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EXHIBIT 10.29
STOCKHOLDER AGREEMENT
THIS STOCKHOLDER AGREEMENT (this "AGREEMENT") is entered into as of
October 2, 2000, by and between The TriZetto Group, Inc., a Delaware corporation
("TRIZETTO"), and IMS Health Incorporated, a Delaware corporation ("IMS").
WHEREAS, TriZetto, Elbejay Acquisition Corp., a Delaware corporation and
a wholly-owned subsidiary of TriZetto ("MERGER SUB"), IMS and ERISCO Managed
Care Technologies, Inc., a New York corporation and wholly owned subsidiary of
IMS ("ERISCO"), have entered into an Agreement and Plan of Reorganization, dated
as of May 16, 2000 (the "MERGER AGREEMENT"), providing for, among other things,
the merger of Erisco with and into Merger Sub (the "MERGER");
WHEREAS, the respective boards of directors of each of TriZetto and IMS
have approved this Agreement;
WHEREAS, in connection with the Merger, TriZetto will issue shares of
capital stock of TriZetto to IMS;
WHEREAS, concurrently with the execution and delivery of this Agreement,
the parties hereto are entering into a Registration Rights Agreement (the
"REGISTRATION RIGHTS AGREEMENT") with respect to the shares of capital stock of
TriZetto to be issued to IMS in connection with the Merger;
WHEREAS, the execution and delivery of this Agreement by the parties
hereto is a condition to the consummation of the Merger; and
WHEREAS, the parties hereto desire to make certain representations,
warranties, covenants and agreements as provided in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Certain Definitions. (a) Capitalized terms that are used but not
otherwise defined herein shall have the meanings given to them in the Merger
Agreement.
(b) For the purposes of this Agreement, the following terms shall
have the following meanings:
"AFFILIATE" and "ASSOCIATE" when used with reference to any
Person shall have the meanings assigned to such terms in Rule 12b-2 of the
Exchange Act as in effect of the date hereof; provided, that TriZetto and its
Subsidiaries and the officers and directors of TriZetto and its Subsidiaries who
are not the IMS Director and who are not directors or officers of IMS or any of
its Subsidiaries shall not, solely as a result of holding such office of
TriZetto or any of its Subsidiaries, be deemed Affiliates or Associates of IMS
for purposes of this Agreement.
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A Person shall be deemed the "BENEFICIAL OWNER", and to have
"BENEFICIAL OWNERSHIP" of, and to "BENEFICIALLY OWN," any securities as to which
such Person is or may be deemed to be the beneficial owner pursuant to Rule
13d-3 and 13d-5 under the Exchange Act, as such rules are in effect on the date
of this Agreement, as well as any securities as to which such Person has the
right to become the Beneficial Owner (whether such right is exercisable
immediately or only after the passage of time or the occurrence of conditions)
pursuant to any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with respect
to a bona fide public offering of securities), or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or otherwise;
provided, however, that no Person shall be deemed the "Beneficial Owner" or to
have "Beneficial Ownership" of, or to "Beneficially Own," any Shares solely by
virtue of the rights set forth in Section 6; provided, further, that a Person
shall not be deemed the "Beneficial Owner", or to have "Beneficial Ownership"
of, or to "Beneficially Own", any Shares (i) solely because such Shares have
been tendered pursuant to a tender or exchange offer made by such Person, or any
of such Person's Affiliates or Associates, until such tendered Shares are
accepted for payment or exchange or (ii) solely because such Person, or any of
such Person's Affiliates or Associates, has or shares the power to vote or
direct the voting of such Shares pursuant to a revocable proxy given in response
to a public proxy or consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations under the Exchange Act, except if
such power (or the arrangements relating thereto) is then reportable under Item
6 of Schedule 13D under the Exchange Act (or any similar provision of a
comparable or successor report). For purposes of this Agreement, in determining
the percentage of the outstanding Shares with respect to which a Person is the
Beneficial Owner, all Shares as to which such Person is deemed the Beneficial
Owner shall be deemed outstanding.
"BOARD" shall mean the Board of Directors of TriZetto.
"CHANGE OF CONTROL" shall mean, with respect to any party, any
transaction or event in connection with a plan pursuant to which (i) all or
substantially all of the assets of or (ii) equity interests in such party that
have the power to cast at least 50% of the votes entitled to be cast in
elections of directors (or similar officials) of such party, shall be exchanged
for, converted into or acquired for or constitute the right to receive
securities, cash or other property (whether by means of a tender or exchange
offer, reclassification, consolidation, merger, sale or other disposition of
such assets or such equity interests, compulsory exchange of equity interests,
liquidation or otherwise). In the case of a Change in Control effected through a
series of transactions or events, such Change in Control shall be deemed to have
occurred when (i) substantially all of the assets of such party or (ii) equity
interests in such party that have the power to cast at least 50% of the votes
entitled to be cast in elections of directors (or similar officials) of such
party, shall be exchanged for, converted into or acquired for or constitute the
right to receive securities, cash or other property.
