Exhibit 10.12
STOCK PURCHASE AND STOCKHOLDER
AGREEMENT
By and Among
HEALTHEXTRAS, INC.
HCEM CORP.
APS BENEFITS
CORPORATION
and
THE SHAREHOLDERS IDENTIFIED
HEREIN
December 6,
2005
STOCK PURCHASE AND STOCKHOLDER
AGREEMENT
THIS STOCK PURCHASE AND STOCKHOLDER
AGREEMENT (the “Agreement”), dated as of this sixth day
of December, 2005, is entered into by and among HEALTHEXTRAS, INC.,
a Delaware corporation (“Parent”), HCEM Corp., a
Delaware corporation (“Merger Sub”), APS Benefits
Corporation, a Maryland close corporation (“Buyer”),
and Charles Davidson, Jay Ver Hulst and Phyllis Shehab, each of
whom have agreed to become individual shareholders of Buyer
(collectively the “Shareholders”).
WHEREAS, the Parent, the Merger Sub,
a subsidiary of the Parent, and Managed Care of America, Inc. are
parties to an Agreement and Plan of Merger (the “Merger
Agreement”) of even date herewith, pursuant to which the
Merger Sub will merge (the “Merger”) with and into
Managed Care of America, Inc., with Managed Care of America, Inc.
as the surviving corporation (the “Company”);
and
WHEREAS, the Shareholders
collectively will be the owners of one million shares of the common
stock of Buyer (the “Owner Shares”) and the ownership
of the common stock of Buyer is as set forth on Exhibit A hereto;
and
WHEREAS, each Shareholder is an
executive officer of the Company prior to the Merger;
and
WHEREAS, the Buyer wishes to
purchase from the Company, and the Company wishes to sell to the
Buyer, 1,000,000 shares (the “Purchased Shares”) of
common stock of the Company (“Company Common Stock”),
representing 20% of the issued and outstanding shares of Company
Common Stock.
NOW, THEREFORE, in consideration of
the premises and subject to the representations, warranties and
covenants contained herein, the parties agree as
follows:
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For purposes of this Agreement,
capitalized terms not otherwise defined herein shall have the
meaning assigned to such term in the Merger Agreement, and the
following capitalized terms, unless otherwise defined in this
Agreement, have the meanings set forth below:
“Affiliate” means any
individual, partnership, corporation, limited liability company,
trust or other entity or association which, directly or indirectly,
through one or more intermediaries, controls, is controlled by, or
is under common control with, a party.
“Claims” means either
(1) any action or proceeding, judicial or administrative
(including arbitration and other alternative dispute resolution
mechanisms), instituted (including by federal, state or local
governmental units) against a party to this Agreement, or (2) any
claim for indemnification brought by a party to this Agreement as
the context requires.
“GAAP” means U.S.
generally accepted accounting principles, consistently applied, as
in effect from time to time.
“Loss” or
“Losses” means any loss, liability, deficiency, damage,
expense or cost (including reasonable attorney’s fees)
incurred by a party as a result of, or with respect to, any breach
or inaccuracy of any representation or warranty, or breach of or
noncompliance with respect to any covenant or agreement (i) in
this Agreement or (ii) subject to an aggregate limitation of
$1,000,000, in the Merger Agreement, as the case may be, but
excluding any special, incidental, consequential or punitive
damages except as awarded by a court in claims instituted by a
third party.
“Material Adverse
Effect” means any circumstance, event, occurrence, change or
effect that, as applicable, materially and adversely affects the
business, operations, properties, condition (financial or
otherwise), assets (tangible or intangible), liabilities (including
contingent liabilities) or results of operations of the Company
taken as a whole or materially and adversely affects any of the
properties, assets or liabilities (including contingent
liabilities) of the Buyer.
“Net Operating Income”
shall have the meaning set forth in Section 11.1.
“Parent’s
Knowledge” means the actual knowledge of Parent’s
executive officers (determined in accordance with rule 16a-1(f)
under the Exchange Act), after due inquiry.
“Shareholder’
Knowledge” means the actual knowledge of the Shareholders
after due inquiry.
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2.
