EXHIBIT 10.1
SUBSCRIPTION AGREEMENT
This Subscription Agreement (the "Agreement") is made as of this 21st
day of December, 2001 between ProxyMed, Inc., a corporation organized under the
laws of the State of Florida with offices at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company"), and the undersigned (the
"Subscriber", and together with each of the other subscribers in the Offering
(defined below), the "Subscribers").
WHEREAS, subject to the terms and conditions set forth herein, the
Company proposes to issue and sell to the Subscribers units (the "Units") in a
private placement (the "Offering"), each Unit consisting of that number of
shares (the "Shares") of the Company's common stock, par value $.001 per share
(the "Common Stock"), which equals $100,000 divided by the Per Share Purchase
Price. The "Per Share Purchase Price" shall be determined by negotiation by and
among the Company, the Placement Agent (as defined below) and the Subscribers,
but in no event shall the Per Share Purchase Price be less than $15.00 per
share; and
WHEREAS, the Company will offer a minimum of 50 Units ($5,000,000) (the
"Minimum Offering") and a maximum of 70 Units ($7,000,000) (the "Maximum
Offering"), with an over-subscription option of 10 additional Units ($1,000,000)
subject to the mutual agreement of the Company and the Placement Agent (as
defined below); and
WHEREAS, the Shares are entitled to registration rights on the terms
set forth in this Agreement; and
WHEREAS, Commonwealth Associates, L.P. is acting as placement agent
(the "Placement Agent") in the Offering pursuant to a placement agency agreement
dated December 18, 2001 between the Company and the Placement Agent (the "Agency
Agreement"); and
WHEREAS, the Subscriber is delivering simultaneously herewith a
completed confidential investor questionnaire (the "Questionnaire").
NOW, THEREFORE, for and in consideration of the promises and the mutual
covenants hereinafter set forth, the parties hereto do hereby agree as follows:
I. SUBSCRIPTION FOR UNITS AND REPRESENTATIONS BY AND COVENANTS OF
SUBSCRIBER
1.1 SUBSCRIPTION FOR UNITS. Subject to the terms and conditions hereinafter
set forth, the Subscriber hereby subscribes for and agrees to purchase from the
Company such number of Units as is set forth upon the signature page hereof at a
price equal to $100,000 per Unit and the Company agrees to sell such Units to
the Subscriber for said purchase price subject to the Company's right to sell to
the Subscriber such lesser number of Units as the Company may, in its sole
discretion, deem necessary or desirable. The purchase price is payable by
certified or bank check made payable to "American Stock Transfer & Trust
Company" as escrow agent (the "Escrow Agent") for the Company or by wire
transfer of funds, contemporaneously with the execution and delivery of this
Agreement. The Escrow Agent shall act as such in accordance with the terms and
conditions of an escrow agreement to be entered into among the Placement
Agent, the Company and the Escrow Agent. Certificates representing the Shares
shall be delivered by the Company within five (5) business days following the
consummation of the Offering as set forth in Article III hereof.
1.2 RELIANCE ON EXEMPTIONS. The Subscriber acknowledges that this Offering
has not been reviewed by the United States Securities and Exchange Commission
(the "SEC") or any state agency because of the Company's representations that
this is intended to be a nonpublic offering exempt from the registration
requirements of the Securities Act of 1933, as amended (the "1933 Act") and
state securities laws. The Subscriber understands that the Company is relying in
part upon the truth and accuracy of, and the Subscriber's compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
the Subscriber set forth herein in order to determine the availability of such
exemptions and the eligibility of the Subscriber to acquire the Shares.
1.3 INVESTMENT PURPOSE. The Subscriber represents that the Shares are being
purchased for its own account, for investment purposes only and not for
distribution or resale to others in contravention of the registration
requirements of the 1933 Act. The Subscriber agrees that it will not sell or
otherwise transfer the Shares unless they are registered under the 1933 Act or
unless an exemption from such registration is available.
1.4 ACCREDITED INVESTOR. The Subscriber represents and warrants that
he/she/it ("it") is an "accredited investor" as such term is defined in Rule 501
of Regulation D promulgated under the 1933 Act, as indicated by its responses to
the Questionnaire, and that it is able to bear the economic risk of any
investment in the Shares. The Subscriber further represents and warrants that
the information furnished in the Questionnaire is accurate and complete in all
material respects.
1.5 RISK OF INVESTMENT. The Subscriber recognizes that the purchase of
Shares involves a high degree of risk in that: (i) an investment in the Company
is highly speculative and only investors who can afford the loss of their entire
investment should consider investing in the Company and the Shares; (ii)
transferability of the Shares is limited; and (iii) the Company will require
substantial additional funds to operate its business and there can be no
assurance that the Maximum Offering will be completed or that any other funds
will be available to the Company, in addition to all of the other risks set
forth in the Company's SEC Documents (as defined in Section 2.5 hereof).