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"GROUP" shall have the meaning assigned to such term in Rule
13d-5 under the Exchange Act as in effect on the date hereof.
"MINIMUM SHARE PERCENTAGE" shall mean, as of any date, 10% of
the Outstanding Shares as of such date.
"OUTSTANDING SHARES" shall mean, as of any date, the issued and
outstanding Shares as of such date, excluding any treasury Shares.
"PERMITTED TRANSFER" shall have the meaning set forth in
Section 5.
"SHARES" shall mean TriZetto Common Stock and any other shares
of common stock of TriZetto.
"SUBSIDIARY" shall mean, with respect to any Person, any entity
at least 50% of the Voting Securities of which are owned directly or indirectly
by such Person.
"TRIZETTO COMMON STOCK" shall mean the Common Stock, par value
$0.001 per share, of TriZetto.
"TRANSFER" shall mean any direct or indirect sale, transfer,
assignment, pledge, hypothecation, mortgage, or other disposition or
encumbrance, provided, that a Transfer shall not include any sale, transfer,
assignment, or other disposition by operation or succession of law, merger or
otherwise.
"VOTING SECURITIES" shall mean any securities entitled to vote
in the ordinary course in the election of directors or of Persons serving in a
similar governing capacity of any partnership, limited liability company or
other entity, including the voting rights attached to such securities.
2. Representations of IMS. As of the date hereof, IMS represents and
warrants to TriZetto that:
(a) IMS does not Beneficially Own any Shares other than those Shares
to be issued to IMS in connection with the Merger;
(b) IMS has all requisite corporate power and authority to enter
into this Agreement and to perform its obligations hereunder. The execution and
delivery of this Agreement by IMS have been duly authorized by all necessary
corporate action on the part of IMS;
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(c) this Agreement has been duly executed and delivered by IMS and
is the valid and binding obligation of IMS, enforceable in accordance with its
terms, except that such enforceability may be subject to the Bankruptcy and
Equity Exception;
(d) no consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required to
be obtained by IMS in connection with the execution and delivery of this
Agreement, except those that have been made or obtained or where the failure to
obtain such consents, approvals, orders, authorizations, registrations,
declarations or filings, would not prevent IMS from performing its obligations
under this Agreement or the Merger Agreement and is not reasonably likely to
have a Material Adverse Effect on IMS or Erisco; and
(e) neither the execution, delivery and performance of this
Agreement nor the consummation of the transactions contemplated hereby nor
compliance with the provisions hereof will conflict with, or result in any
violations of, or cause a breach or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination, amendment,
cancellation or acceleration of any obligation contained in, or the loss of any
material benefit under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the material properties or assets of
IMS or Erisco under, any term, condition or provision of (A) the certificate of
incorporation or bylaws of IMS or (B) any Contract, permit, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to IMS or Erisco
or their respective properties or assets, other than any such conflicts,
violations, defaults, losses, liens, security interests, charges, or
encumbrances which, individually or in the aggregate, would not prevent IMS from
performing its obligations under this Agreement or the Merger Agreement and is
not reasonably likely to have a Material Adverse Effect on IMS or Erisco.
3. Representations of TriZetto. As of the date hereof, TriZetto
represents and warrants to IMS that:
(a) TriZetto has all requisite corporate power and authority to
enter into this Agreement and to perform its obligations hereunder. The
execution and delivery of this Agreement by TriZetto and the consummation by
TriZetto of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of TriZetto;
(b) this Agreement has been duly executed and delivered by TriZetto
and is the valid and binding obligation of TriZetto, enforceable in accordance
with its terms, except that such enforceability may be subject to the Bankruptcy
and Equity Exception;
(c) no consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Entity is required to
be obtained by TriZetto or any of the TriZetto Subsidiaries in connection with
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except those that have been made or obtained
or where the failure to obtain such consents, approvals, orders, authorizations,
registrations, declarations or filings, would not prevent TriZetto from
performing its obligations under this Agreement or the Merger Agreement and is
not reasonably likely to have a Material Adverse Effect on TriZetto; and
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(d) neither the execution, delivery and performance of this
Agreement nor the consummation of the transactions contemplated hereby nor
compliance with the provisions hereof will conflict with, or result in any
violations of, or cause a breach or default (with or without notice or lapse of
time, or both) under, or give rise to a right of termination, amendment,
cancellation or acceleration of any obligation contained in, or the loss of any
material benefit under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the material properties or assets of
TriZetto or any of the TriZetto Subsidiaries under, any term, condition or
provision of (A) the certificate or articles of incorporation or bylaws of
TriZetto or any of the TriZetto Subsidiaries or (B) any Contract, permit,
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to TriZetto or any of the TriZetto Subsidiaries or their respective properties
or assets, other than any such conflicts, violations, defaults, losses, liens,
security interests, charges or encumbrances which, individually or in the
aggregate would not prevent TriZetto from performing its obligations under this
Agreement or the Merger Agreement and is not reasonably likely to have a
Material Adverse Effect on TriZetto.
