended
(the "1933 ACT").
3.3 Obligations With Respect to Capital Stock. Except as set forth
in Section 3.2 or Part 3.3 of the Company Disclosure Letter, there are no equity
securities, partnership interests or similar ownership interests of any class of
Company equity security, or any securities exchangeable or convertible into or
exercisable for such equity securities, partnership interests or similar
ownership interests, issued, reserved for issuance or outstanding. All stock and
rights to purchase stock of any subsidiary of the Company are owned free and
clear of all Encumbrances. Except as set forth in Section 3.2 or Part 3.2 or
Part 3.3 of the Company Disclosure Letter, there are no subscriptions, options,
warrants, equity securities, partnership interests or similar ownership
interests, calls, rights (including preemptive rights), commitments or
agreements of any character to which the Company or any of its subsidiaries is a
party or by which it is bound obligating the Company or any of its subsidiaries
to issue, deliver or sell, or cause to be issued, delivered or sold, or
repurchase, redeem or otherwise acquire, or cause the repurchase, redemption or
acquisition of, any shares of capital stock, partnership interests or similar
ownership interests of the Company or any of its subsidiaries or obligating the
Company or any of its subsidiaries to grant, extend, accelerate the vesting of
or enter into any such subscription, option, warrant, equity security, call,
right, commitment or agreement. There are no registration rights, and there is
no shareholder agreement, investor agreement, voting trust, proxy, rights
agreement, "poison pill" anti-takeover plan or other agreement or understanding
to which the Company is a party or by which it is bound with respect to any
equity security of any class of the Company or with respect to any equity
security, partnership interest or similar ownership interest of any class of any
of its subsidiaries.
3.4 Due Authorization.
(a) The Company has all requisite corporate power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company. No approval of any
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holder of any securities of the Company is required in connection with the
consummation of the transactions contemplated hereby. This Agreement has been
duly executed and delivered by the Company and, assuming the due authorization,
execution and delivery thereof by UHC, constitutes the valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, except as enforceability may be limited by bankruptcy and other
similar laws affecting the rights of creditors generally and general principles
of equity.
(b) The execution and delivery of this Agreement by the Company
does not, and the performance of this Agreement by the Company will not, (i)
conflict with or violate the Company Charter Documents, (ii) subject to
compliance with the requirements set forth in Section 3.4(c), conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to the
Company or by which any of its properties is bound or affected, or (iii) result
in any breach of or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, or impair the Company's rights or
alter the rights or obligations of any third party under, or give to others any
rights of termination, amendment, acceleration or cancellation of, or result in
the creation of an Encumbrance on any of the properties or assets of the Company
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which the
Company is a party or by which the Company or any of its properties are bound or
affected, except, in the case of clauses (ii) and (iii), for such conflicts,
violations, breaches, defaults, impairments, or rights which, individually or in
the aggregate, would not have a Material Adverse Effect on the Company. Part
3.4(b) of the Company Disclosure Letter lists all consents, waivers and
approvals under any of the Company's or any of its subsidiaries' agreements,
contracts, licenses or leases required to be obtained in connection with the
consummation of the transactions contemplated hereby, which, if individually or
in the aggregate not obtained, would have a Material Adverse Effect on the
Company.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with any court, administrative agency or
commission or other governmental entity or instrumentality, foreign or domestic
("GOVERNMENTAL ENTITY") is required to be obtained or made by the Company in
connection with the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby, except for (i) such
consents, approvals, orders, authorizations, registrations, declarations and
filings as may be required under applicable federal, foreign and state
securities (or related) laws and the securities laws of any foreign country, and
(ii) such other consents, authorizations, filings, approvals and registrations
which if not obtained or made would not have a Material Adverse Effect on the
Company or have a material adverse effect on the ability of the parties hereto
to consummate the transactions contemplated hereby.
3.5 SEC Filings; Company Financial Statements.
(a) The Company has filed all forms, reports and documents
required to be filed by the Company with the Securities and Exchange Commission
(the "SEC") since the effective date of the Registration Statement of the
Company's initial public offering (the "COMPANY INITIAL REGISTRATION
STATEMENT"), and has made available to UHC such forms, reports and documents in
the form filed with the SEC. All such required forms, reports and documents
(including those that the Company may file subsequent to the date hereof) and
the Company
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Initial Registration Statement are referred to herein as the "COMPANY SEC
REPORTS." As of their respective dates, the Company SEC Reports (i) were
prepared in accordance with the requirements of the 1933 Act or the Securities
Exchange Act of 1934, as amended (the "1934 ACT"), as the case may be, and the
rules and regulations of the SEC thereunder applicable to such Company SEC
Reports, and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except to the extent corrected prior to the date of this
Agreement by a subsequently filed Company SEC Report. None of the Company's
subsidiaries is required to file any forms, reports or other documents with the
SEC.
(b) Each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the Company SEC Reports (the
"COMPANY FINANCIALS"), including any Company SEC Reports filed after the date
hereof until the Closing, (i) complied as to form in all material respects with
the published rules and regulations of the SEC with respect thereto, (ii) was
prepared in accordance with GAAP applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto or, in the
case of unaudited interim financial statements, as may be permitted by the SEC
on Form 10-Q, 8-K or any successor form under the ▇▇▇▇ ▇▇▇) and (iii) fairly
presented the consolidated financial position of the Company and its
subsidiaries as at the respective dates thereof and the consolidated results of
the Company's operations and cash flows for the periods indicated, except that
the unaudited interim financial statements may not contain footnotes and were or
are subject to normal and recurring year-end adjustments. The balance sheet of
the Company contained in the Company SEC Reports as of September 30, 2000 is
hereinafter referred to as the "COMPANY BALANCE SHEET." Except as disclosed in
the Company Financials, since the date of the Company Balance Sheet neither the
Company nor any of its subsidiaries has any liabilities required under GAAP to
be set forth on a balance sheet (absolute, accrued, contingent or otherwise)
which are, individually or in the aggregate, material to the business, results
of operations or financial condition of the Company and its subsidiaries taken
as a whole, except for liabilities incurred since the date of the Company
Balance Sheet in the ordinary course of business consistent with past practices
and liabilities incurred in connection with this Agreement.
