Document:

exhibit_4-3.htm

Exhibit 4.3

 

THE ISSUANCE OF THIS WARRANT AND THE WARRANT SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (FILE NO. 333- 172122).

 

ELBIT IMAGING LTD.

 

WARRANT

 

Issue Date: September 22, 2011

 

THIS WARRANT has been issued pursuant to the terms of that certain Secured Term Loan Agreement, dated September 21, 2011 (the “Loan Agreement”), by and among Eastgate Property LLC, a Delaware limited liability company (“Eastgate”), as lender, Elbit USA, LLC, a Delaware limited liability company, as borrower, and Elbit Imaging Ltd., an Israeli corporation (the “Company”), as guarantor.  Capitalized terms not otherwise defined herein shall have the respective meanings ascribed to such terms in the Loan Agreement.

 

The Company hereby certifies that, for good and valuable consideration (including the making of the Loan contemplated by the Loan Agreement), the receipt and sufficiency of which are hereby acknowledged, Eastgate, or its registered assigns (the “Holder”), is entitled to purchase from the Company:

 

(1)           at any time and from time to time during the period commencing on March 31, 2012 and ending on March 31, 2014, up to that number of duly authorized, validly issued, fully paid and nonassessable Ordinary Shares equal to (A) 3.3% of the Ordinary Shares Deemed Outstanding on the Exercise Date (the “Initial Shares”), less (B) the aggregate number of Initial Shares previously issued from time to time as a result of any partial exercise of this Warrant in accordance with Section 3, and

 

(2)           if the Company has not repaid the Loan (including all interest accrued on the Loan) in full prior to the six-month anniversary of the Issue Date, at any time and from time to time during the period commencing on the six-month anniversary of the Issue Date (but in no event prior to March 31, 2012) and ending on March 31, 2014, up to that number of duly authorized, validly issued, fully paid and nonassessable Ordinary Shares equal to (A) 9.9% of the Ordinary Shares Deemed Outstanding on the Exercise Date, less (B) the aggregate number of Warrant Shares (including Initial Shares) previously issued from time to time as a result of any partial exercise of this Warrant in accordance with Section 3, at a purchase price per share of U.S. $3.00 as adjusted from time to time pursuant to the terms set forth herein (but in no event, less than zero) (the “Exercise Price”), all subject to the terms and conditions set forth below in this Warrant.  For the avoidance of doubt, in no event shall this Warrant be exercisable for Ordinary Shares in excess of (A) 9.9% of the Ordinary Shares Deemed Outstanding on the Exercise Date, less (B) the aggregate number of Warrant Shares (including Initial Shares) previously issued from time to time as a result of any partial exercise of this Warrant in accordance with Section 3.  In addition, notwithstanding anything in this Warrant to the contrary, in no event shall this Warrant be exercisable for more than 19.9% of the Ordinary Shares actually outstanding prior to the issuance of the Warrant.  The number of Warrant Shares withheld pursuant to a cashless exercise under Section 3(b)(ii) shall be deemed to have to been issued to the Holder for purposes of computing the maximum number of Ordinary Shares issuable pursuant to this Warrant.

 

  

  

  

 

Notwithstanding the foregoing, this Warrant shall not be exercisable for more Warrant Shares than have been approved for listing by the Tel Aviv Stock Exchange from time to time (the “Approved Warrant Shares”).  As of the date hereof, the Company has requested, and the Tel Aviv Stock Exchange has approved, the listing of 3,000,000 Warrant Shares.  Promptly following the end of each calendar quarter during the term of this Warrant, in the event that the number of Ordinary Shares Deemed Outstanding shall have increased resulting in the aggregate number of Approved Warrant Shares to be less than the number of Warrant Shares otherwise issuable pursuant to this Warrant, the Company shall use commercially reasonable efforts to ensure that the Tel Aviv Stock Exchange approve the listing of additional Warrant Shares to enable this Warrant to be fully exercisable.  The Holder acknowledges that, due to common practice and terminology in Israel, this Warrant may be referred to as multiple warrants, each to purchase one Ordinary Share. For example, a warrant to purchase ten ordinary shares would be referred to as “ten warrants”.  Such terminology is not meant to not alter the rights under this Warrant.

 

ARTICLE I

 

1.           Definitions. As used in this Warrant, the following terms have the respective meanings set forth below:

 

“Aggregate Exercise Price” means an amount equal to the product of (a) the number of Warrant Shares in respect of which this Warrant is then being exercised pursuant to Section 3 hereof, multiplied by (b) the Exercise Price.

 

“Business Day” means any day, except a Saturday, Sunday or legal holiday, on which banking institutions in Israel are authorized or obligated by law or executive order to close.

 

  

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“Commission” means the Securities and Exchange Commission

 

“Company” has the meaning set forth in the preamble.

 

“Convertible Securities” means any securities (directly or indirectly) convertible into or exchangeable for Ordinary Shares, but excluding Options.

 

“ESOP” means the Elbit 2006 Employees, Directors and Officers Incentive Plan, as amended.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Excluded Issuances” means any issuance or sale by the Company after the Issue Date of: (a) Ordinary Shares issued upon the exercise of this Warrant; or (b) up to an aggregate of 1,705,917 Ordinary Shares (as such number of shares is equitably adjusted for subsequent share splits, share combinations, share dividends and recapitalizations) issued directly or upon the exercise of Options to directors, officers, employees, or consultants of the Company or affiliates thereof in connection with their service as directors of the Company or affiliates thereof, their employment by the Company or affiliates thereof or their retention as consultants by the Company or affiliates thereof, in each case authorized by the Board and issued pursuant to the Company's ESOP (including all such Ordinary Shares and Options outstanding under such plan prior to the Issue Date).

 

“Exercise Date” means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in Section 3 shall have been satisfied at or prior to 5:00 p.m., Israel local time, on a Business Day.

 

“Exercise Price” has the meaning set forth in the preamble.

 

“Fair Market Value” means, as of any particular date: (a) the greater of the volume weighted average of the applicable closing sales prices of the Ordinary Shares on (i) the Tel Aviv Stock Exchange and (ii) the NASDAQ (or any domestic securities exchange on which the Ordinary Shares are then listed), in each case, for the ten (10) Trading Days immediately prior to (but not including) the Exercise Date; (b) if there have been no sales of the Ordinary Shares on any such exchange on any such day, the average of the highest bid price and lowest asked price for the Ordinary Shares on all such exchanges at the end of such day; (c) if on any such day the Ordinary Shares are not listed on the Tel Aviv Stock Exchange or a domestic securities exchange, the closing sales price of the Ordinary Shares as quoted on the OTC Bulletin Board or similar quotation system or association for such day; or (d) if there have been no sales of the Ordinary Shares on the OTC Bulletin Board or similar quotation system or association on such day, the average of the highest bid and lowest asked prices for the Ordinary Shares quoted on the OTC Bulletin Board or similar quotation system or association at the end of such day; in the cases of clauses (b), (c) and (d), averaged over twenty (20) consecutive Business Days ending on the Business Day immediately prior to the day as of which “Fair Market Value” is being determined; provided, that if the Ordinary Shares are listed on the Tel Aviv Stock Exchange or any domestic securities exchange, the term “Business Day” as used in this sentence means Trading Days.  If at any time the Ordinary Shares are not listed on the Tel Aviv Stock Exchange or any domestic securities exchange, the OTC Bulletin Board or similar quotation system or association, the “Fair Market Value” of the Ordinary Shares shall be the fair market value per share as determined jointly by the Board of Directors of the Company and the Holder.  To the extent that the closing sales prices of the Ordinary Shares on the Tel Aviv Stock Exchange are originally denominated in NIS, such prices shall be converted to U.S. dollars using the representative exchange rate between the U.S. dollar and the NIS published by the Bank of Israel for each applicable day in the presented period.

 

 

  

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“Holder” has the meaning set forth in the preamble.

 

“Issue Date” means the date on which the Warrant was issued by the Company.

 

“Issuer Free Writing Prospectus” shall mean an issuer free writing prospectus, as such term is defined in Rule 433 under the Securities Act.

 

“Notice of Exercise” has the meaning set forth in Section 3(a)(i).

 

“Options” means any warrants or other rights or options to subscribe for or purchase Ordinary Shares or Convertible Securities.

 

“Ordinary Shares” means the Company’s ordinary shares, par value NIS 1.00 per share.

 

“Ordinary Shares Deemed Outstanding” means, at any given time, the sum of (without duplication) (a) the number of Ordinary Shares actually issued and outstanding at such time, plus (b) the number of Ordinary Shares issuable upon exercise of the Company’s options actually outstanding at such time, plus (c) the number of Ordinary Shares issuable upon conversion or exchange of Convertible Securities actually outstanding at such time (treating as actually outstanding any Convertible Securities issuable upon exercise of the Company’s options actually outstanding at such time), in each case, regardless of whether the Company’s options or Convertible Securities are actually exercisable at such time; provided, that Ordinary Shares Deemed Outstanding at any given time shall not include (v) shares owned or held by or for the account of the Company or any of its wholly owned subsidiaries, (w) the Warrant, (x) the Warrant Shares, (y) Convertible Securities representing not more than 1,705,917 Ordinary Shares issuable upon exercise of the Company’s options actually outstanding under the ESOP as of the date hereof and (z) Convertible Securities representing not more than 875,039 Ordinary Shares issuable upon conversion of the Company's Series 1 Convertible Debentures outstanding as of the date hereof.

 

  

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“NASDAQ” means the NASDAQ Stock Market (including any of its subdivisions such as the NASDAQ Global Select Market) or any successor market thereto.

 

“Principal Markets” means the Tel Aviv Stock Exchange and NASDAQ.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

 “Trading Day” means any day on which the Ordinary Shares are traded on either of the Principal Markets, as the case may be, or, if either of the Principal Markets is not the principal trading market for the Ordinary Shares in Israel or in the United States, then on the principal securities exchange or securities market in Israel or in the United States on which the Ordinary Shares are then traded; provided, that “Trading Day” in relation to any Principal Market shall not include any day on which the Ordinary Shares are scheduled to trade thereon for less than 4.5 hours or any day that the Ordinary Shares are suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., local time for such exchange or market).

 

“Warrant” means this Warrant and all warrants issued upon division or combination of, or in substitution for, this Warrant.

 

“Warrant Shares” means the Ordinary Shares purchasable at any time upon exercise of this Warrant in accordance with the terms of this Warrant.

 

2.           Term of Warrant.

 

(a)           Periodic Vesting.  Subject to the terms and conditions hereof (including without limitation the restrictions on exercise contained in paragraphs (1) and (2) above), at any time and from time to time after March 31, 2012 and prior to 5:00 p.m., Israel local time, on March 31, 2014 or, if such day is not a Business Day, on the next Business Day (the “Exercise Period”), the Holder of this Warrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder (subject to adjustment as provided herein).

 

(b)           Accelerated Vesting.  Notwithstanding the provisions of paragraph (a) above, at any time this Warrant shall be and become vested and exercisable as to all of the Warrant Shares upon the occurrence of any corporate event or other transaction contemplated by the provisions of Section 4(d).

 

3.           Exercise of Warrant.

 

(a)           Exercise Procedure. This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part of the unexercised Warrant Shares that may be purchased on the applicable Exercise Date, upon:

 

  

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(i)           delivery of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant; and

 

(ii)           payment to the Company of the Aggregate Exercise Price in accordance with Section 3(b).

 

The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder.

 

(b)           Payment of the Aggregate Exercise Price. Payment of the Aggregate Exercise Price shall be made, at the option of the Holder as expressed in the Notice of Exercise, by the following methods:

 

(i)           by delivery to the Company of a certified or official bank check in United States dollars payable to the order of the Company or by wire transfer of immediately available funds to an account designated in writing by the Company, in the amount of such Aggregate Exercise Price for such Warrant Shares as specified in the Notice of Exercise;

 

(ii)           by “cashless” exercise, in which event the Company shall issue to the Holder the number of Warrant Shares determined as follows:

 

X = Y* [(A-B)/A]

 

where:

 

X = the number of Warrant Shares to be issued to the Holder

 

Y = the number of Warrant Shares with respect to which this Warrant is being exercised

 

A = the Fair Market Value of one Ordinary Share

 

B = the Exercise Price;

 

(iii)           by offsetting and/or releasing outstanding debt of the Company or its subsidiaries (including without limitation the Note then outstanding under the Loan Agreement) having a value as of the Exercise Date equal to the Aggregate Exercise Price (which value shall be the principal amount thereof plus accrued and unpaid interest); or

 

(iv)           any combination of the foregoing.