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THE
TRANSACTION; STOCK PURCHASE AND CLOSING
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2.1 Purchase of the Shares .
The Parent hereby agrees to cause the Company to sell to the Buyer,
and the Buyer hereby agrees to purchase from the Company, the
Purchased Shares for
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the “Per Share Purchase Price” as
set forth in Section 2.4, in accordance with and subject to
the terms and conditions contained in this Agreement.
2.2 The Closing . The closing
of the transactions contemplated by this Agreement (the
“Closing”) shall take place at 10:00 a.m. (Washington,
D.C. time) at the offices of Muldoon Murphy & Aguggia LLP,
5101 Wisconsin Avenue, N.W., Washington, D.C. on the “Closing
Date” (the “Closing Date”) established by the
Merger Agreement.
2.3 The Effective Time .
Subject to the consummation of the Closing, the transactions
contemplated by this Agreement, including the transfer of economic
risks, shall be deemed effective immediately after the
“Effective Time” pursuant to the Merger
Agreement.
2.4 Per Share Purchase Price
. The purchase price per share (the “Per Share Purchase
Price”) for the Purchased Shares purchased by Buyer will be
$1.00 per share, and will aggregate $1,000,000 for all of the
Purchased Shares.
2.5 Intentionally
Omitted.
2.6 Security For Certain
Obligations of Buyer . At the Closing, the Buyer agrees to
execute and deliver to the Parent a Pledge and Security Agreement,
(the “Pledge Agreement”) in the form of Exhibit B
hereto, pursuant to which such Buyer will pledge the Purchased
Shares acquired by the Buyer to the Parent (or its subsidiary
designee), as security for (i) any Losses of the Parent and
the Company as a result of breaches of the representations and
warranties and agreements made by the Buyer or the Shareholders
under this Agreement; and (ii) subject to an aggregate
limitation of $1,000,000, any Losses of the Parent and the Company
as a result of breaches of the representations and warranties and
agreements made by Managed Care of America, Inc. under the Merger
Agreement.
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3.
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REPRESENTATIONS AND WARRANTIES OF THE BUYER AND
THE SHAREHOLDERS
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As an inducement to the Parent and
the Merger Sub to enter into this Agreement, the Buyer and the
Shareholders represent and warrant, jointly and severally, to each
of the Parent and the Merger Sub that:
3.1 Each of the Shareholders has the
full legal power and authority to execute and deliver, this
Agreement and all other agreements and documents necessary to
consummate the contemplated transactions. This Agreement has been
duly executed and delivered by the Shareholders and constitutes the
legal, valid and binding obligation of the Shareholders,
enforceable in accordance with its terms (subject as to enforcement
of remedies to the discretion of courts in awarding equitable
relief and to applicable bankruptcy, reorganization, insolvency,
fraudulent conveyance, moratorium and similar laws affecting the
rights of creditors generally). Any other agreement contemplated to
be entered into by the Shareholders in connection with this
transaction, when duly executed and delivered by the Shareholders
and the other parties thereto, will constitute the legal, valid and
binding obligation of the Shareholders, enforceable in accordance
with their terms (subject to enforcement of remedies in the
discretion of courts in
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awarding equitable relief and to applicable
bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium and similar laws affecting the rights of creditors
generally).
3.2 No Breach . Except as set
forth in Schedule 3.1 hereto, the execution and delivery by
the Buyer and each of the Shareholders of this Agreement and
related agreements contemplated by this Agreement and the
compliance by the Shareholders with their respective terms and the
performance by the Shareholders of any obligation hereunder or
thereunder will not (a) result in the breach or violation
(i) of any provision of law, or (ii) of any provision of
any agreement, indenture, mortgage, lease or other obligation or
instrument, any judgment, or any order or decree of any court or
other agency of government, or cause any acceleration of an
obligation thereunder, to which any of the Shareholders or any
their respective properties or assets is bound, or
(b) conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument, or (c) result in the
creation or imposition of any lien, charge, restriction, claim or
encumbrance of any nature whatsoever upon any of the properties or
assets of the Company, or any of the Shareholders, in each case,
except for instances that, individually or in the aggregate, are
not reasonably likely to have a Material Adverse Effect.
