EXHIBIT 10.44
PURCHASE AGREEMENT
BY AND BETWEEN
SURESCRIPTS, LLC
AND
PROXYMED, INC.
April 30, 2007
| PURCHASE AGREEMENT |
| BY AND BETWEEN |
| SURESCRIPTS, LLC, |
| AND |
| PROXYMED, INC. |
| |
| |
| List of Exhibits |
| Exhibit A | | List of all pharmacies connected to the Pharmacy Health Information Exchange |
| Exhibit B | | Seller Pharmacy Contracts |
| Exhibit C | | Seller Prescriber Contracts |
| Exhibit D | | Form of Escrow Agreement |
| Exhibit E | | Form of Non-Competition Agreement |
| Exhibit F | | Buyer Disclosure Schedule |
| Exhibit G | | Seller Disclosure Schedule |
| Exhibit H | | Seller Talking Points |
Execution Version
PURCHASE AGREEMENT
BY AND BETWEEN
SURESCRIPTS, LLC
AND
PROXYMED, INC.
THIS PURCHASE AGREEMENT (the“Agreement”), dated as of this 30th day ofApril, 2007 (the“Effective Date”), is made by and between ProxyMed, Inc. d/b/a MedAvantHealthcare Solutions, a corporation duly organized and validly existing under the laws of theState of Florida (“Seller”), and SureScripts, LLC, a limited liability company duly organized andvalidly existing under the laws of the State of Virginia (“Buyer”).
WHEREAS,Seller is a party to the Seller Contracts (defined below) pursuant to whichSeller provides various back-end services to pharmacies and providers through its proprietarynational healthcare information network, including enabling pharmacies and providers toexchange prescription information electronically through a system referred to, from time to time,as one or more of the following names: Phoenix, ProxyMed Network, ProxyNet Network,PreScribe.net, and/or ProxyNet Interface (collectively, the“ProxyMed Network” and, togetherwith the Seller Contracts, the“Pharmacy Processing Business”; provided, however, it is agreedthat for purposes of this Agreement, the terms ProxyMed Network and Pharmacy ProcessingBusiness shall apply only to that aspect of Seller’s proprietary national healthcare informationnetwork applicable to Electronic Prescribing Transactions, as defined below);
WHEREAS; Seller licenses third party software applications to physicians so that theymay connect to the ProxyMed Network and send and receive electronic prescription informationvia the ProxyMed Network, and such software applications are referred to, from time to time, byone or more of the following names: PreScribe, ProxyMed.com, MedAvantHealth.com(collectively, the“MedAvant Prescribing Applications”);
WHEREAS,Buyer operates a network that facilitates the electronic exchange ofprescription information between pharmacies and providers (the“Pharmacy HealthInformation Exchange”);
WHEREAS, Buyer and Seller (d/b/a ProxyMed Transaction Services, Inc.) are parties tothat certain Prescriber Network Aggregator Agreement, dated as of May 2, 2005 (the“ProxyMed SureScripts Agreement”);
WHEREAS,Seller is a party to that certain Walgreens Purchase Agreement, dated June27, 1997, as amended (“Walgreens Agreement”), with Walgreen Co., pursuant to whichSeller’s sale of the Pharmacy Processing Business triggers the obligation of Seller to payWalgreens a penalty in the amount of ten million dollars ($10,000,000); and
WHEREAS, Seller desires to sell the Pharmacy Processing Business to Buyer, andBuyer desires to purchase the Pharmacy Processing Business from Seller, upon the terms andconditions set forth herein;
NOW THEREFORE,for good and valuable consideration, the receipt and sufficiencyof which is hereby acknowledged, the parties agree as follows:
ARTICLE 1.
PURCHASE OF PHARMACY PROCESSING BUSINESS
SECTION 1.1.Incorporation of Recitals.The recitals set forth above areincorporated herein by reference.
SECTION 1.2.Terms of Purchase and Sale.
a. As of the Effective Date, Seller will sell, and Buyer shall purchase, allcurrent and future Electronic Prescribing Transactions (as defined below) processed by theProxyMed Network (the“Pharmacy Processing Business”).“Electronic PrescribingTransactions” is defined as all electronic prescribing messages (including, but not limited to,new prescriptions, refill requests, refill responses, stop orders), formulary and/or eligibilitymessages related to prescription claims, and patient identifiable medication history messages asderived from electronic prescribing messages, formulary and/or eli gibility messages, and/or thedispensed history data bases of pharmacies that are processed by and through the ProxyMedNetwork, whether through true electronic data interchange or facsimile. Seller shall continue toprocess Electronic Prescribing Transactions through the ProxyMed Network in the normalcourse of its business, consistent with past practices and course of conduct, until the TerminationDate (as defined below), and Seller shall retain all personnel necessary and devote internal andexternal resources, all at its own cost and expense, necessary to operate the ProxyMed Network,consistent with past practices and course of conduct, during the transition period contemplatedby Sections 1.2. f and/or 1.2. g herein.
