Document:

EXHIBIT 10.39

                           SUBSCRIPTION AGREEMENT AND
                               EXECUTION DOCUMENTS
                      UNIVERSAL COMMUNICATION SYSTEMS, INC.
                                  COMMON STOCK

                               ____________ SHARES

         Enclosed herewith are the documents necessary to subscribe for Shares
of Common Stock, $.001 par value per share (the "Shares"), of Universal
Communication Systems, Inc. ("UCSI" or the "Company"). Set forth herein are
instructions for the execution of the enclosed documents.

                                TABLE OF CONTENTS

How to subscribe
         A.       Instructions
         B.       Communications

Subscription Agreement (2 copies)
         Appendix A-Consideration to be Delivered
         Appendix B-Accredited Investor Certificate

<PAGE>
                                HOW TO SUBSCRIBE

A. Instructions.

     Each person considering subscribing the Shares should review the following
instructions:

     Subscription Agreement: Two copies of the form Subscription Agreement and
Appendixes A and B attached to the Subscription Agreement should be completed,
executed and delivered to the company at the address set forth below. The
Company will execute both copies of the Subscription Agreement and return one to
you for your records.

     The company shall have the right to accept or reject any subscription, in
whole or in part.

     An acknowledgement of the acceptance of your subscription for Shares will
be returned to you promptly after acceptance.

     Payment: Payment of $______ for each Share subscribed for shall be made by
delivery at the Closing (as defined in Section 3 of the Subscription Agreement)
of cash to the Company at the address set forth below to an account specified by
the Company.

B. Communications.

     All documents and checks should be forwarded to:

                  Universal Communication Systems, Inc.
                  407 Lincoln Road, Ste 12F
                  Miami Beach, FL 33139
                  Attention:  Chief Financial Officer

          THE SHARES COMMON STOCK OF UNIVERSAL COMMUNICATION SYSTEMS, INC. HAVE
     NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS
     OF ANY STATE. THERE ARE FURTHER RESTRICTIONS ON THE TRANSFERABILITY OF THE
     SHARES DESCRIBED HEREIN.

          THE PURCHASE OF SHARES COMMON STOCK OF UNIVERSAL COMMUNICATION
     SYSTEMS, INC. INVOLVES A HIGH DEGREE OF RISK AND SHOULD BE CONSIDERED ONLY
     BY PERSONS WHO CAN BEAR THE RISK OF THE LOSS OF THEIR ENTIRE INVESTMENT.

<PAGE>
                             SUBSCRIPTION AGREEMENT

Universal Communication Systems, Inc.
407 Lincoln Road, Ste 12F
Miami Beach, FL 33139

Gentlemen:

         The undersigned understands that Universal Communication Systems, Inc.
(the "Company"), is offering for sale up to __________ Shares of its Common
Stock, $.001 par value per share (the "Shares"), having the rights, privileges
and preferences as set forth in the Certificate of Designations (the
"Certificate") attached hereto as Exhibit A. The undersigned further understands
that the offering is being made without registration of the Shares under the
Securities Act of 1933, as amended (the "Securities Act"), and is being made
only to "accredited investors" (as defined in Rule 501 of Regulation D under the
Securities Act).

         1.   Subscription: Subject to the terms and conditions hererof and the
              provisions of the Memorandum, the undersigned hereby irrevocably
              subscribes for that number of Shares set forth in Appendix A
              hereto at a price per share of $_______, which is payable as
              described in Section 4 hereof.

         2.   Acceptance of Subscription and Issuance of Shares. It is
              understood and agreed that the Company shall have the sole right,
              at its complete discretion, to accept or reject this subscription,
              in whole or in part, for any reasons and that the same shall be
              deemed to be accepted by the Company only when it is signed by a
              duly authorized officer of the Company and delivered to the
              undersigned at the Closing referred to in Section 3 hereof.
              Notwithstanding anything in this Agreement to the contrary, the
              Company shall have no obligation to issue any of the Shares to any
              person who is a resident of a jurisdiction in which the issuance
              of Shares to him would constitute a violation of the securities,
              "blue sky" or other similar laws of such jurisdiction
              (collectively referred to as the "State Securities Laws").

         3.   The Closing. The closing of the purchase and sale of the Shares
              (the "Closing") shall take place at such time and place as the
              Company shall designate by notice to the undersigned.

         4.   Payment for Shares. Payment for the Shares shall be received by
              the Company from the undersigned by cashier's check or wire
              transfer of immediately available funds at or prior to the
              Closing, in an amount as set forth in Appendix A hereto. The
              Company shall deliver the Shares to the undersigned at the
              Closing.

         5.   Representations and Warranties of the Company. As of the Closing,
              the Company represents and warrants that:

              (a) The Company is duly incorporated, validly existing and in good
                  standing under the laws of the State of Nevada, with full
                  power and authority to conduct its business as it is currently
                  being conducted and to own its own assets; and has secured any
                  other authorizations, approvals, permits and orders required
                  by law for the conduct by the Company of its business as it is
                  currently being conducted.

<PAGE>

              (b) The Company has duly authorized the issuance and sale of the
                  Shares upon the terms of their offer by all requisite
                  corporate action.