4. Standstill Provisions.
4.1 From the date hereof until the earlier of (i) the fourth anniversary
of the Closing Date or (ii) the date on which (A) a Change of Control of
TriZetto shall have occurred, or (B) TriZetto shall have publicly announced,
directly or indirectly, its willingness to consider a transaction that would
constitute a Change of Control of TriZetto, IMS, without the prior written
consent of TriZetto, shall not, and shall not suffer or permit any Subsidiaries
of IMS to, whether acting alone or in concert with others:
(a) initiate or propose any stockholder proposal or participate in
the making of, or solicit stockholders for the approval of, one or more
stockholder proposals relating to TriZetto;
(b) seek the removal of any directors or a change in the composition
or size of the Board;
(c) form, join or participate in a Group with respect to any Shares,
other than a Group consisting solely of IMS and Affiliates or Associates of IMS;
(d) deposit any Shares into a voting trust or (except as provided in
this Agreement) subject any Shares to any arrangement or agreement with respect
to the voting or Transfer thereof, other than any such trust, arrangement or
agreement (i) the only parties to or beneficiaries of which are IMS or any
Affiliates or Associates of IMS and (ii) the terms of which prohibit any party
thereto from acting in a manner inconsistent with this Agreement; provided, that
all of the Shares deposited into any such trust or subjected to any such
arrangement or agreement shall be deemed to be Beneficially Owned by IMS or
Affiliates or Associates of IMS for all purposes of this Agreement;
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(e) except for Shares issued to IMS in connection with the Merger,
acquire, offer to acquire or agree to acquire, directly or indirectly, by
purchase, gift or otherwise, Beneficial Ownership of any Shares (the "STOCK
LIMITATION"); or
(f) make, or in any way participate in, directly or indirectly, any
"solicitation" of "proxies" (as such terms are used in the rules or regulations
of the Securities Exchange Commission) to vote, or seek to advise or influence
any person or entity with respect to the voting of, any Voting Securities of
TriZetto;
(g) make any public announcement with respect to, or submit a
proposal for, or offer of (with or without conditions), any merger, business
combination, recapitalization, restructuring, liquidation or other extraordinary
transaction involving TriZetto or its securities or assets;
(h) take any action which might force TriZetto to make a public
announcement regarding any of the types of matters set forth in paragraphs (a)
through (g) above;
(i) enter into discussions or arrangements with any third party with
respect to any of the foregoing;
(j) request publicly TriZetto or any of its Affiliates or
Associates, directly or indirectly, to amend or waive any provision of this
Section 4; or
(k) advise, assist (including by knowingly providing or arranging
financing for that purpose) or knowingly encourage, induce or attempt to
encourage or induce any other Person to take any actions referred to in the
foregoing paragraphs (a) through (j).
4.2 No violation of Section 4.1(e) shall be deemed to occur as a result
of the acquisition by IMS, or any Affiliate or Associate of IMS, of Beneficial
Ownership of Shares in excess of the Stock Limitation (i) as a result of (A) any
stock repurchase or similar transaction undertaken by TriZetto or its Affiliates
that shall cause IMS's percentage ownership in the Shares to exceed the Stock
Limitation even though the number of Shares Beneficially Owned by IMS and its
Affiliates and Associates remains unchanged; (B) any acquisition of Voting
Securities of another corporation by IMS or any Affiliate or Associate of IMS in
a bona fide acquisition of a business, the primary purpose of which is not to
acquire Shares, which results in IMS or any such Affiliate or Associate becoming
the Beneficial Owner of additional Shares; or (C) any stock split, stock
dividend or other distribution relating to Shares; or (ii) in the event that
TriZetto invites, requests or otherwise solicits IMS or any of its Affiliates or
Associates to acquire, offer to acquire or agree to acquire, by purchase or
otherwise, Beneficial Ownership of such Shares.
