<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) October 8, 1996
----------------------------
InfoMed Holdings, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-22162 22-3209241
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
6650 Powers Ferry Road, Atlanta, Georgia 30339
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 644-6700
----------------------------
1180 S.W. 36th Avenue, Pompano Beach, Florida 33069
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(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
On September 5, 1996, InfoMed Holdings, Inc. ("InfoMed") and Simione
Central Holding, Inc. ("Simione") entered into an Agreement and Plan of Merger,
which was amended and restated on September 13, 1996 (the "Agreement"),
pursuant to which Simione was merged (the "Merger") with a wholly-owned
subsidiary of InfoMed effective as of October 8, 1996 (the "Effective Date").
In connection therewith, each issued and outstanding share of Simione common
stock was converted into and exchanged for the right to receive .22021 shares
of InfoMed common stock (the "Exchange Ratio") as of the Effective Date.
Notwithstanding the foregoing, any shares of Simione common stock held by
InfoMed or any of its subsidiaries, any shares held in treasury by Simione and
any shares held by subsidiaries of Simione as of the Effective Date were
cancelled and retired and no consideration has been issued in exchange
therefor. In addition, any shareholders of Simione who fail to deliver certain
representations in connection with the receipt of InfoMed common stock in the
Merger will receive cash in lieu of shares of InfoMed common stock based on the
value of InfoMed common stock on the last trading day immediately preceeding
the Effective Date. Under the terms of the Agreement, all outstanding options
and warrants to purchase Simione common stock as of the Effective Date were
converted into the right to purchase shares of InfoMed common stock; provided
that the number of shares to be so purchased and the respective exercise prices
thereof have been adjusted by the Exchange Ratio.
It is anticipated that the Merger will be accounted for by the "purchase"
method of accounting and that, for accounting purposes, Simione will be
regarded as having acquired InfoMed.
Simione provides business solutions to the home health care industry
through information systems, consulting, training and support services.
Simione currently serves over 400 customers nationwide, supporting both
hospital-based and free standing home care agencies. Simione has offices in
Georgia, Connecticut, Massachusetts and Texas.
-2-
<PAGE> 3
Management After The Merger.
As of the Effective Date, the Board of Directors of InfoMed
consists of the following persons: Gary M. Bremer, Chairman; William J.
Simione, Jr., Vice Chairman; James R. Henderson; Barrett C. O'Donnell; and
Murali Anantharaman. As of the Effective Date, the officers of InfoMed
consist of the following persons: Gary M. Bremer, Chief Executive Officer
and Chairman; James R. Henderson, President; William J. Simione, Jr., Executive
Vice President; Gary W. Rasmussen, Chief Operating Officer; Lori Nadler Siegel,
Chief Financial Officer and Treasurer; and James A. Tramonte, General Counsel
and Secretary.
Messrs. Bremer, Simione, Henderson, Rasmussen, and Tramonte and Ms. Siegel
are and were prior to the Effective Date executive officers of Simione. Mr.
O'Donnell was an executive officer and a director of InfoMed and Mr.
Anantharaman was a director of InfoMed prior to the Effective Date. The
following is information regarding the directors and management of InfoMed
after consummation of the Merger:
MURALI ANANTHARAMAN has been a partner of EGL Holdings, Inc. ("EGL")
since 1987. Mr. Anantharaman is currently a director of several privately
held companies.
GARY M. BREMER has served as Chief Executive Officer and Chairman of
Simione since September 3, 1996. Mr. Bremer has also served as Chief
Executive Officer and President of Central Health Holding Company, Inc.
("CHHC"), a holding company which owns and manages home health care agencies,
since 1978.
JAMES R. HENDERSON has served as President of Simione since September 3,
1996. From July 1992 to November 1995, he served as Executive Vice President
for National Data Corporation, an information services company. From February
1992 through June 1992, Mr. Henderson served as Executive Vice President,
Worldwide Sales, Marketing and Operations, of Quality Micro Systems, Inc., a
computer hardware company. From 1987 through January 1992, Mr. Henderson
served as Executive Vice President of Dun and Bradstreet Software Services,
Inc., a client server software solutions company.
BARRETT C. O'DONNELL has been Chairman of the Board, President and Chief
Executive Officer of O'Donnell Davis, Inc., an investment advisory services
company, since he co-founded it in 1978. He served as Chairman of the Board
of InfoMed from 1992 until the Effective Date and Chief Executive Officer
from 1994 until the Effective Date.
WILLIAM J. SIMIONE, JR. has served as Executive Vice President of Simione
Central, Inc. ("SCI") since August 1996. He served as President of SCI from
January 1996 through July 1996. From January 1973 through December 1995, Mr.
Simione was Managing Partner of the healthcare management consulting practice
of Simione & Simione CPA's.
GARY W. RASMUSSEN has served as Chief Operating Officer of CHHC since June
1, 1996 and Chief Operating Officer of Simione since September 3, 1996. He
served as Chief Financial Officer of CHHC from January 1996 through May 1996
and from October 1994 through December 1995 he served as Chief Financial
Officer of Central Health Services, Inc. ("CHS"). Mr. Rasmussen served as Chief
Financial Officer of Surgical Health Corporation, an outpatient surgery center
company, from May 1992 until September 1994. From October 1987 through May
1992, he served as an Audit Partner with Ernst & Young, LLP.
LORI NADLER SIEGEL has served as Chief Financial Officer and Treasurer of
Simione since September 3, 1996, and has served as Chief Financial Officer of
CHHC since June 1996. From January 1995 through May 1996, she served as
Assistant Vice President of Finance for CHS. From June 1992 through December
1994, she served as Executive Assistant of CHS. She served as Associate
Director of Administrative Services of CHS from July 1991 to May 1992. From
1985 to 1991, Ms. Siegel served as an auditor for the accounting firms of
Touche Ross & Co. (now Deloitte & Touche, LLP), Coopers & Lybrand L.L.P., and
Price Waterhouse LLP.
JAMES A. TRAMONTE has served as General Counsel of Simione since October
1995, of CHHC since January 1996, and of SCI since January 1996. He has also
served as Secretary of Simione since September 3, 1996. From April 1993 through
December 1995, Mr. Tramonte served as Deputy General Counsel of CHS. He served
in
<PAGE> 4
the capacity of Counsel with the Atlanta law firm of Glass, McCullough,
Sherrill & Harrold from January 1, 1993 through March 31, 1993. From 1988
through 1992, Mr. Tramonte was a Partner with the Atlanta law firm of Hurt,
Richardson, Garner, Todd & Cadenhead.
Agreements With Certain Holders of InfoMed Convertible Preferred Stock.
InfoMed is currently a party to certain agreements (the "Prior Agreements")
with the holders of the InfoMed Convertible Preferred Stock pursuant to which
such holders are entitled to certain preferential rights, including rights to
acquire additional shares of capital stock of InfoMed upon the occurrence of
certain events, to approve or disapprove certain transactions to which InfoMed
might become a party, including the Merger, and to require that InfoMed
otherwise take or refrain from taking specified actions. In addition, under
the terms of the InfoMed Convertible Preferred Stock, such holders are entitled
to elect two persons to serve on InfoMed's five-person Board and to receive
preferential dividends. Pursuant to the Merger Agreement, InfoMed obtained
from each person who is or was a purchaser of InfoMed Convertible Preferred
Stock pursuant to such agreements an agreement (a "Preferred Stock and Warrant
Holder Agreement") providing for the conversion or exchange of the outstanding
InfoMed Convertible Preferred Stock into InfoMed common stock. As a result of
the Preferred Stock and Warrant Holder Agreements, all of the outstanding
Convertible Preferred Stock and accrued dividends were converted or exchanged
into 1,562,667 shares of InfoMed common stock as of the Effective Date.
The Preferred Stock and Warrant Holder Agreements amend and restate the
warrants related thereto to provide that (i) if at any time prior to October 7,
1997, the Board of Directors of InfoMed determines that InfoMed requires
additional capital in order to fund the operations of its InfoMed, Inc.
subsidiary and that additional borrowings (if available) under existing debt
facilities are not adequate for such purpose, and (ii) if EGL shall concur in
such conclusion, which concurrence will not be unreasonably withheld, InfoMed
may, by written notice to the holder of the Warrant, require exercise of the
Warrant to the extent required in order to address such capital needs.
Designation of Directors. The Preferred Stock and Warrant Holder
Agreements also provide that so long as EGL and its affiliates are the
beneficial owners of InfoMed voting securities representing 5% or more of the
outstanding voting power of InfoMed, EGL shall be entitled to designate one
person (who shall be reasonably acceptable to the Board of Directors of
InfoMed, it being agreed that Murali Anantharaman is acceptable) to serve as a
director of InfoMed. Furthermore, so long as O'Donnell Davis, Inc. ("ODD") and
its affiliates are the beneficial owners of InfoMed voting securities
representing 5% or more of the outstanding voting power of InfoMed, ODD shall
be entitled to designate one person (who shall be reasonably acceptable to the
Board of Directors of InfoMed, it being agreed that Barrett C. O'Donnell is
acceptable) to serve as a director of InfoMed. Each of the persons designated
by EGL or ODD (each an "Investor"; and collectively the "Investors") is
referred to herein as an "Investor Designee." InfoMed shall use all reasonable
efforts to cause the election of the Investor Designees to the Board of
Directors of InfoMed.
Voting Provisions. Pursuant to the Preferred Stock and Warrant Holder
Agreements, each Investor agrees to effect such action as may be necessary to
ensure that:
(a) subject to the receipt of proper notice and the absence of an
injunction or other final order of any court barring such action, the
Investor and its affiliates are, as shareholders, present in person or
represented by proxy at all shareholder meetings of InfoMed so that all
shares of InfoMed voting securities of which Investor or any of its
affiliates beneficially own are voted and deemed to be present, in person
or by proxy, at all meetings of the shareholders of InfoMed so that all
InfoMed voting securities so beneficially owned may be counted for the
purpose of determining the presence of a quorum at such meetings; and
(b) all InfoMed voting securities that are beneficially owned by the
Investor or any of its affiliates as of the appropriate record date are
voted: (x) in favor of all of the nominees to the Board of Directors of
InfoMed as approved by the Board of Directors (and shall not exercise any
available cumulative voting rights), provided InfoMed has included among
such nominees any Investor Designee that the Investor is entitled to
designate as described above; and (y) on all other matters to be voted upon
by the holders of InfoMed voting securities or any class or series thereof
in the same proportion as the votes cast by the other holders of InfoMed
voting securities with respect to such matter except that (i) the Investor
and such affiliates may, in their sole discretion, vote or cause to be
voted all or a greater proportion of such InfoMed voting securities in
favor of any matter contemplated by this clause (y) that is recommended
favorably by the Board of Directors of InfoMed, and (ii) the Investor and
its affiliates may, in their sole discretion, vote any or all of their
InfoMed voting securities in their sole discretion on any amendment to the
Certificate of Incorporation or Bylaws (other than a proposal only to
increase the number of authorized shares of InfoMed common stock),
disposition of InfoMed (by way of merger, disposition of assets or
otherwise), liquidation, dissolution or any other action contemplated by
this clause (y) that is materially adverse to the Investor or such
affiliates.
Standstill Provisions. The Preferred Stock and Warrant Holder
Agreements provide that neither any Investor nor any of its affiliates shall,
directly or indirectly: (i) make or participate in the making of any public
announcement with respect to, or submit or participate in the submission of a
proposal for, or offer of, any proposal relating to (a) the entry by InfoMed
into any agreement relating to (x) any consolidation or merger of InfoMed in
which InfoMed is not the continuing or surviving corporation or pursuant to
which shares of InfoMed's common stock would be converted into cash, securities
or other property, other than a merger of InfoMed in which the holders of
InfoMed's common stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger, or (y) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all, or
substantially all, of the assets of InfoMed, (b) the acquisition by any person
of InfoMed voting securities representing 50% or more of the outstanding voting
power, or (c) at any time during a period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors of
InfoMed shall cease for any reason to constitute at least a majority thereof,
excluding directors whose election or nomination for election by the
shareholders of InfoMed during such two-year period was approved by a vote of
at least two-thirds of the directors then still in office who were directors at
the beginning of such period (collectively, each event in clauses (a), (b) and
(c) of this clause (i) being referred to as a "Control Event"); (ii) initiate
the solicitation of or solicit proxies or consents or become a "participant" in
a "solicitation" (as such terms are defined in Rule 14a-11 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) with respect to any
InfoMed voting securities in opposition to the recommendation of the Board of
Directors of InfoMed with respect to any matter; (iii) initiate or institute,
or participate in the initiation or institution of, any shareholder vote
(whether pursuant to Rule 14a-8 of the Exchange Act or otherwise) with respect
to any matter which is not required by InfoMed's Certificate of Incorporation
or Bylaws, the rules of any national securities exchange or automated
quotations system on which InfoMed voting securities are then traded, or by any
similar laws or rules to be submitted to InfoMed's shareholders; (iv) initiate
or institute, or participate in the initiation or institution of any legal,
regulatory or administrative action or proceeding in any court of competent
jurisdiction or appropriate regulatory or administrative body or agency with
respect to InfoMed or any of its directors, officers, employees, accountants,
legal counsel or other advisors, which action or proceeding in any way
contests, or otherwise seeks to void, the validity of, or the enforceability of
any provision of the Agreement; or (v) join or become a part of any
partnership, limited partnership, syndicate or other group, or otherwise act in
concert with any other person, for the purpose of voting InfoMed voting
securities on matters set forth in clause (ii) under the caption "Voting
Provisions", except as a member of a group consisting solely of the Investor
and its subsidiaries with respect to actions specifically required or
permitted.