              (c) The Shares, when issued and paid for, will represent validly
                  authorized, duly issued and fully paid and nonassessable
                  Shares of the Company, and the issuance thereof will not
                  conflict with the certificate of incorporation or bylaws of
                  the Company nor with any outstanding warrant, option, call,
                  preemptive right or commitment of any type relating to the
                  Company's capital stock. The Shares shall have the rights,
                  preferences and privileges set forth in the Certificate.

              (d) No representation or warranty by the Company in this
                  Agreement, and no statement by an officer of the Company
                  contained in any document, certificate or other writing
                  furnished to the undersigned in connection with the
                  transactions contemplated hereby, when taken as a whole,
                  contains any untrue statement of a material fact or omits to
                  state any material fact necessary to make statements herein or
                  therein not misleading in light of the circumstances in which
                  they are made.

         6.   Representations, Warranties and Covenants of the Undersigned. The
              undersigned hereby represents and warrants to and covenants with
              the Company and each officer, director and agent of the Company
              that:

              (a) General:

                  (i)   The undersigned has all requisite authority to enter
                        into this Agreement and to perform all the obligations
                        required to be performed by the undersigned hereunder.

                  (ii)  The undersigned is a resident of the state or country
                        set forth on the signature page hereto and is not
                        acquiring the Shares as an agent or otherwise for any
                        person.

              (b) Information Concerning the Company:

                  (i)   The undersigned has been given the opportunity to obtain
                        any information necessary to verify the accuracy of the
                        information contained in documents supplied by the
                        Company and has been furnished all such information so
                        requested.

                  (ii)  The undersigned understands that, unless he notifies the
                        Company in writing to the contrary at or before the
                        Closing, all the undersigned's representations and
                        warranties contained in this Agreement will be deemed to
                        have been reaffirmed and confirmed as of the Closing,
                        taking into account all information received by the
                        undersigned.

                  (iii) The undersigned understands that the purchase of the
                        Shares involves various risks, including those outlined
                        in this Agreement.

                  (iv)  The undersigned understands that no federal or state
                        agency has passed upon the Shares or made any finding or
                        determination concerning the fairness or advisability of
                        this investment.
<PAGE>

              (c) Status of the Undersigned:

                  (i)   The undersigned has such knowledge, skill and experience
                        in business, financial and investment matters so that he
                        is capable of evaluating the merits and risks of an
                        investment in the Shares. To the extent necessary, the
                        undersigned has retained, at his own expense, and relied
                        upon, appropriate professional advice regarding the
                        investment, tax and legal merits and consequences of
                        this Agreement and owning Shares.

                  (ii)  The undersigned is an "accredited investor" as defined
                        in Rule 501 (a) under the Securities Act. The
                        undersigned agrees to furnish any additional information
                        requested to assure compliance with applicable federal
                        and state securities laws in connection with the
                        purchase and sale of the Shares. The undersigned
                        acknowledges that he has completed the Accredited
                        Investor Certificate contained in Appendix B and the
                        information contained therein is complete and accurate
                        as of the date thereof and is hereby affirmed as of the
                        date hereof.

              (d) Restrictions on Transfer or Sale of Shares:

                  (i)   The undersigned is acquiring The Shares solely for his
                        own beneficial Account, for investment purposes, and not
                        with a view to, or for resale in connection with, any
                        distribution of the Shares. The undersigned understands
                        that the Shares have not been registered under the
                        Securities Act or any State Securities Laws by reason of
                        specific exemptions under the provisions thereof which
                        depend in part upon the investment intent of the
                        undersigned and of the other representations made by the
                        undersigned in this Agreement. The undersigned
                        understands that the Company is relying upon the
                        representations and agreements contained in this
                        agreement (and any supplemental information) for the
                        purpose of determining whether this transaction meets
                        the requirements for such exemptions.

                  (ii)  The undersigned understands that the Shares are
                        "restricted securities" under applicable federal
                        securities laws and that the Securities Act and the
                        rules of the Securities and Exchange Commission (the
                        "Commission") provide in substance that the undersigned
                        may dispose of the Shares only pursuant to an effective
                        registration statement under the Securities Act or an
                        exemption therefrom, and the undersigned understands
                        that the Company has no obligation or intention to
                        register any of the Shares (except for the registration
                        rights granted hereunder), or to take action so as to
                        permit sales pursuant to the Securities Act (including
                        Rule 144 thereunder). Accordingly, the undersigned
                        understands that under the Commission's rules, the
                        undersigned may dispose of the Shares principally only
                        in "private placements" which are exempt from
                        registration under the Securities Act, in which event
                        the transferee will acquire "restricted securities"
                        subject to the same limitations as in the hands of the
                        undersigned. As a consequence, the undersigned
                        understands that he must bear the economic risks of the
                        investment in the Shares for an indefinite period of
                        time.

                  (iii) The undersigned agrees: (A) that he will not sell,
                        assign, pledge, give, transfer or otherwise dispose of
                        the Shares or any interest therein, or make any offer or

<PAGE>

                        attempt to do any of the foregoing, except pursuant to
                        registration of the Shares, as applicable, under the
                        Securities Act and all applicable State Securities Laws
                        or in a transaction which is exempt from the
                        registration provisions of the Securities Act and all
                        applicable State Securities Laws; (B) that the
                        certificate(s) for the Shares will bear a legend making
                        reference to the foregoing restrictions; and (C) that
                        the Company and any transfer agent for the Shares shall
                        not be required to give effect to any purported transfer
                        of such shares except upon compliance with the foregoing
                        restrictions.