3.6 Absence of Certain Changes or Events. Since the date of the
Company Balance Sheet there has not been (i) any Material Adverse Effect with
respect to the Company, (ii) any declaration, setting aside or payment of any
dividend on, or other distribution (whether in cash, stock or property) in
respect of, any of the Company's or any of its subsidiaries' capital stock, or
any purchase, redemption or other acquisition by the Company of any of the
Company's capital stock or any other securities of the Company or its
subsidiaries or any options, warrants, calls or rights to acquire any such
shares or other securities except for repurchases from employees following their
termination pursuant to the terms of their pre-existing stock option or purchase
agreements, (iii) any split, combination or reclassification of any of the
Company's or any of its subsidiaries' capital stock, (iv) any material change or
alteration in the policy of the Company relating to the granting of stock
options or other equity compensation to its employees and consultants other than
in the ordinary course of business consistent with past practice, or (v) entry
by the Company or any of its subsidiaries into, or material modification,
amendment or cancellation of, any licensing or other agreement with
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regard to the acquisition, distribution or licensing of any material
Intellectual Property other than licenses, distribution agreements, advertising
agreements, or other similar agreements entered into in the ordinary course of
business consistent with past practice.
3.7 Tax Returns and Payments. The Company has timely filed all tax
returns and reports required by law. All tax returns and reports of the Company
are true and correct in all material respects. The Company has paid all taxes
and other assessments due, except those, if any, currently being contested by it
in good faith, which are listed in the Company Disclosure Schedule.
3.8 Title to Properties.
(a) All real property leases to which the Company is a party and
each amendment thereto that is in effect as of the date of this Agreement that
provide for annual payments in excess of $250,000 are in full force and effect
and are valid and enforceable in accordance with their respective terms, and
there is not, under any of such leases, any existing default or event of default
(or event which with notice or lapse of time, or both, would constitute a
default) that would give rise to a material claim against the Company which
could reasonably be expected to have a Material Adverse Effect on the Company.
(b) The Company has good and valid title to, or, in the case of
leased properties and assets, valid leasehold interests in, all of its tangible
properties and assets, real, personal and mixed, used or held for use in its
business, free and clear of any Encumbrances, except as reflected in the Company
Financials and except where the failure to have valid title or a valid leasehold
interest would not have a Material Adverse Effect on the Company.
3.9 Intellectual Property. For the purposes of this Agreement, the
following terms have the following definitions:
"INTELLECTUAL PROPERTY" means any or all of the following and all
rights in, arising out of, or associated therewith: (i) all United States,
international and foreign patents and applications therefor and all reissues,
divisions, renewals, extensions, provisionals, continuations and
continuations-in-part thereof; (ii) all inventions (whether patentable or not),
invention disclosures, improvements, trade secrets, proprietary information,
know how, technology, technical data and customer lists, and all documentation
relating to any of the foregoing; (iii) all copyrights, copyrights registrations
and applications therefor, and all other rights corresponding thereto throughout
the world; (iv) all industrial designs and any registrations and applications
therefor throughout the world; (v) all trade names, URLs, logos, common law
trademarks and service marks, trademark and service ▇▇▇▇ registrations and
applications therefor throughout the world; (vi) all databases and data
collections and all rights therein throughout the world; (vii) all moral and
economic rights of authors and inventors, however denominated, throughout the
world, and (viii) any similar or equivalent rights to any of the foregoing
anywhere in the world.
"COMPANY INTELLECTUAL PROPERTY" shall mean any Intellectual Property
that is owned by, or exclusively licensed to, the Company or one of its
subsidiaries.
"COMPANY REGISTERED INTELLECTUAL PROPERTY" means all of the
Registered Intellectual Property owned by, or filed in the name of, the Company
or one of its subsidiaries.
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"REGISTERED INTELLECTUAL PROPERTY" means all United States,
international and foreign: (i) patents and patent applications (including
provisional applications); (ii) registered trademarks, applications to register
trademarks, intent-to-use applications, or other registrations or applications
related to trademarks; (iii) registered copyrights and applications for
copyright registration; and (iv) any other Intellectual Property that is the
subject of an application, certificate, filing, registration or other document
issued, filed with, or recorded by any Governmental Entity.
(a) No material Company Intellectual Property or product or
service of the Company is subject to any proceeding, agreement, or stipulation
to which the Company is a party, or any outstanding decree, order or judgment,
which arose out of any proceeding to which the Company was either a party or of
which the Company has knowledge, restricting in any manner the use, transfer, or
licensing thereof by the Company, or which may affect the validity, use or
enforceability of such Company Intellectual Property.
(b) Each material item of Company Registered Intellectual Property
is valid and subsisting, all necessary registration, maintenance and renewal
fees currently due in connection with such Company Registered Intellectual
Property have been made and all necessary documents, recordations and
certificates in connection with such Company Registered Intellectual Property
have been filed with the relevant patent, copyright, trademark or other
authorities in the United States or foreign jurisdictions, as the case may be,
for the purposes of maintaining such Company Registered Intellectual Property,
except, in each case, as would not materially adversely affect such item of
Company Registered Intellectual Property.
(c) The Company or one of its subsidiaries owns and has good and
exclusive title to, or has license sufficient for the conduct of its business as
currently conducted to, each material item of Company Intellectual Property free
and clear of any Encumbrance (excluding licenses and related restrictions).
(d) Neither the Company nor any of its subsidiaries has
transferred ownership of, or granted any exclusive license with respect to, any
Intellectual Property that is or was material Company Intellectual Property, to
any third party.
(e) The operation of the business of the Company as such business
currently is conducted, including the Company's design, development, marketing
and sale of the products or services of the Company (including with respect to
products currently under development) has not, does not and will not materially
infringe or materially misappropriate the Intellectual Property of any third
party or, to its knowledge, constitute unfair competition or trade practices
under the laws of any jurisdiction.
(f) The Company has not received written notice from any third
party that the operation of the business of the Company or any act, product or
service of the Company, infringes or misappropriates the Intellectual Property
of any third party or constitutes unfair competition or trade practices under
the laws of any jurisdiction, which allegation, if true, would have a Material
Adverse Effect on the Company.
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(g) To the knowledge of the Company, no person has or is
infringing or misappropriating any Company Intellectual Property, which
infringement or misappropriation, individually or in the aggregate, would have a
Material Adverse Effect on the Company.