1.6 INFORMATION. The Subscriber acknowledges careful review of: (a) the
Company's Annual Report on Form 10-K for the year ended December 31, 2000, (b)
the Company's Quarterly Report on Form 10-Q for the period ended September 30,
2001, (c) the Company's Proxy Statement for the Annual Meeting of Shareholders
held on July 25, 2001, (d) the Company's Current Report on Form 8-K filed with
the SEC on December 10, 2001, (e) the Confidential Investor Term Sheet dated
December 18, 2001 (the "Investor Term Sheet"), (f) this Agreement, and (g) all
exhibits, schedules and appendices which are part of or referenced in any of the
aforementioned documents (the Investor Term Sheet and this Agreement,
collectively referred to herein as, the "Offering Documents"), and hereby
represents that: (i) the Subscriber has been furnished by the Company during the
course of this transaction with all information regarding the Company which it
has requested; (ii) that the Subscriber has been afforded the
2
opportunity to ask questions of and receive answers from duly authorized
officers of the Company concerning the terms and conditions of the Offering, and
any additional information which it has requested; and (iii) the Subscriber has
been given the opportunity by the Placement Agent to review the Agency Agreement
if it has so requested.
1.7 NO REPRESENTATIONS. The Subscriber hereby represents that, except as
expressly set forth in the Offering Documents, no representations or warranties
have been made to the Subscriber by the Company or any agent, employee or
affiliate of the Company, including the Placement Agent, and in entering into
this transaction the Subscriber is not relying on any information other than
that contained in the Offering Documents and the results of independent
investigation by the Subscriber.
1.8 TAX CONSEQUENCES. The Subscriber acknowledges that the Offering may
involve tax consequences and that the contents of the Offering Documents do not
contain tax advice or information. The Subscriber acknowledges that it must
retain its own professional advisors to evaluate the tax and other consequences
of an investment in the Shares.
1.9 TRANSFER OR RESALE. The Subscriber understands that Rule 144 (the
"Rule") promulgated under the 1933 Act requires, among other conditions, a
one-year holding period prior to the resale (in limited amounts) of securities
acquired in a non-public offering without having to satisfy the registration
requirements under the 1933 Act. The Subscriber understands that the Company
makes no representation or warranty regarding its fulfillment in the future of
any reporting requirements under the Securities Exchange Act of 1934, as amended
(the "1934 Act"), or its dissemination to the public of any current financial or
other information concerning the Company, as is required by the Rule as one of
the conditions of its availability. The Subscriber understands and hereby
acknowledges that the Company is under no obligation to register the Shares
comprising the Units under the 1933 Act, with the exception of certain
registration rights set forth in Article IV herein. The Subscriber consents that
the Company may, if it desires, permit the transfer of the Shares out of the
Subscriber's name only when the Subscriber's request for transfer is accompanied
by an opinion of counsel reasonably satisfactory to the Company that neither the
sale nor the proposed transfer results in a violation of the 1933 Act or any
applicable state "blue sky" laws.
1.10 PLACEMENT AGENT. The Subscriber agrees that neither the Placement Agent
or any of its directors, officers, employees or agents shall be liable to any
Subscriber for any action taken or omitted to be taken by it in connection
herewith, except for willful misconduct or gross negligence.
1.11 LEGENDS. The Subscriber understands that the certificates representing
the Shares, until such time as they have been registered under the 1933 Act,
shall bear a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of such certificates or other
instruments):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE
3
OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I)
IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL, IN A
REASONABLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR APPLICABLE STATE
SECURITIES LAWS, OR (II) UNLESS SOLD PURSUANT TO
RULE 144 UNDER SAID ACT.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Shares upon which it is
stamped, if (a) such Shares are registered under the 1933 Act, (b) such holder
delivers to the Company an opinion of counsel, in a reasonably acceptable form,
to the Company that a disposition of the Shares may be made pursuant to an
exemption from such registration, or (c) such holder provides the Company with
reasonable assurance that a disposition of the Shares may be made pursuant to
the Rule without any restriction as to the number of securities acquired as of a
particular date that can then be immediately sold.
1.12 NO GENERAL SOLICITATION. The Subscriber represents that the Subscriber
was not induced to invest by any form of general solicitation or general
advertising including, but not limited to, the following: (i) any advertisement,
article, notice or other communication published in any newspaper, magazine or
similar media or broadcast over the news or radio; and (ii) any seminar or
meeting whose attendees were invited by any general solicitation or advertising.