b. As of the Effective Date, the ProxyMed SureScripts Agreement is deemedamended, without any further action of the parties required, to amend Exhibit Five thereof to bein the form and substance ofExhibit Ahereto, thereby adding to such exhibit all pharmaciesconnected to the Pharmacy Health Information Exchange, whether directly or indirectly.
c. Seller represents and warrants to Buyer thatExhibit Bhereto sets forth alist of (i) all customers with contracts pursuant to which Electronic Prescribing Transactions areprocessed, as of the Effective Date, to which Seller is a party to with respect to connectivity ofany pharmacy with the ProxyMed Network and (ii) to its knowledge, all contracts pursuant towhich Electronic Prescribing Transactions are processed to which Seller is a party to with respectto connectivity of any pharmacy with the ProxyMed Network (the“Pharmacy Contracts”).Seller shall terminate or cause to be terminated each Pharmacy Contract in conjunction andsimultaneously with the termination of the technical connection (electronic or fax connection)between such contracted pharmacy and the ProxyMed Network. For the periods from theEffective Date until the termination of each such Pharmacy Contract, Seller shall bill each suchpharmacy for all Electronic Prescribing Messages pursuant to its customary practice and historicrates, without any deduction, discount, or offset not in the historic ordinary course of business,and each such bill or invoice shall direct the applicable pharmacy to pay such amounts directly toSureScripts in satisfaction of the invoice. In the event that any such pharmacy sends payment for
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any such invoice to Seller, Seller shall immediately pay such amounts over to Buyer. For theperiods from and after the termination of any such Pharmacy Contract, Buyer and/or its valueadded reseller, as the case may be, shall have the right to bill, and collect from, such pharmaciesall on the terms and conditions of the agreements between SureScripts or its value added reseller,on the one hand, and such pharmacy, on the other hand.
d. Seller represents and warrants to Buyer thatExhibit Chereto sets forth alist of (i) all customers with contracts pursuant to which Electronic Prescribing Transactions areprocessed, as of the Effective Date, pursuant to which Seller provides any third party prescriberapplication with connectivity to the ProxyMed Network and (ii) to its knowledge, all contractspursuant to which Electronic Prescribing Transactions are processed pursuant to which Sellerprovides any third party prescriber application with connectivity to the ProxyMed Network (the“Prescriber Contracts” and, together with the Pharmacy Contracts, the“Seller Contracts”).As soon as reasonably possible after the Effective Date, Seller shall terminate or cause to beterminated all Prescriber Contracts in conjunction and simultaneously with the termination of thetechnical connection (electronic or fax connection) between such contracted third partyprescriber application and the ProxyMed Network. Until termination of such PrescriberContracts, Seller shall be entitled to bill and invoice such third party prescriber applications inthe normal course of business, and SureScripts shall have no right to such billed amounts.
e. Buyer agrees that, from and after the Effective Date, Buyer shall continueto pay Seller the Adoption Incentive Fee as contemplated by Exhibit One of the ProxyMedSureScripts Agreement for any Eligible Transaction, as defined in such Exhibit One, processedby the ProxyMed Network, pursuant to the ProxyMed SureScripts Agreement until suchagreement is terminated pursuant to Section 1.2h below.
f. The parties acknowledge that as soon as reasonably possible after theEffective Date, Seller shall take steps to divest itself of the MedAvant Prescribing Applications.Seller shall sell the MedAvant Prescribing Applications only to an entity that has a contract withBuyer or Buyer’s value added reseller for connectivity to the Pharmacy Health InformationExchange. In the event, after a period of six (6) months from the Effective Date, Seller has notsold the MedAvant Prescribing Applications to an entity that has a contract with Buyer orBuyer’s value added reseller for connectivity to the Pharmacy Health Information Exchange,then Seller shall, during the subsequent six (6) month period, cooperate with Buyer and take allsteps reasonably necessary as requested by Buyer to transfer either the MedAvant PrescribingApplications or the users of such MedAvant Prescribing Applications to an entity(ies) of Buyer’sselection, all for no charge or consideration. Seller shall retain all personnel necessary anddevote internal and external resources, all at its own cost and expense, necessary to operate theMedAvant Prescribing Applications consistent with past practices until the MedAvantPrescribing Applications or the users thereof have been sold or transferred pursuant to the termshereof.
g. Seller shall take all steps reasonably necessary to terminate (i) allconnectivity of any third party with the ProxyMed Network, (ii) unless previously sold andtransferred to a third party, all connectivity of the MedAvant Prescribing Applications with theProxyMed Network, and (ii) all operations of Pharmacy Processing Business, all to occur assoon as reasonably possible after the Effective Date, but no later than July 31, 2007 (the
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“Termination Date”); provided, however, that either Buyer or Seller may extend theTermination Date with respect to the connectivity of any third party (i.e., not the MedAvantPrescribing Applications) to the ProxyMed Network for no more than three (3) periods of thirty(30) days each. Notwithstanding anything herein to the contrary, all connectivity of theMedAvant Prescribing Applications shall be transferred to the Pharmacy Health InformationExchange no later than July 31, 2007. Unless mutually extended in writing by both parties, afterthe Termination Date, Seller shall not operate the Pharmacy Processing Business or theProxyMed Network for any purpose whatsoever. Immediately after all connectivity of any thirdparty vendor applications and th e MedAvant Prescribing Applications with the ProxyMedNetwork are terminated, all Seller Contracts are terminated, and all operations of the PharmacyProcessing Business are terminated, Seller shall provide written notice to Buyer, in form andsubstance acceptable to Buyer, representing and warranting that such has occurred (the“Termination Affidavit”).