Voting Agreements.
In March 1996, certain shareholders of Simione entered into voting
agreements with Gary M. Bremer (the "Voting Agreements"). Pursuant to the
Voting Agreements, such Simione shareholders granted an irrevocable proxy
coupled with an interest to vote their shares of Simione common stock to Mr.
Bremer, and Mr. Bremer agreed to vote his shares of Simione common stock in the
same manner as he voted the common stock of the Simione shareholders that
entered into the Voting Agreements. The Voting Agreements survived the Merger,
resulting in Mr. Bremer possessing the sole voting power with respect to his
shares or InfoMed common stock and approximately 1,329,400 shares of InfoMed
common stock held by the shareholders who are parties to the Voting Agreements.
The Voting Agreements will expire on the earlier of: (i) March 2001; (ii) the
death or disability of Mr. Bremer; (iii) the date on which Mr. Bremer no longer
works on a full-time basis with InfoMed or its affiliates; or (iv) the day on
which equity securities of the same class as such common stock covered
by a registration statement filed in accordance with the Securities Act of
1933, as amended (the "Securities Act"), may lawfully be offered and sold
pursuant to such registration statement.
Registration Rights Agreement.
The InfoMed common stock issued in connection with the Merger will not
initially be registered under the Securities Act and may not be sold or
transferred except in a transaction which is exempt under the Securities Act or
pursuant to an effective registration under the Securities Act. InfoMed has
executed and delivered a registration rights agreement (the "Registration
Rights Agreement"). Under the terms of the Registration Rights Agreement, each
holder of Simione common stock who receives shares of InfoMed common stock in
the Merger and certain large holders of InfoMed common stock will be entitled
to require that InfoMed undertake to register resales of shares of InfoMed
common stock held by such holders under the Securities Act and applicable state
securities laws. Subject to certain limitations, such holders shall be
entitled to up to three demand registrations and unlimited rights to
participate in other registrations undertaken by InfoMed. In addition, InfoMed
has agreed that, within 45 days after it becomes eligible for use of certain
registration statement forms that permit filings made by InfoMed under the
Exchange Act to be incorporated by reference, it will file and seek to
maintain in effect a "shelf" registration permitting resales of such shares
from time to time (subject to certain limitations for holders of more than
20,000 shares of InfoMed common stock following the Merger). In connection
with any such registrations, InfoMed has agreed to pay all expenses of
registration, other than underwriters' and brokers' discounts and commissions.
InfoMed also has agreed, subject to certain limitations, to indemnify
any selling shareholder from and against any liabilities arising under the
Securities Act in connection with such registrations.
<PAGE> 5
Secutiry Ownership.
Set forth below is information regarding beneficial ownership of InfoMed
common stock, after consummation of the Merger, by (i) any person known to
InfoMed to be the beneficial owner of 5% or more of the outstanding shares of
InfoMed common stock, (ii) each person who serves as a director or executive
officer of InfoMed, and (iii) all directors and executive officers of
InfoMed as a group.
(1)
<TABLE>
<CAPTION>
INFOMED COMMON STOCK
---------------------------------------
NAME AND ADDRESS (2) NUMBER PERCENTAGE
- -------------------- ------ ----------
<S> <C> <C>
Central Health Holding 4,248,017 36.0%
Company, Inc. Employee
Stock Ownership Plan Trust
O'Donnell Davis, Inc. 2,084,944(3) 16.8%
P.O. Box 7395
Princeton, NJ 08543
Craig H. Davis 2,084,944(4) 16.8%
P.O. Box 391
Princeton, NJ 08542
David O. Ellis, Ph.D. 2,000,076(5) 15.9%
235 Landfall Road
Sandy Springs, GA 30328
Rowan Nominees Limited 1,707,862(6) 13.7%
33 King William Street
London, ECHR 9AS
Howard B. Krone, M.D. 881,244(7) 7.5%
EGL Holdings, Inc. 813,110(8) 6.5%
6600 Peachtree Dunwoody Road
Atlanta, GA 30328
Gary M. Bremer 3,085,204(9) 25.4%
Barrett C. O'Donnell 2,084,944(10) 16.8%
1180 SW 36th Avenue
Pompano Beach, FL 33069
Murali Anantharaman 1,875,133(11) 14.9%
2830 Shurburne Drive
Alpharetta, GA 30301
James R. Henderson 31,548(12) *
William J. Simione, Jr. 234,816(13) 2.0%
Gary W. Rasmussen 68,602(14) *
Lori Nadler Siegel 7,410(15) *
James A. Tramonte 40,738(16) *
All Directors and Executive
Officers of InfoMed (post-
Merger) as a group (8 persons) 7,134,465(17) 52.4%
</TABLE>
- ---------------------
* Less than 1%
<PAGE> 6
(1) Reflects stock ownership as of October 8, 1996; provided, however, that
stock ownership for each of ODD, Rowan Nominees Limited, EGL and Messrs.
Davis, O'Donnell, Anantharaman and Dr. Ellis is reflected as of September
1, 1996. Pursuant to Rule 13d-3 under the Exchange Act, beneficial
ownership of a security consists of sole or shared voting power (including
the power to vote or to direct the vote) and/or the sole or shared
investment power (including the power to dispose or direct the
disposition) with respect to a security. The number of shares of common
stock includes the number of shares of common stock which are subject to
the exercise of options within 60 days of the date of this Report.
(2) Except as indicated in the table, the business address of each person
identified in the table is c/o Simione Central Holding, Inc., 6650 Powers
Ferry Road, Atlanta, Georgia 30339.
(3) Includes 270,000 shares issuable on exercise of warrants, 321,200 shares
issuable upon exercise of options and 450,000 shares issued upon
conversion of the Convertible Preferred Stock.
(4) Messrs. O'Donnell and Davis are stockholders, directors and officers of
O'Donnell Davis, Inc. ("ODD"). Accordingly, pursuant to Rule 13d-3 under
the Exchange Act, each of them may be deemed to be indirect beneficial
owners of InfoMed's securities beneficially owned by ODD.
(5) Includes 54,356 shares of InfoMed common stock as to which Dr. Ellis has
sole voting power, an additional 2,200 shares owned by members of Dr.
Ellis' family, 122,994 shares related to EGL (a corporation of which Dr.
Ellis is Chairman of the Board and Chief Executive Officer and has voting
rights of InfoMed's shares), 750,000 shares issuable upon exercise of
warrants related to EGL, 44,940 shares issuable upon exercise of options
related to EGL and 869,605 shares issued upon conversion of the
Convertible Preferred Stock owned by Dr. Ellis, certain of his family
members and EGL.
(6) Includes 619,667 shares issuable upon exercise of warrants and 820,000
shares issued upon conversion of the Convertible Preferred Stock. Shares
are held by Rowan Nominees Limited as nominee for EGL.
(7) Includes 630,974 shares subject to a voting agreement pursuant to which
Mr. Bremer has the sole power to vote such shares.
(8) Includes 750,000 shares issuable upon exercise of warrants, 44,490 shares
issuable upon exercise of options and 8,750 shares issued upon conversion
of the Convertible Preferred Stock.
(9) Includes 330,315 shares issuable upon exercise of options and an aggregate
of 1,329,400 shares as to which Mr. Bremer has sole voting power
(including 630,974 shares owned by Dr. Krone, 31,548 shares owned by Mr.
Henderson, and 157,743 shares owned by Mr. Simione) pursuant to voting
agreements with the holders of such shares.
(10) Messrs. O'Donnell and Davis are stockholders, directors and officers of
ODD. Accordingly, pursuant to Rule 13d-3 under the Exchange Act, each of
them may be deemed to be indirect beneficial owners of InfoMed securities
beneficially owned by ODD.
(11) Includes 3,605 shares of InfoMed common stock as to which Mr.
Anantharaman has sole voting power, 122,994 shares of InfoMed common stock
related to EGL, 750,000 shares issuable upon exercise of warrants related
to EGL, 44,940 shares issuable upon exercise of options related to EGL and
846,665 shares issued upon conversion of the Convertible Preferred Stock
related to EGL.
(12) Represents shares subject to a voting agreement pursuant to which Mr.
Bremer has the sole power to vote such shares.
(13) Includes 77,073 shares issuable upon exercise of options and 157,743
shares subject to a voting agreement pursuant to which Mr. Bremer has the
sole power to vote such shares.
(14) Includes 5,505 shares issuable upon exercise of options and 63,097 shares
subject to a voting agreement pursuant to which Mr. Bremer has the sole
power to vote such shares.
(15) Includes 1,101 shares issuable upon exercise of options and 6,309 shares
subject to a voting agreement pursuant to which Mr. Bremer has the sole
power to vote such shares.
(16) Includes 5,505 shares issuable upon exercise of options and 35,233 shares
subject to a voting agreement pursuant to which Mr. Bremer has the sole
power to vote such shares.
(17) Includes 785,639 shares issuable upon exercise of options, 1,020,000
shares issuable upon exercise of warrants and 1,329,400 shares subject to
voting agreements pursuant to which Mr. Bremer has the sole power to vote
such shares.
<PAGE> 7
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
See Item 1 above.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial statements of business acquired.
It is impracticable at this time to provide the required
financial statements. Therefore, pursuant to Item 7(a)(4) of the
Instructions to the Current Report on Form 8-K, the registrant
shall file the required financial statements as an amendment to
this Report within 60 days of the date hereof.
(b) Pro forma financial information.
It is impracticable at this time to provide the required
financial statements. Therefore, pursuant to Item 7(a)(4) of the
Instructions to the Current Report on Form 8-K, the registrant
shall file the required financial statements as an amendment to
this Report within 60 days of the date hereof.
(c) Exhibits.
2.1 Amended and Restated Agreement and Plan of Merger dated as
of September 5, 1996 by and among InfoMed Holdings, Inc.,
Simione Central Holding, Inc. and Infosub, Inc.,
(incorporated by reference to the registrant's Current
Report on Form 8-K dated September 13, 1996).
4.1 Amended and Restated Share Warrant
10.1 Registration Rights Agreement
10.2 Agreement dated as of October 4, 1996 by and among InfoMed
Holdings, Inc., EGL Holdings, Inc., Mercury Asset
Management plc, O'Donnell Davis, Inc., Barrett
O'Donnell and certain other holders of the Class A
Convertible Preferred Stock of the registrant.
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
INFOMED HOLDINGS, INC.
By: /s/ James A. Tramonte
-------------------------------
James A. Tramonte
General Counsel and Secretary
Dated: October 23, 1996
-----------------------
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
- ------- -------------------
<S> <C>
2.1 Amended and Restated Agreement and Plan of Merger dated as
of September 5, 1996 by and among InfoMed Holdings, Inc.
Simione Central Holding, Inc. and Infosub, Inc.
(incorporated by reference to the registrant's Current
Report on Form 8-K dated September 13, 1996).
4.1 Amended and Restated Share Warrant
10.1 Registration Rights Agreement
10.2 Agreement dated as of October 4, 1996 by and among InfoMed
Holdings, Inc., EGL Holdings, Inc., Mercury Asset
Management plc, O'Donnell Davis, Inc., Barrett O'Donnell
and certain other holders of the Class A Convertible
Preferred Stock of the registrant.