1.13 VALIDITY; ENFORCEMENT. If the Subscriber is a corporation, partnership,
trust or other entity, the Subscriber represents and warrants that: (a) it is
authorized and otherwise duly qualified to purchase and hold the Units; and (b)
that this Agreement has been duly and validly authorized, executed and delivered
and constitutes the legal, binding and enforceable obligation of the
undersigned.
1.14 ADDRESS. The Subscriber hereby represents that the address of
Subscriber furnished by the Subscriber at the end of this Agreement is the
undersigned's principal residence if the Subscriber is an individual or its
principal business address if it is a corporation or other entity.
1.15 FOREIGN SUBSCRIBER. If the Subscriber is not a United States person,
such Subscriber hereby represents that it has satisfied itself as to the full
observance of the laws of its jurisdiction in connection with any invitation to
subscribe for the Shares comprising the Units or any use of this Agreement,
including: (a) the legal requirements within its jurisdiction for the purchase
of the Units; (b) any foreign exchange restrictions applicable to such purchase;
(c) any governmental or other consents that may need to be obtained; and (d) the
income tax and other tax consequences, if any, that may be relevant to the
purchase, holding, redemption, sale or transfer of the Shares comprising the
Units. Such Subscriber's subscription and payment for, and its continued
beneficial ownership of the Shares, will not violate any applicable securities
or other laws of the Subscriber's jurisdiction.
4
1.16 NASD MEMBER. The Subscriber acknowledges that if it is a Registered
Representative of a NASD member firm, the Subscriber must give such firm notice
required by the NASD's Rules of Fair Practice, receipt of which must be
acknowledged by such firm on the signature page hereof.
1.17 INCREaSE IN MAXIMUM OFFERING. The Subscriber acknowledges that the
Maximum Offering may be increased by up to 10 Units ($1,000,000) without notice
to Subscribers.
II. REPRESENTATIONS BY THE COMPANY
The Company represents and warrants to the Subscriber, except as set forth in
the disclosure schedules attached hereto:
2.1 ORGANIZATION AND QUALIFICATION. The Company is duly organized, validly
existing, and in good standing under the laws of the jurisdiction in which it is
organized, and has the requisite power and authorization to own its properties
and to carry on its business as now being conducted. The Company is duly
qualified as a foreign corporation to do business and is in good standing in
every jurisdiction in which its ownership of property or the nature of the
business conducted by it makes such qualification necessary, except to the
extent that the failure to be so qualified or be in good standing would not have
a Material Adverse Effect. As used in this Agreement, "Material Adverse Effect"
means any material adverse effect on the business, properties, assets,
operations, results of operations, financial condition or prospects of the
Company, or on the transactions contemplated hereby, or by the other Offering
Documents or the agreements and instruments to be entered into in connection
herewith or therewith, or on the authority or ability of the Company to perform
its obligations under the Offering Documents. The Company has one wholly-owned
operating subsidiary, Key Communications Service, Inc., and one wholly-owned
inactive subsidiary, WPJ, Inc. d/b/a/ Integrated Medical Systems.
2.2 AUTHORIZATION; ENFORCEMENT; VALIDITY. The Company has the requisite
corporate power and authority to enter into and perform its obligations under
the Offering Documents, to file and perform its obligations under the Offering
Documents, and to issue the Shares in accordance with the terms of the Offering
Documents. The execution and delivery of the Offering Documents by the Company
and the consummation by the Company of the transactions contemplated by the
Offering Documents, including without limitation the issuance of the Shares,
have been duly authorized by the Company's board of directors and no further
consent or authorization is required by the Company, its board of directors or
its shareholders.
2.3 ISSUANCE OF SECURITIES. The issuance, sale and delivery of the Shares
have been duly authorized by all requisite corporate action by the Company and,
upon issuance in accordance with the Offering Documents, shall be (a) duly
authorized, validly issued, fully paid and non-assessable, and (b) free from all
taxes, liens and charges with respect to the issue thereof.
2.4 NO CONFLICTS. The execution, delivery and performance of the Offering
Documents by the Company and the consummation by the Company of the transactions
contemplated therein, will not (a) result in a violation of the Company's
Articles of Incorporation, any certificate of designations, preferences and
rights of any outstanding series of preferred stock of the Company, or the
Company's bylaws, (b) conflict with, or constitute a default or an event which
with notice
5
or lapse of time or both would become a default under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any material
agreement, lease, license or instrument (including without limitation, any
document filed as an exhibit to any of the Company's SEC Documents (as defined
below)), or (c) result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws and regulations
and the rules and regulations of the Nasdaq National Market ("Nasdaq")
applicable to the Company or by which any property or asset of the Company is
bound or affected).