h. The ProxyMed SureScripts Agreement shall be deemed terminated, and ofno further force and effect (other than those terms that are intended to survive termination) on thelater to occur of (i) the Termination Date or (ii) when the MedAvant Prescriber Applications ortheir users have been transferred pursuant to Section 1.2. f.
SECTION 1.3.Walgreen.As a condition of the transaction detailed herein, Sellermust obtain from Walgreen Co. a written termination of Seller’s obligations in the Walgreens-ProxyMed PreScribe Purchase Agreement.
SECTION 1.4.No Assumption of Liabilities.Seller specifically agrees that Buyer isnot assuming any liabilities, contracts, employees, or obligations, known or unknown, contingentor otherwise, of Seller pursuant to this Agreement or the transactions contemplated hereby.
SECTION 1.5.Purchase Price.Subject to the terms and conditions of thisAgreement, and in reliance on the representations, warranties, and covenants contained herein, onthe Effective Date, Seller shall sell to Buyer and Buyer shall purchase from Seller the PharmacyProcessing Business for the total amount of five hundred thousand dollars ($500,000) (the“Purchase Price”). The Purchase Price shall be paid as follows:
a. Four hundred thousand dollars ($400,000) shall be paid to Seller on theEffective Date in the form of cash, wire transfer, or other immediately available funds; and
b. One hundred thousand dollars ($100,000) (the“Escrow Amount”) shall bedeposited into an escrow account (an“Escrow Account”) on the Effective Date pursuant to theescrow agreement attached hereto asExhibit D (the “Escrow Agreement”). The EscrowAmount shall be paid to Seller on, or immediately after, the Termination Date (as extendedpursuant to Section 1.2. g) so long as (i) Buyer shall have received an acceptable TerminationAffidavit, and (ii) there shall have been no breach of any of the representations and warranties ofSeller as set forth in Article 3.
ARTICLE 2.
OTHER AGREEMENTS
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SECTION 2.1.Noncompetition Agreement.On the Effective Date, Seller shall enterinto a Noncompetition Agreement with Buyer, substantially in form and substance as set forth inExhibit E, attached hereto and incorporated by reference (“Noncompetition Agreement”).
SECTION 2.2.Cooperation and Further Assurances.From and after the EffectiveDate, Seller shall fully cooperate with, and shall cause all of its employees and agents to fullycooperate with, Buyer to transition on or before the Termination Date all Electronic PrescribingTransactions from the ProxyMed Network to the Pharmacy Health Information Exchange in amanner than minimizes to the greatest extent possible any disruption or interference of service tothe customers of either Buyer or Seller. Such cooperation shall include, but not be limited to,facilitating contacts between Buyer and any entities contracted with Seller (i.e., pharmacies orvendors of prescriber applications). Each party s hall bear its own expenses in connection withany such transition.
b. From and after the Effective Date, Seller will provide Buyer with reportsdetailing Electronic Prescribing Transactions processed and all bills and invoices sent by Sellerfrom the Effective Date until the Termination Date.
c. From time to time after the Effective Date for a period of two (2) yearsfrom the Effective Date, Seller shall give to Buyer and its representatives, auditors, and counselfull access during normal business hours to all of the properties, books, records, contracts,licenses, franchises, and all of the documents of Seller relating to the business being sold andtransferred hereunder, and shall furnish to Buyer all information with respect thereto as Buyermay from time to time reasonably request.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
OF SELLER
Seller represents and warrants to Buyer that, except as set forth on the DisclosureSchedule attached hereto asExhibit F and incorporated herein by reference (which DisclosureSchedule either(i)makes explicit reference to the particular representation or warranty as towhich exception is taken or(ii) describes the exception with sufficient specificity and in such amanner that a reasonable person could determine, without any independent investigation, fromthe terms of this Agreement and the Disclosure Schedule, the particular representation(s) orwarranty(ies) as to which exception is taken):
SECTION 3.1.Organization, Qualification, and Power of Seller.Seller(a) is a dulyorganized and validly existing corporation in good standing under the laws of the State ofFlorida;(b) has the requisite corporate power and authority to carry on its business; and(c) hasall requisite corporate power and authority and licenses, permits, franchises, certificates,authorizations, approvals, consents, and rights to own and operate the Pharmacy ProcessingBusiness.