                  (iv)  The undersigned has not offered or sold any portion of
                        his Shares with others or of reselling or otherwise
                        disposing of any portion of his Shares either currently
                        or after the passage of a fixed or determinable period
                        of time or upon the occurrence or nonoccurrence of any
                        predetermined event or circumstance.

                  (v)   The undersigned acknowledges that neither the
                        Corporation nor any other person offered to sell the
                        Shares to it by means of any form of general
                        advertising, such as media advertising or seminars.

                  (vi)  The undersigned acknowledges that the Seller has the
                        right in its sole and Absolute discretion to abandon
                        this private placement at any time prior to the
                        completion of the offering and to return the previously
                        paid subscription price of the Shares without interest
                        thereon, to the respective subscribers.

                  (vii) The undersigned has not used any person as a "Purchaser
                        Representative" within the meaning of the SEC Regulation
                        D to represent it in determining whether it should
                        purchase the Shares.

         7.   Conditions to Obligations of the Undersigned and the Company. The
              obligations of the undersigned to purchase and pay for the number
              of Shares specified herein and of the Company to sell the Shares
              are subject to the satisfaction at or prior to the Closing of the
              following conditions precedent: the representations and warranties
              of the Company contained in Section 5 hereof and of the
              undersigned contained in Section 6 hereof shall be true and
              correct on and as of the Closing in all respects with the same
              effect as though such representations and warranties had been made
              on and as of the Closing.

         8.   Obligations Irrevocable. The obligations of the undersigned
              hereunder shall be irrevocable, except with the consent of the
              Company, until December 31, 2002.

         9.   Legend. Each certificate for Shares (sold pursuant to this
              Agreement) will be imprinted with a legend in substantially the
              following form:

         "THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR
         ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED OR
         OFFERED FOR SALE OR TRANSFER UNLESS A REGISTRATION STATEMENT UNDER THE
         SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS WITH RESPECT TO
         SUCH SECURITIES IS THEN IN EFFECT, OR IN THE OPINION OF THE COUNSEL,
         SUCH REGISTRATION UNDER THE SECURITIES ACT AND OTHER APPLICABLE
         SECURITIES LAWS IS NOT REQUIRED."

<PAGE>

         10.  Brokers. Subscriber has not entered into any agreement to pay any
              broker's or finder's fee to any Person with respect to this
              Agreement or the transactions contemplated hereby.

         11.  Waiver, Amendment. Neither this Agreement nor any provisions
              hereof shall be modified, changed, discharged or terminated except
              by an instrument in writing, signed by the party against whom any
              waiver, charge, discharge or termination is sought.

         12.  Assignability. Neither this Agreement nor any right, remedy,
              obligation or liability arising hereunder or by reason hereof
              shall be assignable by either the Company or the undersigned
              without the prior written consent of the other party.

         13.  Applicable Law. This Agreement shall be governed by and construed
              in accordance with the laws of the State of Nevada.

         14.  Section and Other Headings. The section and other headings
              contained in this agreement are for reference purposes only and
              shall not affect the meaning or interpretation of this Agreement.

         15.  Counterparts. This Agreement may be executed in any number of
              counterparts, each of which when so executed and delivered shall
              be deemed to be an original and all of which together shall be
              deemed to be one and the same agreement.

         16.  Notices. All notices and other communications provided for herein
              shall be in writing and shall be deemed to have been duly given if
              delivered personally or sent by registered or certified mail,
              return receipt requested, postage prepaid:

              (a) If to the Company, to it at the following address:

                  Universal Communication Systems, Inc.
                  407 Lincoln Road, Ste 12F
                  Miami Beach, FL 33139
                  Attention:  Chief Financial Officer

              (b) If to the undersigned, to him at the following page hereto;

                  _____________________________
                  _____________________________
                  _____________________________

              Or at such other address as either party shall have specified by
              notice in writing to the other.

         17.  Binding Effect. The provisions of this Agreement shall be binding
              upon and accrue to the benefit of the parties hereto and their
              respective heirs, legal representatives, successors and assigns.

<PAGE>

         18.  Survival. All representations, warranties and covenants contained
              in this Agreement shall survive (i) the acceptance of the
              subscription by the Company, (ii) changes in the transactions,
              documents and instruments which are not material or which are to
              the benefit of the undersigned, and (iii) the death or disability
              of the undersigned.

         19.  Notification of Changes. The undersigned hereby covenants and
              agrees to notify the Company upon the occurrence of any event
              prior to the closing of the purchase of the Shares pursuant to
              this Agreement which would cause any representation, warranty or
              covenant of the undersigned contained in this Agreement to be
              false or incorrect.

         IN WITNESS THEREOF, the undersigned has executed this Subscription
Agreement this ________ day of ___________________ 20__.

                                            ____________________________________
                                            Signature

                                            ____________________________________
                                            Print Name

                                            ____________________________________
                                            Number and Street

                                            ____________________________________
                                            City, State and Zip

                                            ____________________________________
                                            Subscriber's Social Security Number
                                            or Tax Identification Number

                                            ____________________________________
                                            Signature of Co-owner if applicable

If Joint Ownership, check one (all parties must sign above):

(    )  Joint Tenants with Right of Survivorship     (    )  Tenants in Common

(    )  Community Property

If Fiduciary or Corporation, check one:

(    )  Trust  (    )  Estate  (    )  Power of Attorney  (    )  Corporation

                                          UNIVERSAL COMMUNICATION SYSTEMS, INC.