2.5 SEC DOCUMENTS; FINANCIAL STATEMENTS. Since September 30, 2001, the
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC pursuant to the reporting requirements
of the 1934 Act (all of the foregoing filed prior to the date hereof and all
exhibits included therein and financial statements and schedules thereto and
documents incorporated by reference therein being hereinafter referred to as the
"SEC Documents"). The Company has made available to the Subscriber or its
representatives copies of the SEC Documents. As of their respective dates, the
SEC Documents complied in all material respects with the requirements of the
1934 Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. As of their respective dates, the financial
statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such financial statements
have been prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (a) as may be
otherwise indicated in such financial statements or the notes thereto, or (b) in
the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments that will not be material). As of the date hereof, the Company meets
the requirements for the use of Form S-3 for registration of the resale of the
Shares and has no reason to believe it will not continue to remain so eligible.
2.6 ABSENCE OF LITIGATION. There is no action, suit, proceeding, inquiry or
investigation before or by Nasdaq, any court, public board, government agency,
self-regulatory organization or body, or arbitrator pending or, to the knowledge
of the Company, threatened against the Company or any of the Company's officers
or directors in their capacities as such which would have a Material Adverse
Effect.
2.7 SECURITIES LAW COMPLIANCE. The offer, offer for sale, and sale of the
Units have not been registered with the SEC. The Units are to be offered for
sale and sold in reliance upon the exemptions from the registration requirements
of Section 5 of the 1933 Act. The Company will conduct the Offering in
compliance with the requirements of Regulation D under the 1933 Act, and the
Company will file all appropriate notices of offering with the SEC.
2.8 DISCLOSURE. None of the representations and warranties of the Company
appearing in this Agreement or any information appearing in any of the Offering
Documents or SEC Documents,
6
when considered together as a whole, contains, or on any Closing Date (as
defined in Section 3.1 below) will contain, any untrue statement of a material
fact or omits, or on any Closing Date will omit, to state any material fact
required to be stated herein or therein in order for the statements herein or
therein, in light of the circumstances under which they were made, not to be
misleading.
2.9 ABSENCE OF CHANGES. Except as set forth on Schedule 2.9 to this
Agreement, since September 30, 2001 the Company has not (i) incurred any debts,
obligations or liabilities, absolute, accrued, contingent or otherwise, whether
due or to become due, except current liabilities incurred in the usual and
ordinary course of business and consistent with past practices, having
individually or in the aggregate a Material Adverse Effect, (ii) made or
suffered any changes in its contingent obligations by way of guaranty,
endorsement (other than the endorsement of checks for deposit in the usual and
ordinary course of business), indemnity, warranty or otherwise, (iii) discharged
or satisfied any liens other than those securing, or paid any obligation or
liability other than, current liabilities shown on the balance sheet dated as at
September 30, 2001 and forming part of the SEC Documents, and current
liabilities incurred since September 30, 2001, in each case in the usual and
ordinary course of business and consistent with past practices, (iv) mortgaged,
pledged or subjected to lien any of its assets, tangible or intangible, (v)
sold, transferred or leased any of its assets except in the usual and ordinary
course of business and consistent with past practices, (vi) cancelled or
compromised any debt or claim, or waived or released any right, of material
value, (vii) suffered any physical damage, destruction or loss (whether or not
covered by insurance) adversely affecting the properties, business or prospects
of the Company, (viii) entered into any transaction other than in the usual and
ordinary course of business except for this Agreement, the other Offering
Documents and the related agreements referred to herein and therein, (ix)
encountered any labor difficulties or labor union organizing activities, (x)
made or granted any wage or salary increase or entered into any employment
agreement, (xi) issued or sold any shares of capital stock or other securities
or granted any options with respect thereto, or modified any equity security of
the Company, (xii) declared or paid any dividends on or made any other
distributions with respect to, or purchased or redeemed, any of its outstanding
equity securities, (xiii) suffered or experienced any change in, or condition
affecting, its condition (financial or otherwise), properties, assets,
liabilities, business operations, results of operations or prospects other than
changes, events or conditions in the usual and ordinary course of its business
and consistent with past practices, having (either by itself or in conjunction
with all such other changes, events and conditions) a Material Adverse Effect,
(xiv) made any change in the accounting principles, methods or practices
followed by it or depreciation or amortization policies or rates theretofore
adopted, or (xv) entered into any agreement, or otherwise obligated itself, to
do any of the foregoing.