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SECTION 3.2.Former Names.Seller either was formally known as, or is the legalowner of, or is the successor to the businesses known as, at one time or another, Phoenix,ProxyMed, Inc., ProxyMed Network, ProxyNet Network, PreScribe.net, and/or ProxyNetInterface, and that no other names are being used, or have been used, to describe Seller’shealthcare information network to permit pharmacies and providers to exchange prescriptioninformation electronically.
SECTION 3.3.Contracts.Seller represents and warrants to Buyer that Seller hasprovided to Buyer true and correct copies of the Seller Contracts as currently in force and effect.Seller represents and warrants to Buyer that no party to any such contract has provided, orthreatened to provide, a notice of breach, a notice of termination, and no such party hassubmitted any complaint to Seller regarding performance under any of the contracts. Buyerrepresents and warrants to Seller that all due diligence materials provided to Buyer in connectionwith this transaction, including but not limited to, volume reports, were when provided and are asof the Effective Date true and correct, without any material misstatement or omission therein.
SECTION 3.4.Validity.Seller has the full legal power and authority to execute,deliver, and perform this Agreement and all other agreements and documents necessary toconsummate the contemplated transactions, and all actions of Seller necessary for suchexecution, delivery, and performance have been taken. This Agreement and all agreementsrelated to this transaction requiring execution by Seller have been duly executed and delivered bySeller and constitute the legal, valid, and binding obligation of Seller, enforceable in accordancewith their respective terms (subject as to enforcement of remedies to the discretion of courts inawarding equitable relief and to applicable bankruptcy, reorg anization, insolvency, moratorium,and similar laws affecting the rights of creditors generally). The execution and delivery by Sellerof this Agreement, and the performance of its obligations hereunder, do not require any action orconsent of any party other than Seller pursuant to any contract, agreement, or other undertakingof Seller, or pursuant to any order or decree to which Seller is a party or to which any of itsproperties or assets are subject, and will not violate any provision of law, the Articles ofIncorporation or Bylaws of Seller, any order of any court or other agency of the government, orany indenture, agreement or other instrument to which Seller, or any of its properties or assets,are bound, or conflict with, result in a breach of or constitute (with due notice or lapse of time orboth) a default under any such indenture, agreement or other instrument, or result in the creationor imposition of any claim of any nature whatsoever upon any of the properties or assets ofSeller.
SECTION 3.5.Disclosure.No representation or warranty by Seller in this Agreement,and no exhibit, schedule or certificate furnished or to be furnished by Seller pursuant hereto,(a)contains any untrue statement of a material fact or(b) omits to state a fact required to be statedtherein or necessary to make the statements contained herein or therein, in light of thecircumstances in which they were made, not materially misleading.
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ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
OF BUYER
Buyer represents and warrants to Seller that, except as set forth on the DisclosureSchedule attached hereto asExhibit F and incorporated by reference (which DisclosureSchedule either(i)makes explicit reference to the particular representation or warranty as towhich exception is taken or(ii) describes the exception with sufficient specificity and in such amanner that a reasonable person could determine, without any independent investigation, fromthe terms of this Agreement and the Disclosure Schedule, the particular representation(s) orwarranty(ies) as to which exception is taken):
SECTION 4.1.Organization, Qualification and Corporate Power of Buyer.Buyer(a) is a limited liability company duly organized, validly existing and in good standing under thelaws of the Commonwealth of Virginia;(b) has the corporate power and authority to carry on itsbusiness as now conducted; and(c) has all requisite power and authority and licenses, permits,franchises, certificates, authorizations, approvals, consents, and rights to own and operate thePharmacy Health Information Exchange.
SECTION 4.2.Validity.Buyer has the full legal power and authority to execute,deliver, and perform this Agreement and all other agreements and documents necessary toconsummate the contemplated transactions, and all corporate actions of Buyer necessary for suchexecution, delivery, and performance have been taken. This Agreement and all agreementsrelated to this transaction have been duly executed and delivered by Buyer and constitute thelegal, valid and binding obligation of Buyer enforceable in accordance with their terms (subjectas to enforcement of remedies to equitable principles and to the discretion of courts in awardingequitable relief and to applicable bankruptcy, reorganization , insolvency, moratorium and similarlaws affecting the rights of creditors generally). The execution and delivery by Buyer of thisAgreement and the other agreements related hereto to which Buyer is a party, and theperformance of its obligations hereunder and thereunder, will not violate any provision of law,the Certificate of Formation or Operating Agreement of Buyer, any order of any court or otheragency of the government, or any indenture, agreement or other instrument to which Buyer, orany of its properties or assets are bound, or conflict with, result in a breach of or constitute (withdue notice or lapse of time or both) a default under any such indenture, agreement or otherinstrument, or result in the creation or imposition of any lien, charge, restriction, claim orencumbrance of an y nature whatsoever upon any of the properties or assets of Buyer.
SECTION 4.3.Other Approvals.All consents, approvals, qualifications, orders orauthorizations of, or filings with, any governmental authority, including any court or other thirdparty, required in connection with Buyer’s valid execution, delivery or performance of thisAgreement, or the consummation of any transaction contemplated by this Agreement, shall havebeen duly made and obtained and are effective on and as of the date hereof.