</TABLE>
<PAGE> 1
EXHIBIT 4.1
INFOMED HOLDINGS, INC.
AMENDED AND RESTATED SHARE WARRANT
NEITHER THIS WARRANT
NOR THE SHARES ISSUABLE UPON THE EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED
_______________, 19__ Warrant to Purchase
Shares of Common Stock
WARRANT
For the Purchase of Shares of the Common Stock,
$.001 Par Value, of InfoMed Holdings, Inc.,
a Delaware Corporation
This is to certify that, for good and valuable consideration received,
______________ ("Investor"), or registered assigns, is entitled to purchase
from InfoMed Holdings, Inc., a Delaware corporation (the "Company") __________
shares of the Common Stock, $.001 par value, of the Company. This Warrant is
subject to the terms and conditions hereinafter set forth, including, without
limitation, the terms governing exercise of this Warrant set forth in Section 1
below.
1. Exercise of Warrant.
1.1 Exercise Period.
Investor shall have the right to purchase shares of Common Stock
under the terms of this Warrant until February 24, 2005; provided, that (i) if
at any time prior to October 7, 1997, the Board of Directors of the Company
determines that the Company requires additional capital in order to fund the
operations of its InfoMed, Inc. subsidiary and that additional borrowings (if
available) under existing debt facilities are not adequate for such purpose,
and (ii) if EGL Holdings, Inc. ("EGL") shall concur in such conclusion, which
concurrence will not be unreasonably withheld, the Company may, by written
notice to the holder of this Warrant, require exercise of this Warrant as and
to the extent required in order to address such capital needs (provided, that
if such capital needs do not require exercise in full of this Warrant and all
other Warrants containing a similar provision (each a "Similar Warrant"), the
Company shall require that the number of shares with respect to which this
Warrant and all Similar Warrants must be exercised shall be determined on a pro
rata basis (based upon the respective numbers of shares with respect to which
this Warrant and such Similar Warrants are then exercisable); provided, further
that in the event any holder of any Similar Warrant shall fail to perform its
obligations under such Warrant (a "Defaulting Holder"), the holder of this
Warrant and the
<PAGE> 2
holders of all other Similar Warrants who are not a Defaulting Holder shall be
required to exercise this Warrant and such other Similar Warrants on a pro rata
basis in amounts necessary to provide to the Company the amount of capital that
would have been provided had such Defaulting Holder performed its obligations
under such Similar Warrant).
1.2 Exercise Price.
The per share price for the shares which may be purchased upon the
exercise of this Warrant shall be equal to fifty cents ($.50) per share,
subject to adjustment from time to time as provided in Section 1.3 hereof.
1.3 Adjustment.
(a) Upon each adjustment of the exercise price, the holder of this
Warrant shall thereafter be entitled to purchase, at the exercise price
resulting from such adjustment, the number of shares obtained by multiplying
the exercise price in effect immediately prior to such adjustment by the number
of shares purchasable pursuant hereto immediately prior to such adjustment and
dividing the product thereof by the exercise price resulting from such
adjustment, and rounding down to the nearest whole share.
(b) If the number of outstanding shares of Common Stock is
increased by a stock split, stock dividend, or other similar event, the
exercise price in effect immediately prior to such event shall be
proportionately reduced, and conversely, if the number of outstanding shares of
Common Stock is decreased by a combination or reclassification of shares, or
other similar event, the exercise price in effect immediately prior to such
event shall be proportionately increased.
(c) If the Company shall effect a reorganization, shall merge with
or consolidate into another corporation, or shall sell, transfer or otherwise
dispose of all or substantially all of its property, assets or business and,
pursuant to the terms of such reorganization, merger, consolidation or
disposition of assets, property or assets of the Company, successor or
transferee or an affiliate thereof or cash are to be received by or distributed
to the holders of Common Stock, then the holder of this Warrant shall have the
right thereafter to receive, upon the exercise of this Warrant, the number of
shares of stock or other securities, property or assets of the Company,
successor, transferee or affiliate thereof or cash receivable upon or as a
result of such reorganization, merger, consolidation or disposition of assets
by a holder of the number of shares of Common Stock equal to that to which the
holder of this Warrant upon the exercise thereof immediately prior to such
event would be entitled. The provisions of this paragraph shall similarly
apply to successive reorganizations, mergers, consolidations or dispositions of
assets. Upon any reorganization, consolidation, merger or transfer hereinabove
referred to, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the shares of stock and other securities,
property, assets and cash receivable upon the exercise of this Warrant after
the consummation of such reorganization, consolidation, merger or transfer, as
the case may be. The Company shall not effect any such reorganization,
consolidation, merger or transfer, unless prior to the consummation thereof the
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<PAGE> 3
successor corporation (if other than the Company) resulting therefrom or the
corporation purchasing such assets shall, by written instrument executed and
mailed to the registered holder hereof at the last address of such holder
appearing on the books of the Company, (i) assume the obligation to deliver to
such holder such shares of stock, securities or assets as, in accordance with
the foregoing provisions, such holder may be entitled to purchase, and (ii)
agree to be bound by all the terms of this Warrant.
1.4 Method of Exercise.
In order to exercise this Warrant, the registered owner hereof shall
present this Warrant to the Company at the office of the Company, accompanied
by written notice to the Company that the owner elects to exercise this
Warrant, in form attached hereto as Schedule A. Such notice shall also state
the name or names (with address) in which the certificate or certificates for
shares which shall be issuable on such exercise shall be issued. As soon as
practicable after the receipt of such notice, the presentation of this Warrant,
and the receipt by the Company of the full exercise price for such shares in
current U.S. funds, the Company shall issue and deliver to the owner a
certificate or certificates for the number of full shares which the owner seeks
the Company to issue upon that exercise of this Warrant.
Such exercise shall be deemed to have been effected immediately
prior to the close of business on the date on which such notice shall have been
received by the Company and this Warrant shall have been presented as
aforesaid, and exercise shall be at the exercise price in effect at such time,
and at such time the rights of the owner of this Warrant as such owner shall
cease with respect to that number of shares, and the person or persons in whose
name or names any certificate or certificates for shares, shall be issuable
upon such exercise shall be deemed to have become the owner(s) of record of the
shares represented thereby.
1.5 Notice of Certain Actions.
In case at any time:
(1) the Company shall declare any discretionary dividend upon any
class of its capital stock payable in securities or make any special dividend
or other distribution;
(2) the Company shall offer for subscription pro rata to the
holders of any class of its capital stock any additional securities of any
class or other rights;
(3) there shall be any capital reorganization, or
reclassification of the capital stock of the Company, or consolidation or
merger of the Company with, or sale of all of substantially all its assets or
stock to, another corporation;
(4) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company; or
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<PAGE> 4
(5) the Company shall enter into an agreement or adopt a plan for
the purpose of effecting a consolidation, merger, or sale of all or
substantially all of its assets or stock, other than a merger where the Company
is the surviving corporation and the terms of the Company's capital stock
remain unchanged;
then, in any one or more of said cases, the Company shall give written notice,
by first class mail, postage prepaid, to the registered owner of this Warrant,
of the date on which (a) the books of the Company shall close or a record shall
be taken for such dividend, distribution or subscription rights, or (b) such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding-up shall take place, as the case may be. Such notice
shall also specify the date as of which the owners of any class of capital
stock of record shall participate in such dividend, distribution or
subscription rights, or shall be entitled to exchange their capital stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger sale, dissolution, liquidation or
winding-up as the case may be. Such written notice shall be given at least 30
days prior to the action in question if practicable and not less than 30 days
prior to the record date or the date on which the Company's transfer books are
closed in respect thereto if practicable.
1.6 Reservation of Shares.
The Company will at all times reserve and keep available out of its
authorized shares of capital stock, solely for the purpose of issuance upon the
exercise of this Warrant as herein provided, such number of Common Shares as
shall then be issuable upon the exercise of this Warrant. The Company
covenants that all shares which shall be so issuable shall, upon the exercise
of this Warrant as herein provided, be duly and validly issued and fully paid
and nonassessable by the Company.
1.7 Registration and Listing.
(a) All persons who acquire shares of capital stock (or other
securities) pursuant to the exercise of this Warrant shall be entitled to the
rights to cause the Company to register such securities with the Securities and
Exchange Commission in accordance with the terms of a Registration Rights
Agreement, dated as of October 7, 1996, a copy of which is attached hereto as
Exhibit A, and the terms of which Registration Rights Agreement are
incorporated herein for the purposes of this Section 1.7.
(b) If any shares required to be reserved for purposes of the
exercise of this Warrant require listing on any national securities exchange
before such shares may be issued upon exercise, the Company will, at its
expense, as expeditiously as possible cause such shares to be listed on the
relevant national securities exchange.
1.8 Taxes.
The issuance of certificates for shares upon exercise of this
Warrant shall be made without charge to the owner of this Warrant for any
issuance tax in respect thereto,
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<PAGE> 5
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the registered owner of this Warrant.
1.9 Partial Exercise.
The purchase rights represented by this Warrant are exercisable at
the option of the registered owner hereof in whole at any time, or in part (in
minimum amounts per exercise of the lesser of 50,000 shares or the then
remaining balance of this Warrant) from time to time, within the period above
specified, provided, however, that such purchase rights shall not be
exercisable with respect to a fraction of a share. In case of the purchase of
less than all the shares purchasable under this Warrant, the Company shall
cancel this Warrant upon the surrender hereof and shall execute and deliver a
new Warrant of like tenor and date for the balance of the shares purchasable
hereunder.
2. Shareholder Rights. This Warrant shall not entitle the owner hereof to
any voting rights or other rights as a shareholder of the Company, or to any
other rights whatsoever except the rights herein expressly set forth, and no
dividends shall be payable or accrue in respect of this Warrant or the interest
represented hereby or the shares purchasable hereunder until or unless, and
except to the extent that, this Warrant shall be exercised. No provision
hereof, in the absence of affirmative action by the owner hereof to exercise
this Warrant, and no mere enumeration herein of the rights or privileges of the
owner hereof, shall give rise to any liability of such owner for the exercise
price or as a shareholder of the Company, whether such liability is asserted by
the Company or by creditors of the Company.
3. Exchange of Warrant. This Warrant is exchangeable upon the surrender
hereof by the registered owner to the Company for a reasonable number of new
Warrants issued to the registered owner of like tenor and date representing in
the aggregate the right to purchase the number of shares purchasable hereunder,
each of such new Warrants to represent the right to purchase such number of
shares as shall be designated by the registered owner at the time of such
surrender.
4. Transfer. This Warrant and the shares which may be purchased by the
exercise of this Warrant have not been registered under the Securities Act of
1933, as amended, or any applicable state securities laws. By accepting this
Warrant, the owner or any successor or assignee of the owner who may hereafter
become the owner of this Warrant, hereby agrees to be bound by the provisions
of such statutes. Except as otherwise provided above, this Warrant and all
rights hereunder are transferable by the registered owner hereof in person or
by duly authorized attorney on the books of the Company upon surrender of this
Warrant, properly endorsed, to the Company.
5. Investment Representation and Legend. The owner of this Warrant, by
acceptance of this Warrant, represents and warrants to the Company that it is
acquiring this Warrant and the shares (or other securities) issuable upon the
exercise hereof for investment purposes only and
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<PAGE> 6
not with a view towards the resale or other distribution thereof and agrees
that the Company may affix upon this Warrant the following legend:
"Neither this Warrant nor the shares issuable upon
exercise of this Warrant have been registered under
the Securities Act of 1933, as amended."
The owner of this Warrant, by acceptance of this Warrant, further agrees that
the Company may affix the following legend (in addition to any other legend(s),
if any, required by applicable state securities laws) to certificates for
shares (or other securities) issued upon exercise of this Warrant ("Warrant
Shares"):
"The shares represented by this certificate have been
acquired for investment and have not been registered
under the Securities Act of 1933, as amended. None of
such shares may be offered sold or transferred in the
absence of such registration or an exemption
therefrom."
6. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant is lost,
stolen, mutilated or destroyed, the Company may, on such terms as to indemnify
or otherwise as it may in its discretion reasonably impose (which shall, in the
case of a mutilated Warrant, include the surrender thereof), issue a new
Warrant of like denomination and tenor as the Warrant so lost, stolen,
mutilated or destroyed. Any such new Warrant shall constitute a contractual
obligation of the Company, whether or not the allegedly lost, stolen, mutilated
or destroyed Warrant shall be at any time enforceable by anyone.