3.3 Consents and Approvals .
None of the Shareholders is required to obtain any approval,
consent, qualification, order or authorization, or to submit any
notice, report or other filing with (i) any governmental
authority in connection with the execution or delivery by the
Shareholders of this Agreement or the consummation of the
transactions contemplated by this Agreement, or (ii) any
person whose consent is required in order for there not to be a
Material Adverse Effect.
3.4 Litigation and
Investigations . There is no: (i) action, suit, claim,
proceeding or investigation pending or, to the Shareholders’
Knowledge, threatened against or affecting any Shareholder by any
private party or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentally, domestic or foreign and, to the Shareholders’
Knowledge, there are no facts or circumstances providing a
reasonable basis for such; (ii) governmental or professional
inquiry pending or, to the Shareholders’ Knowledge,
threatened, against or directly or indirectly affecting any
Shareholder and to Shareholders’ Knowledge there are not
existing facts or circumstances which are likely to provide a basis
for any such claims; in each of case (i) and
(ii) relating to the execution and performance by the
Shareholders of this Agreement.
3.5 Investment Representation
. The Buyer is acquiring the Purchased Shares for its own account,
to hold for investment, and with no present intention of dividing
its participation with others or reselling or otherwise
participating, directly or indirectly, in a distribution of the
Purchased Shares, and it will not make any sale, transfer, or other
disposition of the Purchased Shares in violation of any state
securities laws or in violation of the Securities Act of 1933, as
amended (the “Securities Act”). The Buyer agrees that
there will be placed on the certificates representing the Purchased
Shares, or any substitutions for them, legends stating in
substance:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE
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“SECURITIES ACT”) OR
REGISTERED OR QUALIFIED IN COMPLIANCE WITH ANY STATE SECURITIES
LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE OR TRANSFERRED EXCEPT
(i) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AS TO SUCH
SECURITIES UNDER THE SECURITIES ACT; (ii) PURSUANT TO THE
TERMS OF RULE 144 UNDER SAID ACT; OR (iii) PURSUANT TO AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION OR COMPLIANCE IS NOT REQUIRED.
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF THE STOCK
PURCHASE AND STOCKHOLDERS AGREEMENT BY AND AMONG HEALTHEXTRAS,
INC., HCEM CORP., APS BENEFITS CORPORATION AND THE HOLDER HEREOF
DATED DECEMBER 6, 2005, AND MAY NOT BE ASSIGNED, TRANSFERRED,
PLEDGED, COLLATERALIZED, DIVIDENDED OR HYPOTHECATED EXCEPT AS
PERMITTED BY AND IN ACCORDANCE WITH THE PROVISIONS OF THE STOCK
PURCHASE AND STOCKHOLDERS AGREEMENT. COPIES OF THE STOCK PURCHASE
AND STOCKHOLDERS AGREEMENT WILL BE FURNISHED BY HCEM CORP. TO THE
HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.
3.6 Accredited Investor .
Each of the Shareholders is an “accredited investor”
within the meaning of Regulation D under the Securities Act. Each
of the Shareholders (i) has such knowledge and experience in
financial and business affairs so that it is capable of evaluating
the merits and risks involved in purchasing the securities of the
Company to be received by it pursuant to this Agreement
(ii) is able to bear the economic risks involved in purchasing
such securities, (iii) has had the opportunity to ask
questions of, and receive answers from, the Company concerning the
Company and the terms of such securities and to obtain any
additional information in connection therewith. Each of the
Shareholders acknowledges and agrees that no representation has
been made nor shall be deemed made by the Company as to the value
of these securities.
3.7 Buyer Capital . Prior to
the Closing, the Shareholders will purchase in the aggregate an
additional 1,000,000 shares of Buyer Common Stock for total
consideration of $1,000,000.