(h) The Company and its subsidiaries have taken reasonable steps
to protect the Company's and its subsidiaries' rights in the Company's and such
subsidiaries' confidential information and trade secrets, except where the
failure to do so would not have a Material Adverse Effect on the Company.
3.10 Compliance with Laws; Certain Agreements.
(a) Neither the Company nor any of its subsidiaries is in conflict
with, or in default or in violation of (i) any law, rule, regulation, order,
judgment or decree applicable to the Company or any of its subsidiaries or by
which the Company or any of its subsidiaries or any of their respective
properties is bound or affected, or (ii) any note, bond, mortgage, indenture,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or its or any of their respective properties
is bound or affected, except for conflicts, violations and defaults that,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company. To the Company's knowledge, no investigation or review by any
Governmental Entity is pending or has been threatened in a writing delivered to
the Company against the Company or any of its subsidiaries. There is no
agreement with any Governmental Entity, judgment, injunction, order or decree
binding upon the Company or any of its subsidiaries which has or could
reasonably be expected to have the effect of prohibiting or materially impairing
any material business practice of the Company or any of its subsidiaries, or any
acquisition of material property by the Company or any of its subsidiaries.
(b) The Company and its subsidiaries hold all permits, licenses,
exemptions, orders and approvals from governmental authorities that are material
to or required for the operation of the business of the Company as currently
conducted (collectively, the "COMPANY PERMITS"), and are in compliance with the
terms of the Company Permits, except where the failure to hold such Company
Permits, or be in such compliance, would not, individually or in the aggregate,
have a Material Adverse Effect on the Company.
3.11 Litigation. There are no claims, suits, actions or proceedings
pending or, to the knowledge of the Company, threatened against, relating to or
affecting the Company or any of its subsidiaries, before any Governmental Entity
or any arbitrator that seeks to restrain or enjoin the consummation of the
transactions contemplated by this Agreement or which could reasonably be
expected, either singularly or in the aggregate with all such claims, actions or
proceedings, to have a Material Adverse Effect on the Company following the
transactions contemplated hereby or have a material adverse effect on the
ability of the parties hereto to consummate the transactions contemplated
hereby.
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3.12 Employee Benefit Plans.
(a) Definitions. With the exception of the definition of
"Affiliate" set forth in Section 3.12(a)(i) below (which definition shall apply
only to this Section 3.12), for purposes of this Agreement, the following terms
shall have the meanings set forth below:
(i) "AFFILIATE" shall mean any other person or entity under
common control with the Company within the meaning of Section 414(b), (c), (m)
or (o) of the Code and the regulations issued thereunder;
(ii) "COMPANY EMPLOYEE PLAN" shall mean any plan, program,
policy, practice, contract, agreement or other arrangement providing for
compensation, severance, termination pay, performance awards, stock or
stock-related awards, fringe benefits or other employee benefits or remuneration
of any kind, whether written or unwritten or otherwise, funded or unfunded,
including without limitation, each "EMPLOYEE BENEFIT PLAN," within the meaning
of Section 3(3) of ERISA which is maintained, contributed to, or required to be
contributed to, by the Company or any Affiliate for the benefit of any Company
Employee; and
(iii) "COMPANY EMPLOYEE" shall mean any current, former, or
retired employee, officer, or director of the Company or any Affiliate.
(b) Employee Plan Compliance. Except, in each case, as would not,
individually or in the aggregate, have a Material Adverse Effect on the Company
(i) the Company has performed in all material respects all obligations required
to be performed by it under, is not in default or violation of, and has no
knowledge of any default or violation by any other party to, each Company
Employee Plan, and each Company Employee Plan has been established and
maintained in all material respects in accordance with its terms and in
compliance with all applicable laws, statutes, orders, rules and regulations,
including but not limited to ERISA or the Code; (ii) each Company Employee Plan
intended to qualify under Section 401(a) of the Code and each trust intended to
qualify under Section 501(a) of the Code has either received a favorable
determination letter from the IRS with respect to each such Plan as to its
qualified status under the Code or has remaining a period of time under
applicable Treasury regulations or IRS pronouncements in which to apply for such
a determination letter and make any amendments necessary to obtain a favorable
determination and no event has occurred which would adversely affect the status
of such determination letter or the qualified status of such Plan; (iii) no
"prohibited transaction," within the meaning of Section 4975 of the Code or
Sections 406 and 407 of ERISA, and not otherwise exempt under Section 408 of
ERISA, has occurred with respect to any Company Employee Plan; (iv) there are no
actions, suits or claims pending, or, to the knowledge of the Company,
threatened or reasonably anticipated (other than routine claims for benefits)
against any Company Employee Plan or against the assets of any Company Employee
Plan; (v) each Company Employee Plan can be amended, terminated or otherwise
discontinued after the Closing in accordance with its terms, without liability
to the Company or any of its Affiliates (other than ordinary administration
expenses typically incurred in a termination event); (vi) there are no audits,
inquiries or proceedings pending or, to the knowledge of the Company, threatened
by the IRS or DOL with respect to any Company Employee Plan; (vii) neither the
Company nor any Affiliate is subject to any material penalty or tax with respect
to any Company Employee Plan under Section 402(i) of
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ERISA or Sections 4975 through 4980 of the Code; and (viii) all contributions
due from the Company or any Affiliate with respect to any of the Company
Employee Plans have been made as required under ERISA or have been accrued on
the Company Balance Sheet.
(c) Employment Matters. Except, in each case, as would not,
individually or in the aggregate, have a Material Adverse Effect on the Company,
the Company and each of its subsidiaries: (i) is in compliance in all material
respects with all applicable foreign, federal, state and local laws, rules and
regulations respecting employment, employment practices, terms and conditions of
employment and wages and hours, in each case, with respect to Company Employees;
(ii) has withheld all amounts required by law or by agreement to be withheld
from the wages, salaries and other payments to Company Employees; (iii) has
properly classified independent contractors for purposes of federal and
applicable state tax laws, laws applicable to employee benefits and other
applicable laws; (iv) is not liable for any arrears of wages or any taxes or any
penalty for failure to comply with any of the foregoing; and (v) is not liable
for any material payment to any trust or other fund or to any governmental or
administrative authority, with respect to unemployment compensation benefits,
social security or other benefits or obligations for Company Employees (other
than routine payments to be made in the normal course of business and consistent
with past practice). There are no pending, or, to the Company's knowledge,
threatened material claims or actions against the Company under any worker's
compensation policy or long-term disability policy. To the Company's knowledge,
no Company Employee has violated in any material manner any employment contract,
nondisclosure agreement or noncompetition agreement by which such Company
Employee is bound due to such Company Employee being employed by the Company and
disclosing to the Company or using trade secrets or proprietary information of
any other person or entity.