7. Presentment. Prior to due presentment for registration of transfer of
this Warrant, the Company may deem and treat the registered owner hereof as the
absolute owner of this Warrant, notwithstanding any notation of ownership or
other writing thereon, for the purpose of any exercise thereof and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
8. Notice. Notice or demand pursuant to this Warrant shall be
sufficiently given or made, if sent by first-class mail, postage prepaid,
addressed, if to the owner of this Warrant, to such owner at its last known
address as it shall appear in the records of the Company, and if to the
Company, at InfoMed Holdings, Inc., 6650 Powers Ferry Road, Atlanta, Georgia
30339, Attention: General Counsel. The Company may alter the address to which
communications are to be sent by giving notice of such change of address in
conformity with the provision of this Section 8 for the giving of notice.
9. Governing Law. The validity, interpretation and performance of this
Warrant shall be governed by the laws of the State of Delaware.
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<PAGE> 7
10. Successors, Assigns. All the terms and provisions of this Warrant
shall be binding upon inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto.
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<PAGE> 8
IN WITNESS WHEREOF, the Company has created this Warrant to be executed by
the signatures of its duly authorized officers and the corporate seal hereunto
affixed.
INFOMED HOLDINGS, INC.
By:
---------------------------
Barrett C. O'Donnell
Chief Executive Officer
Dated as of: ____________, 19__ [Corporate Seal]
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<PAGE> 9
SCHEDULE A TO WARRANT
InfoMed Holdings, Inc.
4385 Route One
Princeton, New Jersey 08540-5705
Attn: Mr. Barrett C. O'Donnell
Re: Warrant dated as of __________, 19__, issued to ____________
(the "Warrant")
Gentlemen:
We hereby exercise the Warrant in [whole/part] for _____________ shares of
Common Stock, $.001 par value, at the current exercise price of $___________
per share. Certificates for such shares should be issued in the name of
_______________________. Enclosed is a check in the aggregate amount of
$___________ and the Warrant. [Please issue a Warrant for the ______________
remaining unexercised shares to the undersigned.]
--------------------------
Holder
Dated:
--------------------
<PAGE> 1
EXHIBIT 10.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into this 7th day of October, 1996 (the "Effective Date"), by and among INFOMED
HOLDINGS, INC., a Delaware corporation (the "Company"), those shareholders of
Simione Central Holding, Inc. ("SCHI") appearing as signatories hereto (each,
an "SCHI Investor" and collectively, the "SCHI Investors"), and those
shareholders of the Company appearing as signatories hereto (each, a "Company
Investor" and collectively, the "Company Investors"; each SCHI Investor and
each Company Investor is occasionally referred to herein as an "Investor" and
the SCHI Investors and the Company Investors are occasionally collectively
referred to herein as the "Investors").
R E C I T A L S
WHEREAS, pursuant to the terms of an Amended and Restated Agreement and
Plan of Merger, dated as of September 5, 1996 (the "Merger Agreement"), by and
among the Company, SCHI and Infosub, Inc., a Georgia corporation ("Infosub"),
Infosub shall be merged with and into SCHI, with the result that each of the
outstanding shares of the no par value Class A Common Stock and Class B Common
Stock of SCHI (together the "SCHI Common Stock") will be converted into the
right to receive shares of the $0.001 par value common stock of the Company
(the "Company Common Stock"); and
WHEREAS, the Company has agreed, as a condition precedent to SCHI's
obligations under the Merger Agreement, to grant to all holders of SCHI Common
Stock certain registration rights, and to grant to the Company Investors
similar registration rights; and
WHEREAS, the Company and the Investors desire to define such registration
rights on the terms and subject to the conditions herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following terms have the respective
meanings set forth below:
Commission: shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act;
Exchange Act: shall mean the Securities Exchange Act of 1934, as amended;
Holder: shall mean any holder of Registrable Securities;
Initial Restricted Period: shall mean the 180-day period referred to in
Section 3(a) of this Agreement; provided, that if the Company completes a
Public Offering (as defined in Section
<PAGE> 2
3(b) of this Agreement) during such 180-day period and the time period referred
to in Section 3(b) of this Agreement would expire after expiration of the
180-day period referred to in Section 3(a) of this Agreement, the Initial
Restricted Period shall end on the date of expiration of the time period
referred to in Section 3(b) of this Agreement.
Initiating Holder: shall mean any Investor or any other Holder who is the
Holder of, or group of Holders who in the aggregate are Holders of, more than
10% of the then outstanding Registrable Securities;
Person: shall mean an individual, partnership, joint stock company,
corporation, trust or unincorporated organization, and a government or agency
or political subdivision thereof;
Plan: shall mean the Central Health Holding Company, Inc. Employee Stock
Ownership Plan as now in existence or hereafter amended, together with the
trust established pursuant thereto under that trust agreement dated February
26, 1993 as amended July 25, 1994 and July 16, 1996, and as further amended
from time to time.
register, registered and registration: shall mean a registration effected
by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be
filed) and the declaration or ordering of effectiveness of such registration
statement;
Registrable Securities: shall mean (A) the shares of Company Common Stock
issued to former holders of SCHI Common Stock, including the SCHI Investors,
under the Merger Agreement, (B) any shares of Company Common Stock held by
Company Investors as of the date of this Agreement, (C) the shares of the
Company Common Stock issued upon exercise of options or warrants to purchase
shares of the Company Common Stock, which options or warrants are outstanding
as of the date hereof, if such shares upon issuance constitute "restricted
securities" as defined in Rule 144(a)(3) (or any successor provision thereto)
under the Securities Act, and (D) any securities of the Company issued as a
dividend or other distribution with respect to, or in exchange for or in
replacement of, the shares of Company Common Stock referred to in clauses (A),
(B) or (C); provided, however, that Registrable Securities shall not include
(i) securities with respect to which a registration statement with respect to
the sale of such securities has become effective under the Securities Act and
all such securities have been disposed of in accordance with such registration
statement, or (ii) such securities as are actually sold pursuant to Rule 144
(or any successor provision thereto) under the Securities Act;
Registration Expenses: shall mean all expenses incurred by the Company in
compliance with Sections 2(a), (b) and (c) hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, fees and expenses of one counsel for
all the Holders, blue sky fees and expenses and the expense of any special
audits incident to or required by any such registration (but excluding the
compensation of regular employees of the Company, which shall be paid in any
event by the Company);
Security, Securities: shall have the meaning set forth in Section 2(1) of
the Securities Act;
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<PAGE> 3
Securities Act: shall mean the Securities Act of 1933, as amended;
Selling Expenses: shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for each of the Holders other than fees and expenses
of one counsel for all the Holders; and
Small Holder: shall mean any Holder who is the holder of fewer than
20,000 shares of Company Common Stock.
2. REGISTRATION RIGHTS
(a) Requested Registration.
(i) Request for Registration. If the Company shall receive from an
Initiating Holder, at any time on or after expiration of the Initial Restricted
Period, a written request that the Company effect any registration with respect
to all or a part of the Registrable Securities, the Company will:
(A) promptly give written notice of the proposed registration,
qualification or compliance to all other Holders; and
(B) as soon as practicable, use its reasonable best efforts to
effect such registration (including, without limitation, the execution of an
undertaking to file post-effective amendments, appropriate qualification
under applicable blue sky or other state securities laws and appropriate
compliance with applicable regulations issued under the Securities Act) as
may be so requested and as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request, together with all or such portion of the
Registrable Securities of any Holder or Holders joining in such request as
are specified in a written request received by the Company within ten
business days after written notice from the Company is given under Section
2(a)(i)(A) above; provided that the Company shall not be obligated to
effect, or take any action to effect, any such registration pursuant to
this Section 2(a):
(u) Unless the aggregate of Registrable Securities
requested by all Holders to be registered pursuant to such request
equals the greater of (i) not less than 20% of all Registrable
Securities then held by all Holders and (ii) Registrable Securities
having an estimated aggregate offering price of not less than $10
million;
(v) Solely with respect to underwritten registrations
requested pursuant to this Agreement, if the Company shall have
previously effected an underwritten registration with respect to
Registrable Securities pursuant to Section 2(b) hereof, the Company
shall not be required to effect any underwritten registration pursuant
to this Section 2(a) until a period of 180 days shall have elapsed
from the effective date of the most recent such previous registration;
provided that if, in the most recent such previous registration,
participation pursuant to Section 2(b) hereof shall not have been to
the extent requested pursuant to Section 2(b) hereof, then the
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<PAGE> 4
Company shall not be required to effect any underwritten registration
pursuant to this Section 2(a) until a period of 90 days shall have
elapsed from the effective date of the most recent such previous
registration;
(w) If, upon receipt of a registration request pursuant to
this Section 2(a), the Company is advised in writing (with a copy to
each Initiating Holder) by a recognized national independent investment
banking firm selected by the Company that, in such firm's opinion, a
registration at the time and on the terms requested would adversely
affect any public offering of securities of the Company by the Company
(other than in connection with benefit and similar plans) or by or on
behalf of any shareholder of the Company exercising a demand
registration right (collectively, a "Company Offering") with respect
to which the Company has commenced preparations for a registration
prior to the receipt of a registration request pursuant to this
Section 2(a), the Company shall not be required to effect a
registration pursuant to this Section 2(a) until the earlier of (i) 30
days after the completion of such Company Offering, (ii) promptly
after any abandonment of such Company Offering or (iii) 60 days after
the date of receipt of a registration request pursuant to this Section
2(a); provided, however, that the periods during which the Company
shall not be required to effect a registration pursuant to this
Section 2(a) together with any periods of suspension under Section
2(i) hereof may not exceed 90 days in the aggregate during any period
of 12 consecutive months;
(x) If the Registrable Securities requested by all Holders
to be registered pursuant to such request are included in, and
eligible for sale under, the Shelf Registration (as defined below);
(y) In any particular jurisdiction in which the Company
would be required to execute a general consent to service of process in
effecting such registration, qualification or compliance, unless the
Company is already subject to service in such jurisdiction and except
as may be required by the Securities Act or applicable rules or
regulations thereunder;
(z) After the Company has effected three (3) such
registrations pursuant to this Section 2(a) (in the aggregate for all
Holders) and such registrations have been declared or ordered
effective and the sales of such Registrable Securities shall have
closed; provided, that Holders shall not have the right to request an
underwritten registration pursuant to this Section 2(a) more than one
(1) time in any six-month period; and provided further, that Holders
other than the Plan shall be entitled to deliver no more than two (2)
requests that the Company effect a registration pursuant to this
Section 2(a), thereby reserving at least one (1) such request for the
Plan.
The registration statement filed pursuant to the request of the Initiating
Holders may, subject to the provisions of Section 2(a)(ii) below, include other
Securities of the Company which are held by Persons who, by virtue of
agreements with the Company, are entitled to include their Securities in any
such registration ("Other Stockholders").
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<PAGE> 5
(ii) Underwriting. If the Initiating Holders intend to
distribute the Registrable Securities covered by their request by means of an
underwriting, they shall so advise the Company as a part of their request made
pursuant to Section 2(a). If Other Stockholders request inclusion in any such
registration, the Holders shall offer to include the securities of such Other
Stockholders in the underwriting and may condition such offer on their
acceptance of the further applicable provisions of this Section 2. The Holders
whose shares are to be included in such registration and the Company shall
(together with all Other Stockholders proposing to distribute their securities
through such underwriting) enter into underwriting and related agreements in
customary form with the representative of the underwriter or underwriters
selected for such underwriting by the Initiating Holders and reasonably
acceptable to the Company. Such underwriting agreement will contain such
representations and warranties by the Company and such other terms and
provisions as are customarily contained in underwriting agreements with respect
to secondary distributions, including, without limitation, indemnities and
contribution to the effect and to the extent provided in Section 2(f) hereof
and the provision of opinions of counsel and accountants' letters to the effect
and to the extent provided in Section 2(e) hereof, and the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters shall also be made to and for the benefit of
the Holders. The Company shall cooperate fully with the Holders and the
underwriters in connection with any underwritten offering. Notwithstanding any
other provision of this Section 2(a), if the representative advises the Holders
in writing that marketing factors require a limitation on the number of shares
to be underwritten, the securities of the Company held by Other Stockholders
shall be excluded from such registration to the extent so required by such
limitation. If, after the exclusion of such shares, further reductions are
still required, the number of shares included in the registration by each
Holder shall be reduced on a pro rata basis (based on the number of shares held
by such Holder), by such minimum number of shares as is necessary to comply
with such request. No Registrable Securities or any other securities excluded
from the underwriting by reason of the underwriter's marketing limitation shall
be included in such registration. If any Other Stockholder who has requested
inclusion in such registration as provided above disapproves of the terms of
the underwriting, such person may elect to withdraw therefrom by written notice
to the Company, the underwriter and the Initiating Holders. The securities so
withdrawn shall also be withdrawn from registration. If the underwriter has
not limited the number of Registrable Securities or other securities to be
underwritten, the Company and officers and directors of the Company may include
its or their securities for its or their own account in such registration if
the representative so agrees and if the number of Registrable Securities and
other securities which would otherwise have been included in such registration
and underwriting will not thereby be limited.