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4.3 The provisions of Section 4.1 shall apply to and be binding upon any
Person to whom IMS Transfers Beneficial Ownership of Shares representing at
least the Minimum Share Percentage as of the date of such Transfer. As a
condition to any Transfer referred to in the immediately preceding sentence,
such Transferee shall, prior to such Transfer, agree in writing to be bound by
the provisions of this Agreement. Any such Transfer without compliance with the
immediately preceding sentence shall be null and void and such transferee shall
acquire no rights with respect to such Shares.
5. Share Transfers.
5.1 From the date hereof until the earlier of (i) the date two (2) years
after the Closing Date, (ii) the date on which IMS ceases to Beneficially Own a
number of Shares at least equal to ten percent (10%) of the Outstanding Shares
as of the Closing Date, or (iii) the date on which a Change of Control of
TriZetto shall have occurred (the "RESTRICTED PERIOD"), IMS shall not, without
the prior written consent of TriZetto, Transfer any Shares that are Beneficially
Owned by IMS, except for a Transfer that complies with any of the following
subsections (each such Transfer, a "PERMITTED TRANSFER"):
(a) a Transfer of all or any of such Shares to any Affiliate of IMS;
provided, that contemporaneously with any such Transfer, such Affiliate becomes
a party to a counterpart of this Agreement;
(b) a Transfer of all or any of such Shares in a bona fide pledge of
such Shares to a financial institution to secure borrowings as permitted by
applicable Law; provided, that contemporaneously with such pledge such financial
institution agrees with TriZetto that upon any foreclosure on such pledge it,
and any transferee pursuant to any disposition following default, shall be bound
by the obligations of IMS under this Agreement; or
(c) a Transfer of all or any of such Shares to any Person who has
commenced a tender or exchange offer for Shares that the Board has recommended
that the holders of Shares accept.
6. Right of First Refusal
6.1 For the period commencing upon the termination of the Restricted
Period and continuing until the date on which IMS ceases to Beneficially Own a
number of Shares at least equal to ten percent (10%) of the Outstanding Shares
as of the Closing Date (the "RIGHT OF FIRST REFUSAL PERIOD") (unless at any time
after the date of this Agreement a Change of Control of TriZetto shall have
occurred), if IMS or any of its Affiliates propose to Transfer Beneficial
Ownership of (i) Shares representing in the aggregate at least the Minimum Share
Percentage as of the date of the Right of First Refusal Notice (as defined in
Section 6.1(a)), or (ii) Shares, together with all other Shares Beneficially
Owned by the transferee, would result in such transferee having in the aggregate
Beneficial Ownership of at least the Minimum Share Percentage as of the date
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of the First Refusal Notice, it shall give TriZetto the opportunity, in the
following manner, to purchase such Shares and shall not effect any proposed
Transfer without complying with the following procedures:
(a) Notice; Irrevocable Offer. IMS shall give written notice (the
"RIGHT OF FIRST REFUSAL NOTICE") to TriZetto of its or any of its Affiliates'
intent to Transfer such Shares, the number of Shares proposed to be Transferred
(the "FIRST REFUSAL SHARES") and the price, the identity of proposed
transferees, proposed payment terms and other terms (the "OFFER TERMS") on which
IMS or such Affiliate proposes to Transfer such Shares. Each Right of First
Refusal Notice shall constitute an irrevocable offer by IMS or such Affiliate to
sell to TriZetto the First Refusal Shares on the Offer Terms and the other terms
and conditions set forth in this Section 6.
(b) Exercise; Closing. TriZetto shall have the right to purchase all
but not less than all of the First Refusal Shares on the Offer Terms; provided
that TriZetto shall be required to pay all consideration for the First Refusal
Shares in cash in the event that the Offer Terms include any non-cash
consideration. The cash payable with respect to any non-cash consideration shall
be the fair market value of such non-cash consideration as mutually agreed by
the parties. TriZetto may exercise such right by giving written notice (a
"TRIZETTO ACCEPTANCE NOTICE") to IMS, within 20 days after the date of receipt
by TriZetto of a Right of First Refusal Notice, which shall state that TriZetto
is electing to purchase all of the First Refusal Shares on the Offered Terms.