(d) Labor. No work stoppage or labor strike against the Company is
pending, threatened or reasonably anticipated. The Company does not know of any
activities or proceedings of any labor union to organize any Company Employees.
There are no actions, suits, claims, labor disputes or grievances pending, or,
to the knowledge of the Company, threatened or reasonably anticipated relating
to any labor, safety or discrimination matters involving any Company Employee,
including charges of unfair labor practices or discrimination complaints, which,
if adversely determined, would, individually or in the aggregate, result in any
material liability to the Company. Neither the Company nor any of its
subsidiaries has engaged in any unfair labor practices within the meaning of the
National Labor Relations Act. The Company is not presently, nor has it been in
the past, a party to, or bound by, any collective bargaining agreement or union
contract with respect to Employees and no collective bargaining agreement is
being negotiated by the Company.
3.13 Environmental Matters. To the Company's knowledge, the Company
is not in violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, and to the Company's knowledge,
no material expenditures are or will be required in order to comply with any
such statute, law or regulation.
3.14 Certain Agreements. Other than this Agreement, and except as
otherwise set forth in Part 3.14 of the Company Disclosure Letter, neither the
Company nor any of its subsidiaries is a party to or is bound by:
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(a) any material agreement of indemnification, any material
guaranty or any material instrument evidencing indebtedness for borrowed money
by way of direct loan, sale of debt securities or purchase money obligation;
(b) any agreement or obligation currently in force relating to the
disposition or acquisition by the Company or any of its subsidiaries after the
date of this Agreement of a material amount of assets not in the ordinary course
of business, or pursuant to which the Company has any material ownership or
participation interest in any corporation, partnership, joint venture, strategic
alliance or other business enterprise other than the Company's subsidiaries;
(c) any agreement or obligation currently in force to provide
source code to any third party for any product or technology;
(d) any agreement or obligation with any affiliate of the Company;
or
(e) any agreement or commitment currently in force providing for
capital expenditures by the Company or its subsidiaries in excess of $1,000,000.
The agreements required to be disclosed in the Company Disclosure
Letter pursuant to clauses (a) through (e) above or pursuant to Section 3.9 or
filed with any Company SEC Report (the "COMPANY CONTRACTS") are valid and in
full force and effect, except to the extent that such invalidity would not have
a Material Adverse Effect on the Company. Neither the Company nor any of its
subsidiaries, nor to the Company's knowledge, any other party thereto, is in
breach, violation or default under, and neither the Company nor any of its
subsidiaries has received written notice that it has breached, violated or
defaulted, any of the terms or conditions of any Company Contract in such a
manner as would have a Material Adverse Effect on the Company.
3.15 Brokers' and Finders' Fees. The Company has not incurred, nor
will it incur, directly or indirectly, any liability for brokerage or finders'
fees or agents' commissions or any similar charges in connection with this
Agreement or any transaction contemplated hereby.
3.16 Insurance. The Company and each of its subsidiaries have
policies of insurance and bonds of the type and in amounts customarily carried
by persons conducting business or owning assets similar to those of the Company
and its subsidiaries. There is no material claim pending under any of such
policies or bonds as to which coverage has been questioned, denied or disputed
by the underwriters of such policies or bonds. All premiums due and payable
under all such policies have been paid and the Company and its subsidiaries are
otherwise in compliance in all material respects with the terms of such policies
and bonds.
ARTICLE IV
REPRESENTATIONS, WARRANTIES
AND CERTAIN AGREEMENTS OF UHC
UHC hereby represents and warrants to the Company as follows:
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4.1 Organization, Good Standing and Qualification. UHC represents
that it is an entity duly organized, validly existing and in good standing under
the laws of the state of its formation and has all requisite power and
authority, and all requisite qualifications to do business as a foreign entity,
to conduct its business in the manner in which its business is currently being
conducted, except where the failure to be so organized, existing or in good
standing or to have such power, authority or qualifications would not have a
Material Adverse Effect on UHC.
4.2 Authorization.
(a) UHC has all requisite power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
action on the part of UHC. This Agreement has been duly executed and delivered
by UHC and constitute the valid and binding obligations of UHC, enforceable
against UHC in accordance with their terms, except as enforceability may be
limited by bankruptcy and other similar laws affecting the rights of creditors
generally and general principles of equity.
(b) The execution and delivery of this Agreement by UHC does
not, and the performance of this Agreement by UHC will not, (i) conflict with or
violate the certificate of incorporation, bylaws, operating agreement or other
organizational documents of UHC, (ii) subject to compliance with the
requirements set forth in Section 4.2(c) with regard to UHC, conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to UHC
or by which any of its properties are bound or affected, or (iii) result in any
breach of or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or impair UHC's rights or alter the
rights or obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of an Encumbrance on any of the properties or assets of UHC pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which UHC is a party or
by which UHC or any of its properties are bound or affected, except, in the case
of clauses (ii) and (iii), for such conflicts, violations, breaches, defaults,
impairments, or rights which, individually or in the aggregate, would not have a
Material Adverse Effect on UHC. Except as set forth in a letter delivered by UHC
to the Company concurrently with the execution of this Agreement, no consents,
waivers and approvals under any of UHC's or any of its subsidiaries' agreements,
contracts, licenses or leases are required to be obtained in connection with the
consummation of the transactions contemplated hereby, which, if individually or
in the aggregate not obtained, would have a Material Adverse Effect on UHC.
(c) No consent, approval, order or authorization of, or
registration, declaration or filing with any Governmental Entity is required to
be obtained or made by UHC in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby, except
for (i) such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable federal, foreign
and state securities (or related) laws and the securities laws of any foreign
country, and (ii) such other consents, authorizations, filings, approvals and
registrations which if not obtained or made would
13
not have a Material Adverse Effect on UHC or have a material adverse effect on
the ability of the parties hereto to consummate the transactions contemplated
hereby.