(b) Company Registration.
(i) If the Company shall determine to register any of its equity
securities either for its own account or for the account of Other Stockholders,
other than the Shelf Registration, or a registration relating solely to benefit
plans, or a registration relating solely to a Commission Rule 145 transaction,
or a registration on any registration form which does not permit secondary
sales or does not include substantially the same information as would be
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<PAGE> 6
required to be included in a registration statement covering the sale of
Registrable Securities, the Company will:
(A) promptly give to each of the Holders a written notice
thereof (which shall include a list of the jurisdictions in which the
Company intends to attempt to qualify such securities under the applicable
blue sky or other state securities laws); and
(B) include in such registration (and any related
qualification under blue sky laws or other compliance), and in any
underwriting involved therein, all the Registrable Securities specified in
a written request or requests, made by the Holders within ten (10) business
days after the giving of the written notice from the Company described in
clause (i) above, except as set forth in Section 2(b)(ii) below. Such
written request shall specify the amount of Registrable Securities intended
to be disposed of by a Holder and may specify all or a part of the Holders'
Registrable Securities.
Notwithstanding the foregoing, if, at any time after giving such written notice
of its intention to effect such registration and prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register such equity securities
the Company may, at its election, give written notice of such determination to
the Holders and thereupon the Company shall be relieved of its obligation to
register such Registrable Securities in connection with the registration of
such equity securities (but not from its obligation to pay Registration
Expenses to the extent incurred in connection therewith as provided herein),
without prejudice, however, to the rights (if any) of Holders immediately to
request that such registration be effected as a registration under Section 2(a)
hereof.
(ii) Underwriting. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise each of the Holders as a part of the written notice
given pursuant to Section 2(b)(i)(A). In such event, the right of each of the
Holders to registration pursuant to this Section 2(b) shall be conditioned upon
such Holders' participation in such underwriting and the inclusion of such
Holders' Registrable Securities in the underwriting to the extent provided
herein. The Holders whose shares are to be included in such registration shall
(together with the Company and the Other Stockholders distributing their
securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected for the underwriting by the Company or such Other Stockholders, as the
case may be. Such underwriting agreement will contain such representations and
warranties by the Company and such other terms and provisions as are
customarily contained in underwriting agreements with respect to secondary
distributions, including, without limitation, indemnities and contribution to
the effect and to the extent provided in Section 2(f) hereof and the provision
of opinions of counsel and accountants' letters to the effect and to the extent
provided in Section 2(e), and the representations and warranties by, and the
other agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of the Holders whose
shares are to be included in such registration. Notwithstanding any other
provision of this Section 2(b), if the representative determines that marketing
factors require a limitation on the number of shares to be underwritten, the
Company shall so advise all holders of securities requesting registration, and
the number of shares of securities that are entitled to be included in
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<PAGE> 7
the registration and underwriting shall be allocated in the following manner:
The securities of the Company held by officers, directors and Other
Stockholders (other than Other Stockholders who are exercising demand
registration rights with respect to such underwriting ("Other Demanding
Holders")) of the Company shall be excluded from such registration and
underwriting to the extent required by such limitation, and, if a limitation on
the number of shares is still required, the number of shares that may be
included in the registration and underwriting by each of the Holders and by
each Other Demanding Holder shall be reduced, on a pro rata basis (based on the
number of shares held by such holder), by such minimum number of shares as is
necessary to comply with such limitation. If any of the Holders or any
officer, director or Other Stockholder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to the
Company and the underwriter. Any Registrable Securities or other securities
excluded or withdrawn from such underwriting shall be withdrawn from such
registration.
(c) Shelf Registration.
(i) Within 45 days after the date (the "S-3 Eligibility Date") on
which the Company shall become eligible to utilize Registration Statement Form
S-3 (or other successor form which shall permit the Company to incorporate by
reference periodic reports filed under the Exchange Act both before and after
the date such registration statement is declared effective) to effect the
registration of shares of Company Common Stock for resale by securityholders,
the Company shall file a "shelf" registration statement pursuant to Rule 415
under the Securities Act (the "Shelf Registration") with respect to the
Registrable Securities to be issued under the Merger Agreement to Small Holders
and shares of Registrable Securities to be issued to the Plan under the Merger
Agreement. The Company shall, (A) subject to Section 2(i) hereof, use its
reasonable best efforts to have the Shelf Registration declared effective as
soon as practicable after the filing thereof, and (B) subject to Section 2(i)
hereof, use its reasonable best efforts to keep the Shelf Registration
continuously effective from the date such Shelf Registration is effective until
the date of termination of this Agreement in order to permit the prospectus
forming a part thereof to be usable by Holders during such period. Except as
set forth in Section 2(c)(iii) below, the Shelf Registration may not include
other securities of the Company which are held by Other Stockholders.
(ii) Subject to Section 2(i) hereof, the Company shall supplement
or amend the Shelf Registration, (A) as required by the registration form
utilized by the Company or by the instructions applicable to such registration
form or by the Securities Act or the rules and regulations promulgated
thereunder, (B) to include in such Shelf Registration any additional securities
that become Registrable Securities by operation of the definition thereof, (C)
from and after the later of the date on which the Initial Restricted Period
expires and the date that is 45 days after the S-3 Eligibility Date, to cover
offers and sales of all or part of the Registrable Securities then outstanding
which are held by Holders who are not Small Holders, and (D) from and after the
later of the date on which the Initial Restricted Period expires and the date
that is 45 days after the S-3 Eligibility Date, following the written request
of an Initiating Holder pursuant to Section 2(c)(iii) below, to cover offers
and sales of all or a part of the Registrable Securities by means of an
underwriting including the incorporation of any information required pursuant
to Section 2(e)(x) below. The Company shall furnish to the Holders of the
Registrable Securities to
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<PAGE> 8
which the Shelf Registration relates copies of any such supplement or amendment
sufficiently in advance (but in no event less than five business days in
advance) of its use and/or filing with the Commission to allow the Holders a
meaningful opportunity to comment thereon.
(iii) From and after the later of the date on which the Initial
Restricted Period expires and the date that is 45 days after the S-3
Eligibility Date, the Holders may, at their election and upon written notice by
an Initiating Holder to the Company, subject to the limitations set forth in
clauses (u), (v), (w), (y) and (z) of Section 2(a)(i)(B) hereof, effect offers
and sales under the Shelf Registration by means of one or more underwritten
offerings, in which case the provisions of Section 2(a)(ii) above shall apply
to any such underwritten distribution of securities under the Shelf
Registration and such underwriting shall, if sales of Registrable Securities
pursuant thereto shall have closed, be regarded as the exercise of one of the
registration rights contemplated by Section 2(a) hereof; provided, that sales
by the Plan pursuant to such underwriting shall under no circumstances be
regarded as an exercise of such rights unless the Plan shall have been the
person that made demand that such sales be effected pursuant to an
underwriting. In the event any Initiating Holder does so notify the Company
pursuant to this Section 2(c)(iii), the Company shall promptly give written
notice to all other Holders and (subject to the provisions of Section 2(a)(ii)
above) shall include in such request all or such portion of the Registrable
Securities of any Holder or Holders joining in such request as are specified in
a written request received by the Company within ten (10) business days after
the written notice from the Company is given. In the event of such an
election, and, without the consent of the Holders of a majority of the then
outstanding Registrable Securities, under no other circumstances, the Shelf
Registration may, subject to Section 2(a)(ii) above, be amended to include
other shares of Company Common Stock which are held by Other Stockholders.
(d) Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Section 2 (including all Registration Expenses incurred in connection with the
Shelf Registration and any supplements or amendments thereto, whether or not it
becomes effective, and whether all, none or some of the Registrable Securities
are sold pursuant to the Shelf Registration) shall be borne by the Company, and
all Selling Expenses shall be borne by the Holders of the securities so
registered pro rata on the basis of the number of their shares so registered;
provided, however, that if, as a result of the withdrawal of a request for
registration by any of the Holders, as applicable, the registration statement
does not become effective, the Holders and Other Stockholders requesting
registration may elect to bear the Registration Expenses (pro rata on the basis
of the number of their shares so included in the registration request, or on
such other basis as such Holders and Other Stockholders may agree), in which
case such registration shall not be counted as a registration pursuant to
Section 2(a)(i)(B)(z).
(e) Registration Procedures. In the case of each registration effected
by the Company pursuant to this Section 2, the Company will keep the Holders,
as applicable, advised in writing as to the initiation of each registration and
as to the completion thereof. At its expense, the Company will:
(i) other than the Shelf Registration, the obligations in respect of
which are set forth in Section 2(c)(i)(B) above, keep such registration
effective for a period of one
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<PAGE> 9
hundred eighty (180) days or until the Holders, as applicable, have
completed the distribution described in the registration statement relating
thereto, whichever first occurs;
(ii) furnish to each Holder, and to any underwriter before filing with
the Commission, copies of any registration statement (including all
exhibits) and any prospectus forming a part thereof and any amendments and
supplements thereto (including all documents incorporated or deemed
incorporated by reference therein prior to the effectiveness of such
registration statement and including each preliminary prospectus, any
summary prospectus or any term sheet (as such term is used in Rule 434
under the Securities Act)) and any other prospectus filed under Rule 424
under the Securities Act, which documents, other than documents
incorporated or deemed incorporated by reference, will be subject the
review of the Holders and any such underwriter for a period of at least
five business days, and the Company shall not file any such registration
statement or such prospectus or any amendment or supplement to such
registration statement or prospectus to which any Holder or any such
underwriter shall reasonably object within five business days after the
receipt thereof; a Holder or such underwriters, if any, shall be deemed to
have reasonably objected to such filing only if the registration statement,
amendment, prospectus or supplement, as applicable, as proposed to be
filed, contains a material misstatement or omission;
(iii) furnish to each Holder and to any underwriter, such number of
conformed copies of the applicable registration statement and of each
amendment and supplement thereto (in each case including all exhibits) and
such number of copies of the prospectus forming a part of such registration
statement (including each preliminary prospectus, any summary prospectus or
any term sheet (as such term is used in Rule 434 under the Securities Act))
and any other prospectus filed under Rule 424 under the Securities Act, in
conformity with the requirements of the Securities Act, and such other
documents, including without limitation documents incorporated or deemed to
be incorporated by reference prior to the effectiveness of such
registration, as each of the Holders or any such underwriter, from time to
time may reasonably request;
(iv) to the extent practicable, promptly prior to the filing of any
document that is to be incorporated by reference into any registration
statement or prospectus forming a part thereof subsequent to the
effectiveness thereof, and in any event no later than the date such
document is filed with the Commission, provide copies of such document to
the Holders, if requested, and to any underwriter, make representatives of
the Company available for discussion of such document and other customary
due diligence matters, and include such information in such document prior
to the filing thereof as any Holder or any such underwriter reasonably may
request;
(v) make available at reasonable times for inspection by the Holders,
any underwriter participating in any disposition pursuant to such
registration and any attorney or accountant retained by the Holders or any
such underwriter, all financial and other records, pertinent corporate
documents and properties of the Company and cause the officers, directors
and employees of the Company to supply all information reasonably requested
by the Holders and any such underwriters, attorneys or accountants in
connection
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<PAGE> 10
with such registration subsequent to the filing of the applicable
registration statement and prior to the effectiveness of the applicable
registration statement;
(vi) use its reasonable best efforts (x) to register or qualify all
Registrable Securities and other securities covered by such registration
under such other securities or blue sky laws of such States of the United
States of America where an exemption is not available and as the sellers of
Registrable Securities covered by such registration shall reasonably
request, (y) to keep such registration or qualification in effect for so
long as the applicable registration statement remains in effect, and (z) to
take any other action which may be reasonably necessary or advisable to
enable such sellers to consummate the disposition in such jurisdictions of
the securities to be sold by such sellers, except that the Company shall
not for any such purpose be required to qualify generally to do business as
a foreign corporation in any jurisdiction where it is not so qualified, or
to subject itself to taxation in any such jurisdiction, or to execute a
general consent to service of process in effecting such registration,
qualification or compliance, unless the Company is already subject to
service in such jurisdiction and except as may be required by the
Securities Act or applicable rules or regulations thereunder;
(vii) use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other federal or state governmental agencies or
authorities as may be necessary in the opinion of counsel to the Company
and counsel to the Holders of Registrable Securities to enable the Holders
thereof to consummate the disposition of such Registrable Securities;
(viii) subject to Section 2(i) hereof, promptly notify each Holder of
Registrable Securities covered by a registration statement (A) upon
discovery that, or upon the happening of any event as a result of which,
the prospectus forming a part of such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, (B) of the issuance by the Commission of any stop
order suspending the effectiveness of such registration statement or the
initiation of proceedings for that purpose, (C) of any request by the
Commission for (1) amendments to such registration statement or any
document incorporated or deemed to be incorporated by reference in any such
registration statement, (2) supplements to the prospectus forming a part of
such registration statement or (3) additional information, or (D) of the
receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction or the initiation of
any proceeding for such purpose, and at the request of any such Holder
promptly prepare and furnish to it a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
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<PAGE> 11
(ix) use its reasonable best efforts to obtain the withdrawal of any
order suspending the effectiveness of any such registration, or the lifting
of any suspension of the qualification (or exemption from qualification) of
any of the Registrable Securities for sale in any jurisdiction;
(x) if requested by any Initiating Holder, or any underwriter,
promptly incorporate in such registration statement or prospectus, pursuant
to a supplement or post effective amendment if necessary, such information
as the Initiating Holder and any underwriter may reasonably request to have
included therein, including, without limitation, information relating to
the "plan of distribution" of the Registrable Securities, information with
respect to the principal amount or number of shares of Registrable
Securities being sold to such underwriter, the purchase price being paid
therefor and any other terms of the offering of the Registrable Securities
to be sold in such offering and make all required filings of any such
prospectus supplement or post-effective amendment as soon as practicable
after the Company is notified of the matters to be incorporated in such
prospectus supplement or post effective amendment;
(xi) furnish to the Holders, addressed to them, an opinion of counsel
for the Company, dated the date of the closing under the underwriting
agreement, if any, or the date of effectiveness of the registration
statement if such registration is not an underwritten offering, and use its
reasonable best efforts to furnish to the Holders, addressed to them, a
"cold comfort" letter signed by the independent certified public
accountants who have certified the Company's financial statements included
in such registration, covering substantially the same matters with respect
to such registration (and the prospectus included therein) and, in the case
of such accountants' letter, with respect to events subsequent to the date
of such financial statements, as are customarily covered in opinions of
issuer's counsel and in accountants' letters delivered to underwriters in
underwritten public offerings of securities and such other matters as the
Holders may reasonably request;
(xii) provide promptly to the Holders upon request any document filed
by the Company with the Commission pursuant to the requirements of Section
13 and Section 15 of the Exchange Act; and
(xiii) use its reasonable best efforts to cause all Registrable
Securities included in any registration pursuant hereto to be listed on
each securities exchange on which securities of the same class are then
listed, or, if not then listed on any securities exchange, to be eligible
for trading in any over-the-counter market or trading system in which
securities of the same class are then traded.