 

In the event of any withholding of Warrant Shares pursuant to clause (ii) or (iv) above where the number of shares whose value is equal to the Aggregate Exercise Price is not a whole number, the number of shares withheld by the Company shall be rounded up to the nearest whole share and, at the request of the Holder, the Company shall make a cash payment to the Holder (by delivery of a certified or official bank check or by wire transfer of immediately available funds) based on the incremental fraction of a share being so withheld by the Company in an amount equal to the product of (x) such incremental fraction of a share being so withheld multiplied by (y) the Fair Market Value per Warrant Share as of the Exercise Date.

 

  

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(c)           Delivery of Ordinary Share Certificates. Upon receipt by the Company of the Notice of Exercise and payment of the Aggregate Exercise Price (in accordance with Section 3(a) hereof), the Company shall, as promptly as practicable, and in any event within five (5) Business Days thereafter, execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder a certificate or certificates representing the Warrant Shares issuable upon such exercise, together with cash in lieu of any fraction of a share, as provided in Section 3(d) hereof. The share certificate or certificates so delivered shall be, to the extent possible, in such denomination or denominations as the exercising Holder shall reasonably request in the Notice of Exercise and shall be registered in the name of the Holder or, subject to compliance with Section 6 below, such other Person’s name as shall be designated in the Notice of Exercise. This Warrant shall be deemed to have been exercised and such certificate or certificates of Warrant Shares shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares for all purposes, as of the Exercise Date.

 

(d)           Fractional Shares. The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant. As to any fraction of a Warrant Share that the Holder would otherwise be entitled to purchase upon such exercise, at the request of the Holder, the Company shall pay to the Holder an amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product of (i) such fraction multiplied by (ii) the Fair Market Value of one Warrant Share on the Exercise Date.

 

(e)           Valid Issuance of Warrant and Warrant Shares; Payment of Taxes. With respect to this Warrant and the exercise thereof, the Company hereby represents, covenants and agrees as of the Issue Date, as follows:

 

(i)           This Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued.

 

(ii)           All Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall take all such actions as may be necessary or appropriate in order that such Warrant Shares are, validly issued, fully paid and non-assessable, issued without violation of any preemptive or similar rights of any shareholder of the Company and free and clear of all liens and charges.

 

  

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(iii)           The Company shall take all such actions as may be necessary to ensure that all such Warrant Shares are issued without violation by the Company of any applicable law or governmental regulation or any requirements of the Tel Aviv Stock Exchange or any domestic securities exchange upon which the Ordinary Shares or other securities constituting Warrant Shares may be listed at the time of such exercise (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance).

 

(iv)           The Company shall pay all expenses in connection with, and all taxes and other governmental charges that may be imposed with respect to, the issuance or delivery of Warrant Shares upon exercise of this Warrant; provided, that the Company shall not be required to pay any tax or governmental charge that may be imposed with respect to any applicable withholding on the issuance or delivery of the Warrant Shares to any Person other than the Holder or on the transfer of all or a portion of this Warrant, and no such issuance or delivery shall be made unless and until the Person requesting such issuance has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid or is not required to be paid.

 

(v)           The execution and delivery of this Warrant and the issuance of the Warrant Shares: (1) have been approved by the Company's Board of Directors and have received all of the approvals and consents required under applicable law or governmental regulation or any requirements of the Tel Aviv Stock Exchange; (2) are not, and the issuance of the Warrant Shares upon exercise of the Warrant in accordance with the terms hereof will not be, inconsistent with the Company’s Memorandum of Association or Articles of Association or with any Bank Obligation, and (3) do not and will not contravene any applicable law, governmental rule or regulation, judgment or order applicable to the Company.

 

(vi)           During the one (1) year period immediately prior to the date hereof, the Company has filed all forms, reports, statements and other documents required to be filed by it during such period with the Commission (“SEC Reports”).  As of their respective filing or publication dates, the SEC Reports complied in all material respects with the requirements of the Exchange Act and the Securities Act applicable to the Company. The SEC Reports did not at the time they were filed or published, respectively, contain any untrue or misleading statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(f)           Conditional Exercise. Notwithstanding any other provision hereof, if an exercise of any portion of this Warrant is to be made in connection with a public offering or a sale of the Company (pursuant to a merger, sale of Ordinary Shares, or otherwise), such exercise may at the election of the Holder be conditioned upon the consummation of such transaction, in which case such exercise shall not be deemed to be effective until immediately prior to the consummation of such transaction.

 

  

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(g)           Reservation of Shares. During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued Ordinary Shares or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall at all times be less than or equal to the applicable Exercise Price. The Company shall not increase the par value of any Warrant Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect, and shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Ordinary Shares upon the exercise of this Warrant or any part thereof.

 

4.           Adjustment to Exercise Price and Number of Warrant Shares. In order to prevent dilution of the purchase rights granted under this Warrant, the Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as provided in this Section 4 (provided, however, in no event shall the Exercise Price be adjusted to less than zero).

 

(a)           Adjustment to Exercise Price Upon Issuance of Ordinary Shares.  Except in the case of an event described in any of Section 4(c), Section 4(d), Section 4(e), Section 4(f) or Section 5 (or in the case of Excluded Securities), if the Company shall, at any time or from time to time after the Issue Date, issue or sell, or in accordance with Section 4(b) is deemed to have issued or sold, any Ordinary Shares without consideration or for consideration per share less than the Exercise Price in effect immediately prior to such issuance or sale (or deemed issuance or sale), then immediately upon such issuance or sale (or deemed issuance or sale), the Exercise Price in effect immediately prior to such issuance or sale (or deemed issuance or sale) shall be reduced (and in no event increased) to an Exercise Price equal to the quotient obtained by dividing:

 

(i)           the sum of (A) the product obtained by multiplying the Ordinary Shares Deemed Outstanding immediately prior to such issuance or sale (or deemed issuance or sale) by the Exercise Price then in effect plus (B) the aggregate consideration, if any, received by the Company upon such issuance or sale (or deemed issuance or sale); by

 

(ii)           the sum of (A) the Ordinary Shares Deemed Outstanding immediately prior to such issuance or sale (or deemed issuance or sale) plus (B) the aggregate number of Ordinary Shares issued or sold (or deemed issued or sold) by the Company in such issuance or sale (or deemed issuance or sale).

 

  

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(b)           Effect of Certain Events on Adjustment to Exercise Price. For purposes of determining the adjusted Exercise Price under Section 4(a) hereof, the following shall be applicable (except for Excluded Securities):

 

(i)           Issuance of Options.  If the Company shall, at any time or from time to time after the Issue Date, in any manner grant or sell (whether directly or by assumption in a merger or otherwise) any Options, whether or not such Options or the right to convert or exchange any Convertible Securities issuable upon the exercise of such Options are immediately exercisable, and the price per share (determined as provided in this paragraph and in Section 4(b)(v)) for which Ordinary Shares is issuable upon the exercise of such Options or upon the conversion or exchange of Convertible Securities issuable upon the exercise of such Options is less than the Exercise Price in effect immediately prior to the time of the granting or sale of such Options, then the total maximum number of Ordinary Shares issuable upon the exercise of such Options or upon conversion or exchange of the total maximum amount of Convertible Securities issuable upon the exercise of such Options shall be deemed to have been issued as of the date of granting or sale of such Options (and thereafter shall be deemed to be outstanding for purposes of adjusting the Exercise Price under Section 4(a)), at a price per share equal to the quotient obtained by dividing (A) the sum (which sum shall constitute the applicable consideration received for purposes of Section 4(a)) of (x) the total amount, if any, received or receivable by the Company as consideration for the granting or sale of all such Options, plus (y) the minimum aggregate amount of additional consideration payable to the Company upon the exercise of all such Options, plus (z), in the case of such Options which relate to Convertible Securities, the minimum aggregate amount of additional consideration, if any, payable to the Company upon the issuance or sale of all such Convertible Securities and the conversion or exchange of all such Convertible Securities, by (B) the total maximum number of Ordinary Shares issuable upon the exercise of all such Options or upon the conversion or exchange of all Convertible Securities issuable upon the exercise of all such Options. Except as otherwise provided in Section 4(b)(iii), no further adjustment of the Exercise Price shall be made upon the actual issuance of Ordinary Shares or of Convertible Securities upon exercise of such Options or upon the actual issuance of Ordinary Shares upon conversion or exchange of Convertible Securities issuable upon exercise of such Options.

 

(ii)           Issuance of Convertible Securities.  If the Company shall, at any time or from time to time after the Issue Date, in any manner grant or sell (whether directly or by assumption in a merger or otherwise) any Convertible Securities, whether or not the right to convert or exchange any such Convertible Securities is immediately exercisable, and the price per share (determined as provided in this paragraph and in Section 4(b)(v)) for which Ordinary Shares are issuable upon the conversion or exchange of such Convertible Securities is less than the Exercise Price in effect immediately prior to the time of the granting or sale of such Convertible Securities, then the total maximum number of Ordinary Shares issuable upon conversion or exchange of the total maximum amount of such Convertible Securities shall be deemed to have been issued as of the date of granting or sale of such Convertible Securities (and thereafter shall be deemed to be outstanding for purposes of adjusting the Exercise Price pursuant to Section 4(a)), at a price per share equal to the quotient obtained by dividing (A) the sum (which sum shall constitute the applicable consideration received for purposes of Section 4(a)) of (x) the total amount, if any, received or receivable by the Company as consideration for the granting or sale of such Convertible Securities, plus (y) the minimum aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange of all such Convertible Securities, by (B) the total maximum number of Ordinary Shares issuable upon the conversion or exchange of all such Convertible Securities. Except as otherwise provided in Section 4(b)(iii), (A) no further adjustment of the Exercise Price shall be made upon the actual issuance of Ordinary Shares upon conversion or exchange of such Convertible Securities and (B) no further adjustment of the Exercise Price shall be made by reason of the issue or sale of Convertible Securities upon exercise of any Options to purchase any such Convertible Securities for which adjustments of the Exercise Price have been made pursuant to the other provisions of this Section 4(b).

 

  

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(iii)           Change in Terms of Options or Convertible Securities. Upon any change in any of (A) the total amount received or receivable by the Company as consideration for the granting or sale of any Options or Convertible Securities referred to in Section 4(b)(i)  or Section 4(b)(ii) hereof, (B) the minimum aggregate amount of additional consideration, if any, payable to the Company upon the exercise of any Options or upon the issuance, conversion or exchange of any Convertible Securities referred to in Section 4(b)(i) or Section 4(b)(ii) hereof, (C) the rate at which Convertible Securities referred to in Section 4(b)(i) or Section 4(b)(ii) hereof are convertible into or exchangeable for Ordinary Shares, or (D) the maximum number of Ordinary Shares issuable in connection with any Options referred to in Section 4(b)(i) hereof or any Convertible Securities referred to in Section 4(b)(ii) hereof, then (whether or not the original issuance or sale of such Options or Convertible Securities resulted in an adjustment to the Exercise Price pursuant to this Section 4) the Exercise Price in effect at the time of such change shall be adjusted or readjusted, as applicable, to the Exercise Price which would have been in effect at such time pursuant to the provisions of this Section 4 had such Options or Convertible Securities still outstanding provided for such changed consideration, conversion rate or maximum number of shares, as the case may be, at the time initially granted, issued or sold.