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SECTION 4.4.Disclosure.No representation or warranty by Buyer in this Agreement,and no exhibit, schedule or certificate furnished or to be furnished by Buyer pursuant hereto,(a)contains any untrue statement of a material fact or(b) omits to state a fact required to be statedtherein or necessary to make the statements contained herein or therein, in light of thecircumstances in which they were made, not materially misleading.
ARTICLE 5.
COVENANTS OF SELLER
SECTION 5.1.Cooperation with Buyer.Seller covenants to Buyer that Seller shallcooperate with Buyer and shall use its reasonable best efforts after the Effective Date so thatBuyer shall obtain all required consents of third parties and approvals for Buyer’ purchase of thebusiness contemplated hereby, and in addressing other matters necessary to consummate thetransactions and receive the benefits contemplated by this Agreement.
SECTION 5.2.Non-Contravention.Seller covenants to Buyer that it shall not takeany action, or omit to take any action, which action or omission would have the effect ofmaterially violating any of the covenants of this Agreement or warranties or representations ofSeller in this Agreement.
ARTICLE 6.
JOINT COVENANTS OF THE PARTIES
SECTION 6.1.Confidentiality of Business Information.The parties heretofore havereceived and hereafter may receive various financial and other information concerning theactivities, business, assets, and properties of the other parties hereto. The parties agree that:
a. all such information thus received by a party hereto shall not at any time, or inany way or manner, be utilized by such party for its respective advantage or disclosed by it toothers for any purpose whatsoever; and
b. the parties shall take all reasonable measures to assure that no employee oragent under its respective control shall at any time use or disclose any information described inthis Section other than for the purposes hereunder; and
c. this Section shall not apply to(i) any such information that was known to aparty prior to its disclosure to such party in accordance with this Section or was, is, or becomesgenerally available to the public other than by disclosure by the party or any of its respectiveemployees or agents in violation of this Section;(ii) any disclosure which such party makes toany regulatory agency pursuant to that party’s obligations of disclosure to such agency;(iii) anydisclosure that is necessary or appropriate in obtaining any consent or approval required for theconsummation of the transactions contemplated by this Agreement; or(iv) any disclosurerequired by or necessary or appropriate in connection with legal proceedings.
SECTION 6.2.Confidentiality of this Agreement.Until such time as the partieshereto publicly disclose the existence and contents of this Agreement and any related documents
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in accordance with the requirements of this Section 6.2 (“Public Disclosure”), the nature andstatus of the transactions described herein shall be confidential. The timing and content of anyannouncements, press releases or other public statements concerning the transactionscontemplated by this Agreement will occur upon, and be determined by, the mutual agreementand consent of Seller and Buyer, which shall not be unreasonably withheld. This Section shallnot apply to:
a. any disclosure to such party’s directors, managers, members, officers, keyemployees, affiliates, accounting, investment banking and legal advisers;
b. any disclosure which such party makes to any regulatory agency pursuant tothat party’s obligations of disclosure to such agency;
c. any disclosure that is necessary or appropriate in obtaining any consent orapproval required for the consummation of the transactions contemplated by this Agreement;
d. any disclosure required by or necessary or appropriate in connection withlegal proceedings; or
e. any disclosure which, in the written opinion of counsel to the party seeking tomake the disclosure, is required by applicable law.
Attached hereto asExhibit H is an outline representing Seller’s position as it relates to thistransaction (“Talking Points”). Buyer agrees to adhere to the Talking Points or defer questionsto Seller whenever responding to questions about Seller. Seller shall defer any questions aboutBuyer to Buyer. The Party’s agree that once Public Disclosure has occurred, the Party’s canspeak with media outlets and publicly about the transactions contemplated hereby withoutseeking the other Party’s consent.
ARTICLE 7.
INDEMNIFICATION
SECTION 7.1.Indemnification by Seller.Subject to Section 7.4, Seller agrees toindemnify and hold harmless Buyer, its officers, employees, agents, directors, representatives,members, controlling persons and affiliates (collectively, the“Buyer Indemnified Persons”)for, and will pay to the Buyer Indemnified Persons the amount of, any loss, liability, claim,damage (including incidental and consequential damages), expense (including costs ofinvestigation and defense and reasonable attorneys’ fees) or diminution of value incurred byBuyer Indemnified Persons, whether or not involving a third-party claim, arising, directly orindirectly, from or in connection with:
a. any breach of any representation or warranty made by Seller in thisAgreement or any other certificate or document delivered by Seller pursuant to this Agreement;
b. any federal, state, or local tax or fee incurred, accrued, or assessed inconnection with the ProxyMed Network prior to the Effective Date;
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c. any liability or obligation of Seller related to or in connection with any SellerContract or the Pharmacy Processing Business as conducted by Seller. Seller specifically agreesthat Buyer is not assuming any obligation or liability of Seller under any contract to which it is aparty, whether related to the Pharmacy Processing Business, the MedAvant PrescribingApplications or otherwise; or
d. any breach by Seller of any covenant or obligation of Seller in thisAgreement.