4.3 Acquisition for Own Account. The Shares to be purchased by UHC
hereunder will be acquired for investment for UHC's own account, not as a
nominee or agent, and not with a view to the public resale or distribution
thereof within the meaning of the 1933 Act, and UHC represents that it has no
present intention or agreement to sell, grant any participation in, or otherwise
distribute any of the Shares to be purchased by UHC hereunder in any public
resale or distribution within the meaning of the 1933 Act. UHC also represents
that it has not been formed for the specific purpose of acquiring the Shares
under this Agreement.
4.4 Disclosure of Information. UHC believes it has received or has
had full access to all the information it considers necessary or appropriate to
make an informed ownership decision with respect to the Shares to be purchased
by UHC under this Agreement. UHC further has had an opportunity to ask questions
and receive answers from the Company regarding the terms and conditions of the
offering of the Shares and to obtain additional information (to the extent the
Company possessed such information or could acquire it without unreasonable
effort or expense) necessary to verify any information furnished to UHC or to
which UHC had access. The foregoing, however, does not in any way limit or
modify the representations and warranties made by the Company in Article III.
4.5 Experience. UHC understands that the purchase of the Shares
involves substantial risk. UHC: (i) has experience as an investor in securities
of companies in the development stage and acknowledges that UHC is able to fend
for itself, can bear the economic risk of UHC's investment in the Shares and has
such knowledge and experience in financial or business matters that UHC is
capable of evaluating the merits and risks of this investment in the Shares and
protecting its own interests in connection with this investment and/or (ii) has
a preexisting personal or business relationship with the Company and certain of
its officers, directors or controlling persons of a nature and duration that
enables UHC to be aware of the character, business acumen and financial
circumstances of such persons.
4.6 Accredited Investor Status. UHC is an "accredited investor"
within the meaning of Regulation D promulgated under the 1933 Act.
4.7 Restricted Securities. UHC understands that the Shares will be
characterized as "restricted securities" under the 1933 Act inasmuch as they are
being acquired from the Company in a transaction not involving a public offering
and that under the 1933 Act and applicable regulations thereunder such
securities may be resold without registration under the 1933 Act only in certain
limited circumstances. In this connection, UHC represents that UHC is familiar
with Rule 144 of the SEC, as presently in effect, and understands the resale
limitations imposed thereby and by the 1933 Act.
4.8 No Solicitation. At no time was UHC presented with or
solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general advertising or solicitation in connection
with the issuance or delivery of the Shares.
14
4.9 Further Limitations on Disposition. Without in any way
limiting the representations set forth above, UHC further agrees not to make any
disposition of all or any portion of the Shares or of any interest therein to
any person or entity unless:
(a) there is then in effect a registration statement under the
1933 Act covering such proposed disposition of Shares and such disposition is
made in accordance with such registration statement; or
(b) UHC shall have notified the Company of the proposed
disposition of the Shares and shall have furnished the Company with a statement
of the circumstances surrounding such proposed disposition, and, at the expense
of UHC or its transferee, with an opinion of counsel, reasonably satisfactory to
the Company, that such disposition will not require registration of such
securities under the 1933 Act.
4.10 Legends. UHC understands and agrees that the certificates
evidencing the Shares will bear legends substantially similar to those set forth
below, as applicable, in addition to any other legend that may be required by
applicable law, by the Company's Certificate of Incorporation or Bylaws, or by
any agreement between the Company and UHC:
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR
RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL
RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF
THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER
OTHERWISE PERMITTED UNDER CONTRACTUAL RESTRICTIONS ON RESALE APPLICABLE TO
THESE SECURITIES IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
(b) THE SECURITIES REPRESENTED HEREBY MAY BE SUBJECT TO CERTAIN
RESTRICTIONS ON RESALE AND ON VOTING AND THE HOLDERS HEREOF MAY BE BOUND
BY CERTAIN RESTRICTIONS ON ACQUISITION OF THE ISSUER'S CAPITAL STOCK
PURSUANT TO A COMMON STOCK PURCHASE AGREEMENT BETWEEN THE ORIGINAL HOLDERS
OF THESE SECURITIES AND THE ISSUER, A COPY OF WHICH MAY BE OBTAINED FROM
THE ISSUER.
The legend set forth in (a) above shall be removed by the Company from any
certificate evidencing Shares upon delivery to the Company of an opinion by
counsel, reasonably satisfactory to the Company, to the effect that a
registration statement under the 1933 Act is at that time in effect with respect
to the legended security or to the effect that such security can be freely
transferred in a public sale without such a registration statement being in
effect and that such transfer will not jeopardize the exemption or exemptions
from registration pursuant to which the Company issued the Shares.
15
4.11 Tax Liability. UHC has reviewed with its own tax advisors the
federal, state, local and foreign tax consequences of this investment and the
transactions contemplated by this Agreement. UHC relies solely on such advisors
and not on any statements or representations of the Company, the Company's
counsel, or any of the Company's agents. It understands that it (and not the
Company) shall be responsible for its own tax liability that may arise as a
result of this investment or the transactions contemplated by this Agreement.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 Voting of Common Stock. UHC acknowledges and agrees that for
so long as the outstanding shares of Common Stock (including the Shares and any
outstanding Restricted Shares and Vested Shares, as such terms are defined in
that certain Amendment to Amended and Restated Common Stock and Warrant
Agreement, dated as of January 25, 2001, by and between the Company and UHC)
beneficially owned by UHC and its "affiliates" (which for purposes of this
Agreement (other than Section 3.12) shall have the meaning given such term in
Rule 144(a)(1) promulgated under the ▇▇▇▇ ▇▇▇) exceeds 9% of the then
outstanding Common Stock of the Company, the Shares shall be considered Excess
Shares (as such term is defined in Section 6.1 of that certain Amended and
Restated Common Stock and Warrant Agreement, dated as of March 30, 2000, by and
between the Company and UHC (the "COMMON STOCK AND WARRANT AGREEMENT")) and
shall be subject to the restriction set forth in Section 6.1 of the Common Stock
and Warrant Agreement.