 

(iv)           Treatment of Expired or Terminated Options or Convertible Securities. Upon the expiration or termination of any unexercised Option (or portion thereof) or any unconverted or unexchanged Convertible Security (or portion thereof) for which any adjustment (either upon its original issuance or upon a revision of its terms) was made pursuant to this Section 4 (including without limitation upon the redemption or purchase for consideration of all or any portion of such Option or Convertible Security by the Company), the Exercise Price then in effect hereunder shall forthwith be changed pursuant to the provisions of this Section 4 to the Exercise Price which would have been in effect at the time of such expiration or termination had such unexercised Option (or portion thereof) or unconverted or unexchanged Convertible Security (or portion thereof), to the extent outstanding immediately prior to such expiration or termination, never been issued.

 

(v)           Calculation of Consideration Received. If the Company shall, at any time or from time to time after the Issue Date, issue or sell, or is deemed to have issued or sold in accordance with Section 4(b), any Ordinary Shares, Options or Convertible Securities: (A) for cash, the consideration received therefor shall be deemed to be the net amount received by the Company therefor; (B) for consideration other than cash, the amount of the consideration other than cash received by the Company shall be the fair value of such consideration, except where such consideration consists of marketable securities, in which case the amount of consideration received by the Company shall be the market price (as reflected on any securities exchange, quotation system or association or similar pricing system covering such security) for such securities as of the end of business on the date of receipt of such securities; (C) for no specifically allocated consideration in connection with an issuance or sale of other securities of the Company, together comprising one integrated transaction, the amount of the consideration therefor shall be deemed to be the fair value of such portion of the aggregate consideration received by the Company in such transaction as is attributable to such Ordinary Shares, Options or Convertible Securities, as the case may be, issued in such transaction; or (D) to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving corporation, the amount of consideration therefor shall be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such Ordinary Shares, Options or Convertible Securities, as the case may be, issued to such owners. The net amount of any cash consideration and the fair value of any consideration other than cash or marketable securities shall be determined in good faith jointly by the Company's Board of Directors and the Holder.

 

  

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(vi)           Record Date. For purposes of any adjustment to the Exercise Price or the number of Warrant Shares in accordance with this Section 4, in case the Company shall take a record of the holders of its Ordinary Shares for the purpose of entitling them (A) to receive a dividend or other distribution payable in Ordinary Shares, Options or Convertible Securities or (B) to subscribe for or purchase Ordinary Shares, Options or Convertible Securities, then such record date shall be deemed to be the date of the issue or sale of the Ordinary Shares deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be.

 

(vii)           Treasury Shares. The number of Ordinary Shares outstanding at any given time shall not include shares owned or held by or for the account of the Company or any of its wholly-owned subsidiaries, and the disposition of any such shares (other than the cancellation or retirement thereof or the transfer of such shares among the Company and its wholly-owned subsidiaries) shall be considered an issue or sale of Ordinary Shares for the purpose of this Section 4.

 

(c)           Adjustment to Exercise Price Upon Dividend, Subdivision or Combination of Ordinary Shares. If the Company shall, at any time or from time to time after the Issue Date, (i) pay a dividend or make any other distribution upon the Ordinary Shares or any other share capital of the Company payable in Ordinary Shares or in Options or Convertible Securities (excluding Purchase Rights), or (ii) subdivide (by any share split, recapitalization or otherwise) its outstanding Ordinary Shares into a greater number of shares, the Exercise Price in effect immediately prior to any such dividend, distribution or subdivision shall be proportionately reduced.  If the Company at any time combines (by combination, reverse share split or otherwise) its outstanding Ordinary Shares into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall be proportionately increased.  Any adjustment under this Section 4(c) shall become effective at the close of business on the date the dividend, subdivision or combination becomes effective.

 

  

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(d)           Adjustment to Exercise Price and Warrant Shares Upon Reorganization, Reclassification, Consolidation or Merger. In the event of any (i) capital reorganization of the Company, (ii) reclassification of the share capital of the Company (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a share dividend or subdivision, split-up or combination of shares), (iii) consolidation or merger of the Company with or into another Person, (iv) sale of all or substantially all of the Company's assets to another Person or (v) other similar transaction (other than any such transaction covered by Section 4(c)), in each case which entitles the holders of Ordinary Shares to receive (either directly or upon subsequent liquidation) shares, securities or assets with respect to or in exchange for Ordinary Shares, the Warrant shall, immediately after such reorganization, reclassification, consolidation, merger, sale or similar transaction, remain outstanding and shall thereafter, in lieu of or in addition to (as the case may be) the number of Warrant Shares then exercisable under this Warrant, be exercisable for the kind and number of Ordinary Shares or other securities or assets of the Company or of the successor Person resulting from such transaction to which the Holder would have been entitled upon such reorganization, reclassification, consolidation, merger, sale or similar transaction if the Holder had exercised this Warrant in full immediately prior to the time of such reorganization, reclassification, consolidation, merger, sale or similar transaction and acquired the applicable number of Warrant Shares then issuable hereunder as a result of such exercise (without taking into account any limitations or restrictions on the exercisability of this Warrant); and, in such case, appropriate adjustment (in form and substance satisfactory to the Holder) shall be made with respect to the Holder's rights under this Warrant to insure that the provisions of this Section 4 hereof shall thereafter be applicable, as nearly as possible, to this Warrant in relation to any Ordinary Shares, securities or assets thereafter acquirable upon exercise of this Warrant (including, in the case of any consolidation, merger, sale or similar transaction in which the successor or purchasing Person is other than the Company, an immediate adjustment in the Exercise Price to the value per share for the Ordinary Shares reflected by the terms of such consolidation, merger, sale or similar transaction, and a corresponding immediate adjustment to the number of Warrant Shares acquirable upon exercise of this Warrant without regard to any limitations or restrictions on exercise, if the value so reflected is less than the Exercise Price in effect immediately prior to such consolidation, merger, sale or similar transaction), subject to any applicable limitations under the Israeli Companies Law, 5759-1999, or the NASDAQ Listing Rules). The provisions of this Section 4(d) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales or similar transactions. In the event of any such reorganization, reclassification, consolidation, merger, sale or similar transaction, the Company shall give at least 20 days' notice to the Holder of the proposed date of consummation of such transaction and shall use its commercially reasonable efforts, prior to the consummation thereof, to cause the successor Person (if other than the Company) resulting from such reorganization, reclassification, consolidation, merger, sale or similar transaction, to assume, by written instrument substantially similar in form and substance to this Warrant and reasonably satisfactory to the Holder, the obligation to deliver to the Holder such Ordinary Shares, securities or assets which, in accordance with the foregoing provisions, such Holder shall be entitled to receive upon exercise of this Warrant.  Notwithstanding anything to the contrary contained herein, with respect to any corporate event or other transaction contemplated by the provisions of this Section 4(d), (A) the Holder shall have the right to elect prior to the consummation of such event or transaction, to give effect to the exercise rights contained in Section 2 immediately prior to the consummation of such transaction instead of giving effect to the provisions contained in this Section 4(d) with respect to this Warrant and (B) if such transaction is a merger, acquisition or similar transaction as a result of which all of the outstanding Ordinary Shares will be owned by one person or group of persons (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act), then, without derogating from Section 3(f), this Warrant shall terminate upon the consummation of such transaction (provided, however, that in the case of any such transaction in which the successor or purchasing Person is Mr. Mordechay Zisser or an affiliate (as such term is defined in Rule 405 of the Securities Act), then this Warrant will continue in full force and effect subsequent to the consummation of such transaction).

 

  

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(e)           Certain Events. If any event of the type contemplated by the provisions of this Section 4 but not expressly provided for by such provisions (including, without limitation, the granting of SARs or other rights with equity features) occurs, then the Company's Board of Directors shall make an appropriate adjustment in the Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant so as to protect the rights of the Holder in a manner consistent with the provisions of this Section 4; provided, that no such adjustment pursuant to this Section 4(e) shall increase the Exercise Price or decrease the number of Warrant Shares issuable as otherwise determined pursuant to this Section 4.

 

(f)           Dividends and Distributions. Subject to the provisions of Section 4(a), as applicable, if the Company shall, at any time or from time to time after the Issue Date, make or declare, or fix a record date for the determination of holders of Ordinary Shares entitled to receive, a dividend or any other distribution payable in securities of the Company (other than a dividend or distribution of Ordinary Shares, Options or Convertible Securities in respect of outstanding Ordinary Shares), cash or other property, then, and in each such event, (1) provision shall be made so that the Holder shall receive upon exercise of the Warrant, in addition to the number of Warrant Shares receivable thereupon, the kind and amount of securities of the Company, cash or other property which the Holder would have been entitled to receive had the Warrant been exercised in full into Warrant Shares on the date of such event and had the Holder thereafter, during the period from the date of such event to and including the Exercise Date, retained such securities, cash or other property receivable by them as aforesaid during such period, giving application to all adjustments called for during such period under this Section 4 with respect to the rights of the Holder; provided, that no such provision shall be made if the Holder receives, simultaneously with the distribution to the holders of Ordinary Shares, a dividend or other distribution of such securities, cash or other property in an amount equal to the amount of such securities, cash or other property as the Holder would have received if the Warrant had been exercised in full into Warrant Shares on the date of such event; or, (2) in the event of a cash dividend, whether payable out of earnings or surplus legally available for dividends or as a dividend in liquidation or partial liquidation or by way of return of capital, the Holder may, under its sole discretion, choose that the Exercise Price shall be reduced by an amount equal to the U.S. dollar amount of the per Ordinary Share dividend distribution.  Notwithstanding the foregoing, (i) in the event of a distribution in kind, if it is not reasonably practicable for the Company to comply with clause (b)(1) above (as determined in good faith by the Board of Directors of the Company), upon notice to the Holder of any such determination 20 days prior to any such distribution in order to permit the Holder the opportunity to exercise the Warrant in its sole discretion, the Exercise Price shall be proportionately reduced by the fair market value of the distribution per Ordinary Share (as determined in good faith by the Board of Directors of the Company) and (ii) in no event shall the Exercise Price be reduced below zero or shall the Company be obliged to pay the Holder an amount per share (in cash or in kind) upon exercise of this Warrant that exceeds the Exercise Price then in effect.

 

  

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(g)           Certificate as to Adjustment.

 

(i)           As promptly as reasonably practicable following any adjustment of the kind of Warrant Shares pursuant to the provisions of Section 4(a), but in any event not later than five (5) Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer setting forth in reasonable detail such adjustment and the facts upon which it is based and certifying the calculation thereof.

 

(ii)           As promptly as reasonably practicable following the receipt by the Company of a written request by the Holder, but in any event not later than five (5) Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer certifying the amount of Ordinary Shares, other securities or assets then issuable upon exercise of the Warrant.

 

(h)           Notices. In the event:

 

(i)           that the Company shall take a record of the holders of its Ordinary Shares (or other share capital or securities at the time issuable upon exercise of the Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, to vote at a meeting (or by written consent), to receive any right to subscribe for or purchase any shares of any class or any other securities, or to receive any other security; or

 

  

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(ii)           of any capital reorganization of the Company, any reclassification of the Ordinary Shares, any consolidation or merger of the Company with or into another Person, or sale of all or substantially all of the Company's assets to another Person; or

 

(iii)           of the voluntary or involuntary dissolution, liquidation or winding-up of the Company;

 

then, and in each such case, the Company shall send or cause to be sent to the Holder at least twenty (20) days prior to the applicable record date or the applicable expected effective date, as the case may be, for the event, a written notice specifying, as the case may be, (A) the record date for such dividend, distribution, meeting or consent or other right or action, and a description of such dividend, distribution or other right or action to be taken at such meeting or by written consent, or (B) the effective date on which such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up is proposed to take place, and the date, if any is to be fixed, as of which the books of the Company shall close or a record shall be taken with respect to which the holders of record of Ordinary Shares (or such other share capital or securities at the time issuable upon exercise of the Warrant) shall be entitled to exchange their Ordinary Shares (or such other share capital or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Warrant and the Warrant Shares.  The Holder expressly agrees to maintain in confidence any material nonpublic information received from the Company pursuant to this Section 4(h), and further agrees not to trade in Company securities based upon any such information in violation of applicable law.