SECTION 7.2.Indemnification by Buyer. Subject to Section 7.4, Buyer agrees toindemnify and hold harmless Seller, and its officers, employees, agents, directors,representatives, members, controlling persons and affiliates (collectively,“Seller IndemnifiedPersons”) for, and will pay to the Seller Indemnified Persons the amount of, any loss, liability,claim, damage (including incidental and consequential damages), expense (including costs ofinvestigation and defense and reasonable attorneys’ fees) incurred by Seller Indemnified Persons,whether or not involving a third-party claim, arising, directly or indirectly, from or i n connectionwith:
a. any breach of any representation or warranty made by Buyer in thisAgreement or any other certificate or document delivered by Buyer pursuant to this Agreement;
b. any federal, state, or local tax or fee incurred, accrued or assessed inconnection with Buyer with respect to any period from and after the Effective Date; or
c. any breach by Buyer of any covenant or obligation of Buyer in thisAgreement.
SECTION 7.3.Liability and Risk of Loss.Seller shall remain liable for all of itsobligations and liabilities, costs and expenses, fixed or contingent following the Effective Date.
SECTION 7.4.Procedure for Indemnification: Third Party Claims.Promptly afterreceipt by an indemnified party under either Section 7.1, or 7.2 of notice of the commencementof any proceeding against it by a third party, such indemnified party will, if a claim is to be madeagainst an indemnifying party under either such Section, give notice to the indemnifying party ofthe commencement of such claim, but the failure to notify the indemnifying party will not relievethe indemnifying party of any liability that it may have to any indemnified party, except to theextent that the indemnifying party demonstrates that the defense of such action is prejudiced bythe indemnified party’s failure to give such notice.
b. If any proceeding is brought against an indemnified party and it gives noticeto the indemnifying party of the commencement of such proceeding, the indemnifying party willbe entitled to participate in such proceeding and, to the extent that it wishes (unless(i) theindemnifying party is also a party to such proceeding and the indemnified party determines ingood faith that joint representation would be inappropriate, or(ii) the indemnifying party fails toprovide reasonable assurance to the indemnified party of its financial capacity to defend suchproceeding and provide indemnification with respect to such proceeding), to assume the defenseof such proceeding with counsel satisfactory to the indemnified party and, after notice from theindemnifying party to the indemnified party of its election to assume the defense of such
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proceeding, the indemnifying party will not, as long as it diligently conducts such defense, beliable to the indemnified party under this Section 7 for any fees of other counsel or any otherexpenses with respect to the defense of such proceeding, in each case subsequently incurred bythe indemnified party in connection with the defense of such proceeding, other than reasonablecosts of investigation. If the indemnifying party assumes the defense of a proceeding,(i) it willbe conclusively established for purposes of this Agreement that the claims made in thatproceeding are within the scope of and subject to indemnification;(ii) no compromise orsettlement of such claims may be effected by the indemni fying party without the indemnifiedparty’s consent unless(a) there is no finding or admission of any violation of legal requirementsor any violation of the rights of any person and no effect on any other claims that may be madeagainst the indemnified party, and(b) the sole relief provided is monetary damages that are paidin full by the indemnifying party; and(iii) the indemnified party will have no liability withrespect to any compromise or settlement of such claims effected without its consent. If notice isgiven to an indemnifying party of the commencement of any proceeding and the indemnifyingparty does not, within ten (10) days after the indemnified party’s n otice is given, give notice tothe indemnified party of its election to assume the defense of such proceeding, the indemnifyingparty will be bound by any determination made in such proceeding or any compromise orsettlement effected by the indemnified party.
c. Notwithstanding the foregoing, if an indemnified party determines in goodfaith that there is a reasonable probability that a proceeding may adversely affect it or itsaffiliates other than as a result of monetary damages for which it would be entitled toindemnification under this Agreement, the indemnified party may, by notice to the indemnifyingparty, assume the exclusive right to defend, compromise, or settle such proceeding, but theindemnifying party will not be bound by any determination of a proceeding so defended or anycompromise or settlement effected without its consent (which may not be unreasonablywithheld).
ARTICLE 8.