III. TERMS OF SUBSCRIPTION
3.1 OFFERING PERIOD. The subscription period will begin as of December 18,
2001 and will terminate at 11:59 PM Eastern time on February 18, 2002, unless
extended by mutual agreement of the Company and the Placement Agent for up to an
additional 30 days (the "Termination Date"). Provided the Minimum Offering shall
have been subscribed for, funds representing the sale thereof shall have
cleared, all conditions to closing set forth in the Agency Agreement have been
satisfied or waived and neither the Company nor the Placement Agent have
notified the
7
other that they do not intend to effect the closing of the Minimum Offering, a
closing (the "Initial Closing") shall take place at the offices of counsel to
the Placement Agent, Loeb & Loeb LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
within three business days thereafter (but in no event later than three days
following the Termination Date, which closing date may be accelerated or
adjourned by agreement between the Company and the Placement Agent. At the
Initial Closing, payment for the Units issued and sold by the Company shall be
made against delivery of the Shares comprising such Units. Subsequent closings
(each of which shall be deemed a "Closing" hereunder) shall take place by mutual
agreement of the Company and the Placement Agent. The date of the last closing
of the Offering is hereinafter referred to as the "Final Closing" and the date
of any Closing hereunder is hereinafter referred to as a "Closing Date".
3.2 EXPENSES; FEES. Simultaneously with payment for and delivery of the
Units at each Closing, the Company shall pay to the Placement Agent under the
Agency Agreement a cash fee equal to 7% of the gross proceeds of the Units sold.
The Company shall also reimburse the Placement Agent for its actual
out-of-pocket expenses incurred in connection with the Offering, including,
without limitation, the reasonable fees and disbursements of its counsel (Loeb &
Loeb LLP), due diligence expenses, travel and road-show expenses, and printing
and mailing expenses, up to an aggregate maximum of $50,000.
3.3 ESCROW. Pending the sale of the Units, all funds paid hereunder shall
be deposited by the Company in escrow with the Escrow Agent. If the Company
shall not have obtained the Minimum Offering on or before the Termination Date,
then this subscription shall be void and all funds paid hereunder by the
Subscriber, without interest, shall be promptly returned to the Subscriber,
subject to Section 3.5 hereof.
3.4 CERTIFICATES. The Subscriber hereby authorizes and directs the Company,
upon each Closing in the Offering, to deliver the Shares to be issued to such
Subscriber pursuant to this Agreement either (a) to the Subscriber's address
indicated in the Questionnaire, or (b) directly to the Subscriber's account
maintained with the Placement Agent, if any.
3.5 RETURN OF FUNDS. The Subscriber hereby authorizes and directs the
Company to return any funds for unaccepted subscriptions to the same account
from which the funds were drawn, including any customer account maintained with
the Placement Agent.
IV. REGISTRATION RIGHTS
4.1 AUTOMATIC REGISTRATION. The Company hereby agrees with the Subscribers
or their permitted transferees (other than a transferee who acquires shares
pursuant to the Rule or an effective registration statement) (collectively, the
"Holders") that no later than 45 days following the earlier of (a) the date of
the Final Closing or (b) two weeks following the date of the Initial Closing,
the Company shall prepare and file a registration statement under the 1933 Act
with the SEC covering the resale of the Shares, and the Company will use its
best efforts to cause such registration to become effective within 75 days after
the earlier of (a) the date of the Final Closing or (b) two weeks following the
date of the Initial Closing. In the event that the Company's registration
statement covering the resale of the Shares has not been declared effective by
the SEC within 75 day period set forth above, the Per Share Purchase Price shall
be
8
reduced by 5% for each month (or on a pro rata basis for any portion thereof)
thereafter until such time as the registration statement is effective; provided,
however, that the maximum reduction in the Per Share Purchase Price shall be
25%; and provided, further, that any day during which the SEC is closed due to
war, terrorism or national emergency shall be excluded from the calculation of
the delay period. The reduction in the Per Share Purchase Price shall be
evidenced by the issuance of additional Shares (the "Adjustment Shares") to the
Holders within five days following the effective date of the registration
statement. The Adjustment Shares shall be covered by the registration statement.
The Company's obligation to keep the registration statement effective shall
continue until the earlier of (a) the date that all of the Shares and Adjustment
Shares have been sold pursuant to the Rule under the 1933 Act or an effective
registration statement, or (b) such time as the Shares and Adjustment Shares are
eligible for immediate resale pursuant to Rule 144(k) under the 1933 Act. For
purposes of this Article IV, the term Shares shall be deemed to include the
Adjustment Shares.