 

5.           Purchase Rights. In addition to any adjustments pursuant to Section 4(a) above, if at any time the Company grants, issues or sells any Ordinary Shares (excluding any dividend of Ordinary Shares covered by Section 4(c)), Options, Convertible Securities or rights to purchase warrants, securities or other property pro rata to the record holders of Ordinary Shares (the “Purchase Rights”), then , to the extent permitted by applicable securities laws, the Holder shall be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder would have acquired if the Holder had held the number of Warrant Shares acquirable upon complete exercise of this Warrant immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be determined for the grant, issue or sale of such Purchase Rights.

 

6.           Transfer of Warrant. This Warrant and all rights hereunder are transferable, in whole or in part, by the Holder without charge to the Holder, upon surrender of this Warrant to the Company at its then principal executive offices with a properly completed and duly executed Assignment in the form attached hereto as Exhibit B, together with funds sufficient to pay any transfer taxes described in Section 3(e)(iv) in connection with the making of such transfer. Upon such compliance, surrender and delivery and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.

 

  

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7.           Holder Not Deemed a Shareholder; Limitations on Liability. Except as otherwise specifically provided herein (including Section 4(b), prior to the issuance to the Holder of the Warrant Shares to which the Holder is then entitled to receive upon the due exercise of this Warrant, the Holder shall not be entitled to vote or receive dividends or be deemed the holder of Ordinary Shares for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of Ordinary Shares, reclassification of Ordinary Shares, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a shareholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.  Notwithstanding this Section 7, the Company shall provide the Holder with copies of the same notices and other information given to the shareholders of the Company generally, contemporaneously with the giving thereof to the shareholders, provided that any such notice or information published via international wire or furnished to or filed with the U.S. Securities and Exchange Commission shall satisfy this requirement.

 

8.           Replacement on Loss; Division and Combination.

 

(a)           Replacement of Warrant on Loss. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and upon delivery of an indemnity reasonably satisfactory to it (it being understood that a written indemnification agreement and affidavit of loss of the Holder shall be a sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant for cancellation to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor and exercisable for an equivalent number of Warrant Shares as the Warrant so lost, stolen, mutilated or destroyed; provided, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.

 

(b)           Division and Combination of Warrant. Subject to compliance with the applicable provisions of this Warrant as to any transfer or other assignment which may be involved in such division or combination, this Warrant may be divided or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants to the Company at its then principal executive offices, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the respective Holders or their agents or attorneys. Subject to compliance with the applicable provisions herein as to any transfer or assignment which may be involved in such division or combination, the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered in accordance with such notice. Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with such notice.

 

  

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9.           Compliance with the Securities Laws.  The Company represents and warrants to the Holder as of the date hereof and agrees with the Holder that:

 

(a)           Registration Statement.  A registration statement of the Company on Form F-3 (File No. 333- 172122) (the “Registration Statement”), including the Prospectus contained therein (the “Base Prospectus”), has been filed with the Commission pursuant to Rule 415 under the Securities Act.  The Company meets the requirements for use of Form F-3 under the Securities Act, and the rules and regulations of the Commission thereunder (the “Rules and Regulations”).  The Company is a “foreign private issuer” as defined in Rule 405 under the Securities Act.  The aggregate market value of the Company’s voting and non-voting common equity held by non-affiliates of the Company was at least $75 million within 60 days prior to the date of filing the Registration Statement or the Company’s most recent Annual Report on Form 20-F, whichever is later.  The Company has filed in a timely manner all reports required to be filed pursuant to Sections 13(a), 13(e) and 15(d) of the Exchange Act during the preceding 12 months.

 

(b)           Offering.  The offering and sale of the Warrant and the Warrant Shares (the “Offering”) is being made pursuant to (i) the Registration Statement, including the Base Prospectus, (ii) if applicable, any Issuer Free Writing Prospectuses that have been filed with the Commission and delivered to Holder (or made available to Holder by the filing by the Company of an electronic version thereof with the Commission) on or prior to the Issue Date, containing certain supplemental information regarding the Warrant and the Warrant Shares, the terms of the Offering and the Company and (iii) a Prospectus Supplement (the “Prospectus Supplement” and, together with the Base Prospectus, the “Prospectus”) filed pursuant to Rule 424(b) of the Rules and Regulations containing certain supplemental information regarding the Warrant and terms of the Offering that has been filed with the Commission and delivered to Holder (or made available to Holder by the filing by the Company of an electronic version thereof with the Commission).

 

(c)           Authorizations.  Except pursuant to the Securities Act and the rules and regulations of the Principal Markets in connection with the purchase of the Warrant by the Holder and the listing of the Warrant Shares on the Principal Markets, no consent, approval, authorization or order of, or filing, qualification or registration (each an “Authorization”) with, any court, governmental or non-governmental agency or body, foreign or domestic, which has not been made, obtained or taken and is not in full force and effect, is required for the execution and delivery of the Warrant by the Company or for offer and sale of the Warrant and the Warrant Shares; and no event has occurred that allows or results in, or after notice or lapse of time or both would allow or result in, revocation, suspension, termination or invalidation of any such Authorization or any other impairment of the rights of the holder or maker of any such Authorization.  The offer and sale of the Warrant and the Warrant Shares comply in all respects with all the provisions of the Israeli Securities Law, 5728-1968.

 

  

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(d)           No Stop Order.  No order preventing or suspending the use of any Issuer Free Writing Prospectus or the Prospectus has been issued by the Commission, and no proceeding for that purpose or pursuant to Section 8A of the Securities Act has been instituted or threatened by the Commission, and each Prospectus, at the time of filing thereof, conformed in all material respects to the requirements of the Securities Act and the Rules and Regulations, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

(e)           Full Disclosure.  At the time the Registration Statement and any amendments thereto became or become effective, and at the Issue Date, the Registration Statement and any amendments thereto conformed and will conform in all material respects to the requirements of the Securities Act and the Rules and Regulations and did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus and any amendments or supplements thereto, at the time the Prospectus or any amendment or supplement thereto was issued and at the Issue Date, conformed and will conform in all material respects to the requirements of the Securities Act and the Rules and Regulations and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  The Prospectus contains all required information under the Securities Act with respect to the Warrant and the Warrant Shares and the distribution of the Warrant and the Warrant Shares.

 

(f)           SEC Compliance.  The Company shall cause its Ordinary Shares to continue to be registered under Sections 12(b) or Section 12(g) of the Exchange Act, to comply in all material respects with its reporting and filing obligations under the Exchange Act and to not take any action or file any document (whether or not permitted by the Exchange Act, the rules and regulations promulgated thereunder, the Securities Act or the Rules and Regulations) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would permit such termination.  In addition, the Company shall keep the Registration Statement (or another registration statement covering issuance and resale of the Warrant and the Warrant Shares) continuously effective until the Warrant has been exercised in full by the holder thereof or March 13, 20141.  In addition, the Company shall file such amendments to the Registration Statement (or such other registration statement covering the issuance or resale of Warrant Shares) and such prospectus supplements that may be necessary for the issuance of any Warrant Shares to the purchasers thereof free of any restrictive legends and/or any other limitations on resale of such Warrant Shares by the Purchasers under the Securities Act.

 

  

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(g)           Resale of Warrant Shares.  Unless in the opinion of counsel to the Company acceptable to Holder, based on a ruling or established policy of the Israeli Securities Authority, all of the Warrant Shares are able to be sold without any regulatory volume limitations or manner of sale requirements on the Tel Aviv Stock Exchange, the Company shall prepare and file, or cause to be prepared and filed, with the Commission a registration statement on Form F-3 (the “Resale Registration Statement”) covering the resale to the public by the Holder of the Warrant Shares issuable under this Warrant.  The Company shall cause the Resale Registration Statement to become effective under the Securities Act by March 31, 3012.  At the time the Resale Registration Statement becomes effective under the Securities Act, the Holder shall be named as a selling securityholder in the Resale Registration Statement and the related Prospectus in such a manner as to permit the Holder to deliver such Prospectus to purchasers of Warrant Shares in accordance with the Securities Act.  The Company shall cause the Resale Registration Statement to remain effective until the earliest to occur of (A) all of the Warrant Shares shall have been sold pursuant thereto, (B) in the opinion of counsel to the Company acceptable to Holder, all of the Warrant Shares are able to be sold without any regulatory volume limitations or manner of sale requirements on the Principal Markets, and (C) expiration of the Warrant.

 

(h)           Listing of Ordinary Shares.  The Company hereby agrees to use best efforts to maintain the listing or quotation of the Ordinary Shares on the Principal Markets for a period of at least thirty-six (36) months from the Issue Date, the Company shall apply to list or quote all of the Warrant Shares on the Principal Markets and promptly secure the listing of all of the Warrant Shares on the Principal Markets.  The Company will take all action reasonably necessary to continue the listing and trading of its Ordinary Shares on the Principal Markets and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Principal Markets.

 

(i)           Listing of Warrant Shares.  The Company shall take all action which may be necessary so that no later than April 30, 2012, the Warrant Shares shall be registered for trading on the Principal Markets under applicable law or governmental regulation or any requirements of the Principal Markets.

 

1 This is the expiration date of the existing F-3.

 

  

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(j)           Registration Procedures.

 

(i)           In connection with the filing by the Company of the Resale Registration Statement, the Company shall furnish to the Holder a copy of the prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act.

 

(ii)           The Company shall use commercial best efforts to register or qualify the Warrant Shares covered by the Resale Registration Statement under the securities laws of each state of the United States, or to exempt the Warrant Shares from the application of such securities laws; provided, however, that the Company shall not be required in connection with this paragraph (ii) to qualify as a foreign corporation or execute a general consent to service of process in any jurisdiction.

 

(iii)           If the Company has delivered preliminary or final prospectuses to the Holder and after having done so the prospectus is required to be amended or supplemented to comply with the requirements of the Securities Act, the Company shall promptly notify the Holder and, if requested by the Company, the Holder shall immediately cease making offers or sales of shares under the Resale Registration Statement and return all prospectuses to the Company.  The Company shall promptly provide the Holder with revised or supplemented prospectuses and, following receipt of the revised or supplemented prospectuses, the Holder shall be free to resume making offers and sales under the Resale Registration Statement.

 

(iv)           The Company shall pay the expenses incurred by it in complying with its obligations under this Section 9, including all registration and filing fees, exchange listing fees, fees and expenses of counsel for the Company, and fees and expenses of accountants for the Company but excluding any brokerage fees, selling commissions or underwriting discounts incurred by the Holder in connection with sales under the Resale Registration Statement.  The Company shall also pay the fees and expenses of legal counsel retained by or on behalf of the Holder.

 

(k)           Indemnification; Contribution.

 

(i)           To the extent permitted by law, the Company will indemnify the Holder whose shares are included in the Applicable Registration Statement, each of its officers, directors, members and partners, and each person controlling the Holder, with respect to which registration, qualification or compliance has been effected pursuant to this Agreement, each director and controlling person of the Company and each officer of the Company who signed the registration statement, and each underwriter, if any, and each person who controls any underwriter, against all claims, losses, damages and liabilities (or actions, proceedings or settlements, if such settlements are effected with the written consent of the Company, in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any prospectus, Issuer Free Writing Prospectus, offering circular or other document (including any related registration statement, notification or the like) incident to any such registration, qualification or compliance, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of the Securities Act or the Exchange Act, or any other applicable securities laws or any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and will reimburse the Holder, each of its officers, directors, members and partners, and each person controlling the Holder, each such director, controlling person and officer, each such underwriter and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, loss, damage, liability, action or proceeding; provided, however, that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission made in such registration statement, prospectus, Issuer Free Writing Prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by the Holder or underwriter and stated to be specifically for use therein.