5.2 Reasonable Efforts. Upon the terms and subject to the
conditions set forth in this Agreement, each of the parties agrees to use all
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other party in doing, all
things necessary, proper or advisable to consummate and make effective, in the
most expeditious manner practicable, the transactions contemplated by this
Agreement, including the taking of all reasonable acts necessary to cause the
conditions precedent set forth in Articles VI and VII to be satisfied.
5.3 Registration Rights. The Company shall use its reasonable best
efforts to cause the requisite holders of registration rights under the Amended
and Restated Registration Rights Agreement among the Company and certain of its
investors dated June 30, 2000 to amend such agreement in substantially the form
attached hereto as Exhibit A.
5.4 Public Disclosure. The Company and UHC agree that they will
promptly after the date of this Agreement issue a joint press release with
respect to their entry into this Agreement. The Company and UHC will consult
with each other, and to the extent practicable, agree, before issuing a joint
press release or otherwise making any public statement with respect to their
entry into this Agreement and will not issue any such joint press release or
make any such public statement prior to such consultation, except as may be
required by law or any listing agreement with a national securities exchange.
5.5 Company Board of Directors. The Board of Directors of the
Company will take all actions necessary such that as soon as practicable
following the Closing, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
16
shall be appointed to the Company's Board of Directors. For so long as the
Company remains UHC's exclusive provider of an Internet-based exchange related
to Supply Chain Management Services as set forth in Section 6.1 of that certain
Outsourcing and Operating Agreement, dated as of March 30, 2000, and amended and
restated as of May 24, 2000 and January 25, 2001, the Company will take all
actions reasonably necessary to have one person appointed by UHC, who shall be
UHC's chief executive officer or such other person as UHC and the Company
mutually agree upon, be a member of the Company's Board of Directors.
ARTICLE VI
CONDITIONS TO UHC'S OBLIGATIONS AT CLOSING
The obligations of UHC under Sections 1 and 2 of this Agreement are
subject to the fulfillment or waiver, on or before the Closing, of each of the
following conditions:
6.1 Representations and Warranties. The representations and
warranties of the Company contained in this Agreement shall be true and correct
in all material respects on the date of the Closing with the same effect as
though such representations and warranties had been made on and as of the
Closing (other than representations and warranties that address matters only as
of a particular date, which shall be true and correct as of such date), except
where the failure of such representations or warranties to be true or correct
would not have, individually or in the aggregate, a Material Adverse Effect on
the Company. It is understood that, for purposes of determining the accuracy of
such representations and warranties, any update of or modification to the
Company Disclosure Letter made or purported to have been made after the
execution of this Agreement shall be disregarded. UHC shall have received a
certificate with respect to the foregoing signed on behalf of the Company by the
Chief Executive Officer or the Chief Financial Officer of the Company.
6.2 Performance. The Company shall have performed and complied in
all material respects with all agreements, obligations and conditions contained
in this Agreement that are required to be performed or complied with by it on or
before the Closing.
6.3 Securities Exemptions. The offer and sale of the Shares to UHC
pursuant to this Agreement shall be exempt from the registration requirements of
the 1933 Act, the qualification requirements of the California Corporate
Securities Law of 1968, as amended ("CALIFORNIA LAW") and the registration
and/or qualification requirements of all other applicable state securities laws.
6.4 Consents. (i) All required approvals or consents of any
Governmental Entity or other person in connection with the consummation of the
transactions contemplated hereby shall have been obtained (and all relevant
statutory, regulatory or other governmental waiting periods, shall have expired)
unless the failure to receive any such approval or consent would not be
reasonably likely, directly or indirectly, to result in a Material Adverse
Effect on the Company and its subsidiaries, taken as a whole, and (ii) all such
approvals and consents which have been obtained shall be on terms that are not
reasonably likely, directly or indirectly, to result in a Material Adverse
Effect on the Company and its subsidiaries, taken as a whole.
17
6.5 Nasdaq Listing. The Shares shall have been approved for
listing on the Nasdaq Stock Market, subject to official notice of issuance.
ARTICLE VII
CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING
The obligations of the Company under this Agreement are subject to
the fulfillment or waiver on or before the Closing of each of the following
conditions:
7.1 Representations and Warranties. The representations and
warranties of UHC contained in Article IV shall be true and correct in all
material respects on the date of the Closing with the same effect as though such
representations and warranties had been made on and as of the Closing. The
Company shall have received a certificate with respect to the foregoing signed
on behalf of UHC by the Chief Executive Officer or the Chief Financial Officer
of UHC.
7.2 Performance. UHC shall have performed and complied in all
material respects with all agreements, obligations and conditions contained in
this Agreement that are required to be performed or complied with by it on or
before the Closing.
7.3 Securities Exemptions. The issuance of the Shares to UHC
pursuant to this Agreement shall be exempt from the registration requirements of
the 1933 Act, the qualifications requirements of California Law and the
registration and/or qualification requirements of all other applicable state
securities laws.
7.4 Consents. (i) All required approvals or consents of any
Governmental Entity or other person in connection with the consummation of the
transactions contemplated hereby shall have been obtained (and all relevant
statutory, regulatory or other governmental waiting periods, shall have expired)
unless the failure to receive any such approval or consent would not be
reasonably likely, directly or indirectly, to result in a Material Adverse
Effect on the Company and its subsidiaries, taken as a whole, and (ii) all such
approvals and consents which have been obtained shall be on terms that are not
reasonably likely, directly or indirectly, to result in a Material Adverse
Effect on the Company and its subsidiaries, taken as a whole.
ARTICLE VIII
TERMINATION
8.1 Termination. This Agreement may be terminated prior to the
Closing:
(a) by mutual written consent duly authorized by the Boards of
Directors of the Company and UHC;
(b) by either the Company or UHC if the Closing shall not have
occurred by February 15, 2001 for any reason; provided, however, that the right
to terminate this Agreement under this Section 9.1(b) shall not be available to
any party whose action or failure to act has been a principal cause of or
resulted in the failure of the Closing to occur on or before such date and such
action or failure to act constitutes a breach of this Agreement; or
18
(c) by either the Company or UHC if a Governmental Entity shall
have issued an order, decree or ruling or taken any other action, in any case
having the effect of permanently restraining, enjoining or otherwise prohibiting
the Closing, which order, decree, ruling or other action is final and
nonappealable.