                                          By:___________________________________
                                                 Name: _________________________
                                                 Title:_________________________

Accepted as of ____________________________ _____

<PAGE>

                                   APPENDIX A

                          CONSIDERATION TO BE DELIVERED

Shares of Common Stock to be Acquired                Amount to be paid
-------------------------------------                -----------------

__________  Shares of Common Stock at
______ per share                                     _____________

<PAGE>

                                   APPENDIX B

                         ACCREDITED INVESTOR CERTIFICATE

         The undersigned Investor hereby certifies that he is an Accredited
Investor as that term is defined in Regulation D adopted pursuant to the
Securities Act of 1933 (the "Act"). The specific category(s) of Accredited
Investor applicable to the undersigned is checked below.

     _____    a.  An individual whose individual net worth, or joint net worth
              with that individual's spouse, exceeds $1,000,000 (including the
              value of homes, home furnishings and personal automobiles);

     _____    b.  An individual who had an individual income in excess of
              $200,000 in the previous two years or joint income with that
              person's spouse in excess of $300,000 in each of those years and
              who reasonably expects to reach the same income level in the
              current year. For purposes of this offering, individual income
              shall equal adjusted gross income, as reported in the investor's
              federal income tax return, less any income attributable to a
              spouse or to a property owned by the spouse, and as may be further
              adjusted in accordance with the rules, regulations and releases of
              the Commission;

      _____   c.  A bank as defined in Section 3 (a) (2) of the Securities Act
              of 1933, as amended (the "Act") , or a savings and loan
              association or other institution as defined in Section 3 (a) (5)
              (A) of the Act, whether acting in its individual or fiduciary
              capacity; an insurance company as defined in Section 2 (13) of the
              Act; an investment company registered under the Investment Company
              Act of 1940 (the "1940 Act") or a business development company as
              defined in Section 2 (a) (48) of the 1940 act; A Small Business
              Investment Company licensed by the U.S. Small Business
              Administration under Section 301 (c) or (d) of the Small Business
              Investment Act of 1958; or an employee benefit plan within the
              meaning of Title I of the Employee Retirement Income Security Act
              of 1974 ("ERISA"), if the investment decision is made by a plan
              fiduciary, as defined in Section 3 (21) of ERISA, which is either
              a bank, savings and loan association, insurance company or
              registered investment advisor, or if the employee benefit plan has
              total assets in excess of $5,000,000 or if a self-directed plan,
              with investment decisions made solely by persons that are
              accredited investors;

      _____   d.  Private business development company as defined in Section
              202 (a) (22) of the Investment Advisers Act of 1940;

     _____    e.  An organization described in Section 501 (c) (3) of the
              Internal Revenue Code, corporation, Massachusetts or similar
              business trust, or partnership, not formed for the specific
              purpose of acquiring the Shares, with total assets in excess of
              $5,000,000;

<PAGE>

      _____   f.  An individual who is a director or executive officer of the
                  Company; or

      _____   g.  An entity in which all of the equity owners are accredited
              investors as set forth above.

              IN WITNESS WHEREOF, the undersigned has executed this Accredited
         Investor Certificate this __________ day of ____________________, ____.

                                             ___________________________________
                                             Signature

                                             ___________________________________
                                             Printed NamePrepared and filed by St Ives Financial

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

MEDECISION, INC.

200,000 Shares

Date
  of Issuence: February 12, 1997

Expiration
  Date: February 11, 2007

Warrant for the Purchase of Common Stock

FOR VALUE RECEIVED, MEDecision, Inc., a Pennsylvania corporation (the Company”), with its principal office 724 W. Lancaster Avenue, Suite 200, Wayne, Pennsylvania 19087, hereby certifies that Commerce Bank/Pennsylvania, N.A., or assigns, (the “Holder”) is entitled, subject to the provisions of this Warrant, to purchase from the Company, at any time before 5:00 p.m. (Eastern Standard Time) on February 11, 2007 (the “Expiration Date”), up to Two Hundred Thousand (200,000) shares of common stock, no par value (“Common Stock”), of the Company.

The Common Stock purchasable upon exercise of this Warrant may be purchased at an exercise price, subject to adjustment pursuant to Section 6 below of $2.00 per share (as adjusted pursuant to Section 6 hereof, the “Exercise Price”). The term “Common Stock” shall mean the Common Stock of the Company, together with any other equity securities that may be issued by the Company to holders of Common Stock or in substitution therefor as provided herein.

The number of shares of Common Stock to be received upon the exercise of this Warrant and the price to be paid for a share of Common Stock are subject to adjustment from time to time as hereinafter set forth. The shares of Common Stock deliverable upon such exercise, as adjusted from time to time, are hereinafter sometimes referred to as the “Warrant Shares.”