 

  

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(ii)           If the indemnification provided for in this Section 9(g) shall for any reason be unenforceable by the Holder, although otherwise available in accordance with its terms, then the Company shall, in lieu of indemnifying the Holder, contribute to the amount paid or payable by the Holder as a result of the losses, claims, damages, liabilities or expenses with respect to which the Holder has claimed indemnification, in such proportion as is appropriate to reflect (i) the relative benefits received by the Company, on the one hand, and the Holder, on the other hand, from their sale of Warrant Shares as well as (ii) the relative fault of the Holder on the one hand and the Company on the other in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations.  The relative fault, in the case of an untrue statement, alleged untrue statement, omission or alleged omission, shall be determined by, among other things, whether such statement, alleged statement, omission or alleged omission relates to information supplied by the Company or the Holder, and such parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement, alleged statement, omission or alleged omission.  The Company and the Holder agree that it would not be just and equitable if contribution pursuant hereto were to be determined by pro rata allocation or by any other method of allocation which does not take into account such equitable considerations.  The amount paid or payable by the Holder as a result of the losses, claims, damages, liabilities or expenses referred to herein shall be deemed to include any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending against any action or claim which is the subject hereof.  In no case, however, shall a Holder be responsible for a portion of the contribution obligation in excess of the net proceeds to such Holder of securities sold as contemplated herein.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who is not guilty of such fraudulent misrepresentation.

 

  

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(l)           Eligibility to Use Form F-3; Reports. The Company shall timely file all reports required to be filed with the Commission pursuant to the Exchange Act, and the Company shall not terminate its status as an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would permit such termination. The Company further agrees to file all reports required to be filed by the Company with the Commission in a timely manner so as to maintain its eligibility for the use of Form F-3.  The Company shall issue a press release describing the material terms of the transaction contemplated hereby as soon as practicable following the Issue Date but in no event more than four (4) Business Days following the Issue Date, which press release shall be subject to prior review by the Holder.

 

(m)           Rule 144 and Rule 144A.  The Company shall (a) use commercially reasonable efforts to timely file all reports required to be filed by it under the Securities Act or the Exchange Act (including, but not limited to, the reports under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144), and (b) take such further action as the Holder may reasonably request, all to the extent required from time to time to enable the Holder to sell the Warrant Shares without registration under the Securities Act within the limitation of the exemptions provided by (i) Rule 144, (ii) Rule 144A or (iii) any similar rule or regulation hereafter adopted by the Commission.

 

(n)           No Integration. The Company shall not make any offers or sales of any security under circumstances that would require registration of Warrant Shares being offered or sold hereunder under the Securities Act or cause the offering of the Warrant Shares to be integrated with any other offering of securities by the Company for the purpose of any shareholder approval provision applicable to the Company or its securities.

 

10.           No Impairment. The Company shall not, by amendment of its Memorandum of Association or Articles of Association, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but shall at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the Holder in order to protect the exercise rights of the Holder against dilution or other impairment, consistent with the tenor and purpose of this Warrant.

 

11.           No Waiver.  Notwithstanding any provision herein to the contrary, nothing herein shall be construed to limit, waive, amend or alter the terms and provisions of the Loan Agreement or the other Loan Documents or any rights or remedies available to Eastgate in its capacity as creditor of the Credit Parties thereunder.  This restriction shall terminate only at such time as the Credit Parties have paid in full any and all Obligations (other than contingent indemnification Obligations to the extent no claim giving rise thereto has been asserted) under the Loan Agreement, and all financing arrangements under the Loan Agreement among the Lender and the Credit Parties have terminated pursuant to the terms of the Loan Agreement and the other Loan Documents and no disputes remain outstanding with respect thereto.

 

  

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12.           Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or electronic mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 12).

 

	
If to the Company:

	
Elbit Imaging Ltd.

2 Weitzman Street

Tel Aviv 64239, Israel

Facsimile: +972-3-608-6050

 

E-mail: tals@elbitimaging.com

Attention: Tal Shani, Corporate Secretary

 

	
with a copy to:

	
E-mail: zvim@elbitimaging.com

Attention: Zvi Maayan, General Counsel

 

	
If to the Holder:

	
Eastgate Property, LLC

c/o NCH Capital Inc.

712 Fifth Avenue, 46th Floor

New York, New York  10019

 

Facsimile:                      212-641-3201

E-mail:

Attention:                     Gregory Katz

 

	
with a copy to:

	
Fulbright & Jaworski L.L.P.

801 Pennsylvania Avenue, N.W.

Washington, D.C. 20004-2623

 

Facsimile:                      202-662-4643

E-mail:                            alachenmayr@fulbright.com

Attention:                     Andrea Lachenmayr

 

  

24

  

13.           Cumulative Remedies. Except to the extent expressly provided in Section 7 to the contrary, the rights and remedies provided in this Warrant are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise.

 

14.           Equitable Relief. Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction.

 

15.           Entire Agreement. This Warrant constitutes the sole and entire agreement of the parties with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter.

 

16.           Successor and Assigns. This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto and the successors of the Company and the successors and permitted assigns of the Holder. Such successors and/or permitted assigns of the Holder shall be deemed to be a Holder for all purposes hereunder.

 

17.           No Third-Party Beneficiaries. This Warrant is for the sole benefit of the Company and the Holder and their respective successors and, in the case of the Holder, permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Warrant.

 

18.           Headings. The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.  The preamble of this Warrant and the Exhibits attached hereto are integral parts of this Warrant.

 

19.           Amendment and Modification; Waiver. Except as otherwise provided herein, this Warrant may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by the Company or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

  

25

  

20.           Severability. If any term or provision of this Warrant is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other jurisdiction.

 

21.           Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of New York without giving effect to any choice or conflict of law provision or rule that would cause the application of laws of any jurisdiction other than those of the State of New York.

 

22.           Submission to Jurisdiction. Any legal suit, action or proceeding arising out of or based upon this Warrant or the transactions contemplated hereby may be instituted in the federal courts of the United States of America or the courts of the State of New York in each case located in the city of New York and County of New York, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding; provided, however, that nothing herein shall limit the right of the Holder to bring proceedings against the Company or its subsidiaries in the courts of any other jurisdiction.  Service of process, summons, notice or other document by certified or registered mail to such party’s address set forth herein shall be effective service of process for any suit, action or other proceeding brought in any such court.  The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

 

23.           Waiver of Jury Trial. Each party acknowledges and agrees that any controversy which may arise under this Warrant is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Warrant or the transactions contemplated hereby.

 

24.           Counterparts. This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Warrant delivered by facsimile, electronic mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.

 

25.           No Strict Construction. This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.

 

[SIGNATURE PAGE FOLLOWS]

 

  

26

  

 

IN WITNESS WHEREOF, the Company has duly executed this Warrant on the date first set forth above.

 

	  	
ELBIT IMAGING LTD.

 

	  	
By: /s/ Zvi Maayan

Name: Zvi Maayan

Title: General Counsel

 

	
Accepted and agreed,

 

	
EASTGATE PROPERTY, LLC

 

	  
	
By: /s/ Gregory Katz

Name: Gregory Katz

Title:

	  

Signature Page to Warrant

 

  

  

  

 

EXHIBIT A

 

 

NOTICE OF EXERCISE

 

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE

THIS WARRANT TO PURCHASE ORDINARY SHARES

 

ELBIT IMAGING LTD

 

The undersigned holder hereby exercises the right to purchase a percentage of the Ordinary Shares (“Warrant Shares”) of ELBIT IMAGING LTD, an Israeli Corporation (the “Company”) evidenced by the attached Warrant (the “Warrant”).  Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

 

 

1.           Form of Exercise Price.  The Holder intends that payment of the Exercise price shall be made as:

 

                 a “Cash Exercise” with respect to                  Warrant Shares, and/or

 

 

                 a “Cashless Exercise” with respect to                  Warrant Shares.

 

 

2.           Payment of Exercise Price.  In the event that the holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in accordance with the terms of the Warrant, as follows:

 

__________ to the Company in cash in the sum of $_______; and/or

 

__________ by way of set-off or release of debt as detailed below (lender, borrower, agreement, amount of principal and accrued interest):

 

_________________________________________________________

 

______________________________________________________

 

Date:                        ,       

 

	
EASTGATE PROPERTY, LLC

 

By:                                                               

Name:

Title:

  

  

  

 

EXHIBIT B

 

 

FORM OF ASSIGNMENT

 

(To be executed only upon assignment of Warrant)

 

 

For value received,                                            hereby sells, assigns and transfers unto the Assignee(s) named below the rights represented by such Warrant to purchase the number of Warrant Shares listed opposite the respective name(s) of the Assignee(s) named below and all other rights of the Registered Holder under the within Warrant , and does hereby irrevocably constitute and appoint                                            attorney, to transfer said Warrant on the books of the within-named Company with respect to the number of Warrant Shares set forth below, with full power of substitution in the premises:

	
Name(s) of

Assignee(s)

	
Address

	
No. of Warrant Shares

	  	  	  
	  	  	  
	  	  	  

 

If said number of Warrant Shares shall not be all the Warrant Shares represented by the Warrant, a new Warrant is to be issued in the name of said undersigned for the balance remaining of the Warrant Shares registered by said Warrant.

	
 

Date:                      ,       

	
 

Signature:  ______________________________________CONFIDENTIAL

Exhibit 10.8

CONFIDENTIAL TREATMENT REQUESTED.
CONFIDENTIAL
PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE
BEEN
SEPARATELY FILED WITH THE COMMISSION.

	
       
	
       

	
      
	
      SOFTWARE LICENSE AND SERVICES
      AGREEMENT

	
       

	 
  

This Software License and Services Agreement (the
“Agreement”) is made and entered into as of the date of the last
signature below (“Effective Date”) by and between GREENWAY MEDICAL
TECHNOLOGIES, INC., a Georgia corporation having its principal place of business
at 121 Greenway Boulevard, Carrollton, Georgia 30117 (“Greenway”) and
WALGREEN CO., an Illinois corporation with offices located at 200 Wilmot Rd,
Deerfield, Illinois 60015, on behalf of itself, and its Subsidiaries as defined
herein (“Client”). 

This Agreement consists of this cover page and the
following documents: 

	
       
	
       
	
       

	
       
	
      •
	
      Software License and Services Agreement

	
       
	
      •
	
      Schedule A (Support Services Agreement)

	
       
	
      •
	
      Schedule B (Business Associate Agreement)

	
       
	
      •
	
      Schedule C (Services Schedule)

	
       
	
      •
	
      Schedule D (Pricing)

	
       
	
      •
	
      Schedule E (Transition
Services)

Signing below indicates that you have read and
agree to the terms of said documents. 

IN WITNESS WHEREOF, the parties hereby indicate
their acceptance of the terms of this Agreement by causing their duly authorized
officers or representatives to execute this document as of the Effective Date.

	
       
	
       
	
       
	
       
	
       

	
      WALGREEN CO.
	
       
	
      GREENWAY MEDICAL TECHNOLOGIES,
INC.

	
       
	
       
	
       
	
       
	
       

	
      BY:
	
      /s/ Tim Theriault
	
       
	
      BY:
	
      /s/ William G. Esslinger, Jr.

	
       
	  	
       
	
       
	  
	
       
	
           (Authorized
      Signature)
	
       
	
      (Authorized Signature)

	
       
	
       
	
       
	
       
	
       

	
      Tim Theriault
	
       
	
      William G. Esslinger, Jr.