(f) Indemnification.
(i) The Company will indemnify each of the Holders, as applicable,
each of its officers, directors, members and partners, and each person
controlling each of the Holders, with respect to each registration which has
been effected pursuant to this Section 2, and each underwriter, if any, and
each person who controls any underwriter, against all claims, losses, damages
and liabilities (or actions in respect thereof) arising out of or based on any
untrue
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<PAGE> 12
statement (or alleged untrue statement) of a material fact contained in any
prospectus, offering circular or other document (including any related
registration statement, notification or the like) incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by
the Company of the Securities Act or the Exchange Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction
required of the Company in connection with any such registration, qualification
or compliance, and will reimburse each of the Holders, each of its officers,
directors, members and partners, and each person controlling each of the
Holders, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating and defending any such claim, loss, damage,
liability or action, provided that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission based upon
written information furnished to the Company by the Holders or underwriter and
stated to be specifically for use therein.
(ii) Each of the Holders will, if Registrable Securities held by it
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers and each underwriter, if any, of the Company's securities covered by
such a registration statement, each person who controls the Company or such
underwriter, each Other Stockholder and each of their officers, directors,
members and partners, and each person controlling such Other Stockholder
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement,
prospectus, offering circular or other document made by such Holder, or any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements by such Holder therein not
misleading, and will reimburse the Company and such Other Stockholders,
directors, officers, partners, members, persons, underwriters or control
persons for any legal or any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information furnished
to the Company by such Holder and stated to be specifically for use therein;
provided, however, that the obligations of each of the Holders hereunder and
under clause (vi) below shall be limited to an amount equal to the net proceeds
to such Holder of securities sold as contemplated herein.
(iii) Each party entitled to indemnification under this Section
2(f) (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may
be sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom; provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not unreasonably be withheld) and the Indemnified Party
may participate in such defense at such party's expense (unless the Indemnified
Party shall have reasonably concluded that there may be a conflict of
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<PAGE> 13
interest between the Indemnifying Party and the Indemnified Party in such
action, in which case the fees and expenses of one such counsel for all
Indemnified Parties shall be at the expense of the Indemnifying Party), and
provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 2 unless the Indemnifying Party is materially prejudiced
thereby. No Indemnifying Party, in the defense of any such claim or litigation
shall, except with the consent of each Indemnified Party (which consent shall
not be unreasonably withheld or delayed), consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself or the claim
in question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with the defense of such claim and
litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 2(f) is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue (or alleged untrue) statement of a material fact or the
omission (or alleged omission) to state a material fact relates to information
supplied by the Indemnifying Party or by the Indemnified Party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(v) Notwithstanding the foregoing, to the extent that the
provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with any underwritten public offering
contemplated by this Agreement are in conflict with the foregoing provisions,
the provisions in such underwriting agreement shall be controlling.
(vi) The foregoing indemnity agreement of the Company and Holders is
subject to the condition that, insofar as they relate to any loss, claim,
liability or damage made in a preliminary prospectus but eliminated or remedied
in the amended prospectus on file with the Commission at the time the
registration statement in question becomes effective or the amended prospectus
filed with the Commission pursuant to Commission Rule 424(b) (the "Final
Prospectus"), such indemnity or contribution agreement shall not inure to the
benefit of any underwriter or Holder (but only if such Holder was required to
deliver such Final Prospectus) if a copy of the Final Prospectus was furnished
to the underwriter and was not furnished to the person asserting the loss,
liability, claim or damage at or prior to the time such action is required by
the Securities Act.
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<PAGE> 14
(g) Information by the Holders. Each of the Holders holding securities
included in any registration shall furnish to the Company such information
regarding such Holder and the distribution proposed by such Holder as the
Company may reasonably request in writing and as shall be reasonably required
in connection with any registration, qualification or compliance referred to in
this Section 2.
(h) Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may permit the sale of
restricted securities to the public without registration, the Company agrees
to:
(i) make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act ("Rule 144"),
at all times;
(ii) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and
(iii) so long as the Holder owns any Registrable Securities, furnish
to the Holder upon request, a written statement by the Company as to its
compliance with the reporting requirements of Rule 144, and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so
filed as the Holder may reasonably request in availing itself of any rule
or regulation of the Commission allowing the Holder to sell any such
securities without registration.
(i) Holdback Agreement; Postponement. Notwithstanding the provisions of
Sections 2(a), (b) and (c), if the Board of Directors of the Company determines
in good faith that it is in the best interests of the Company (A) not to
disclose the existence of facts surrounding any proposed or pending
acquisition, disposition, strategic alliance or financing transaction involving
the Company or (B) for any purpose, to suspend the registration rights set
forth herein, the Company may, by notice to the Holders in accordance with
Section 5(a), (1) suspend the rights of the Holders to make sales pursuant to
the Shelf Registration and (2) postpone any registration which is requested
pursuant to Section 2(a), in each case for such a period of time as the Board
of Directors may determine; provided that (x) such periods of suspension
together with any periods of suspension effected pursuant to Section
2(a)(i)(B)(v) hereof may not exceed 90 days in the aggregate during any period
of 12 consecutive months and (y) the Company may not impose such a suspension
or a postponement pursuant to Section 2(a)(i)(B)(v) following the printing and
distribution of a preliminary prospectus in any underwritten public offering of
Registrable Securities pursuant to Section 2(a)(i) or 2(c)(iii) (except such
suspension, not to exceed ten days, which results from an event that is not
within the reasonable control of the Company).
(j) Assignment. The registration rights set forth in Section 2 hereof
may be assigned, in whole or in part, to any transferee of Registrable
Securities (who shall be considered thereafter to be a Holder (provided that
any transferee who is not an affiliate of Investor shall be a Holder only with
respect to such Registrable Securities so acquired and any stock of the
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<PAGE> 15
Company issued as a dividend or other distribution with respect to, or in
exchange for or in replacement of, such Registrable Securities) and shall be
bound by all obligations and limitations of this Agreement).
(k) Registration Rights. The Company will not grant any right of
registration under the Securities Act relating to any of its equity securities
to any person or entity other than pursuant to this Agreement unless the
Holders shall be entitled to have included in any registration effected
pursuant to Section 2(b)(ii) all Registrable Securities requested by them to be
so included prior to the inclusion of any securities requested to be registered
by the persons or entities entitled to any such other registration rights,
other than securities of Other Demanding Holders with respect to such
registration, which shall rank on a parity with shares held by Holders in
respect of such Section 2(b)(ii) registration.
3. RESALE RESTRICTIONS. Each Investor agrees and covenants to the Company
as follows:
(a) For a period of 180 days following the Effective Time, the Investor
will not, directly or indirectly, sell, offer to sell or otherwise
dispose of any Company Common Stock; and
(b) For a period of 90 days (or such longer period not to exceed 180 days,
as may be agreed upon by the Company and the underwriters) after the
effective date of any distribution of securities in an underwritten public
offering (a "Public Offering") to the general public pursuant to a
registration statement filed with and declared effective with the
Commission pursuant to the 1933 Act, the Investor will not, directly or
indirectly, sell, offer to sell or otherwise dispose of any Company Common
Stock (other than any of such Shareholder's Company Common Stock included
in such Public Offering) unless otherwise consented to by the
representatives of the underwriters in such Public Offering.
(c) Notwithstanding the provisions of paragraphs (a) and (b) above,
the Plan shall not be prohibited from making distributions of Company
Common Stock to participants in the Plan in accordance with the terms of
the Plan and applicable law, whether such distribution is effected pursuant
to the Shelf Registration, another registration statement or an applicable
exemption from the registration requirements of the Securities Act and
applicable state securities laws.
4. INTERPRETATION OF THIS AGREEMENT
(a) Directly or Indirectly. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person.
(b) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia.
(c) Section Headings. The headings of the sections and subsections of
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
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<PAGE> 16
5. MISCELLANEOUS
(a) Notices.
(i) All communications under this Agreement shall be in writing and
shall be delivered by facsimile or by hand or mailed by overnight courier or by
registered or certified mail, postage prepaid:
(A) if to the Company, to InfoMed Holdings, Inc., 6600 Powers
Ferry Road, Atlanta, Georgia 30339, (770) 644-6532, Attention: General Counsel
and Secretary, or at such other address as it may have furnished in writing to
the Investors;
(B) if to the Investors, at the addresses listed on Schedule I
hereto, or at such other addresses as may have been furnished the Company in
writing.
(ii) Any notice so addressed shall be deemed to be given: if
delivered by hand, on the date of such delivery; if mailed by courier, on the
first business day following the date of such mailing; and if mailed by
registered or certified mail, on the third business day after the date of such
mailing.
(b) Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, any consents, waivers and
modifications which may hereafter be executed may be reproduced by the Investor
by any photographic, photostatic, microfilm, microcard, miniature photographic
or other similar process and the Investors may destroy any original document so
reproduced. The parties hereto agree and stipulate that any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by the Investors in the regular
course of business) and that any enlargement, facsimile or further reproduction
of such reproduction shall likewise be admissible in evidence.