8.2 Notice of Termination; Effect of Termination. Any proper
termination of this Agreement under Section 8.1 will be effective immediately
upon the delivery of written notice of the terminating party to the other party
hereto. In the event of the termination of this Agreement as provided in Section
8.1, this Agreement shall be of no further force or effect, except (i) as set
forth in this Section 8.2 and Article IX, each of which shall survive the
termination of this Agreement, and (ii) nothing herein shall relieve either
party from liability for any willful breach of this Agreement.
ARTICLE IX
GENERAL PROVISIONS
9.1 Survival of Warranties. The representations, warranties and
covenants of UHC (except for any covenant that by its express terms survives the
Closing, and for the representations, warranties and covenants set forth in
Sections 4.3 through 4.10 inclusive, which shall survive the execution and
delivery of this Agreement and the Closing) contained in or made pursuant to
this Agreement shall terminate at the Closing. The representations, warranties
and covenants of the Company (except for any covenant that by its express terms
survives the Closing) contained in or made pursuant to this Agreement shall
terminate at the Closing.
9.2 Assignment. No party may assign either this Agreement or any
of its rights, interests, or obligations hereunder without the prior written
consent of the other party hereto. Subject to the preceding sentence, this
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Any purported
assignment in violation of this Section shall be void.
9.3 Governing Law. This Agreement shall be governed by and
construed under the internal laws of the State of Delaware as applied to
agreements among Delaware residents entered into and to be performed entirely
within Delaware, without reference to principles of conflict of laws or choice
of laws.
9.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
9.5 Interpretation; Certain Defined Terms.
(a) When a reference is made in this Agreement to Exhibits, such
reference shall be to an Exhibit to this Agreement unless otherwise indicated.
When a reference is made in this Agreement to Sections, such reference shall be
to a Section of this Agreement unless otherwise indicated. The words "INCLUDE,"
"INCLUDES" and "INCLUDING" when used herein shall be deemed in each case to be
followed by the words "WITHOUT LIMITATION." The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
19
meaning or interpretation of this Agreement. When reference is made herein to
"THE BUSINESS OF" an entity, such reference shall be deemed to include the
business of all direct and indirect subsidiaries of such entity. Reference to
the subsidiaries of an entity shall be deemed to include all direct and indirect
subsidiaries of such entity.
(b) For purposes of this Agreement, "ENCUMBRANCES" means any lien,
pledge, hypothecation, charge, mortgage, security interest, encumbrance, claim,
option, right of first refusal, preemptive right, community property interest or
restriction of any nature (including any restriction on the voting of any
security, any restriction on the transfer of any security or other asset, any
restriction on the receipt of any income derived from any asset, any restriction
on the use of any asset and any restriction on the possession, exercise or
transfer of any other attribute of ownership of any asset) (other than (i) liens
for taxes not yet due and payable; (ii) liens reflected on the Company Balance
Sheet, if applicable; (iii) liens which are not material in character, amount or
extent, and which do not materially detract from the value or materially
interfere with the use of the property subject thereto or affected thereby; and
(iv) contractor's liens).
(c) For purposes of this Agreement, the term "MATERIAL ADVERSE
EFFECT" when used in connection with an entity means any change, event,
violation, inaccuracy, circumstance or effect that is or is reasonably likely to
be materially adverse to the business, assets (including intangible assets),
capitalization, financial condition, operations or results of operations of such
entity taken as a whole with its subsidiaries, except to the extent that any
such change, event, violation, inaccuracy, circumstance or effect directly and
primarily results from (i) changes in general economic conditions or changes
affecting the industry generally in which such entity operates (provided that
such changes do not affect such entity in a substantially disproportionate
manner) or (ii) changes in the trading prices for such entity's capital stock.
(d) For purposes of this Agreement, the term "PERSON" shall mean
any individual, corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, company (including any limited liability company or joint stock
company), firm or other enterprise, association, organization, entity or
Governmental Entity.
9.6 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given upon delivery either personally or by
commercial delivery service, or sent via facsimile (receipt confirmed) to the
parties at the following addresses or facsimile numbers (or at such other
address or facsimile number for a party as shall be specified by like notice):
IF TO UHC: WITH A COPY TO:
University HealthSystem Consortium ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇ Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attn: Executive Vice President Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
20
IF TO THE COMPANY: WITH A COPY TO:
▇▇▇▇▇▇▇▇.▇▇▇, Inc. Fenwick & West LLP
3061 Zanker Road Two ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇ Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attn: Chief Financial Officer
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
9.7 Expenses; Finder's Fees. All fees and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such expenses whether or not the Closing occurs. UHC
agrees to indemnify and to hold harmless the Company from any liability for any
commission or compensation in the nature of a finder's or broker's fee (and any
asserted liability) for which UHC or any of its officers, partners, members,
employees, or representatives is responsible. The Company agrees to indemnify
and hold harmless UHC from any liability for any commission or compensation in
the nature of a finder's or broker's fee (and any asserted liability) for which
the Company or any of its officers, employees or representatives is responsible.
9.8 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision(s) shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
9.9 Entire Agreement. This Agreement, together with all exhibits
and schedules hereto, constitute the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes any and all
prior negotiations, correspondence, agreements, understandings duties or
obligations between the parties with respect to the subject matter hereof.
9.10 Further Assurances. From and after the date of this Agreement,
upon the request of UHC or the Company, the Company and UHC shall execute and
deliver such instruments, documents or other writings as may be reasonably
necessary or desirable to confirm and carry out and to effectuate fully the
intent and purposes of this Agreement.
9.11 Amendment; Extension; Waiver. Subject to applicable law, this
Agreement may be amended by the parties hereto at any time by execution of an
instrument in writing signed on behalf of the Company and UHC. At any time prior
to the Closing any party hereto may, to the extent legally allowed, (i) extend
the time for the performance of any of the obligations or other acts of the
other party hereto, (ii) waive any inaccuracies in the representations and
warranties made to such party contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any of the agreements or
conditions for the benefit of such party contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party. Delay in
exercising any right under this Agreement shall not constitute a waiver of such
right.