	  	
       
	 
  
	
      (Name)
	
       
	
      (Name)

	
       
	
       
	
       
	
       
	
       

	
      Senior Vice President/CIO
	
       
	
      Vice President, General Counsel & CPO

	  	
       
	 
  
	
      (Title)
	
       
	
      (Title)

	
       
	
       
	
       
	
       
	
       

	
      2/28/2011
	
       
	
      2/25/2011

	  	
       
	 
  
	
      (Date)
	
       
	
      (Date)

	
       
	
       
	
       
	
       
	
       

	  	
       
	 
  
	
        Approved by Department
	
       
	
      
	
       

	  	
       
	 
  
	
        Commercial
	
      By:
	
       
	
       
	
       

	  	
       
	 
  
	
        Transactions Law
	
       
	
       
	
       
	
       

	  	
       
	 
  
	
        Strategic Sourcing
	
      By:
	
       
	
       
	
       

	  	
       
	 
  
	
        IT Enterprise
	
      By:
	
       
	
       
	
       

	  	
       
	 
  
	
        Applications and
  Services
	
       
	
       
	
       
	
       

	  	
       
	 
  

	
       
	
       

	 
  
	
      Greenway Medical Technologies, Inc./Walgreen Co.
      SLSA
	
      Page 1

CONFIDENTIAL

SOFTWARE LICENSE AND SERVICES AGREEMENT

Definitions are in Section 14

1. SOFTWARE 

1.1 License; Content. Subject to the
payment of all Fees due Greenway and subject to the terms and conditions of this
Agreement, Greenway hereby grants to Client, and Client hereby accepts, a
paid-up, perpetual (subject to Section 4 herein), nonexclusive, world-wide right
and license to use and copy Licensed Software and Documentation. If connection
with the license to use the Software granted to Client hereunder, Client shall
also have a perpetual non-transferable, non-sublicensable, non-exclusive license
within the United States to use and modify Content. Except after a Release
Event, Client shall not have the right to retain a third party to perform any
modifications to the Content without the prior written consent of Greenway.
Client shall notify Greenway in the event that it desires to use a third party
to perform any modifications or if otherwise expressly allowed to have a third
party access the Content or Software according to the terms of this Agreement.
Greenway shall have the right to determine that such third party is not a
competitor of Greenway in its reasonable discretion. In the event that Greenway
determines such party is a competitor, Client shall select an alternative third
party. Client shall not permit any approved third party to access the Content or
any other Greenway Confidential Information until such third party has executed
a confidentiality agreement at least as protective of Greenway’s Confidential
Information as the terms of this Agreement. 

1.2 Employer EMR License. The license
granted under Section 1.1 is separate from the licenses granted pursuant to that
certain Software License and Services Agreement dated as of February 4, 2010
(the “Take Care SLSA”) by and between Greenway and Take Care Employer Solutions,
LLC (“Take Care”). Nothing contained in the Take Care SLSA or this Agreement
shall prohibit or otherwise restrict Take Care from utilizing the license
granted the Take Care SLSA. In addition, Take Care shall have the right to
utilize the PrimeSuite Retail Clinic EHR licensed from Greenway pursuant o the
enterprise license set forth in Section 1.1 above. 

1.3 Authorized Users; Authorized Hardware.
The license granted by this Agreement authorizes use of the Software only by
Authorized Users for the business purposes of Client on the Authorized Hardware.
Client shall not transfer, lease, loan, resell, distribute, or otherwise grant
any rights in the Software in any form to any other party, including any
commercial time-sharing, rental, or service bureau use. Greenway shall test any
hardware as requested by Client in order to determine the compatibility of any
proposed hardware with the Software and shall provide confirmation of Client’s
current hardware on or before the Effective Date. Such confirmation shall be
deemed a right on the part of Greenway to reject any hardware that otherwise is
compatible with the Software. 

1.4 Authorized Location. Client shall give
Greenway six (6) weeks prior written notice before transferring the Software on
the server from the Authorized Location. Without such notice, Greenway may
suspend Support Services. Notwithstanding anything herein to the contrary, a
transfer of the Software from an Authorized Location shall be deemed acceptable
if such transfer is in connection with a Release Event under the Escrow
Agreement and this Agreement. Client shall provide prompt notice of such
transfer to Greenway and otherwise comply with this Agreement. 

1.5 No Modification or Reverse Engineering;
Access. Client shall not and shall not allow any third party to: (i) reverse
engineer, reverse assemble, decompile, or otherwise attempt to derive the source
code (or underlying structure or algorithms) from the Software or decode or
decrypt any data files created by or associated with the Software; or (ii)
alter, adapt, or modify the Software or otherwise create any derivative works
from the Software, except with respect to the limited license granted to modify
the Content and except in cooperation with, and with the approval of, Greenway.
Client shall not allow any of its employees, personnel, contractors,
consultants, agents or representatives who provide services in or are otherwise
associated with Client’s business in the Retail Health Clinic Field to access,
use or otherwise utilize any of 

Greenway’s Software, Content, Services,
  documentation, information or other intellectual property related thereto that
  any such personnel would not be able to otherwise access, use or otherwise
  utilize but for their employment with or retention by Client or unless and until
  the parties enter into an Order Form pursuant to which Client licenses Software
  for use in the Retail Health Clinic Field. Client shall take all commercially
  reasonable actions (including, without limitation, commercially reasonable
  security, technology and firewall restrictions, if any) to ensure compliance
  with the foregoing. 

1.6 Copy of the Software. Greenway shall
furnish to Client copies of the Software listed in the applicable Order Form,
which includes an electronic copy of the Documentation. Client may make a
reasonable number of copies of the Software for the sole purpose of disaster
recovery, archival, quality assurance purposes, development and training
support, subject to all other terms of this Agreement. Except as set forth
herein, Client shall not copy the Software or Documentation without the prior
written consent of Greenway. Client shall not remove, modify, or obscure any
copyright and other proprietary rights notices without the prior written consent
of Greenway. 

1.7 Acknowledgement of Greenway’s Ownership
Rights. Client acknowledges that the license granted under Sections1.1 and
1.2 do not constitute a transfer or sale of Greenway’s ownership rights in and
to the Software, the Documentation, or the Content (or any modifications
thereto). All right, title, and interest, including all intellectual property
rights, in and to the Software, the Documentation, and the Content or any
modifications thereto made by or for Client (including any copies or subsequent
Releases) shall be, and will remain the exclusive property of Greenway or any
third party from whom Greenway has licensed software or technology. Client
further acknowledges that the Software, Documentation, Content, and the
information therein is proprietary to Greenway and its licensors and comprises:
(a) original works of authorship, including compiled information containing
Greenway’s or its licensors’ selection, arrangement and coordination, and
expression of such information; (b) confidential and trade secret information;
and (c) information that has been created, developed, and maintained by Greenway
or its licensors at great expense of time and money such that misappropriation
or unauthorized use by others for commercial gain would unfairly and irreparably
harm Greenway or its licensors. This section shall apply to all Content whether
or not it originated from Greenway’s Content library. 

1.8 Client Requirements. Greenway shall
ensure that all Software is free from viruses, worms, Trojan horses, spyware,
adware, and other malicious code. Greenway shall not use the Software to disrupt
Client’s computer systems or network equipment. In the event that Client loses
or damages any media provided by Greenway that contains the Software, then, upon
written notice from Client, Greenway shall provide a replacement copy of the
media at no additional charge. 

1.9 Client Proprietary Rights. Except as
otherwise stated herein, as between Client and Greenway, Client Confidential
Information is and shall remain the sole and exclusive property of Client,
including all applicable rights to patents, copyrights, trademarks, trade
secrets or other proprietary property rights thereto. Additionally, all right,
title and interest in and to any of Client’s proprietary data relating to its
business shall remain the property of Client, whether or not supplied to
Greenway, uploaded into the Software or otherwise obtained by Greenway.

1.10 [CONFIDENTIAL MATERIAL REDACTED AND
FILED SEPARATELY WITH THE COMMISSION] 

1.11 [CONFIDENTIAL MATERIAL REDACTED AND
FILED SEPARATELY WITH THE COMMISSION]

1.12 Source Code Escrow 

1.12.1 Escrow Agreement. Greenway shall be
added as a Depositor to that certain Master Three-Party Escrow Service Agreement
dated as of May 19, 2010 by and between Client and Iron Mountain Intellectual
property Management, Inc. (the “Escrow Agreement”) within sixty (60) days
of the Effective Date and Greenway shall remain a Depositor of the Escrow
Agreement during the Term of this Agreement 

	
       
	
       

	  	  
	
      Greenway Medical Technologies, Inc./Walgreen Co.
      SLSA
	
      Page 2

CONFIDENTIAL

and for such period thereafter as may be required
for Greenway and/or the applicable escrow agent to discharge its obligations
under the Escrow Agreement that accrued prior to the end of the term. Greenway
shall be responsible for any mutually agreed upon, reasonable fees charged by
the escrow agent for source code deposit and yearly maintenance. 

1.12.2 Release Event. The Escrow Agreement
shall provide for release of the Escrow Materials in the event of a termination
of the Agreement due to: (i) a Discontinuance of Business (as defined in Section
4.3 below); (ii) a Bankruptcy Event (as defined in Section 4.3 below) of
Greenway; or (iii) a Material Support Failure (collectively, the “Release
Events”). 

1.12.3 Escrow License. Subject to and in
accordance with the terms and conditions of this Agreement and the Escrow
Agreement, upon a Release Event, Client shall have the limited right to use the
source code to the Software and all deposited Documentation related thereto (the
“Escrow Materials”), to modify, enhance, make Releases, and create
derivative works and translations of such source code for the sole purpose of
maintaining and supporting the Software for its business use. Such license shall
continue to be subject to all other terms and conditions set forth in this
Agreement not otherwise modified by the escrow license granted hereunder or that
would not be applicable under the escrow release terms and conditions. All
improvements or inventions related to Client’s use of the Escrow Materials, and
all intellectual property rights therein, shall be owned by Greenway
(collectively “Developed IP”). Client agrees to assign (or cause to be
assigned) and does hereby irrevocably assign fully to Greenway all right, title
and interest in and to any and all Developed IP and all derivative works thereof
in all media, including, without limitation, all intellectual property or
proprietary rights relating thereto. During and after the Term, at Greenway’s
request and expense, Client shall, and shall cause its personnel to, execute
such instruments and take such other actions as may be necessary or appropriate,
in Greenway’s sole discretion and expense, to evidence or further document
Greenway’s ownership of the Developed IP and/or to register, file, prosecute,
maintain and/or defend any applicable intellectual property rights in such
Developed IP in the name of Greenway. In addition, upon a release of Escrow
Materials after a Release Event, Greenway grants Client a limited right to use
any additional materials, and Greenway shall deliver such materials, related to
the Escrow Materials necessary for Client to exercise its source code license
rights set forth above, including, without limitation, any printed matter, user
manuals, training materials, guides, product descriptions, technical manuals,
product specifications, supporting materials and all other materials (printed
and/or in electronic form) needed to allow Client to understand and use the
source code and enhance and otherwise provide service continuity for Client and
Authorized Users. 

1.12.4 Protection of Escrow Materials.
Without limiting the generality of Section 11 (Confidential Information), upon
the release of Escrow Materials pursuant to a Release Event, Client shall take
the following measures to protect the Escrow Materials, including the Greenway
source code. Client shall: (i) use commercially reasonable best efforts to
ensure that only a limited and controlled group of identified employees of
Client will be permitted access to the Escrow Materials, and Client shall
maintain a list of such individuals available to Greenway upon Greenway’s
written request; (ii) notify each such individual in writing of Client’s
obligations in respect of maintaining the confidentiality and security of the
Escrow Materials, and shall use commercially reasonable best efforts to get each
of such individuals, at the request of Greenway, to execute a personal
nondisclosure acknowledgement with Client and Greenway, with confidentiality
obligations not less restrictive than provided for in this Agreement; (iii) keep
hard disk copies of the Escrow Materials only on password protected computers;
(iv) not transfer or permit the transfer of soft copies of the Escrow Materials
across any Internet link except in encrypted form; (v) keep all hard copies and
portable disk copies of the Escrow Materials under lock and key when unattended;
and (vi) not remove, or permit the removal of, any copy of the Escrow Materials
from Client’s premises. Any encryption required by this Section shall conform to
then current industry standards for strong encryption, and in any event shall
use no less than 128 bit encryption or (where transfer of 128 bit encryption is
not permitted under applicable law) the strongest encryption permitted to be
transferred under such 

applicable law. 

2. SERVICES; HARDWARE; THIRD PARTY SOFTWARE;
THIRD PARTY DATABASES 
Subject to the terms and
conditions of this Agreement and the execution of an applicable Order Form or
statement of work, Client may purchase from Greenway certain Services, hardware,
third party software, and third party databases. Greenway shall provide to
Client those Services expressly set forth in a task order, statement of work or
other document (“Statement of Work” or “SOW”) executed by the
parties. Greenway may also provide professional or related services
(“Professional Services”) to Client during the term of the Agreement
which may include services related to the development or customization of
portions of the Software, or related to other specialized development projects
upon mutual agreement of the parties as set forth in an applicable Statement of
Work. All Professional Services (and not any other Services such as Deployment
Services or Transaction Services) shall be provided under the terms of Schedule
E attached hereto (“Services Schedule”). 