3.8 Buyer and Shareholders’
Acknowledgement . Buyer and Shareholders acknowledge and agree
that Company and Parent have made the Purchased Shares available to
Buyer as an inducement to the Shareholders to have a financial
interest in the continued success of the Company and its
subsidiary, EBRx, Inc. (“EBRx”), and to induce the
Shareholders to promote the long term success of the Company and
EBRx, as well as to provide an incentive to the Shareholders to
assist Parent and Company in additional acquisitions. Any services
rendered by a Shareholder to the Company or Parent will be
compensated pursuant to a separate employment agreement or
arrangement negotiated between the parties.
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4.
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REPRESENTATIONS AND WARRANTIES OF PARENT AND
MERGER SUB
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As an inducement to the Buyer and
the Shareholders to enter into this Agreement, the Parent and the
Merger Sub represent and warrant to the Buyer and the Shareholders
that:
4.1 Organization, Qualification
and Corporate Power . Each of the Parent and the Merger Sub is
validly existing and in good standing under the laws of the State
of Delaware.
4.2 Validity . Each of the
Parent and the Merger Sub has all necessary corporate power and
authority to execute and deliver this Agreement and to perform its
obligations hereunder and to consummate the other transactions
contemplated to be consummated by it by this Agreement, and, with
respect to the Company, to cause the Company as the surviving
corporation in the Merger to issue the Purchased Shares pursuant to
this Agreement. The execution and delivery of this Agreement by
each of the Parent and the Merger Sub and the consummation of the
transactions contemplated by this Agreement by each of the Parent
and the Merger Sub, have been validly authorized by all necessary
corporate action, and this Agreement has been validly executed and
delivered by each of the Parent and the Merger Sub, and assuming
the due authorization, execution and delivery by the other parties
hereto, constitutes the legal, valid and binding obligations of
each of the Parent and the Merger Sub, enforceable against each of
the Parent and the Merger Sub in accordance with its terms (subject
as to enforcement of remedies to the discretion of courts in
awarding equitable relief and to applicable bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium and
similar laws affecting the rights of creditors
generally).
4.3 No Breach . The execution
and delivery by each of Parent and the Merger Sub of this Agreement
and related agreements contemplated by this Agreement, and the
performance by each of the Parent and the Merger Sub of any
obligation hereunder or thereunder will not result in the breach or
violation of the Articles of Incorporation or Bylaws of each of the
Parent and the Merger Sub, or any provision of law, or of any
provision of any agreement, indenture, mortgage, lease or other
obligation or instrument, any judgment, or any order or decree of
any court or other agency of government, or cause any acceleration
of any obligations thereunder, to which each of the Parent and the
Merger Sub or any of their properties or assets are bound, or
conflict with, result in a breach of or constitute (with due notice
or lapse of time or both) a default under any such indenture,
agreement or other instrument, or result in the creation or
imposition of any lien, charge, restriction, claim or encumbrance
of any nature whatsoever upon any of the properties or assets of
the Parent or the Merger Sub, in each case, except for instances
that, individually or in the aggregate, are not reasonably likely
to have a Material Adverse Effect.
4.4 Governmental Authorities;
Consents . Neither the Parent nor the Merger Sub is required to
obtain any approval, consent, qualification, order or
authorization, or to submit any notice, report or other filing with
any governmental authority in connection with the execution or
delivery by it of this Agreement or the consummation of the
transactions contemplated by this Agreement, other than as required
in order to comply with the Securities Laws of any
State.
4.5 Litigation and
Investigations . There is no: (i) action, suit, claim,
proceeding or investigation pending or, to the Parent’s
Knowledge, threatened against or affecting the Parent or
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the Merger Sub by any private party or any
federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign and, to the Parent’s Knowledge, there are no facts or
circumstances providing a reasonable basis for such;
(ii) governmental or professional inquiry pending or,
to the Parent’s Knowledge, threatened, against or directly or
indirectly affecting the Parent or the Merger Sub and to the
Parent’s Knowledge there are not existing facts or
circumstances which are likely to provide a basis for any such
claims; in each of case (i) and (ii) relating to the
execution and performance by the Parent or the Merger Sub of this
Agreement.