(c) Third Party Beneficiaries; Successors and Assigns. Each of the
Shareholders as of the Effective Date of the Merger is an intended beneficiary
of this Agreement and shall be entitled to the benefits of this Agreement,
subject to compliance with the obligations of this Agreement as applied to
Shareholders hereunder. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties.
(d) Entire Agreement; Amendment and Waiver. This Agreement constitutes
the entire understanding of the parties hereto and supersedes all prior
understanding among such parties. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with)
the written consent of the Company and the Holders of a majority of the then
outstanding Registrable Securities.
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<PAGE> 17
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
(f) No Inconsistent Agreements. The Company will not hereafter enter
into any agreement with respect to its securities which is inconsistent with
the rights granted to the Holders of Registrable Securities in this Agreement.
(g) Remedies. Each Holder of Registrable Securities, in addition to
being entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to specific performance of its rights under this
Agreement. The Company agrees that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.
(h) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended and understood that all of the rights and privileges
of each of the Holders shall be enforceable to the fullest extent permitted by
law.
[Signatures appear on the following page.]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
INFOMED HOLDINGS, INC.
By:
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Name:
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Title:
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SCHI INVESTORS:
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COMPANY INVESTORS:
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Name:
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Name:
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Name:
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Name:
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Name:
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<PAGE> 1
EXHIBIT 10.2
AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into as of October
4, 1996, by and among InfoMed Holdings, Inc., a Delaware corporation (the
"Company"), EGL Holdings, Inc., a Georgia corporation ("EGL"), Mercury Asset
Management plc, a United Kingdom limited company ("MAM") on behalf of itself
and certain of its discretionary investor clients (the "MAM Clients"),
O'Donnell Davis, Inc., a New Jersey corporation ("ODD"), Barrett O'Donnell
("O'Donnell") and certain other holders of the Class A Convertible Preferred
Stock of the Company (the "Convertible Preferred Stock") listed on Schedule I
hereto (the "Individual Investors").
All capitalized terms not otherwise defined herein shall have the meaning
ascribed them in the Merger Agreement (as hereinafter defined).
WHEREAS, the Company, EGL, MAM, ODD and certain Individual Investors
(collectively, the "ODD Stock Purchase Parties") and Frederick Neufield
("Neufield") entered into that certain InfoMed Holdings, Inc. Stock Purchase
Agreement (the "ODD Stock Purchase Agreement"), dated as of March 31, 1994,
pursuant to the terms of which ODD purchased from the Company 65,000 shares of
Convertible Preferred Stock; and
WHEREAS, the Company, EGL, MAM, O'Donnell, ODD and certain Individual
Investors (collectively, the "EGL Stock Purchase Parties"; and together with
the ODD Stock Purchase Parties, the "Stock Purchase Parties") and Neufield
entered into that certain InfoMed Holdings, Inc. Stock Purchase Agreement (the
"EGL Stock Purchase Agreement"; and together with the ODD Stock Purchase
Agreement, the "Stock Purchase Agreements"), dated as of March 31, 1994,
pursuant to the terms of which EGL, MAM and the Individual Investors signatory
thereto purchased from the Company an aggregate of 100,000 shares of
Convertible Preferred Stock; and
WHEREAS, the Company, EGL, MAM, as representative and on behalf of the MAM
Clients, ODD and certain Individual Investors (collectively, the "MAM Stock and
Warrant Purchase Parties") entered into that certain InfoMed Holdings, Inc.
Stock and Warrant Purchase Agreement (the "MAM Stock and Warrant Purchase
Agreement"), dated as of February 24, 1995, pursuant to the terms of which MAM,
the MAM Clients and the Individual Investors signatory thereto purchased from
the Company (i) 43,500 shares of Convertible Preferred Stock, and (ii) warrants
("Share Warrants") for the right to purchase 435,000 shares of the Company's
$0.001 par value common stock (the "InfoMed Common Stock"), exercisable at
$0.50 per share; and
WHEREAS, the Company, EGL, MAM, as representative and on behalf of the MAM
Clients, and ODD (collectively, the "ODD Stock and Warrant Purchase Parties";
and together with the MAM Stock and Warrant Purchase Parties, the "Stock and
Warrant Purchase Parties") entered into that certain InfoMed Holdings, Inc.
Stock and Warrant Purchase Agreement (the "ODD Stock and Warrant Purchase
Agreement"; and together with the MAM Stock and Warrant Purchase Agreement, the
"Stock and Warrant Purchase Agreements"), dated as of February 24,
<PAGE> 2
1995, pursuant to the terms of which ODD purchased from the Company (i) 10,000
shares of Convertible Preferred Stock, and (ii) Share Warrants for the right to
purchase 100,000 shares of the InfoMed Common Stock, exercisable at $0.50 per
share; and
WHEREAS, pursuant to the terms of the Stock Purchase Agreements and the
Stock and Warrant Purchase Agreements, the Stock Purchase Parties and the Stock
and Warrant Purchase Parties have retained certain rights and obligations under
and pursuant to the Stock Purchase Agreements and the Stock and Warrant
Purchase Agreements, respectively, including, without limitation: (i) certain
obligations to vote their shares for the nominees of purchasers of Convertible
Preferred Stock and Share Warrants under the Stock Purchase Agreements and the
Stock and Warrant Purchase Agreements; (ii) certain co-sale obligations among
the parties to such agreements (excluding the Company); (iii) rights to require
the Company to comply with certain covenants contained therein; (iv) preemptive
rights to acquire additional InfoMed Common Stock; and (v) rights to require
that InfoMed undertake to register under federal and state securities laws
resales of securities by some or all of such parties; and
WHEREAS, pursuant to the terms of the Stock and Warrant Purchase
Agreements, it was agreed that the conversion price per share of InfoMed Common
Stock at which shares of Convertible Preferred Stock would be converted would
be reduced to $2.00; and
WHEREAS, pursuant to the terms of the Stock and Warrant Purchase
Agreements, there was provision made for holders of Convertible Preferred Stock
to receive additional shares of Convertible Preferred Stock in lieu of cash
dividends, however, the additional shares of Convertible Preferred Stock to
which such holders of Convertible Preferred Stock are entitled (as set forth in
Schedule II hereto) have not been issued as of the date of this Agreement (the
"Dividend Stock"); and
WHEREAS, the Company has determined that it is in the best interests of
the Company to create Infosub, Inc. ("Infosub"), as a wholly-owned subsidiary
of the Company, and to merge Infosub (the "Merger") with and into Simione
Central Holding, Inc., a Georgia corporation ("SCHI"), with SCHI as the
surviving entity of the Merger; and
WHEREAS, in consideration of the Merger each share of SCHI Common Stock
shall be converted into the right to receive 0.22021 shares of InfoMed Common
Stock, pursuant to an Agreement and Plan of Merger, dated as of September 5,
1996 (as the same may be amended, the "Merger Agreement"), by and among the
Company, SCHI and Infosub; and
WHEREAS, the Merger Agreement provides that it is a condition to the
obligations of SCHI to consummate the Merger that the parties hereto shall have
executed and delivered this Agreement and complied with the terms hereof as of
the effective time of the Merger as provided in the Merger Agreement (the
"Effective Time of the Merger");
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
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<PAGE> 3
1. Election to Convert. In accordance with Section 5 of the designations
of the Convertible Preferred Stock, each of the parties hereto that is the
owner of (or who has the right to receive) shares of Convertible Preferred
Stock and Dividend Stock (individually, a "Preferred Holder"; and collectively,
the "Preferred Holders") hereby irrevocably elects, effective as of the
Effective Time of the Merger, to exercise its right to convert all of the
shares of Convertible Preferred Stock and Dividend Stock held by such Party
into, and does hereby exchange all of such shares of Convertible Preferred
Stock and Dividend Stock for, shares of InfoMed Common Stock, on a basis of
five (5) shares of InfoMed Common Stock for each such share of Convertible
Preferred Stock and Dividend Stock so converted and exchanged, and the Company
hereby agrees, in consideration of the surrender of such Convertible Preferred
Stock and Dividend Stock and the relinquishment of the other rights of the
Preferred Holders as set forth herein, to issue to each such Preferred Holder
shares of InfoMed Common Stock on a basis of five (5) shares of InfoMed Common
Stock for each share of Convertible Preferred Stock and Dividend Stock so
converted and exchanged.
2. Termination of Stock Purchase Agreements and Stock and Warrant Purchase
Agreements.
(a) Effective as of the Effective Time of the Merger, each of the ODD
Stock Purchase Parties hereby terminates all surviving representations,
warranties, agreements and covenants under the ODD Stock Purchase Agreement as
they relate to such ODD Stock Purchase Party; and, accordingly, all of the
surviving representations, warranties, agreements and covenants under the ODD
Stock Purchase Agreement are hereby terminated and of no further force or
effect.
(b) Effective as of the Effective Time of the Merger, each of the EGL
Stock Purchase Parties hereby terminates all surviving representations,
warranties, agreements and covenants under the EGL Stock Purchase Agreement as
they relate to such EGL Stock Purchase Party; and, accordingly, each of the
surviving representations, warranties, agreements and covenants under the EGL
Stock Purchase Agreement are hereby terminated and of no further force or
effect.
(c) Effective as of the Effective Time of the Merger, each of the MAM
Stock and Warrant Purchase Parties hereby terminates all surviving
representations, warranties, agreements and covenants under the MAM Stock and
Warrant Purchase Agreement as they relate to such MAM Stock and Warrant
Purchase Party; and, accordingly, all of the surviving representations,
warranties, agreements and covenants under the MAM Stock and Warrant Purchase
Agreement are hereby terminated and of no further force or effect.
(d) Effective as of the Effective Time of the Merger, each of the ODD
Stock and Warrant Purchase Parties hereby terminates all surviving
representations, warranties, agreements and covenants under the ODD Stock and
Warrant Purchase Agreement as they relate to such ODD Stock and Warrant
Purchase Party; and, accordingly, all of the surviving representations,
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<PAGE> 4
warranties, agreements and covenants under the ODD Stock and Warrant Purchase
Agreement are hereby terminated and of no further force or effect.
3. Restatement of Share Warrants. The Company and each of the parties
hereto who are holders of Share Warrants hereby agree to execute and deliver,
prior to the Effective Time, an Amended and Restated Share Warrant
substantially in the form of Exhibit A hereto.
4. Waiver of Claims. Each of the parties hereto unconditionally releases
the Company, its subsidiaries and all of its Affiliates (including all of the
Company's officers, directors, stockholders, employees, agents, attorneys and
representatives) from and against any and all claims, actions or other rights
it may have against the Company for acts or omissions of the Company, occurring
at any time, arising out of the Stock Purchase Agreements or the Stock and
Warrant Purchase Agreements to which such party was a party.
5. Waiver of Rights. Each of the parties hereby waives any rights it may
have with respect to the execution and delivery by the Company of the Merger
Agreement and the consummation of the transactions contemplated therein,
including, without limitation: (a) any rights relating to preemption under
Section 10.2 of each of the Stock Purchase Agreements, and under each of the
Stock and Warrant Purchase Agreements, as such are incorporated by reference in
Section 9(a) thereof; and (b) any rights of approval for the sale of stock or a
merger or consolidation under Sections 9.13(a) and (d) of each of the Stock
Purchase Agreements, and under each of the Stock and Warrant Purchase
Agreements, as such are incorporated by reference in Section 9(a) thereof.
6. Directors.
(a) So long as EGL and its Affiliates are the beneficial owners of
Company Voting Securities (as defined below) representing 5% or more of the
Outstanding Voting Power (as defined below), EGL shall be entitled to designate
one person (who shall be reasonably acceptable to the Board of Directors of the
Company, it being agreed that Murali Anantharaman is acceptable) to serve as a
director of the Company. So long as ODD and its Affiliates are the beneficial
owners of Company Voting Securities representing 5% or more of the Outstanding
Voting Power, ODD shall be entitled to designate one person (who shall be
reasonably acceptable to the Board of Directors of the Company, it being agreed
that Barrett C. O'Donnell is acceptable) to serve as a director of the Company.
Each of the persons designated by EGL or ODD (each an "Investor"; and
collectively the "Investors") pursuant to this Section 6(a) is referred to
herein as an "Investor Designee."