MISCELLANEOUS
SECTION 8.1.Notice.Whenever notice must be given under the provisions of thisAgreement, such notice must be in writing and addressed to the parties at their respectiveaddresses set forth below and shall be deemed to have been duly given if delivered by(a) hand-delivery (with written confirmation of receipt);(b) facsimile (with written confirmation ofreceipt), provided that a copy is delivered by one of the other methods authorized in this Section;or(c) by commercial overnight delivery service, as follows:
| If to Seller: | | ProxyMed, Inc. |
| | | 1854 Shackleford Court |
| | | Suite 200 | | | | |
| | | Norcross, GA |
| | | Attention: General Counsel |
| | | Telephone: (404)770-4803 |
| | | Facsimile: (404)877-3385 |
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| If to Buyer: | | 5971 Kingstowne Village Parkway |
| | | Suite 200 | | | | |
| | | Alexandria, VA 22315 |
| | | Attention: Paul L. Uhrig, Esq. |
| | | Facsimile: (703) 921-2161 |
Notices shall be deemed given upon the earliest to occur of(i) receipt by the party towhom such notice is directed, if hand delivered;(ii) if sent by facsimile machine, on the day(other than a Saturday, Sunday or legal holiday in the jurisdiction to which such notice isdirected) such notice is sent if sent (as evidenced by the facsimile confirmed receipt) prior to5:00 p.m. Pacific Time and, if sent after 5:00 p.m. Pacific Time, on the day (other than aSaturday, Sunday or legal holiday in the jurisdiction to which such notice is directed) after whichsuch notice is sent; or(iii) on the first business day (other than a Saturda y, Sunday or legalholiday in the jurisdiction to which such notice is directed) following the day the same isdeposited with the commercial carrier if sent by commercial overnight delivery service. Eachparty, by notice duly given in accordance therewith may specify a different address for the givingof any notice hereunder.
SECTION 8.2.Survival of Provisions.All warranties, representations, hold harmlessand indemnity obligations and restrictions made, undertaken and agreed to by the parties underthis Agreement shall survive the Closing.
SECTION 8.3.Amendment.No modification, waiver, amendment, discharge, orchange of this Agreement shall be valid unless in writing and signed by the party against whomenforcement of such modification, waiver, amendment, discharge or change is sought; providedany party may change their own address as set forth in Section 8.1 hereof by unilateral writtennotice to the other parties hereto.
SECTION 8.4.Assignment.This Agreement shall not be assignable by any partywithout the prior written consent of the others. Except as noted above, no other person orcorporate entity shall acquire or have any rights under or by virtue of this Agreement.
SECTION 8.5.Severability.If any one or more of the provisions of this Agreementshould be ruled wholly or partly invalid or unenforceable by a court or other government body ofcompetent jurisdiction, then:(a) the validity and enforceability of all provisions of thisAgreement not ruled to be invalid or unenforceable shall be unaffected;(b) the effect of theruling shall be limited to the jurisdiction of the court or other government body making theruling;(c) the provision(s) held wholly or partly invalid or unenforceable shall be deemedamended, and the court or other government body is authorized to reform the provision(s), to theminimum extent necessary to render them valid and enforceable in conformity with the parties’intent as manifested herein and a provision having a similar economic effect shall be substituted;and(d) if the ruling and/or the controlling principle of law or equity leading to the ruling, issubsequently overruled, modified or amended by legislative, judicial or administrative action, theprovision(s) in question as originally set forth in this Agreement shall be deemed valid andenforceable to the maximum extent permitted by the new controlling principle of law or equity.
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SECTION 8.6.Choice of Law.The interpretation of this Agreement and the rights andobligations of the parties hereunder shall be governed by the laws of the Commonwealth ofVirginia, without regard to choice of law provisions.
SECTION 8.7.Binding Nature.The provisions, covenants, and agreements hereincontained shall inure to the benefit of, and be binding upon, the parties hereto and each of theirrespective legal representatives, successors and permitted assigns.
SECTION 8.8.Headings.All headings contained in this Agreement are for referencepurposes only and are not intended to affect in any way the meaning or interpretation of thisAgreement. All words used in this Agreement shall be construed to be of such gender andnumber as the circumstances require.
SECTION 8.9.Counterparts.This Agreement may be executed in one or morecounterparts, each of which shall be deemed an original, but all of which collectively shallconstitute one and the same agreement.
SECTION 8.10.Expenses.Each of the parties shall bear its own expenses inconnection with this Agreement.
SECTION 8.11.Waiver.The waiver by any party of a breach or violation of anyprovision of this Agreement shall not operate or be construed as a waiver of any subsequentbreach of such provision or any other provision of this Agreement.
SECTION 8.12.Construction.This Agreement shall not be construed more strictlyagainst any party hereto by virtue of the fact that the Agreement may have been drafted orprepared by such party or its counsel, it being recognized that all of the parties hereto havecontributed substantially and materially to its preparation and that this Agreement has been thesubject of and is the product of negotiations between the parties.
SECTION 8.13.Cumulative Remedies.Any right, power, or remedy provided underthis Agreement to any party hereto shall be cumulative and in addition to any other right, power,or remedy provided under this Agreement now or hereafter existing at law or in equity, and maybe exercised singularly or concurrently.