4.2 "PIGGYBACK" REGISTRATION RIGHTS. At any time commencing after the Final
Closing, if the Company shall determine to proceed with the actual preparation
and filing of a registration statement under the 1933 Act in connection with the
proposed offer and sale of any of its securities by it or any of its security
holders (other than a registration statement on Form ▇-▇, ▇-▇ or other limited
purpose form), the Company will give written notice of its determination to all
record holders of the Shares. Upon the written request from any Holders (the
"Requesting Holders"), within 15 days after receipt of any such notice from the
Company, the Company will, except as herein provided, cause all of the Shares
covered by such request (the "Requested Stock") held by the Requesting Holders
to be included in such registration statement, all to the extent requisite to
permit the sale or other disposition by the prospective seller or sellers of the
Requested Stock; provided, further, that nothing herein shall prevent the
Company from, at any time, abandoning or delaying any registration. If any
registration pursuant to this Section 4.2 shall be underwritten in whole or in
part, the Company may require that the Requested Stock be included in the
underwriting on the same terms and conditions as the securities otherwise being
sold through the underwriters. In such event, the Requesting Holders shall, if
requested by the underwriters, execute an underwriting agreement containing
customary representations and warranties by selling shareholders and a lock-up
on Shares not being sold. If in the good faith judgment of the managing
underwriter of such public offering the inclusion of all of the Requested Stock
would reduce the number of shares to be offered by the Company or interfere with
the successful marketing of the shares of stock offered by the Company, the
number of shares of Requested Stock otherwise to be included in the underwritten
public offering may be reduced pro rata (by number of shares) among the
Requesting Holders or excluded in their entirety if so required by the
underwriter. To the extent only a portion of the Requested Stock is included in
the underwritten public offering, those shares of Requested Stock which are thus
excluded from the underwritten public offering and any other securities of the
Company held by such Holders shall be withheld from the market by the Holders
thereof for a period, not to exceed 90 days, which the managing underwriter
reasonably determines is necessary in order to effect the underwritten public
offering. The obligation of the Company under this Section 4.2 shall not apply
after the earlier of (a) the date that all of the Shares have been sold pursuant
to the Rule under the 1933 Act or an effective registration statement, or (b)
such time as the Shares are eligible for immediate resale pursuant to Rule
144(k) under the 1933 Act.
9
4.3 REGISTRATION PROCEDURES. To the extent required by Sections 4.1 or 4.2,
the Company will:
(a) prepare and file with the SEC a registration
statement with respect to such securities, and use its best efforts to cause
such registration statement to become and remain effective;
(b) prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration statement effective;
(c) furnish to the Holders participating in such
registration and to the underwriters of the securities being registered such
reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such underwriters may
reasonably request in order to facilitate the public offering of such
securities;
(d) use its best efforts to register or qualify the
securities covered by such registration statement under such state securities or
blue sky laws of such jurisdictions as the Holders may reasonably request in
writing within 20 days following the original filing of such registration
statement, except that the Company shall not for any purpose be required to
execute a general consent to service of process or to qualify to do business as
a foreign corporation in any jurisdiction wherein it is not so qualified;
(e) notify the Holders, promptly after it shall receive
notice thereof, of the time when such registration statement has become
effective or a supplement to any prospectus forming a part of such registration
statement has been filed;
(f) notify the Holders promptly of any request by the SEC
for the amending or supplementing of such registration statement or prospectus
or for additional information;
(g) prepare and file with the SEC, promptly upon the
request of any Holders, any amendments or supplements to such registration
statement or prospectus which, in the reasonable opinion of counsel for such
Holders (and concurred in by counsel for the Company), is required under the
1933 Act or the rules and regulations thereunder in connection with the
distribution of Common Stock by such Holders;
(h) prepare and promptly file with the SEC and promptly
notify such Holders of the filing of such amendment or supplement to such
registration statement or prospectus as may be necessary to correct any
statements or omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the 1933 Act, any event shall have
occurred as the result of which any such prospectus or any other prospectus as
then in effect would include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances in which they were made, not misleading; and
(i) advise the Holders, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop order by the SEC
suspending the effectiveness of
10
such registration statement or the initiation or threatening of any proceeding
for that purpose and promptly use its best efforts to prevent the issuance of
any stop order or to obtain its withdrawal if such stop order should be issued.
The Holders shall cooperate with the Company in providing the
information necessary to effect the registration of their Shares, including
completion of customary questionnaires.
4.4 EXPENSES.
(a) With respect to the any registration required
pursuant to Section 4.1 or 4.2 hereof, all fees, costs and expenses of and
incidental to such registration, inclusion and public offering (as specified in
paragraph (b) below) in connection therewith shall be borne by the Company,
provided, however, that the Holders shall bear their pro rata share of the
underwriting discount and commissions and transfer taxes and the cost of their
own counsel.