Section
  1. Exercise of Warrant. This
  Warrant may be exercised in whole or in part on any business day prior to the
  Expiration Date by presentation and surrender hereof to the Company at its principal
  office at the address set forth in the initial paragraph hereof (or at such
  other address as the Company may hereafter notify the Holder in writing) with
  the Purchase Form annexed hereto duly executed and accompanied by proper payment
  of the Exercise Price in lawful money of the United States of America in the
  form of a check or such other means as is acceptable to the Company, subject
  to collection, for the number of Warrant Shares specified in the Purchase Form.
  If this Warrant should be exercised in part only, the Company shall, upon surrender
  of this Warrant, execute and deliver a new Warrant evidencing the right of the
  Holder thereof to purchase the balance of the Warrant Shares purchasable hereunder,
  for the remaining exercise period, if any. Upon receipt by the Company of this
  Warrant and such Purchase Form, together with proper payment of the Exercise
  Price, at such office, the Holder shall be deemed to be the holder of record
  of the Warrant Shares, notwithstanding that the stock transfer books of the
  Company shall then be closed or that certificates representing such Warrant
  Shares shall not then be actually delivered to the Holder. The Company shall
  pay any and all documentary stamp or similar issue or transfer taxes payable
  in respect of the issuance or delivery of the Warrant Shares.

Section
  2. Issuance of Certificates.
  As soon as possible after the exercise of this Warrant, the Company shall issue
  and cause to be delivered with all reasonable dispatch (and in any event within
  five days of such exercise) a certificate or certificates evidencing the shares
  to which the Holder is entitled, in fully registered form, registered in such
  name or names and delivered to such Person or Persons as may be directed by
  the Holder pursuant to the Election to Exercise. Such certificate or certificates
  evidencing the shares shall be deemed to have been issued and any Persons who
  are designated to be named therein shall be deemed to have become the holder
  of record of such shares as of the close of business on the date of such exercise
  (notwithstanding that the certificates representing such shares shall not actually
  have been delivered or that the stock transfer books of the Company shall then
  be closed). After such exercise of any Warrant or Warrants, the Company shall
  also issue or cause to be issued to or upon the written order of the Holder,
  a new Warrant Certificate evidencing the number of unexpired Warrants, if any,
  remaining unexercised.

Section 3. Reservation of Shares. The Company hereby agrees that at all times there shall be reserved for issuance and delivery out of its authorized but unissued Common Stock or Common Stock held in the treasury of the Company upon exercise of this Warrant all shares of its Common Stock or other shares of capital stock of the Company from time to time issuable upon exercise of this Warrant and the shares of Common Stock so delivered shall be fully paid and nonassessable and free from all liens and security interests.

Section 4. Fractional Interest. The Company will not issue a fractional share of Common Stock upon the exercise of this Warrant. Instead, the Company will deliver its check for a sum equal to the proportional part of the per share Exercise Price represented by such fractional share.

Section 5. Loss of Warrant. Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant, and, in the case of losses, theft or destruction, of indemnification satisfactory to the Company, and upon surrender and cancellation of this Warrant, if mutilated, the Company shall execute and deliver a new Warrant of like tenor and date.

-2-

Section
  6. Rights of the Holder. The
  Holder shall not, by virtue hereof, be entitled to any rights of a shareholder
  in the Company, either at law or in equity, and the rights of the Holder are
  limited to those expressed in this Warrant. Nothing contained in this Warrant
  shall be construed as conferring upon the Holder hereof the right to vote, consent,
  or receive notice as a shareholder of the Company on any matters or with respect
  to any rights whatsoever as a shareholder of the Company. No dividends or interest
  shall be payable or accrued in respect of this Warrant or the interest represented
  hereby or the Warrant Shares purchasable hereunder until, and only to the extent
  that, this Warrant shall have been exercised in accordance with its terms.

Section
  7. Adjustment of Exercise Price and Number of Shares.
  The number and kind of securities purchasable upon the exercise of this Warrant
  and the Exercise Price shall be subject to adjustment from time to time upon
  the occurrence of certain events, as follows:

	
       

      (a) Adjustment
        for Change in Capital Stock. If at any time after the date hereof, the
        Company:

          

	
       
 	
      (A)
 	
            pays a dividend or makes a distribution on its Common Stock in shares of its Common Stock;
 

	
       

    	
      (B)

    	
      subdivides
        its outstanding shares of Common Stock into a greater number of shares;

    

	
       

    	
      (C)

    	
      combines
        its outstanding shares of Common Stock into a smaller number of shares;

    

	
       

    	
      (D)

    	
      makes
        a dividend or makes a distribution on its Common Stock in shares of its
        capital stock other than Common Stock; or

    

	
       

    	
      (E)

    	
      issues
        by reclassification of its Common Stock any shares of its capital stock;

    

then the Exercise Price in effect immediately prior to such action shall be adjusted so that the Holder may receive upon exercise of this Warrant and payment of the same aggregate consideration the number of shares of capital stock of the Company which the Holder would have owned immediately following such action if the Holder had exercised the Warrant immediately prior to such action or immediately prior to the record date applicable thereto, if any.

The adjustment shall become effective immediately after the record date in the case of a dividend or distribution and immediately after the effective date in the case of a subdivision, combination or reclassification.