SECTION 8.14.Attorneys’ Fees.Each party shall bear its own attorney’s fees,expenses and any costs associated with any dispute or litigation arising from or related to thisAgreement
SECTION 8.15.Arbitration.In the event of a dispute between the parties arising fromor relating to this Agreement, including, but not limited to, construction, interpretation,implementation or enforcement of this Agreement or the performance or breach of any provisionin this Agreement, the parties shall meet and confer in good faith to resolve such dispute. In theevent such efforts do not resolve the dispute within fifteen (15) days from the date the disputearises, either party may demand arbitration, within one (1) year after the date the dispute arises,by the American Arbitration Association, before three (3) arbitrators, under its CommercialArbitration Rules existing as of the Effec tive Date, such arbitration to be final, conclusive andbinding. The arbitrators shall have no authority to award punitive or exemplary damages or
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attorneys’ fees. Judgment on the award rendered by the arbitrator may be entered by any courthaving proper jurisdiction. The arbitrators shall base their award on the terms of this Agreement,and they will endeavor to follow the law and judicial precedents which a United States Districtjudge sitting in the District of the District of Columbia would apply in the event the dispute waslitigated in such court. The arbitrators shall render the award in writing and, unless both partiesagree otherwise, shall include an explanation of the reasons for their award, the findings of factand conclusions of law upon which their award is based. Notwithstanding the foregoing, anyparty may seek or assert entitlement to injunctive relief or specific performance in court as aninitial matter and s hall have no prior obligation to establish in arbitration the entitlement toinjunctive relief or specific performance.
SECTION 8.16.Entire Agreement.This Agreement supersedes all prior agreementsbetween the parties with respect to its subject matter (including all term sheets and letters ofintent exchanged by the parties), and constitutes (along with the documents referred to in thisAgreement) a complete and exclusive statement of the terms of the agreement among the partieswith respect to its subject matter.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to beexecuted by their respective duly authorized officers as of the date first above written.
| SURESCRIPTS, LLC |
| |
| By: | | /s/ Kevin Hutchinson |
| | | Signature |
| |
| | | Kevin Hutchinson |
| | | Print Name |
| |
| Its: | | President & CEO |
| | | Title |
| |
| PROXYMED, INC., D/B/A |
| MEDAVANT HEALTHCARE |
| SOLUTIONS, INC. |
| |
| By: | | /s/ Peter Fleming |
| | | Signature |
| |
| | | Peter Fleming |
| | | Print Name |
| |
| Its: | | General Counsel |
| | | Title |
Signature Page to Purchase Agreement
EXHIBIT A
LIST OF SURESCRIPTS PHARMACIES
The following table represents those pharmacies, Certified Pharmacy Aggregators, and CertifiedVARs with contractual commitments to the Pharmacy Health Information Exchange.
| Organization |
|
| Abacus Systems |
| CarePoint |
| RxLinc (Computer-Rx) |
| eRx Network, LLC (PDX customers only) |
| HealthCare Computer Corporation (Synercom, AlphaPC, and Visual Pharmacy) |
| McKesson Corporation |
| Micro Merchant |
| PerSe* |
| QS/1 Data Systems (RxCarePlus, CRX, and NRX) |
| Albertson’s, Inc. |
| CVS Corporation |
| Wal*Mart Stores, Inc. |
*PerSe has contracts with pharmacy organizations utilizing PerSe software products includingbut not limited to Condor, EnterpriseRx, PharmacyRx, and Zadall. In addition, PerSe hascontracts with organizations, including, but not limited to, the following:
Best Computer Systems
Brooks
Brookshire Grocery Co.
Community Distributors
CompuSolve
DataDoc
Datascan
Discount Drug Mart
Eckerds (Brooks)
EnterpriseRx
Etreby
Foundation Systems
Giant Eagle
Giant Foods
Haggens
Health Business Systems
HEB
Hy-Vee
ISM
JasCorp
Kerr Drug
Kinney Drugs
Kroger Company, The
Lewis
Longs
Marc’s
Medicine Shoppe International, Inc.
Midco
NeighborCare
Opus-ISM
Pacific Pharmacy Computers
PharmacyRx
Pharmacy Solutions
Price Chopper (Golub)
Raleys
Rite-Aid
Sav-Mor Franchising, Inc.
Shaws
Stop & Shop
Transaction Data Systems
TOPS
Ukrops
USADrug
Walgreens
EXHIBIT B
PHARMACY CONTRACTS
1. Walgreens
2. Rite-Aide
3. CareMark
4. Medco
5. e-Rx
6. SureScritps
7. WalMart
8. QS1
EXHIBIT C
PRESCRIBER CONTRACTS
| 1. | Medical Manger (Emdeon Business Services) |
| |
| 2. | Availty |
| |
| 3. | Imedica |
| |
| 4. | Iscribe/CareMark |
| |
| 5. | Misys |
| |
| 6. | e-Rx |
| |
EXHIBIT D
ESCROW AGREEMENT
(See attached.)
EXHIBIT E
NONCOMPETITION AGREEMENT
(See attached.)
EXHIBIT F
SELLER DISCLOSURE SCHEDULE
None
EXHIBIT G
SELLER DISCLOSURE SCHEUDLE
None
EXHIBIT G
TALKING POINTS
The pharmacy business was MedAvant’s smallest business line and it did notcomplement their business strategy. This sell allows MedAvant to now focus on its key businesslines.
The divestiture was a small but important step in simplifying MedAvant’s businessstructure and focusing on their core business lines, which hold the best opportunity for futuregrowth.
The sell allows MedAvant to focus on its core strategy of leveraging their Phoenix andPilot technologies and well as their national PPO in order to build upon a strong market presencein their core business lines.