4.6 Purchased Shares . The
Purchased Shares to be issued to the Buyer, when issued pursuant to
this Agreement, will be duly authorized, validly issued, fully paid
and non-assessable. Upon consummation of the Merger, the authorized
capital stock of the Company will consist of ten million
(10,000,000) shares of Company Common Stock and one million
(1,000,000) shares of preferred stock, par value $0.01 per
share. Prior to the Closing, (i) 4,000,000 shares of Company
Common Stock will be issued and outstanding, all of which will be
validly issued, fully paid and nonassessable and (ii) the
Company has issued no options, warrants or other rights to acquire
Company Common Stock and no shares of Company Common Stock are
reserved for future issuance pursuant to outstanding options,
warrants or other rights to acquire Company Common Stock. The
Parent represents and warrants that subsequent to the Merger and
prior to the Closing it shall cause the Company not to issue any
additional shares of capital stock of the Company or any options,
warrants or other rights to acquire capital stock of the Company
without the prior written consent of the Shareholders.
4.7 Parent and Merger Sub
Acknowledgement . Parent and Merger Sub acknowledge and agree
that Merger Sub and Parent have made the Company Shares available
to Buyer as an inducement to the Shareholders to have a financial
interest in the continued success of EBRx, and to induce the
Shareholders to promote the long term success of EBRx as well as to
provide an incentive to the Shareholders to assist Parent and
Company in additional acquisitions. Any services rendered by a
Shareholder to the Company or Parent will be compensated pursuant
to a separate employment agreement or contract negotiated between
the parties.
4.8 No Conflict; Required Filings
and Consents . (a) The execution and delivery of this
Agreement by each of Parent and Merger Sub do not, and the
performance of this Agreement by Parent and Merger Sub will not,
(i) conflict with or violate any provision of the Certificate
of Incorporation or By-Laws of Parent or Merger Sub,
(ii) assuming that all consents, approvals, authorizations and
permits described in Section 4.4 have been obtained and all
filings and notifications described in Section 4.4 have been
made, conflict with or violate any Law applicable to Parent or
Merger Sub or by which any property or asset of Parent or Merger
Sub is bound or affected, or (iii) require any consent or
approval under, result in any breach of, any loss of any benefit
under or constitute a default (or an event which with notice or
lapse of time or both would become a default) under, or give to
others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other
encumbrance on any property or asset of Parent or Merger Sub
pursuant to any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation, except, with respect to clauses (ii) and
(iii) of this Section 4.8, for any such conflicts,
violations,
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breaches, defaults or other occurrences that
would not prevent or materially delay the consummation of the
transactions contemplated by this Agreement.
4.9 Financing . Parent has,
or shall have, sufficient funds to pay or cause the Merger Sub to
pay the aggregate Per Share Repurchase Price in connection with the
Parent Right or Shareholder Right described in Section 9 and
10 and consummate the purchase of the Owner Shares.
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5.
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CONDITIONS
TO THE CLOSING
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5.1 Conditions to Each
Party’s Obligations . The respective obligations of each
party to effect the Closing shall be subject to the satisfaction of
the following conditions:
(a) Merger Agreement .
Consummation of the Merger Agreement.
(b) Approvals and Consents .
The parties shall have obtained the approvals, consents or waivers
of any Governmental Entity or other person whose consent or
approval shall be required to consummate the transactions
contemplated by this Agreement.
(c) No Injunctions or Restraints;
Illegality . No party hereto shall be subject to any order,
decree or injunction of a court or agency of competent jurisdiction
that enjoins or prohibits the consummation of the transactions
contemplated by this Agreement and no governmental authority shall
have instituted any proceeding for the purpose of enjoining or
prohibiting the consummation of the transactions contemplated by
this Agreement. No statute, rule or regulation shall have been
enacted, entered, promulgated or enforced by any governmental
authority which prohibits or makes illegal consummation of the
transactions contemplated by this Agreement.
(d) Buyer’s Articles of
Incorporation and Bylaws. The Articles of Incorporation and
Bylaws of the Buyer shall be as set forth in Exhibits C and D,
respectively.