If the number of shares of Common Stock outstanding is increased as a result of such action, the Exercise Price shall be decreased to equal the Exercise Price immediately prior to such action multiplied by a fraction, the numerator of which is the number of outstanding shares of Common Stock prior to such action and the denominator of which is the number of outstanding shares of Common Stock after such action. If the number of shares of Common Stock outstanding is decreased as a result of such action, the Exercise Price shall be increased to equal the Exercise Price immediately prior to such action multiplied by a fraction, the numerator of which is the number of outstanding shares of Common Stock after such action and the denominator of which is the number of outstanding shares of Common Stock prior to such action.

-3-

In the event that such dividend or distribution is not so paid or made or such subdivision, combination or reclassification is not effected, the number of shares issuable upon exercise of this Warrant (the “Exercise Rate”) shall again be adjusted to be the Exercise Rate which would then be in effect if such record date or effective date had not been so fixed.

	

      (b) Adjustment
        for sale of Common Stock below Exercise Price. If, after the date hereof,
        the Company sells any Common Stock or any securities convertible into
        or exchangeable or exercisable for the Common Stock at a price per share
        less than the Exercise Price, the Exercise Rate shall be adjusted in accordance
        with the formula:

      

    

 

	
       

    	
      E’
        =

    	
      E
        x

    	
      (O
        + N)

    	
       
 
	
       

    	
       

    	
       

    	
      (O
        + (N x P/M))

    	
       

    

where:

E’ = the adjusted Exercise Rate; 

E = the current Exercise Rate;

O = the number of shares of Common Stock outstanding immediately prior to the sale of Common Stock to which this paragraph (b) applies;

N = the number of shares of Common Stock so sold or the maximum stated number of shares of Common Stock issuable upon the conversion, exchange, or exercise of any such convertible, exchangeable or exercisable securities, as the case may be;

P = the offering price per share pursuant to any such convertible, exchangeable or exercisable securities so sold or the sale price of the shares so sold, as the case may be; and

M = the Exercise Price as of the time of determination or at the time of sale as the case maybe

; provided, however, that (i) the issuance of Shares upon the exercise of Warrants, (ii) the sale of any security convertible into, or exchangeable or exercisable for, the Common Stock, which security the issuance thereof has previously been the subject of any required adjustment pursuant to this Section 3, or (iii) the issuance of shares of Common Stock (A) upon conversion of any of the issued shares of Series A Convertible Preferred Stock, (B) pursuant to subscriptions, warrants, options, convertible securities or other rights which were outstanding on February 12, 1997, or (C) pursuant to the exercise of options to purchase Common Stock granted to employees of the Corporation, not to exceed in the aggregate 3,950,000 shares (appropriately adjusted to reflect stock splits, stock dividends, combination of shares and the like with respect to the Common Stock) shall not give rise to an adjustment under this Section 7(b).

-4-

The adjustment shall become effective immediately after the record date for the determination of shareholders entitled to receive the rights, warrants or options to which this paragraph (b) applies or upon consummation of the sale of Common Stock, as the case may be. To the extent that shares of Common Stock are not delivered after the expiration of such rights or warrants, the Exercise Hate shall be readjusted to the Exercise Rate which would otherwise be in effect had the adjustment made upon the issuance of such rights or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. In the event that such rights or warrants are not so issued, the Exercise Rate shall again be adjusted to be the Exercise Rate which would then be in effect if such date fixed for determination of stockholders entitled to receive such rights or warrants had not been so fixed.

(c) Other Events. If any event occurs of the type contemplated by the provisions of this Section 6 but not expressly provided for by such provisions, the Board of Directors of the Company will make appropriate adjustments in the per share Exercise Price.

(d) Minimum Adjustment. Except as hereinafter provided, no adjustment of the per share Exercise Price hereunder shall be made if such adjustment results in a change of the per share Exercise Price then in effect of less than $.01. Any adjustment of less than $.01 shall be carried forward and shall be made at the time of and together with any subsequent adjustment which, together with the adjustment or adjustments so carried forward, amounts to $.01 or more of the per share Exercise Price then in effect. However, upon the exercise of this Warrant, the Company shall make all necessary adjustments not theretofore made to the per share Exercise Price up to and including the date upon which this Warrant is exercised.

(e) Notice of Adjustments. Whenever the per share Exercise Price or number of shares deliverable upon exercise of this Warrant shall be adjusted pursuant to this Section 6, the Company shall promptly prepare a certificate signed by the Chief Executive Officer, President or a Vice President and by the Treasurer or an Assistant Treasurer of the Company setting forth, in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated (including a description of the basis on which the Board of Directors of the Company made any determination hereunder), and shall promptly cause copies of such certificate to be mailed (by first class mail, postage prepaid) to the Holder,

(f) No Adjustment. No adjustments shall be made under any Section herein in connection with the issuance of Warrant Snares upon the exercise of this Warrant or upon a change in the par value of the Common Stock.

(g) Common Stock Defined. Whenever reference is made to the issuance of shares of Common Stock, the term “Common Stock” shall include any equity securities of any class of the Company hereinafter authorized which shall not be limited to a fixed sum or percentage in respect of the right of the holders thereof to participate in dividends or distributions of assets upon the voluntary or involuntary liquidation, dissolution or winding up of the Company. However, subject to the provisions of Section 7 hereof, shares issuable upon exercise hereof shall include only shares of the class designated as Common Stock of the Company as of the date hereof or shares of any class or classes resulting from any reclassification or reclassifications thereof or as a result of any corporate reorganization as provided for in Section 7 hereof.