The TriZetto Acceptance Notice shall constitute an irrevocable commitment to
purchase from IMS or such Affiliate the First Refusal Shares on the Offer Terms
and the other terms and conditions set forth in this Section 6. The closing of
any purchase by and sale to TriZetto of the First Refusal Shares shall take
place, to the extent legally practicable, on such date that is no less than 5
and no more than 30 days following the date of the TriZetto Acceptance Notice,
as TriZetto and IMS shall mutually agree. The closing shall be held at 10:00
a.m., local time, at the principal office of TriZetto. At such closing: (i) IMS
shall deliver to TriZetto certificates representing the First Refusal Shares
being sold (or affidavits of loss in lieu thereof), free and clear of any Lien;
(ii) TriZetto shall deliver to IMS the cash consideration to be paid for such
First Refusal Shares in accordance with this Section 6.1(b); and (iii) IMS and
TriZetto shall execute or cause to be executed such other documents and take or
cause to be taken such other actions as shall be reasonably necessary to
consummate the purchase and sale of the First Refusal Shares on the terms
contemplated by the Offer Terms and the other terms and conditions set forth in
this Section. TriZetto and IMS each will pay any costs that it incurs in
complying with the obligations set forth in this paragraph.
(c) Non-Exercise. If TriZetto fails to elect to purchase all the
First Refusal Shares within the 20-day time period specified in paragraph (b) of
this Section, then IMS or such Affiliate (i) shall be under no obligation to
sell any of the First Refusal Shares to TriZetto, unless IMS or such Affiliate
so elects, and (ii) may, within a period of 120 days from and after the date of
the Right of First Refusal Notice, Transfer all or less than all of the First
Refusal Shares to a proposed transferee for a price and on terms and conditions
not materially less favorable to IMS or such Affiliate than those set forth in
the Offer Terms.
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(d) Subsequent Application. If TriZetto does not elect to purchase
all the First Refusal Shares on the Offer Terms and IMS or such Affiliate shall
not have consummated the Transfer of all of the First Refusal Shares to a third
party or third parties prior to the expiration of the 120-day period specified
in the foregoing paragraph (c), then the provisions of this Section 6 shall
again apply, and IMS or such Affiliate shall not Transfer any of such First
Refusal Shares not so Transferred during the Right of First Refusal Period
without again complying with this Section.
6.2 The obligations of IMS and its Affiliates pursuant to this Section 6
shall not apply to (i) any Permitted Transfer and (ii) a Transfer of all or any
of such Shares in a bona fide firm commitment public offering registered under
the Securities Act of 1933, as amended, provided that IMS will use its
reasonable best efforts, and will instruct the managing underwriters to use
their reasonable best efforts, to achieve a broad public distribution of the
Shares.
6.3 TriZetto may assign its rights under this Section 6 if (i) TriZetto
desires to exercise such rights and (ii) TriZetto is prohibited from exercising
such rights under applicable Delaware law.
7. Right of First Offer.
7.1 During the Right of First Refusal Period (unless at any time after
the date of this Agreement a Change of Control of TriZetto shall have occurred),
if IMS or any of its Affiliates proposes to Transfer Beneficial Ownership of any
Shares, IMS or such Affiliate shall comply with the following procedures:
(a) Notice; Consultation. IMS or such Affiliate shall give written
notice (the "FIRST OFFER NOTICE") to TriZetto of its intent to Transfer such
Shares and the number of Shares proposed to be Transferred (the "FIRST OFFER
SHARES") and, if known, the proposed transferee. For a period of 20 days
following TriZetto's receipt of a First Offer Notice, IMS or such Affiliate
shall discuss in good faith with TriZetto the possibility of effecting such a
transaction with TriZetto, and during such 20-day period, IMS or such Affiliate
shall negotiate in good faith and exclusively with TriZetto to determine whether
it is possible to agree to such a transaction with TriZetto, but neither party
shall be obligated to enter into any agreement to do so.
(b) TriZetto Offer; Acceptance. In the event that IMS or such
Affiliate and TriZetto shall not have agreed on the terms of a transaction with
respect to the First Offer Shares, TriZetto shall, at or prior to the conclusion
of such 20-day period, deliver to IMS either (i) a statement of TriZetto's final
offer price with respect to the First Offer Shares (a "TRIZETTO OFFER NOTICE"),
which notice shall constitute an irrevocable offer by TriZetto to IMS or such
Affiliate to acquire all of the First Offer Shares in cash at such price, or
(ii) a written notice stating that TriZetto is not interested in making a final
offer
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for the First Offer Shares (a "TRIZETTO REJECTION NOTICE"). In the event that
IMS or such Affiliate elects to sell the First Offer Shares to TriZetto pursuant
to the TriZetto Offer Notice, it shall provide written notice to such effect (an
"IMS ACCEPTANCE NOTICE") to TriZetto within 2 days of receipt of the TriZetto
Offer Notice. The closing of any purchase by and sale to TriZetto of the First
Offer Shares shall take place, to the extent legally practicable, on such date
that is no less than 5 and no more than 30 days following the date of the IMS
Acceptance Notice, as TriZetto and IMS or such Affiliate shall mutually agree.