(b) The fees, costs and expenses of registration to be
borne by the Company as provided in paragraph (a) above shall include, without
limitation, all registration, filing, and NASD fees, printing expenses, fees and
disbursements of counsel and accountants for the Company, and all legal fees and
disbursements and other expenses of complying with state securities or blue sky
laws of any jurisdictions in which the securities to be offered are to be
registered and qualified (except as provided in 4.4(a) above). Fees and
disbursements of counsel and accountants for the Holders and any other expenses
incurred by the Holders not expressly included above shall be borne by the
Holders.
4.5 INDEMNIFICATION.
(a) The Company will indemnify and hold harmless each
Holder which is included in a registration statement pursuant to the provisions
of Sections 4.1 and 4.2 hereof, its directors and officers, and any underwriter
(as defined in the ▇▇▇▇ ▇▇▇) for such Holder and each person, if any, who
controls such Holder or such underwriter within the meaning of the 1933 Act,
from and against, and will reimburse such Holder and each such underwriter and
controlling person with respect to, any and all loss, damage, liability, cost
and expense to which such Holder or any such underwriter or controlling person
may become subject under the 1933 Act or otherwise, insofar as such losses,
damages, liabilities, costs or expenses are caused by any untrue statement or
alleged untrue statement of any material fact contained in such registration
statement, any prospectus contained therein or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading; provided, however, that the Company will not be liable in any
such case to the extent that any such loss, damage, liability, cost or expenses
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission so made in conformity with information furnished
by or on behalf of such Holder, such underwriter or such controlling person in
writing specifically for use in the preparation thereof.
(b) Each Holder included in a registration pursuant to
the provisions of Sections 4.1 or 4.2 hereof will indemnify and hold harmless
the Company, its directors and
11
officers, any controlling person and any underwriter from and against, and will
reimburse the Company, its directors and officers, any controlling person and
any underwriter with respect to, any and all loss, damage, liability, cost or
expense to which the Company or any controlling person and/or any underwriter
may become subject under the 1933 Act or otherwise, insofar as such losses,
damages, liabilities, costs or expenses are caused by any untrue statement or
alleged untrue statement of any material fact contained in such registration
statement, any prospectus contained therein or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances in which they were made,
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
so made in reliance upon and in strict conformity with written information
furnished by or on behalf of such Holder specifically for use in the preparation
thereof; provided, that in no case shall the Holder be responsible for any
amount in excess of the net proceeds received by it from the sale of the Shares.
(c) Promptly after receipt by an indemnified party
pursuant to the provisions of paragraph (a) or (b) of this Section 4.5 of notice
of the commencement of any action involving the subject matter of the foregoing
indemnity provisions such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of said paragraph
(a) or (b), promptly notify the indemnifying party of the commencement thereof;
but the omission to so notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than
hereunder. In case such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party,
provided, however, if counsel for the indemnifying party concludes that a single
counsel cannot under applicable legal and ethical considerations, represent both
the indemnifying party and the indemnified party, the indemnified party or
parties have the right to select separate counsel to participate in the defense
of such action on behalf of such indemnified party or parties, it being
understood, however, that the indemnifying party shall not, in connection with
any one such action or separate but substantially similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (together with appropriate local counsel as required by the
local rules of such jurisdiction) at any time for all such indemnified parties.
After notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party pursuant to the provisions of said paragraph
(a) or (b) for any legal or other expense subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation, unless (i) the indemnified party shall have employed
counsel in accordance with the provisions of the preceding sentence, (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after the notice of the commencement of the action or (iii) the
indemnifying party has, in its sole discretion, authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party.
12
V. MISCELLANEOUS
5.1 NOTICE. Any notices, consents, waivers or other communications required
or permitted to be given under the terms of this Agreement must be in writing
and will be deemed to have been delivered: (a) upon receipt, when delivered
personally, (b) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party), or (c) one (1) business day after deposit with an overnight
courier service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall be:
If to the Company:
ProxyMed, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (954) 473- 2341
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Financial Officer
With a copy to:
Holland & Knight LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇, Esq.
If to the Subscriber, to its address and facsimile number set forth at the end
of this Agreement, or to such other address and/or facsimile number and/or to
the attention of such other person as specified by written notice given to the
Company five (5) days prior to the effectiveness of such change. Written
confirmation of receipt (a) given by the recipient of such notice, consent,
waiver or other communication, (b) mechanically or electronically generated by
the sender's facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of such transmission, or (c) provided by
an overnight courier service shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from an overnight courier service in accordance
with clause (a), (b) or (c) above, respectively.