5.2 Conditions to the Obligations
of the Buyer . The obligations of the Buyer to effect the
Closing shall be further subject to the satisfaction of the
following additional conditions, any one or more of which may be
waived by the Buyer:
(a) Parent’s and Merger
Sub’s Representations and Warranties . Each of the
representations and warranties of the Parent and the Merger Sub
contained in this Agreement shall be true and correct (except for
inaccuracies that are de minimis) as of the date of this Agreement
and as of the Closing Date as though made at and as of the Closing
Date.
(b) Performance of Parent’s
and Company’s Obligations . Parent and the Merger Sub
shall have performed in all material respects all obligations
required to be performed by them under this Agreement at or prior
to the Closing Date.
(c) Parent’s
Certificate . Buyer shall have received a certificate signed by
Parent to the effect that the conditions set forth in Sections
5.2(a) and (b) have been satisfied
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(d) Opinion of Counsel for the
Company . The Company shall have delivered at the Closing an
opinion from counsel for the Company dated as of the Closing Date
in the form of Exhibit E to this Agreement.
(e) No Litigation . No action
or proceeding before a court or any other governmental agency or
body shall have been instituted and be pending to restrain or
prohibit any of the transactions contemplated by this Agreement or
to seek monetary damages as a result of the consummation of the
transactions contemplated by this Agreement.
(f) Supporting Documents .
The Company shall have delivered at the closing the supporting
documents listed in Section 6.4.
5.3 Conditions to the Obligations
of Parent and Company . The obligations of Parent and the
Company to effect the Closing shall be further subject to the
satisfaction of the following additional conditions, any one or
more of which may be waived by the Parent or the
Company:
(a) Buyer’s Representations
and Warranties . Each of the representations and warranties of
Buyer and the Shareholders contained in this Agreement shall be
true and correct (except for inaccuracies that are de minimis) as
of the date of this Agreement and as of the Closing Date as though
made at and as of the Closing Date.
(b) Performance of Buyer’s
Obligations . Buyer shall have performed in all material
respects all obligations required to be performed by it under this
Agreement at or prior to the Closing Date.
(c) Buyer’s Certificate
. Parent or the Company shall have received a certificate signed by
the Buyer and each of the Shareholders to the effect that the
conditions set forth in Sections 5.3(a) and (b) have been
satisfied.
(d) Supporting Documents .
Buyer shall have delivered at the Closing the supporting documents,
if any, required by Section 7.4.
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6.
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DELIVERIES
BY THE COMPANY
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At the Closing, the Parent will
cause the Company to deliver or cause to be delivered to the Buyer
the following:
6.1 Stock Certificate and Stock
Powers . Certificate(s) representing the Purchased Shares,
registered in the name of the Buyer.
6.2 Opinion of Counsel for the
Company . An opinion from counsel for the Company as required
by Section 5.2(d).
6.3 Parent’s
Certificate . A certificate signed by Parent as required by
Section 5.2(c).
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6.4 Supporting Documents .
The following additional documents:
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6.4.2
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Certificate of
the Secretary of the Company attesting to the incumbency of the
Company’s officers, and the continuing validity of the
Articles of Incorporation and Bylaws of the Company;
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6.4.3
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Such additional
supporting documents and other information with respect to the
operations and affairs of the Company as the Buyer or their counsel
reasonably may request.
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7.
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DELIVERIES
BY THE BUYER
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At the Closing, the Buyer will
deliver or cause to be delivered to the Parent and the Company, as
the surviving corporation in the Merger, the following:
7.1 Payment of the Purchase
Price . A promissory note in the principal amount of the
Purchase Price payable to the Company and due in immediately
available funds within five (5) business days after receipt by
the Shareholders of the proceeds of their directly held shares of
Managed Care of America, Inc., pursuant to the Merger, provided
such shares are submitted to the Company within ten
(10) business days after receipt by the Shareholders of the
Letter of Transmittal pursuant to the Merger Agreement, otherwise
within 20 business days after the receipt of that Letter of
Transmittal.
7.2 Pledge and Security
Agreement . The duly executed Pledge and Security Agreement
from the Buyer in favor of the Parent (or its permitted designee)
in the form of Exhibit B.
7.3 Buyer’s Certificate
. A certificate signed by the Buyer as required by
Section 5.3(c).