The closing shall be held at 10:00 a.m., local time, at the principal office of
TriZetto. At such closing: (i) IMS or such Affiliate shall deliver to TriZetto
certificates representing the First Offer Shares being sold (or affidavits of
loss in lieu thereof), free and clear of any Lien; (ii) TriZetto shall deliver
to IMS or such Affiliate the cash consideration to be paid for such First Offer
Shares in accordance with the TriZetto Offer Notice; and (iii) IMS or such
Affiliate and TriZetto shall execute or cause to be executed such other
documents and take or cause to be taken such other actions as shall be
reasonably necessary to consummate the purchase and sale of the First Offer
Shares on the terms contemplated by the TriZetto Offer Notice and the other
terms and conditions set forth in this Section. TriZetto and IMS or such
Affiliate each will pay any costs that it incurs in complying with the
obligations set forth in this paragraph. In the event that IMS or such Affiliate
elects not to sell the First Offer Shares to TriZetto pursuant to the TriZetto
Offer Notice, it shall provide written notice to such effect (an "IMS REJECTION
NOTICE") within 2 days of receipt of the TriZetto Offer Notice.
(c) Transfers to Third Parties. In the event that the First Offer
Shares are not acquired by TriZetto pursuant to Sections 7.1(a) or 7.1(b), for a
period of one hundred twenty (120) days from the date of delivery of either (i)
an IMS Rejection Notice or (ii) a TriZetto Rejection Notice, IMS or such
Affiliate shall be free to negotiate and to initiate and hold discussions with
other potential purchasers, and to consummate a sale of any or all of the First
Offer Shares to one or more third parties; provided, however, that if TriZetto
has delivered a TriZetto Offer Notice, the purchase price of such First Offer
Shares payable by each such third party must be at least equal to the purchase
price thereof set forth in such TriZetto Offer Notice, and all other terms and
conditions shall not be materially less favorable to IMS or such Affiliate than
those contained in the TriZetto Offer Notice; provided, further, that if the
closing of any such purchase is subject to the making of any necessary filings
with, the expiration of any applicable waiting periods imposed by, or obtaining
any approvals from, any Governmental Entities, such purchase may be consummated
at any time prior to 20 days after the expiration of such waiting period or the
granting of such consent or approval, as the case may be.
(d) Subsequent Application. If IMS or such Affiliate shall not have
consummated the Transfer of all of the First Offer Shares prior to the
expiration of the period specified in the foregoing paragraph (c), then the
provisions of this Section 7 shall again apply, and IMS or such Affiliate shall
not Transfer any of such Shares without again complying with this Section.
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7.2 The obligations of IMS and its Affiliates pursuant to this Section 7
shall not apply to (i) any Permitted Transfer and (ii) a Transfer of all or any
of such Shares in a bona fide firm commitment public offering registered under
the Securities Act of 1933, as amended, provided that IMS will use its
reasonable best efforts, and will instruct the managing underwriters to use
their reasonable best efforts, to achieve a broad public distribution of the
Shares.
8. Board Representation.
8.1 IMS Director. As long as IMS Beneficially Owns a number of Shares at
least equal to ten percent (10%) of the Outstanding Shares as of the Closing
Date, IMS shall be entitled to designate one individual (the "IMS DIRECTOR") to
be a Class II member of the Board. In the event that IMS shall at any time cease
to Beneficially Own a number of Shares at least equal to ten percent (10%) of
the Outstanding Shares as of the Closing Date, IMS shall thenceforth not be
entitled to designate an IMS Director under this Section 8; provided, that the
IMS Director shall remain a member of the Board until the natural expiration of
the IMS Director's term. Prior to each meeting of TriZetto's stockholders for
the election of directors to the Board at which the term of the incumbent IMS
Director is to expire, IMS shall give reasonable advance written notice to
TriZetto prior to the mailing of the proxy statement relating to such matters
requesting that TriZetto include, and TriZetto shall include, the IMS Director
as a nominee for the slate of directors to be elected to the Board. IMS shall
designate an individual reasonably acceptable to TriZetto as the IMS Director,
provided that as long as the Chief Executive Officer ("CEO") of IMS as of the
signing of the Merger Agreement is an executive officer of IMS, such CEO shall
be the individual designated by IMS as the IMS Director.
8.2 Efforts to Nominate and Elect IMS Director. TriZetto shall nominate
and use its reasonable best efforts to take and cause to be taken all necessary
action (corporate and other) to cause the election to the Board of the IMS
Director.
8.3 In the event of consummation of either a transaction with, or a
tender or exchange offer by, any of the entities listed on Schedule 8.3 hereto
or any of their respective successors or Affiliates which results in a Change of
Control of IMS, or in the event of the acquisition of a majority equity interest
in any of the entities listed on Schedule 8.3 or any of their respective
successors or Affiliates by IMS, IMS's right to designate the IMS Director shall
immediately terminate, and IMS shall cause the then current IMS Director to
immediately resign from the Board.
9. Matters Requiring Consent of IMS. For so long as IMS Beneficially
Owns a number of Shares at least equal to ten percent (10%) of the Outstanding
Shares as of the Closing Date, except as set forth on Schedule 9(a) hereto,
TriZetto shall not, and shall cause its Affiliates and Associates not to,
without the prior written consent of IMS (which can be withheld for any reason),
enter into, consummate, agree to or approve any merger, consolidation, purchase
or sale of assets or equity
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interests, business combination or similar transaction, or any equity-based
joint venture or similar transaction, with any of the entities set forth on
Schedule 9(b) hereto; provided, however, that such consent will not be required
if the Board of Directors of TriZetto shall have determined, after consultation
with its outside legal counsel, that TriZetto is required to enter into,
consummate, agree to or approve any such transaction pursuant to its fiduciary
duties under applicable law. In the event that IMS shall enter into, consummate,
agree to or approve any merger, consolidation, purchase or sale of assets or
equity interests, business combination or similar transaction, or any
equity-based joint venture or similar transaction, with any of the entities set
forth on Schedule 8.3 hereto, the rights of IMS pursuant to this Section 9 shall
immediately terminate.
10. Rights Agreement. From and after the date hereof, TriZetto shall not
(i) amend or supplement the TriZetto Rights Agreement in any manner which would
adversely affect the rights of the Grandfathered Entities or (ii) adopt or
implement any other stockholder protection rights agreement or any similar plan
or arrangement unless such agreement, plan or arrangement is in no way less
favorable to the Grandfathered Entities than the TriZetto Rights Agreement.
11. Miscellaneous.
(a) Governing Law and Venue; Waiver of Jury Trial. The laws of the State
of Delaware (irrespective of its choice of law principles) will govern the
validity of this Agreement, the construction of its terms and the interpretation
and enforcement of the rights and duties of the parties hereto. The parties
hereby irrevocably submit to the jurisdiction of the courts of the State of
Delaware and the Federal courts of the United States of America located in the
State of Delaware solely in respect of the interpretation and enforcement of the
provisions of this Agreement and of the documents referred to in this Agreement,
and in respect of the transactions contemplated hereby and thereby, and hereby
waive, and agree not to assert, as a defense in any action, suit or proceeding
for the interpretation or enforcement hereof or of any such document, that it is
not subject thereto or that such action, suit or proceeding may not be brought
or is not maintainable in said courts or that the venue thereof may not be
appropriate or that this Agreement or any such document may not be enforced in
or by such courts, and the parties hereto irrevocably agree that all claims with
respect to such action or proceeding shall be heard and determined in such a
Delaware State or Federal court. The parties hereby consent to and grant any
such court jurisdiction over the person of such parties and over the subject
matter of such dispute and agree that mailing of process or other papers in
connection with any such action or proceeding in the manner provided in Section
11(g) or in such other manner as may be permitted by law shall be valid and
sufficient service thereof. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO
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THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH
PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH
PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 11(a).
(b) Assignment; Binding Upon Successors and Assigns. Except as expressly
set forth herein, neither party hereto may assign any of its rights or
obligations hereunder without the prior written consent of the other party
hereto. This Agreement will be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
(c) Severability. If any provision of this Agreement, or the application
thereof, will for any reason and to any extent be invalid or unenforceable, the
remainder of this Agreement and application of such provision to other Persons
or circumstances will be interpreted so as reasonably to effect the intent of
the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the greatest extent possible, the economic, business and
other purposes of the void or unenforceable provision.
(d) Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be an original as regards any party whose
signature appears thereon and all of which together will constitute one and the
same instrument. This Agreement will become binding when one or more
counterparts hereof, individually or taken together, will bear the signatures of
all the parties reflected hereon as signatories.
(e) Other Remedies. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby or by law on such party,
and the exercise of any one remedy will not preclude the exercise of any other.
(f) Amendment and Waivers. Any term or provision of this Agreement may
be amended, and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only by a writing signed by duly authorized officers of the party
to be bound thereby. The waiver by a party of any breach hereof or default in
the performance hereof will not be deemed to constitute a waiver of any other
default or any succeeding breach or default.