-5-

(h) Multiple Adjustments. After an adjustment to the Exercise Rate under Section 2, any subsequent event requiring an adjustment under this Section 2 shall cause an adjustment to the Exercise Rate as so adjusted.

(i) Statement of Warrant Certificate. This Warrant Certificate shall entitle the Holder to purchase such number of shares at such Exercise Price as may be determined in accordance with the terms hereof after giving effect to any adjustments in the number or kind of shares purchasable upon the exercise hereof or the Exercise Price, as the case may be, notwithstanding that this Warrant may continue to express the same price and number and kind of shares as are initially stated herein.

Section 8. Reclassification, Reorganization, Consolidation or Merger. In the event of any reclassification, capital reorganization or other change of outstanding shares of Common Stock of the Company (other than a subdivision or combination of the outstanding Common Stock and other than a change in the par value of the Common Stock) or in the event of any consolidation or merger of the Company with or into another corporation (other than a merger in which the Company is the continuing corporation and that does not result in any reclassification, capital reorganization or other change of outstanding shares of Common Stock of the class issuable upon exercise of this Warrant) or in the event of any sale, lease, transfer or conveyance to another corporation of the property and assets of the Company as an entirety or substantially as an entirety,
the Holder shall have the right thereafter, by exercising this Warrant, to purchase the kind and amount of shares of stock and other securities and property (including cash) receivable upon such reclassification, capital reorganization and other change, consolidation, merger, sale or conveyance by a holder of the number of shares of Common Stock that might have been received upon exercise of this Warrant immediately prior to such reclassification, capital reorganization, change, consolidation, merger, sale or conveyance. The foregoing provisions of this Section 7 shall similarly apply to successive reclassifications, capital reorganizations and changes of shares of Common Stock and to successive consolidations, mergers, sales or conveyances. In the event that in connection with any such capital reorganization, or reclassification, consolidation, merger, sale or conveyance, additional shares of Common Stock shall be issued in exchange, conversion, substitution or payment, in whole or
in part, for, or of, a security of the Company other than Common Stock, any such issuance shall be treated as an issuance of Common Stock covered by the provisions of subsection (a) of Section 6.

-6-

Section
  9. Transfer to Comply with the Securities Act of 1933.
  This Warrant may not be exercised and neither this Warrant nor any of the Warrant
  Shares, nor any interest in either, may be sold, assigned, pledged, hypothecated,
  encumbered or in any other manner transferred or disposed of, in whole or in
  part, except in compliance with applicable United States federal and state securities
  or Blue Sky laws and the terms and conditions hereof. Each Warrant shall bear
  a legend in substantially the same form as the legend set forth on the first
  page of this Warrant. Each certificate for Warrant Shares issued upon exercise
  of this Warrant, unless at the time of exercise such Warrant Shares are acquired
  pursuant to a registration statement that has been declared effective under
  the Act, shall bear a legend substantially in the following form:

THE
  SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
  ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS
  OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
  AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
  ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO AN EFFECTIVE REGISTRATION
  STATEMENT OR AN EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE
  AN OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER
  TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE
  ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

Any certificate for any Warrant Shares issued at any time in exchange or substitution for any certificate for any Warrant Shares bearing such legend (except a new certificate for any Warrant Shares issued after the acquisition of such Warrant Shares pursuant to a registration statement that has been declared effective under the Act) shall also bear such legend unless, in the opinion of legal counsel for the Company, the Warrant Shares represented thereby need no longer be subject to the restriction contained herein. The provisions of this Section 8 shall be binding upon all subsequent holders of certificates for Warrant Shares bearing the above legend and all subsequent holders of this Warrant, if any.

Section 10. Delivery and Registration.

(a) Registration. The Company will keep at the Warrant Office, a register or registers in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of, and registration of transfer and exchange o£ Warrants as provided in this Section 10. Each Person designated by the Company from time to time as a Person authorized to register the transfer and exchange of the Warrants is hereinafter called, individually and collectively, the “Registrar.” Upon notice to the Holder and any acting Registrar, the Company may appoint a successor Registrar for such purposes. The Registrar shall hold a master list of names and addresses of the holders of Warrants (the “Warrant Register”). The
Company hereby appoints its Secretary as the initial Registrar, and such Person shall act as the Registrar unless and until some other Person is, by written notice from the Company to the Holder and the Registrar, designated by the Company to act as such.

(b) Registration of Transfers and Exchanges. To transfer this Warrant to another Person or to exchange this Warrant for a Warrant of other authorized denominations (with a like aggregate amount of Warrants as this warrant), the Holder shall present this Warrant to the Company, duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Company, duly executed by the Holder or by its duly authorized attorney. Upon receipt thereof, the Company shall register such transfer or exchange this Warrant as requested.

-7-

All Warrants issued upon any registration, transfer or exchange of this Warrant shall be the valid obligations of the Company and shall entitle holder thereof to the same rights as the Holder.

Prior to due presentment for registration of transfer of this Warrant, the Company may deem and treat the Holder as the absolute owner of the Warrants evidenced by this Warrant (notwithstanding any notation of ownership or other writing hereon made by anyone), and the Company shall not be affected by notice to lie contrary.