7.4 Supporting Documents .
The following additional documents:
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7.4.4
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Certificate of
the Secretary of State of the State of Maryland as to the legal
existence and good standing of the Buyer in the State of
Maryland;
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7.4.5
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Certificate of
the Secretary of the Buyer attesting to the incumbency of the
Buyer’s officers, and the continuing validity of the Articles
of Incorporation and Bylaws of the Buyer;
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7.4.6
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Such additional
supporting documents and other information with respect to the
operations and affairs of the Buyer as the Parent or Company or
their counsel reasonably may request.
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7.5 For the purpose of Sections 6
and 7, appropriate adjustment shall be made to the number of
Purchased Shares and/or the Per Share Purchase Price to prevent
dilution or enlargement as a result of any stock dividend or split,
recapitalization, merger, consolidation, spin-off, reorganization,
combination, or exchange of shares or other similar corporate
change.
8.1 Termination. This Agreement may
be terminated, and the transactions contemplated hereby abandoned,
at any time prior to the Closing Date:
(a) by the mutual written consent of
the Parent and the Buyer; or
(b) by either Parent or the Buyer,
if either (i) any approval, consent or waiver of a
governmental authority or other person required to permit
consummation of the transactions contemplated by this Agreement
shall have been denied or (ii) any Governmental Entity of
competent jurisdiction shall have issued a final, unappealable
order enjoining or otherwise prohibiting consummation of the
transactions contemplated by this Agreement; or
(c) by either Parent or the Buyer,
in the event that the Closing has not occurred by December 31,
2005, unless the failure to so consummate by such time is due to
the breach of any representation, warranty or covenant contained in
this Agreement by the party seeking to terminate; or
(d) by either Parent or Buyer
(provided that the party seeking termination is not then in
material breach of any representation, warranty, covenant or other
agreement contained herein), in the event of a breach of any
covenant or agreement on the part of the other party set forth in
this Agreement, or if any representation or warranty of the other
party shall have become untrue, and such breach or untrue
representation or warranty has not been or cannot be cured within
30 days following written notice to the party committing such
breach or making such untrue representation or warranty.
8.2 Effect of Termination .
In the event of termination of this Agreement by either Parent or
the Buyer as provided in Section 8.1, this Agreement shall
forthwith become void and have no effect, and there shall be no
liability on the part of any party hereto or their respective
officers and directors, except that (i) Sections 13.1, 13.2
and 13.3 and 14 shall survive any termination of this Agreement,
and (ii) notwithstanding anything to the contrary contained in
this Agreement, no party shall be relieved or released from any
liabilities or damages arising out of its willful breach of any
provision of this Agreement.
11
9.1 Parent Right .
(a) The Parent (or at its election, the Company or EBRx) shall
have the right to purchase for cash from each of the Shareholders
any or all of the Owner Shares purchased by giving one or more
notices of purchase (a “Purchase Notice”) to the
Shareholders at any time during the period beginning after twelve
full calendar months and ending after fifteen full calendar months
after the Effective Time.
(b) The purchase price per share
(the “Per Share Repurchase Price”) for the Owner Shares
purchased by the Parent (or at its election, the Company or EBRx so
long as the Company or EBRx, as the case may be, has adequate funds
available to complete the purchase) from the Shareholders pursuant
to this Section 9 (and Section 10 as adjusted by
Section 10.1(b), as applicable) would be that amount
calculated as follows:
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(i)
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if the
Annualized Net Operating Income of EBRx for the six or twelve-month
period, as the case may be, ended on the later of December 31,
2006 or the month most recently ended prior to thirty days before
the date of a Purchase Notice (or a “Repurchase Notice”
defined in Section 10.1) (the “Purchase Date Net
Operating Income”) is less than $4,400,000, then the Per
Share Repurchase Price would be $10.00 minus $0.50 for each full
$200,000 by which the Purchase Date Net Operating Income is less
than $4,400,000;
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(ii)
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if the Purchase
Date Net Operating Income is at least $4,400,000 and not more than
$4,600,000, then the Per Share Repurchase Price would be
$10.00;
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(iii)
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if the Purchase
Date Net Operating Income is greater than
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