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(g) Notices. All notices and other communications pursuant to this
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally, via
facsimile, sent by nationally recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following address (or at such other address for a party as shall
be specified by like notice):
If to IMS: IMS Health Incorporated
200 Nyala Farms
Westport, Connecticut 06880
Attention: Chief Executive Officer
Telecopy: (203) 222-4247
With a copy to: IMS Health Incorporated
200 Nyala Farms
Westport, Connecticut 06880
Attention: General Counsel
Telecopy: (203) 222-4268
And to: Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Alan J. Sinsheimer
Keith A. Pagnani
Telecopy: (212) 558-3588
And if to TriZetto: The TriZetto Group, Inc.
567 San Nicolas Drive, Suite 367
Newport Beach, California 92660
Attention: Christine A. Miller
Telecopy: (949) 219-2197
With a copy to: Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, CA 92660-6422
Attention: K.C. Schaaf
Michael E. Flynn
Telecopy: (949) 725-4100
All such notices and other communications shall be deemed to have been received
(a) in the case of personal delivery, on the date of such delivery, (b) in the
case of a facsimile, when the party receiving such copy shall have confirmed
receipt of the communication, (c) in the case of delivery by nationally
recognized overnight courier, on the business day following dispatch, and (d) in
the case of mailing, on the third business day following such mailing.
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(h) Construction of Agreement. This Agreement has been negotiated by the
respective parties hereto and their attorneys and the language hereof will not
be construed for or against either party. A reference to a Section will mean a
Section in this Agreement unless otherwise explicitly set forth. The titles and
headings herein are for reference purposes only and will not in any manner limit
the construction of this Agreement which will be considered as a whole. Whenever
the words "include," "includes" or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation."
(i) Further Assurances. Each party agrees to cooperate fully with the
other parties and to execute such further instruments, documents and agreements
and to give such further written assurances as may be reasonably requested by
any other party to evidence and reflect the transactions described herein and
contemplated hereby and to carry into effect the intents and purposes of this
Agreement.
(j) Entire Agreement. This Agreement, the Merger Agreement (including
the Exhibits and Schedules thereto), the Voting Agreements, the IMS Disclosure
Letter, the TriZetto Disclosure Letter, the Data Rights Agreement, the
Registration Rights Agreement, the HealthWeb License Agreement and the
Transitional Services Agreements constitute the entire understanding and
agreement of the parties hereto with respect to the subject matter hereof and
supersede all prior and contemporaneous agreements or understandings,
inducements or conditions, express or implied, written or oral, between the
parties with respect hereto other than the Confidentiality Agreement, which
shall remain in full force and effect. The express terms hereof control and
supersede any course of performance or usage of trade inconsistent with any of
the terms hereof.
(k) Termination; Survival. Immediately upon the satisfaction of the
obligations of each party pursuant to Sections 4, 5, 6, 7, 8, and 9 of this
Agreement (other than Sections 1, 2, 3, 10 and 11), this Agreement shall
terminate automatically without any action by any party and such terminated
provisions of this Agreement shall not survive such termination. This Section 11
and Sections 1, 2, 3, and 10 shall survive any termination of all or any part of
this Agreement indefinitely.
(l) Headings; Recitals. All Section headings and the recitals herein are
for convenience of reference only and are not part of this Agreement, and no
construction or reference shall be derived therefrom.
(m) Specific Performance. Each party hereto acknowledges that it will be
impossible to measure in money the damage to the other party if a party hereto
fails to comply with any of the obligations imposed by this Agreement, that
every such obligation is material and that, in the event of any such failure,
the other party will not have an adequate remedy at law or damages. Accordingly,
each party hereto agrees that injunctive relief or other equitable remedy, in
addition to remedies at law or damages, is the appropriate remedy for any such
failure and will not oppose the granting of such relief on the basis that the
other party has an adequate remedy at law. Each party hereto agrees that it
shall not seek, and agrees to waive any requirement for, the securing or posting
of a bond in connection with any other party's seeking or obtaining such
equitable relief.
(n) Third Party Beneficiaries. Nothing in this Agreement, express or
implied, is intended to confer upon any third party any rights or remedies of
any nature whatsoever under or by reason of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Stockholder
Agreement as of the date first above written
THE TRIZETTO GROUP, INC.
By: /s/ Jeffrey H. Margolis
------------------------------
Name: Jeffrey H. Margolis
Title: Chairman of the Board,
Chief Executive Officer
and President
IMS HEALTH INCORPORATED
By: /s/ Victoria R. Fash
------------------------------
Name: Victoria R. Fash
Title: President & CEO,
IMS Health
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