(c) Payment of Taxes. The Company shall pay all documentary stamp taxes attributable to the initial issuance of this Warrant and of the shares issued upon the exercise of this Warrant; provided, however, that the Company shall not be required to pay any tax or other governmental charge which may be payable in respect of any transfer or exchange or any Warrant or any certificates for shares in a name other than the registered holder of a Warrant surrendered upon the exercise of a Warrant. In any such case, no transfer or exchange shall be made unless or until the Person or Persons requesting issuance thereof shall have paid to the Company the amount of such tax or other governmental charge or shall have established to the satisfaction of the Company that such tax or other governmental charge has been paid or an exemption is available therefrom.

Section 11. Modification and Waiver. Neither this Warrant nor any term hereof may be changed, waived, discharged or terminated other than by an instrument in writing signed by the Company and by the Holder hereof.

Section 12. Descriptive Headings and Governing Law. The headings of the several sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the Commonwealth of Pennsylvania, without regard to its rules or principles relating to conflicts of laws.

Section 13. Rules 144 and 144A. The Company agrees that, commencing 90 days after the Company completes its initial underwritten public offering, upon request of the Holder or any beneficial owner of this Warrant, to make available the information necessary to permit sales pursuant to Rule 144 or 144A under the Securities Act of 1933, as amended (the “Securities Act”) and to take such further action as the Holder or any such beneficial owner may reasonably request to the extent required from time to time to tenable the Holder or such beneficial owner to sell Warrants without registration under the Securities Act within the limitation of the exemptions provided by Rule 144(k) and Rule 144A under the Securities Act or any similar rule or regulation hereafter adopted by the Securities and Exchange Commission.

Section 14. No Dilution or Impairment. The Company will not, by amendment of its charter or through reorganization, consolidation, merger, dilution, sale of assets or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder against dilution or other impairment. Without limiting the generality of the foregoing, the Company will not increase the par value of any shares of stock receivable upon the exercise of the Warrants evidenced hereby above the amount payable therefor upon such exercise, and at all times will take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue folly paid and nonassessable stock upon the exercise of Warrants evidenced hereby.

-8-

Section 15. Registration Rights. The holders of Shares issued upon exercise of the Warrants evidenced hereby are entitled to the registration rights set forth in the Registration Rights Agreement dated as of the date hereof between the Company and Commerce Bank/Pennsylvania, N.A.

Section 16. Successors. This Warrant shall bind and inure to the benefit of the Company and its permitted successors and assigns hereunder, the Holders and its successors and assigns hereunder, and in addition, shall inure to the benefit of and be enforceable by all holders from time to time of the shares of Common Stock, Without limiting the generality of the foregoing, the rights of the Holders and its successors and assigns and the holders from time to time of shares of Common Stock shall survive any reorganization, consolidation or merger of the Company with or into another entity or the sale or conveyance to another Person or the property, assets or business of the Company as an entirety or substantially as an entirety and such successor or purchasing Person, as the case may be, shall execute such agreements or other instruments as may be
reasonably requested by the Holder or such holders to give effect to the foregoing.

Section 17. Notices. All communications under this Warrant shall be in writing and shall be sent by telecopier, a nationally recognized express courier, hand delivery or certified or registered mail, postage prepaid, if to the Company, to MEDecision, Inc., 724 W. Lancaster Avenue, Suite 200, Wayne, Pennsylvania 19087 or if to the Holder to its address set forth in the Register.

IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed by its duly authorized officer and to be dated as of February 12, 1997.

 

	
             
 	
             
 	
            MEDecision, Inc.
 
	
            
 
 
 	
             
 	
            By: 
 	
            
 /s/ David St. Clair 
 
	
             
 	
             
 	
             
 	
            

 
	
             
 	
             
 	
             
 	
            David St. Clair, Chairman and Chief
 Executive Officer
 

-9-

PURCHASE FORM

Dated
  __________________, 19 __

The undersigned hereby irrevocably elects to exercise the within Warrant dated as of __________________ to purchase _________________ common shares, without par value, of MEDecision, Inc., a Pennsylvania corporation, and hereby makes payment of $______________ in payment of the Exercise Price thereof.

 

	  		
      Holder:

    
	 	
       

    	
       

    	 	
       

    
	 	
       

    	
       

    	 	
       

    
	
      
    
	
       

    	
      
      

    
	  	
       

    	
       

    	
      By:

    	
       

    
	
       

    	
      
    
	
       

    	
       

    	
      
      

    
	  	
       

    	
       

    	
      Print Name:

    	
       

    
	
       

    		
      
    
	
       

    	
       

    	 	
      
      

    
	  	
       

    	
       

    	
      Date:

    	
       

    
	
       

    	
      
    
	
       

    	
       

    	
      
      

    

-10-

FORM OF ASSIGNMENT

FOR VALUE RECEIVED _____________________ hereby sells, assigns and transfers unto ____________________________ the within Warrant Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint ________________ attorney, to transfer said Warrant Certificate on the books of the within-named Company, with full power of substitution in the premises.

Dated: _____________________

 

	
             
 	
             
 	
        Signature:
          _____________________________________________________________

      
	
             
 	
             
 	

        Note:
          The above signature must correspond with the name
          as written upon the face of this Warrant Certificate
          in every particular, without alteration or enlargement
          or any change whatever.

      
	
             
 	
             
 	
        Signature Guaranteed:  ___________________________________________________

      

-11-

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