3. FEES AND EXPENSES 

3.1 Fees. Client shall pay to Greenway a
Fee for the following items licensed or purchased pursuant to an executed Order
Form or Statement of Work: 

	
       
	
       
	
       

	
       
	
      •
	
      Software licenses

	
       
	
      •
	
      Support Services

	
       
	
      •
	
      Deployment Services

	
       
	
      •
	
      Transaction Services

	
       
	
      •
	
      third party databases

	
       
	
      •
	
      hardware and third party software

	
       
	
      •
	
      other Services (including Professional
    Services)

3.2 [CONFIDENTIAL MATERIAL REDACTED AND
FILED SEPARATELY WITH THE COMMISSION] 

3.3 [CONFIDENTIAL MATERIAL REDACTED AND
FILED SEPARATELY WITH THE COMMISSION]

3.4 [CONFIDENTIAL MATERIAL REDACTED AND
FILED SEPARATELY WITH THE COMMISSION] 

3.5 [CONFIDENTIAL MATERIAL REDACTED AND
FILED SEPARATELY WITH THE COMMISSION]

3.6 Invoices. Greenway will invoice Client
for amounts due in accordance with Schedule F (but not more frequently than
monthly), an applicable Order form or applicable Statement of Work. Upon request
by Client, invoices and payments of invoices will be submitted using an
electronic method agreed upon between Client and Greenway. All invoices must
include, at a minimum, the following information: (a) name and address of
Greenway; (b) Greenway DUNS number (if such a number has been assigned); (c)
invoice number; (d) description of Services provided; (e) date; (f) dollar
amount due; (g) a reference to the applicable Statement of Work; and (g)
Department number as provided by Client. 

3.7 Disputes. If Client, in good faith,
disputes any fee, expense, or other charge, Client will promptly provide
Greenway with written notice of such dispute. Client and Greenway will use their
best efforts to resolve the dispute within sixty (60) days. Each party will
provide the other party with copies of all reasonably requested supporting
documentation in their possession relating to the dispute within thirty (30)
days after written request. Such amount (or such amount as may be ultimately
determined to be correct) shall not be due until thirty (30) days after the
dispute is resolved but in no event earlier than the original Invoice Due Date.
Notwithstanding anything contained herein, Client shall have no obligation to
pay an amount disputed in accordance with this Section until resolution of the
dispute. The existence of a good faith billing dispute shall not constitute
valid ground for non-performance hereunder, except only as to the payment of the
amount in dispute. 

3.8 Taxes. All Fees are exclusive of any
and all taxes, duties, or levies 

	
       
	
       

	 
  
	
      Greenway Medical Technologies, Inc./Walgreen Co.
      SLSA
	
      Page 3

CONFIDENTIAL

assessed by applicable governmental authorities.
All such taxes, duties, and levies (exclusive of any taxes based upon Greenway’s
income) shall be assumed by and paid for by Client. Greenway is responsible for
the collection and remittance of all taxes, however designated, levied, or based
on the purchase of the Software and/or Services. Client will pay to Greenway any
sales, use or excise tax, whether federal, state or local, imposed on or arising
out of the delivery of Services or the Software by Greenway. Client shall not be
responsible for paying any other taxes or fees of Greenway, including Greenway’s
licensing or business fees or assessments that are not specified as a sales, use
or excise tax. Once Client has paid such tax to Greenway, Client shall have no
other responsibility with respect to such sales, use or excise taxes and
Greenway shall be responsible for promptly paying such tax to the appropriate
taxing authority. If it is later determined that such tax, or any portion
thereof, was not due, Greenway will promptly refund the amount thereof to
Client. Greenway shall, on every taxable event, make all reasonable efforts to
limit any and all tax consequences to Client. Greenway is solely responsible for
paying any and all taxes (including social security, employment and income)
required by any federal, state or local law or regulation pertaining to Greenway
personnel related to the performance of Services. 

3.9 Illinois Software Taxes. The parties
intend that any Software that is installed at locations within Illinois under
the software license granted under this Agreement shall satisfy Section 86
Illinois Administrative Code 130.1935(a)(1). Therefore, no sales tax will be due
on charges in connection with this Agreement for any Software licensed for use
in Illinois, or for related maintenance agreements or updates, as this
transaction is not considered a taxable retail sale. Furthermore, no sales tax
will be shown on any invoice with respect to charges for Software licensed for
use in Illinois, or for related maintenance agreements or updates, as no sales
tax is due. 

4. TERM AND TERMINATION 

4.1 Term. The term of this Agreement shall
commence upon the Effective Date and continue in full force and effect until
terminated in accordance with this Agreement (the “Term”) 

4.2 Mutual Termination. Either party may
terminate this Agreement and any Software license granted hereunder by providing
written notice to the other party upon the occurrence of any of the following
events: (i) the other party attempts to assign or otherwise transfer its rights,
obligations, or duties under this Agreement in violation of the terms of this
Agreement; or (ii) the other party materially breaches any of its obligations
under any provision of this Agreement, which breach is not remedied by such
party within thirty (30) days after receipt of written notice from the
non-breaching party. 

4.3 Termination by Client. Client shall
have the right to terminate this Agreement in the event that (i) a Material
Support Failure occurs, (ii) Greenway fails to correct the Errors during any
applicable Acceptance Period as provided in Section 5, (iii) a receiver is
appointed for Greenway or its property; (iv) Greenway makes a general assignment
of all or substantially all of its assets or business for the benefit of its
creditors; (v) Greenway commences or has commenced against it, proceedings under
any bankruptcy law, which proceedings are not dismissed within sixty (60) days
(clause (iii), (iv) and (v) collectively, a “Bankruptcy Event”); or (vi)
Greenway Discontinues its Employer Health Center Business (“Discontinuance of
Business”). In addition, Client may terminate this Agreement at any time
upon one hundred eighty (180) days written notice to Greenway. 

4.4 [CONFIDENTIAL MATERIAL REDACTED AND
FILED SEPARATELY WITH THE COMMISSION] 

4.5 Rights Upon Termination. 

4.5.1 Upon expiration or termination of
this Agreement or any Statement or Work hereunder, the provisions for Transition
Assistance Activities, specified in Schedule I, detailing each party’s
respective tasks in connection with the orderly transition, and migration of the
Software and Services to Client or a third party provider (as determined by
Client in its sole discretion), shall apply. 

4.5.2 Termination of this Agreement or any
Software license shall not limit either party from pursuing other remedies
available to it (except where a sole remedy is specified), including injunctive
relief, nor shall such termination relieve Client’s obligation to pay all Fees,
expenses, and costs that have accrued or are otherwise owed by Client to
Greenway. The parties’ rights and obligations under Sections 1.1 through 1.8, 3,
4.5, 7, 8, 9, 11, 13.1, 13.5, 13.7, 13.9, 13.10, 13.11, 13.12 and 13.13 shall
survive termination or expiration of this Agreement. The parties’ rights and
obligations under Sections 1.9.6, 12.1, 12.2 and 12.3 shall solely survive for
the periods indicated therein. 

5. [CONFIDENTIAL MATERIAL REDACTED AND
FILED SEPARATELY WITH THE COMMISSION] 

6. WARRANTIES; COVENANTS 

6.1 Software. Greenway warrants that:

     a. The Software
shall perform substantially in accordance with the accompanying Documentation
during the Warranty Period. The foregoing warranty shall be null and void if any
Software is (i) modified or disabled by any party other than Greenway or its
authorized representatives; (ii) used by Client in combination with hardware
that is not Authorized Hardware or software not supplied or authorized by
Greenway; provided the use of such hardware or software was the cause of any
applicable defect for which Client is making claim under this warranty; (iii)
not utilized substantially in accordance with the Documentation

     b. All Updates to
the Software by Greenway will be compatible with, and will not materially
diminish the features or functionality of the Software when used in accordance
with the Documentation and all of the terms and conditions hereof. 

     c. The Software,
Services, Greenway Content, and Documentation rendered pursuant to this
Agreement are and will be manufactured, produced, sold and rendered in
conformity with all applicable laws, ordinances, orders, directions, rules, and
regulations of the Federal, state, county, and municipal governments applicable
thereto, all as they may be amended from time to time. 

     d. Upon delivery to
Client, the Software does not contain any disabling code (defined as computer
code designed to interfere with the normal operation of the Software or Client’s
hardware or software) or any program routine, device or other undisclosed
feature, including but not limited to, viruses, worms, Trojan horses, or other
malicious code which is specifically designed to permit unauthorized access,
delete, disable, deactivate, interfere with or otherwise harm the Software or
Client’s hardware or software. In addition, Greenway warrants that it will not
cancel or otherwise terminate Client’s use of the Software through the use of
disabling passwords, keys or tokens. 

6.2 Services. Greenway warrants that any
Services provided hereunder shall be provided in a professional and workmanlike
manner. 

6.3 Hardware. Greenway shall pass through
to Client any original manufacturers’ warranties for hardware products acquired
by Greenway for Client. Greenway does not make any warranties in connection with
the hardware and hereby expressly disclaims any warranties with respect thereto.

6.4 HIPAA. Greenway represents and warrants
to Client that the Software and Services fully comply with the applicable
provisions of Public Law 104-91, Health Insurance Portability and Accountability
Act of 1996 (“HIPAA”) and the Health Care Financing Administration Internet
Security Policy of 1998 Health Insurance Portability and Accountability Act of
1996. Furthermore, Greenway agrees to use commercially reasonable efforts to
establish and maintain an effective program to prevent and detect violations of
law, including but not limited to violations of HIPAA and all proposed rules and
final rules issues pursuant to HIPAA applicable to and affecting Client, the
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6.5 Compliance with Client’s Policies, Goals
and Guidelines. Greenway agrees to cooperate with Client’s commitment to
support a diverse base of vendors and contractors, and will comply with Client’s
vendor policies in support of Client’s Supplier Diversity Initiative(http://www.walgreens.com/topic/sr/supplier_
diversity/sr_supplier_diversity_home.jsp).
Greenway will complete the Vendor Diversity Classification and Certification
Requirements section of the Vendor Setup process and participate in any studies
or surveys that may be conducted by Client, its representatives, or any federal
or state agency for identification of vendor classifications and utilization.
Greenway agrees to submit quarterly reports detailing its use of certified
diverse contractors, to the extent Greenway collects or maintains such data. The
reporting shall be on a form or in a format specified by Client, which will
include allocations of expenditures directly and indirectly related to Client.

7. DISCLAIMERS

7.1 Third Party Databases; Data. Greenway
shall not be liable for any specific settings or databases embedded within the
Software. Greenway does not warrant the accuracy of codes or other data
contained in the Software or any third party database incorporated into the
Software. The clinical information contained in the Software, including that
contained in the Content, or any third party database incorporated into the
Software is intended as a supplement to, and not a substitute for, the
knowledge, expertise, skill, and judgment of physicians or other healthcare
professionals. The absence of a warning for a given drug or drug combination
shall not be construed to indicate that the drug or drug combination is safe,
appropriate, or effective in any given patient. Billing codes, including without
limitation ICD, CPT, and E&M codes, which might be suggested by the Software
are merely suggestions based upon the amount of documentation completed, and
such codes are not intended to be a substitute for the healthcare professional’s
judgment. Client is responsible for ensuring that billing codes entered into the
Content are appropriate for the level of documentation completed. Any hard copy
documents or images that are scanned and saved as files within the Software, and
any digital images imported as files into the Software, are to be used for
documentation purposes only and not for diagnostic purposes. Greenway shall not
be liable for the content, accuracy, clarity, or resolution of any scanned
images or digital images. 