5.2 ENTIRE AGREEMENT; AMENDMENT. This Agreement supersedes all other prior
oral or written agreements between the Subscriber, the Company, their affiliates
and persons acting on their behalf with respect to the matters discussed herein,
and this Agreement and the instruments referenced herein contain the entire
understanding of the parties with respect to the matters covered herein and
therein and, except as specifically set forth herein or therein, neither the
Company nor the Subscriber makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be
amended or waived other than by an instrument in writing signed by the Company
and the holders of at least a majority of the Shares then outstanding (or if
prior to the Closing, the Subscribers purchasing at least a majority
13
of the Shares to be purchased at the Closing). No such amendment shall be
effective to the extent that it applies to less than all of the holders of the
Securities then outstanding.
5.3 SEVERABILITY. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
5.4 GOVERNING LAW; JURISDICTION; JURY TRIAL. All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby
irrevocably submits to the non-exclusive jurisdiction of the state and federal
courts sitting in the Southern District of New York, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. Each party hereby irrevocably waives any right it may
have, and agrees not to request, a jury trial for the adjudication of any
dispute hereunder or in connection with or arising out of this Agreement or any
transaction contemplated hereby.
5.5 HEADINGS. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
5.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and assigns,
including any purchasers of the Shares. The Company shall not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the holders of at least a majority the Shares then outstanding,
except by merger or consolidation. The Subscriber may assign some or all of its
rights hereunder without the consent of the Company, provided, however, that any
such assignment shall not release the Subscriber from its obligations hereunder
unless such obligations are assumed by such assignee and the Company has
consented to such assignment and assumption, which consent shall not be
unreasonably withheld.
5.7 NO THIRD PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
14
5.8 SURVIVAL. The representations and warranties of the Company and the
Subscriber contained in Articles I and II and the agreements set forth in this
Article V shall survive the Final Closing for a period of two years.
5.9 FURTHER ASSURANCES. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
5.10 NO STRICT CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.
5.11 LEGAL REPRESENTATION. The Subscriber acknowledges that: (a) it has read
this Agreement and the exhibits hereto; (b) it understands that the Company has
been represented in the preparation, negotiation, and execution of this
Agreement by Holland & Knight LLP, counsel to the Company, and that such counsel
has not represented and is not representing the Subscriber; (c) it understands
that the Placement Agent has been represented by Loeb & Loeb LLP, and that such
counsel has not represented and is not representing the Subscriber; (d) it has
either been represented in the preparation, negotiation, and execution of this
Agreement by legal counsel of its own choice, or has chosen to forego such
representation by legal counsel after being advised to seek such legal
representation; and (e) it understands the terms and consequences of this
Agreement and is fully aware of its legal and binding effect.
5.12 CONFIDENTIALITY. The Subscriber agrees that, at all times during the
period ending five (5) business days after the filing by the Company with the
SEC of its next Annual Report on Form 10-K or Current Report on Form 8-K
following the date hereof, it shall keep confidential and not divulge, furnish
or make accessible to anyone, the confidential information concerning or
relating to the business or financial affairs of the Company contained in the
Offering Documents to which it has become privy by reason of this Agreement. The
Company agrees that it shall not disclose the name of the Subscriber in any
press release or public filing without the consent of the Subscriber.
5.13 COUNTERPARTS. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party; provided that a facsimile signature shall be
considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile
signature.
15
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first written above.
--------------------------------------------- ------------------------------------------------
Signature of Subscriber Signature of Co-Subscriber
--------------------------------------------- ------------------------------------------------
Name of Subscriber Name of Co-Subscriber
[please print] [please print]
--------------------------------------------- ------------------------------------------------
Address of Subscriber Address of Co-Subscriber
--------------------------------------------- ------------------------------------------------
Social Security or Taxpayer Social Security or Taxpayer Identification
Identification Number of Subscriber Number of Co-Subscriber
---------------------------------------------
Subscriber's Account Number
at Commonwealth Associates, L.P.
*If Subscriber is a Registered Representative
with an NASD member firm, have the
following acknowledgment signed by
the appropriate party:
The undersigned NASD member firm Subscription Accepted:
acknowledges receipt of the notice required by
Rule 3040 of the NASD Conduct Rules.
PROXYMED, INC.
---------------------------------------------
Name of NASD Member Firm
By:
By ---------------------------------------------
------------------------------------------- Name:
Authorized Officer Title:
---------------------------------------------
Dollar Amount of Units Subscribed For
------------------------------------------------
Dollar Amount of Subscription Accepted
16