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9.12 Other Remedies; Specific Performance. Except as otherwise
provided herein, any and all remedies herein expressly onferred upon a party
will be deemed cumulative with and not exclusive of any other remedy conferred
hereby, or by law or equity upon such party, and the exercise by a party of any
one remedy will not preclude the exercise of any other remedy. The parties
hereto agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
9.13 Rules of Construction. The parties hereto agree that they have
been represented by counsel during the negotiation and execution of this
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.
9.14 Company Disclosure Letter. Disclosure made with regard to a
representation or warranty of the Company in the Company Disclosure Letter shall
also be deemed to qualify other representations and warranties of the Company if
it is readily apparent from the language contained in such disclosure that such
disclosure is applicable to such other representation or warranty.
9.15 Waiver Of Jury Trial. EACH OF THE COMPANY AND UHC HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS THE COMPANY OR UHC IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
* * * * *
22
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized respective officers as of the date first written above.
▇▇▇▇▇▇▇▇.▇▇▇, INC.
By:_____________________________________
Name:___________________________________
Title:__________________________________
UNIVERSITY HEALTHSYSTEM CONSORTIUM
By:_____________________________________
Name:___________________________________
Title:__________________________________
[SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT]
23
SCHEDULE OF EXHIBITS
Exhibit A: Registration Rights Agreement Amendment
24
EXHIBIT A
AMENDMENT NO. 1 TO
REGISTRATION RIGHTS AGREEMENT
This AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT dated January 25,
2001 (this "AMENDMENT") amends that certain Registration Rights Agreement, dated
as of June 30, 2000, by and among ▇▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware corporation
(the "COMPANY"), and the Investors (the "PRIOR RIGHTS AGREEMENT"). The
capitalized terms not otherwise defined herein have the respective meanings
given to them in the Prior Rights Agreement.
RECITALS
WHEREAS, Section 7.1 of the Prior Rights Agreement states in part that any
term or provision of the Prior Rights Agreement may be amended by a writing
signed by the Company and the holders of a majority of the shares of the
Registrable Securities.
WHEREAS, the undersigned parties include the Company and the holders of a
majority of the shares of the Registrable Securities.
NOW, THEREFORE, in consideration of the mutual promises made herein and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree to amend the Prior Rights
Agreement as follows:
1. Amendment of Section 1.7 of the Prior Rights Agreement. Section 1.7
of the Prior Rights Agreement is amended to add (i) the shares of Common Stock
issued to VHA pursuant to that certain Common Stock Purchase Agreement, dated as
of January 25, 2001, by and between the Company and VHA and (ii) the shares of
Common Stock issued to UHC pursuant to that certain Common Stock Purchase
Agreement, dated as of January 25, 2001, by and between the Company and UHC to
the definition of Registrable Securities. Section 1.7 shall read in its entirety
as follows:
"1.7 "REGISTRABLE SECURITIES" means shares of Common Stock of the
Company (i) issued or issuable upon conversion of the Preferred Stock (the
"CONVERSION STOCK") and (ii) issued or issuable with respect to, or in
exchange for or in replacement of the Conversion Stock or other
Registrable Securities, (iii) issued or issuable with respect to, or in
exchange for or in replacement of other securities convertible into or
exercisable for Preferred Stock upon any stock split, stock dividend,
recapitalization, or similar event, (iv) issued to the former stockholders
of Pharos Technologies, Inc., (the "PHAROS INVESTORS") in connection with
its acquisition by the Company, (v) issued to the former stockholders of
U.S. LifeLine, Inc. (the "USL INVESTORS") in connection with its
acquisition by the Company, (vi) issued to the former stockholders of
EquipMD, Inc., (the "EMI INVESTORS") in connection with its acquisition by
the Company, (vii) issued to, or issuable upon exercise of warrants issued
to, VHA, Inc., a Delaware corporation ("VHA") or University Healthsystem
Consortium, an Illinois corporation ("UHC") in connection with the
commercial agreement among Neoforma, Novation, LLC, a
25
Delaware limited liability company ("NOVATION"), Healthcare Purchasing
Partners International, LLC, a Delaware limited liability company, VHA and
UHC, (viii) issued to VHA pursuant to that certain Common Stock Purchase
Agreement, dated as of January 25, 2001, by and between the Company and
VHA and (ix) issued to UHC pursuant to that certain Common Stock Purchase
Agreement, dated as of January 25, 2001, by and between the Company and
UHC (the shares of Common Stock of the Company (or other securities
convertible or exchangeable therefor) described in clauses (vii), (viii)
and (ix), the "NOVATION REGISTRABLE SECURITIES"), excluding: (A) any
shares of Common Stock that have been sold to or through a broker, dealer,
market maker or underwriter in a public distribution or a public
securities transaction or redeemed by the Company in accordance with its
Certificate of Incorporation, (B) any shares of Common Stock of the
Company (or Preferred Stock or other securities convertible or exercisable
therefor) that have been sold in violation of this Agreement, and (C) all
shares of Common Stock of the Company (or Preferred Stock or other
securities convertible or exchangeable therefor) described in clause (i),
(ii), (iii), (iv), (v), (vi), (vii), (viii) or (ix) of this Section 1.7
held by a Holder that can, in the opinion of counsel to the Company, be
sold by such Holder in a three-month period without registration under the
Securities Act pursuant to Rule 144."
2. All Other Terms Unchanged. Except as expressly modified by this
Amendment, all terms of the Prior Rights Agreement shall remain in full force
and effect.
3. Governing Law. This Amendment shall be governed by and construed
under the internal laws of the State of Delaware as applied to agreements among
Delaware residents entered into and to be performed entirely within Delaware,
without reference to principles of conflict of laws or choice of laws.
4. Counterparts. This Amendment may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
26
IN WITNESS WHEREOF, this Amendment has been executed as of the date first above
written.
COMPANY: INVESTORS (Entity):
▇▇▇▇▇▇▇▇.▇▇▇, INC.
________________________________
(Printed Entity Name Here)
By:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ By:_____________________________
Chief Financial Officer and Secretary
Name:___________________________
Title:__________________________
INVESTORS (Individual):
________________________________
Signature Here
________________________________
Printed Name Here
[SIGNATURE PAGE TO AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT]