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EXHIBIT 10.12
SETTLEMENT OF CLAIMS AGREEMENT
This is an Agreement (the "Agreement") made as of March 13,
1998. between ALLTEL Information Services, Inc., an Arkansas corporation, whose
address is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("ALLTEL"),
Eclipsys Corporation, a Delaware corporation, whose address is ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Eclipsys"), and
Eclipsys Solutions Corp. (on its own and on behalf of ALLTEL Healthcare
Information Services, Inc.), a Delaware corporation, whose address is ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ("Eclipsys Solutions").
NOW, THEREFORE, the parties agree as follows:
1. Settlement and Release of Claims.
(a) On December 18, 1997 (the "December 18
Letter") Eclipsys notified ALLTEL of certain asserted claims made pursuant to
Section 10.2(i) of the Agreement of Merger dated as of January 24, 1997 (the
"Merger Agreement") among ALLTEL, ALLTEL Healthcare Information Services, Inc.,
Eclipsys Solutions and Eclipsys.
(b) Eclipsys represents and agrees that it has no
other claims to assert against ALLTEL as of the date hereof with respect to the
Merger Agreement except as referred to herein.
(c) In order to settle the claims set forth in
the December 18 Letter, and to resolve certain other matters, the parties agree
that upon ALLTEL's payment and delivery to Eclipsys of 11,000 shares of Series
C 8.5% Cumulative
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Redeemable Preferred Stock of Eclipsys (the "Series C Stock") on or before
March 20, 1998 (the completion of such condition shall be referred to herein as
the "Termination Effective Date"), all claims asserted in the December 18
Letter including those referred to in the cover letter thereto shall be
extinguished and deemed to be fully satisfied.
(d) Subject to the following proviso, Eclipsys
further covenants that it will assert no additional claims against ALLTEL or
its affiliate pursuant to Section 10.2(i) of the Merger Agreement, and hereby
releases ALLTEL and its affiliates from any and all such claims, provided,
however, that Eclipsys reserves all of its rights under the Merger Agreement
(including Section 10.2(i) thereof) with respect only to the following: (i)
claims relating to Section 5.1(c) and (x) of the Merger Agreement; (ii) any Tax
claims made pursuant to Sections 10.2(ii) and (iii) of the Merger Agreement
(provided that indemnification is on a dollar for dollar basis and not subject
to a multiple); (iii) [any claims made under Section 10.2(iv) of the Merger
Agreement; and (iv)] any liability or obligation of ALLTEL referred to on
Schedule 1(d) attached hereto, and all legal actions referred to on Schedule
1(d) attached hereto.
(e) The parties agree that the aggregate amount
for which ALLTEL is liable for indemnification under Section 10.6 of the Merger
Agreement shall hereafter be $7,600,000 and that notwithstanding Section 10.7
of the Merger Agreement, any future indemnification shall be settled in cash if
ALLTEL no longer retains Series C Preferred Stock.
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2. Side Letters. The parties agree that (a) the side
letter dated January 24, 1997 between Eclipsys and ALLTEL regarding the St.
▇▇▇▇▇▇▇, UAMS and ▇▇▇▇▇▇▇ contracts is terminated effective the Termination
Effective Date without any further obligation on the part of the parties
thereto, and (b) the side letter dated January 24, 1997 requiring ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ or his affiliate Wilfam, Ltd. (collectively, "▇▇▇▇▇▇") to purchase
175,302 shares of Series D Preferred Stock from certain partnerships affiliated
with General Atlantic Partners, LLC (the "GAP Partnerships") is terminated
effective the Termination Effective Date without any obligation on the part of
▇▇▇▇▇▇ or the GAP Partnerships.
3. Option Agreements. The parties confirm that the
agreement of ALLTEL to purchase up to 103,602 shares of Series D Convertible
Preferred Stock from ▇▇▇▇▇▇ and the GAP Partnerships is being fully satisfied
upon the execution and delivery of Option Agreements dated the date hereof
between ALLTEL, ▇▇▇▇▇▇, the GAP Partnerships and Eclipsys.
4. Eclipsys Obligations. The parties agree that Eclipsys
shall have sole responsibility for all of its liabilities incurred since the
effective date of the merger referred to in the Merger Agreement (the "Merger
Effective Date"), including, without limitation, those liabilities and
obligations and legal actions referred to on Schedule 4, except as otherwise
provided for herein and subject to Eclipsys's reservation of rights in Section
1(d) hereof.
5. Termination Payment Amounts. In consideration of
Eclipsys agreeing to the satisfaction and release of the claims set forth in
the December 18 Letter and the other provisions hereof, ALLTEL shall pay and
deliver to Eclipsys
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11,000 shares of Series C Stock on or before March 20, 1998 and waive (a) all
dividends due on such 11,000 shares through the date of delivery and (b) all
dividends due on all remaining shares of Series C Stock owned by it until the
earlier of July 1, 1998 or the thirtieth day following the closing of the
initial public offering of Eclipsys's common stock. Within 10 days after
Eclipsys's receipt of ALLTEL's Series C Stock certificate, Eclipsys agrees to
issue and deliver to ALLTEL a new Series C Stock certificate for the remaining
4,500 shares. ALLTEL agrees that such remaining 4,500 shares shall bear no
interest (and all prior interest thereon shall be deemed fully paid) and that
no dividends will be payable thereon until the earlier of July 1, 1998 or the
thirtieth day following the closing of the initial public offering of
Eclipsys's common stock.
6. Confidentiality. Each party agrees to keep the
existence of this Agreement, as well as the underlying terms and conditions of
this Agreement confidential, except as required by applicable law, regulation
or national stock exchange rule.
7. Redemption of Series C Stock. On the consummation of
Eclipsys's initial public offering and for a period of 30 days thereafter,
Eclipsys agrees that upon written request by ALLTEL to Eclipsys, ALLTEL has the
right to cause Eclipsys to redeem ALLTEL's 4,500 remaining shares of Series C
Stock for an aggregate price of $4,500,000, plus dividends from the earlier of
July 1, 1998 or the thirtieth day following the closing of the initial public
offering of Eclipsys'S common stock, in accordance with the optional redemption
procedures set forth in Eclipsys's Second Amended and Restated Certificate of
Incorporation filed as of the date hereof.
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8. Cooperation on Guarantees. Eclipsys agrees that it
will cooperate with ALLTEL, and provide access to ALLTEL's counsel to relevant
documents and personnel, at reasonable times and at ALLTEL's expense, in the
event ALLTEL becomes involved in a dispute or litigation with third parties
under the guarantees referred to in Item 11 on Schedule 1(d).
9. Successors and Assigns. This Agreement will be
binding upon and inure to the benefit of the parties hereto and their
respective successors or permitted assigns. Neither party may assign or
delegate any of its respective rights or duties without the prior written
consent of the other party.
10. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same Agreement.
11. Representations and Warranties of the Parties. As of
the date hereof, each party represents and warrants to the other party that
this Agreement has been duly executed and delivered by each party, and assuming
the due execution and delivery by the other party, constitutes a valid and
binding obligation of each party enforceable against each party in accordance
with its terms.
12. Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, regardless
of the laws that might otherwise govern under applicable principles of conflict
of laws. Any action, suit or other proceeding initiated by any party hereto
against any other party under or in connection with this Agreement shall be
brought exclusively in any Federal court in the State of Delaware, as the party
bringing such action, suit or
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proceeding shall elect, having jurisdiction over the subject matter thereof. In
accordance with Title 6, Section 2708 of the Delaware Code Annotated, the
parties hereto hereby submit themselves to the jurisdiction of any such court
for the purpose of any such action and agree that service of process on them in
any such action, suit or proceeding may be effected by the means of written
notice to the address set forth above.
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IN WITNESS WHEREOF, this Agreement has been executed by the
duly authorized representatives of the parties as of the date and year first
above written.
ALLTEL INFORMATION SERVICES, INC. ECLIPSYS CORPORATION
By: By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Title: President
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IN WITNESS WHEREOF, this Agreement has been executed by the
duly authorized representatives of the parties as of the date and year first
above written.
ALLTEL INFORMATION SERVICES, INC. ECLIPSYS CORPORATION
By: [SIG] By:
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Name: (ILLEGIBLE) Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President Title: President