(b) The Company shall use all reasonable efforts to cause the election
of the Investor Designees to the Board of Directors of the Company, including
taking the following actions: (i) at each annual meeting of Company
stockholders during the term of this Agreement at which an Investor Designee's
term as a director expires, if the Investor that has designated such Investor
Designee is still entitled to designate a person to serve as a director of the
Company in accordance with this Agreement, such Investor Designee shall be
included in the
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<PAGE> 5
slate of nominees recommended by the Company's Board of Directors to the
stockholders for election as directors, unless either (i) an Investor Designee
requests not to be so included in the slate of nominees, in which case such
Investor Designee shall not be so included, or (ii) service by an Investor
Designee as a director or his nomination for election as a director is
violative of applicable law or regulation (and in each such case arising under
either clause (i) or (ii), the Investor designating such Investor Designee
being provided a reasonable opportunity to designate an alternative person to
serve as a director), and (ii) in the event that an Investor Designee is unable
to serve, or once having commenced to serve, is removed or withdraws from the
Board of Directors of the Company, the Investor that designated such Investor
Designee will have the right to designate such person's replacement and the
Company agrees to take all reasonable action within its power to cause the
election of the substitute Investor Designee to the Board of Directors as soon
as practicable following such person's designation. Notwithstanding the
provisions of this Section 6, the Company shall not be required to include any
Investor Designee in the slate of nominees for a term of office that would
extend beyond the term of this Agreement.
(c) In the event that, any time after an annual meeting of Company
stockholders in connection with which an Investor was entitled to designate an
Investor Designee, such Investor Designee was elected as directors and such
Investor Designee is still serving as a director at such time prior to the next
annual meeting of Company stockholders when such Investor shall beneficially
own Company Voting Securities representing less than 5% of the Outstanding
Voting Power, then, at the request of the Company (provided such Investor at
the time of such request still beneficially owns Company Voting Securities
representing less than 5% of the Outstanding Voting Power), such Investor shall
use all reasonable efforts to cause such Investor Designee to resign as a
director.
(d) So long as an Investor beneficially owns Company Voting Securities
representing 5% or more of the Outstanding Voting Power, the Company shall
effect all corporate action necessary to appoint such Investor's Investor
Designee to the Executive Committee of the Board of Directors (or other
committee or group performing similar functions) of the Company.
(e) As used herein, the following terms shall have the following
meanings:
"Beneficial owner" (and various derivations of such term such as
"beneficially owned") shall have the meaning set forth in the regulations
of the SEC included in 17 C.F.R. Section 240.13d-3; provided that for
purposes of this Agreement, (i) MAM and its Affiliates shall not be deemed
to beneficially own Company Voting Securities with respect to which all
investment decisions with respect to such Company Voting Securities are
made by an independent investment manager or investment advisor (provided,
that if MAM or such Affiliate exercises voting power in respect of such
Company Voting Securities, MAM or such Affiliate shall be deemed to
beneficially own such Company Voting Securities for purposes of Section 7
of this Agreement), and (ii) any option, warrant, right, conversion
privilege or arrangement to purchase, acquire or vote Company Voting
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<PAGE> 6
Securities regardless of the time period during or at which it may be
exercised and regardless of the consideration paid shall be deemed to give
the holder thereof beneficial ownership of the Company Voting Securities to
which it relates. Any Company Voting Securities which are subject to such
options, warrants, rights, conversion privileges or other arrangements
shall be deemed to be outstanding for purposes of computing the percentage
of outstanding securities owned by such Person but shall not be deemed to
be outstanding for the purpose of computing the percentage of outstanding
securities owned by any other Person.
"Company Voting Securities" shall mean all classes of capital stock of
the Company which are then entitled to vote generally in the election of
directors and any securities exchanged or substituted for such classes of
capital stock and any securities convertible into or exchangeable or
exercisable for (whether or not presently convertible, exchangeable or
exercisable) such classes of capital stock. For purposes of determining
the amount or percentage of outstanding Company Voting Securities
beneficially owned by a Person, and for purposes of calculating the
aggregate voting power relating to such Company Voting Securities,
securities that are deemed to be outstanding shall be included to the
extent provided in the definition of "beneficial owner."
"Outstanding Voting Power" shall mean total number of votes which may
be cast in the election of directors of the Company at any meeting of
shareholders of the Company if all Company Voting Securities then
outstanding were present and voted at such meeting, other than votes that
may be cast only by one class or series of stock (other than Company Common
Stock) or upon the happening of a contingency.
7. Voting of Company Voting Securities. Notwithstanding any other
provision of this Agreement, each Investor shall effect such action as may be
necessary to ensure that:
(a) subject to the receipt of proper notice and the absence of a
preliminary or permanent injunction or other final order of any United
Stated Federal or state court barring such action, the Investor and its
Affiliates are, as shareholders, present in person or represented by proxy
at all shareholder meetings of the Company so that all shares of Company
Voting Securities of which Investor or any of its Affiliates beneficially
own are voted and deemed to be present, in person or by proxy, at all
meetings of the shareholders of the Company so that all Company Voting
Securities so beneficially owned may be counted for the purpose of
determining the presence of a quorum at such meetings; and
(b) all Company Voting Securities that are beneficially owned by the
Investor or any of its Affiliates as of the appropriate record date are
voted: (x) in favor of all of the nominees to the Board of Directors of the
Company as approved by the Board of Directors (and shall not exercise any
available cumulative voting rights), provided the Company has included
among such nominees any Investor Designee that the Investor is entitled to
designate pursuant to Section 6; and (y) on all other matters to be voted
upon by the holders of Company Voting Securities or any class or series
thereof in the same proportion as the
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<PAGE> 7
votes cast by the other holders of Company Voting Securities with respect
to such matter (it being agreed that it shall be sufficient for the
Investor and its Affiliates to file with the Inspectors of Election for
such meeting of shareholders, prior to the closing of the polls, a ballot
stating that such Company Voting Securities are intended to be voted in the
same proportion as the votes cast by the other holders of Company Voting
Securities with respect to such matter), except that (i) the Investor and
such Affiliates may, in their sole discretion, vote or cause to be voted
all or a greater proportion of such Company Voting Securities in favor of
any matter contemplated by this clause (y) that is recommended favorably by
the Board of Directors of the Company and (ii) the Investor and its
Affiliates may, in their sole discretion, vote any or all of their Company
Voting Securities in their sole discretion on any amendment to the
Certificate of Incorporation or Bylaws (other than a proposal only to
increase the number of authorized shares of Company Common Stock),
disposition of the Company (by way of merger, disposition of assets or
otherwise), liquidation, dissolution or any other action contemplated by
this clause (y) that is materially adverse to the Investor or such
Affiliates.
8. General Restrictions. Neither any Investor nor any of its Affiliates
shall, directly or indirectly: (i) make or participate in the making of any
public announcement with respect to, or submit or participate in the submission
of a proposal for, or offer of, any proposal relating to (a) the entry by the
Company into any agreement relating to (x) any consolidation or merger of the
Company in which the Company is not the continuing or surviving corporation or
pursuant to which shares of the Company's Common Stock would be converted into
cash, securities or other property, other than a merger of the Company in which
the holders of the Company's Common Stock immediately prior to the merger have
the same proportionate ownership of common stock of the surviving corporation
immediately after the merger or (y) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company, (b) the acquisition by any
Person of Company Voting Securities representing 50% or more of the Outstanding
Voting Power, or (c) at any time during a period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Company shall cease for any reason to constitute at least a
majority thereof, excluding directors whose election or nomination for election
by the shareholders of the Company during such two-year period was approved by
a vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period (collectively, each event in clauses
(a), (b) and (c) of this clause (i) being referred to as a "Control Event");
(ii) initiate the solicitation of or solicit proxies or consents or become a
"participant" in a "solicitation" (as such terms are defined in Rule 14a-11
under the 1934 Act) with respect to any Company Voting Securities in opposition
to the recommendation of the Board of Directors of the Company with respect to
any matter; (iii) initiate or institute, or participate in the initiation or
institution of, any shareholder vote (whether pursuant to Rule 14a-8 of the
1934 Act or otherwise) with respect to any matter which is not required by the
Company's Certificate of Incorporation or Bylaws, the rules of any national
securities exchange or automated quotations system on which Company Voting
Securities are then traded, or by any similar laws or rules to be submitted to
the Company's shareholders; (iv) initiate or institute, or participate in the
initiation or institution of any legal, regulatory or administrative action or
proceeding in any
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<PAGE> 8
court of competent jurisdiction or appropriate regulatory or administrative
body or agency with respect to the Company or any of its directors, officers,
employees, accountants, legal counsel or other advisors, which action or
proceeding in any way contests, or otherwise seeks to void, the validity of, or
the enforceability of any provision of this Agreement; or (v) join or become a
part of any partnership, limited partnership, syndicate or other group, or
otherwise act in concert with any other Person, for the purpose of voting
Company Voting Securities on matters set forth in clause (ii) of Section 7(b)
of this Agreement, except as a member of a group consisting solely of the
Investor and its Subsidiaries with respect to actions specifically required or
permitted by Section 7 of this Agreement or this Section 8.
9. Stock Legends. The following legend shall be placed upon all
certificates for shares of the Company Voting Securities held by each Investor,
which legend will remain thereon as long as such Company Voting Securities are
subject to the restrictions contained in Sections 6, 7 and 8 this Agreement:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
PROVISIONS OF AN AGREEMENT, DATED AS OF OCTOBER 4, 1996, AMONG
INFOMED HOLDINGS, INC. AND VARIOUS STOCKHOLDERS THEREOF. A COPY OF
SUCH AGREEMENT IS ON FILE AT THE OFFICE OF THE SECRETARY OF
INFOMED HOLDINGS, INC. INFOMED HOLDINGS, INC. WILL FURNISH TO ANY
SHAREHOLDER, UPON REQUEST AND WITHOUT CHARGE, A FULL STATEMENT OF
THE RIGHTS, TERMS AND CONDITIONS OF SUCH AGREEMENT."
Certificates representing Company Voting Securities acquired subsequent to the
date of this Agreement by an Investor shall be promptly surrendered to the
Company for placement thereon of the foregoing legend. The Company may enter a
stop transfer order with the transfer agent or agents of Company Voting
Securities against the transfer of Company Voting Securities except in
compliance with the requirements of this Agreement. The Company agrees to
remove promptly any stop transfer order with respect to, and issue promptly
unlegended certificates in substitution for, certificates for the Company
Voting Securities that are no longer subject to the restrictions contained in
this Agreement.
10. Term of Agreement. Except as otherwise expressly provided in this
Agreement, the respective rights and obligations of the parties under Sections
6, 7 and 8 of this Agreement shall arise from and after the Effective Time of
the Merger and continue in full force and effect through the second anniversary
of the Effective Time of the Merger.
11. Remedies. The parties recognize and hereby acknowledge that it may be
difficult to accurately measure the amount of damages that would result to a
party by reason of a failure of the other Party to perform any of the
obligations imposed on it by this Agreement. The parties accordingly agree
that each such Party shall be entitled to an injunction to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the
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United States or any state having jurisdiction, in addition to any other
remedies to which such party may be entitled at law or in equity in accordance
with this Agreement.
12. Amendments. This Agreement may be amended by a subsequent writing
signed by all Parties materially affected thereby upon the approval of each of
such parties.
13. Counterparts. This Agreement may be executed in two or more
counterparts all of which shall be one and the same Agreement and shall become
effective when one or more counterparts have been signed by each party and
delivered to each other party.
14. Successors and Assigns. All terms and conditions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by any
successor to an Investor and any successor to the Company.
15. Severability. If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any
manner affect or render illegal, invalid or unenforceable any other provision
of this Agreement, and this Agreement shall be carried out as if any such
illegal, invalid or unenforceable provision were not contained herein.
16. Entire Agreement. This Agreement constitutes the entire understanding
between and among the parties with respect to the subject matter hereof and
shall supersede any prior agreements and understandings among the parties with
respect to such subject matter.
17. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware (or the jurisdiction of
incorporation of any successor to the Company), without regard for any
principles of conflicts of laws thereof.
[Signatures on Next Page]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
INFOMED HOLDINGS, INC.
By:
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Title:
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BARRETT O'DONNELL
O'DONNELL DAVIS, INC.
By:
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Title:
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EGL HOLDINGS, INC.
By:
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Title:
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MERCURY ASSET MANAGEMENT PLC
By:
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Title:
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INDIVIDUAL INVESTORS
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David O. Ellis, as attorney-in-fact
for the Individual Investors
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SCHEDULE I
List of Individual Investors
<PAGE> 12
EXHIBIT A
AMENDED AND RESTATED SHARE WARRANT