7.2 Professional Duty. Client acknowledges
that the professional duty to the patient in providing healthcare services lies
solely with the healthcare professional providing such services. Client takes
full responsibility for the use of information provided by the Software or any
third party databases incorporated into the Software in patient care and
acknowledges that the use of the Software or any third party databases
incorporated into the Software is in no way intended to replace, or serve as a
substitute for, professional judgment. Greenway does not assume any
responsibility for actions of Client which may result in any liability or
damages due to malpractice, failure to warn, negligence, or any other basis.
Client shall ensure that all healthcare professionals using the Software are
aware of the limitations on the use of the Software. 

7.3 General. NEITHER GREENWAY NOR ITS
LICENSORS WARRANT THAT THE SOFTWARE WILL BE UNINTERRUPTED OR ERROR-FREE OR THAT
ANY SOFTWARE, CONTENT, OR SERVICES WILL MEET CLIENT’S REQUIREMENTS. EXCEPT AS
SET FORTH ABOVE, GREENWAY AND ITS LICENSORS SPECIFICALLY DISCLAIM ALL WARRANTIES
WITH RESPECT TO THE SOFTWARE, THE DOCUMENTATION, THE CONTENT, AND/OR ANY
MATERIALS OR SERVICES FURNISHED TO CLIENT UNDER THIS AGREEMENT, WHETHER EXPRESS,
IMPLIED, STATUTORY, OR OTHERWISE, INCLUDING ALL IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND NON-INFRINGEMENT.
THERE IS NO WARRANTY AGAINST INTERFERENCE WITH THE ENJOYMENT OF THE SOFTWARE,
DOCUMENTATION, OR SERVICES PROVIDED HEREUNDER. 

7.4 Content. CONTENT PROVIDED AT
DEPLOYMENT, VIA GREENWAY’S CONTENT LIBRARY, OR OTHERWISE IS PROVIDED ON AN “AS
IS” AND “AS AVAILABLE” BASIS. CLIENT EXPRESSLY AGREES THAT USE OF THE CONTENT IS
AT CLIENT’S SOLE RISK. THE CONTENT MAY CONTAIN CONTENT UPLOADED BY USERS, 

AND SUCH CONTENT HAS NOT BEEN REVIEWED BY GREENWAY. CLIENT UNDERSTANDS AND AGREES
THAT CLIENT IS SOLELY RESPONSIBLE FOR VERIFYING THE ACCURACY OF CONTENT,
INCLUDING, BUT NOT LIMITED TO, ANY MEDICAL INFORMATION, DRUG AND DOSING
INFORMATION, AND PROPER BILLING CODES CONTAINED IN THE CONTENT. GREENWAY AND ITS
AFFILIATES ASSUME NO RESPONSIBILITY FOR AND MAKE NO WARRANTY OR REPRESENTATION
AS TO THE ACCURACY, CURRENCY, COMPLETENESS, RELIABILITY, OR USEFULNESS OF ANY
CONTENT. 

8. EXCLUSIVE REMEDIES 
CLIENT’S SOLE AND
EXCLUSIVE REMEDY AGAINST GREENWAY OR ITS LICENSORS FOR BREACH OF ANY OF THE
WARRANTIES SET FORTH IN SECTION 6 SHALL BE FOR GREENWAY, AT ITS OPTION, TO USE
COMMERCIALLY REASONABLE EFFORTS TO (A) CORRECT ANY ERROR IN THE SOFTWARE AS TO
WHICH CLIENT HAS GIVEN GREENWAY WRITTEN NOTICE; (B) REPLACE ANY DEFECTIVE
SOFTWARE AS TO WHICH CLIENT HAS GIVEN GREENWAY WRITTEN NOTICE; AND (C)
RE-PERFORM ANY SERVICE PROVIDED BY GREENWAY WHICH CLIENT REASONABLY DEEMS
DEFICIENT AND AS TO WHICH CLIENT HAS GIVEN GREENWAY WRITTEN NOTICE. IN THE EVENT
GREENWAY, IN ITS SOLE DISCRETION, DETERMINES THAT IT WOULD NOT BE COMMERCIALLY
REASONABLE TO CORRECT, REPLACE, OR RE-PERFORM ANY DEFECTIVE SOFTWARE OR
DEFICIENT SERVICE, CLIENT SHALL BE ENTITLED TO A REFUND OF FEES PAID TO GREENWAY
FOR ANY SUCH SOFTWARE OR SERVICE. 

9. LIMITATION OF LIABILITY 

9.1 [CONFIDENTIAL MATERIAL REDACTED AND
FILED SEPARATELY WITH THE COMMISSION] 

9.2 Data. Client agrees to perform periodic
backups of the data in the Software database in accordance with standard
industry practices then in place so that the likelihood of data loss is
minimized. Greenway may provide Client guidelines for proper data backup;
however, (i) Client shall be solely responsible for performing backups and (ii)
without limiting the generality of Section 9.1, Greenway shall in no event be
liable for any lost data, re-run time, inaccurate input, work delays, or lost
profits resulting from Client’s use of the Software or failure to backup data in
accordance with standard industry practices then in effect. 

10. INDEMNIFICATION 

10.1 Indemnity by Greenway. Greenway shall
indemnify, defend, and hold harmless Client from and against any: 

          (i) Claim by,
on behalf of or relating to a subcontractor of Greenway in respect of the
Services or Greenway’s employees except to the extent, if any, that the Claim is
attributable in part or in whole to Client’s negligence or willful misconduct.
In the case of a Claim by employees of Greenway, Greenway’s indemnification of
the Client will be to the same extent as if the Claim was made by a person who
is not an employee of Greenway; 

          (ii) Claim
for taxes (including interest and penalties) assessed against Client that are
the responsibility of Greenway under this Agreement or according to applicable
law, or for interest or penalties that arise as a result of Greenway having
issued an incorrect invoice to Client with respect to taxes or collection
thereof, provided that Client notifies Greenway of such Claim within a
reasonable period; 

          (iii) Claim
for death or bodily injury, or the damage, loss or destruction of real or
tangible personal property of third parties (including employees of Client and
Greenway and their respective subcontractors) brought against Client in
connection with performance of the Services by Greenway caused by the negligent
acts or omissions of Greenway, its employees, subcontractors, or anyone else for
whose acts Greenway is legally responsible under applicable law. This indemnity
obligation will apply to the extent of Greenway’s negligence even if both
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          (iv) Losses
that would have been indemnified by the insurance coverage Greenway is required
to have under Section 13.17 with respect to which Client has been designated as
additional insureds or joint loss payees but for Greenway’s breach of its
obligations under Section 13.17; and 

          (v) Claims
and Losses related to direct infringement of any valid patent, trademark, trade
secret, copyright, or other intellectual property right of a third party in any
suit based upon the proper use by Client of the Software under the license by
Greenway hereunder, where Greenway is the infringer with respect thereto.

10.2 Procedure. Client shall: (a) notify
Greenway promptly in writing of any alleged infringement of which Client becomes
aware; (b) give Greenway sole authority to control fully the defense and
settlement of any infringement claim; and (c) furnish all reasonable assistance
and provide all appropriate documentation in its possession reasonably requested
by Greenway; provided that Greenway shall not agree to any settlement or other
disposition that imposes any obligation on Client or otherwise would result in
Client losing any rights granted Client under this Agreement other than the
payment of damages or costs for which Client is indemnified by Greenway
hereunder. 

10.3 Exclusions. Notwithstanding the
foregoing, Greenway shall have no obligation to indemnify Client pursuant to
this Section 10 with respect to any infringement or alleged infringement
resulting from (i) any modification to the Software made by any party other than
Greenway or Greenway’s authorized representatives; (ii) any unauthorized use of
the Software by Client or any third party; (iii) failure of Client to use
Releases provided by Greenway, provided the failure to use of such Releases gave
rise to such infringement; (iv) any use of the Software in combination with
other software, hardware, or data not supplied or authorized by Greenway to the
extent that such combination gives rise to such infringement where the Software
alone, without the combination, in no way causes the infringement (for purposes
of clarity, concurrent causes of infringement will not negate Greenway’s duty to
defend); or (v) Greenway’s compliance with Client’s specific, non-discretionary
designs, specifications, requirements, processes, or formulas. 

10.4 Greenway Options. In the event of an
infringement claim against Client with respect to any Module of the Software, or
in the event Greenway believes such a claim is likely, Greenway shall have the
option, at its expense, to (i) modify or replace the applicable Module so that
they are non-infringing; or (ii) obtain for Client a right to continue accessing
such Module. Greenway shall use its best efforts to accomplish the foregoing
alternatives. If Greenway, after assertion of its best efforts, is unable to
accomplish one of the foregoing alternatives, Greenway shall have the right to
require the Client to return the Module of the Software subject to the
infringement claim, and Greenway shall refund to Client a pro-rata refund of all
Fees paid for such Module calculated on the basis of straight line depreciation
over three years, and the license granted for such Module shall terminate with
no continuing obligation or liability of Greenway to Client with respect to such
Module. 

10.5 Sole Remedy. THE FOREGOING STATES THE
SOLE AND EXCLUSIVE LIABILITY OF GREENWAY FOR ANY THIRD PARTY CLAIM OF
INFRINGEMENT AND IS IN LIEU OF ANY AND ALL WARRANTIES, EXPRESSED OR IMPLIED, IN
REGARD THERETO. 

10.6 [CONFIDENTIAL MATERIAL REDACTED AND
FILED SEPARATELY WITH THE COMMISSION] 

11. CONFIDENTIAL INFORMATION 

11.1 Client acknowledges that the Software,
the Documentation, and the Content contain Greenway’s and/or its licensor’s
proprietary information and Confidential Information. Each party shall treat as
confidential all Confidential Information of the other party, will not use such
Confidential Information except as expressly set forth herein or otherwise
authorized in writing, will implement reasonable procedures to prohibit the
disclosure, unauthorized duplication, misuse, or removal of the other party’s
Confidential Information, and will not disclose such Confidential Information to
any third party except as may be necessary and required 

in connection with the
rights and obligations of such party under this Agreement, and subject to
confidentiality obligations at least as protective as those set forth herein.
Without limiting the foregoing, each of the parties will use at least the same
procedures and degree of care which it uses to prevent the disclosure of its own
confidential information of like importance to prevent the disclosure of
Confidential Information disclosed to it by the other party under this
Agreement, but in no event less than reasonable care. The recipient of
Confidential Information will be responsible for any breach of this Section by
its employees, representatives, and agents. 

11.2 Exclusions. For purposes hereof,
“Confidential Information” will not include any information that the Receiving
Party can establish by convincing written evidence: (a) was independently
developed by the Receiving Party without use of or reference to any Confidential
Information belonging to the Disclosing Party; (b) was acquired by the Receiving
Party from a third party having the legal right to furnish same to the Receiving
Party; or (c) was at the time in question (whether at disclosure or thereafter)
generally known by or available to the public (through no fault of the Receiving
Party).

12. AUDIT 

12.1 Greenway Audit Rights. During the term
of this Agreement and for a term of one (1) year after termination, upon
reasonable notice, Greenway may perform reasonable audit and inspection
procedures to confirm Client’s compliance with the terms and conditions of this
Agreement, including, but not limited to, provisions relating to scope of use of
the Software and protection of Confidential Information. Client shall reasonably
cooperate in any such inquiry, which may be conducted in person or remotely.

12.2 Client Audit Rights. So long as Client
is receiving and has paid for Support Services and is otherwise in material
compliance with the terms of this Agreement and for a term of one (1) year after
termination of the Support Services, Client and its financial and data security
auditors (internal and external) will have the right, upon thirty (30) days
prior written notice, to inspect, examine and audit (collectively, “Audit”) the
records, data, practices and procedures of Greenway, its affiliates, and its
approved subcontractors that are relevant to determining the following: (i) the
accuracy of Greenway’s invoices; and (ii) Greenway’s software development life
cycle (from analysis to development) with respect to the Software. Such audit
shall be conducted during Greenway’s normal business hours and shall not
materially interfere with its business activities. 

12.3 Governmental or Regulatory Audits.
Client may be subject to regulation and audit by governmental bodies,
standards organizations, or other regulatory authorities under applicable laws,
rules, regulations, and standards. If Client is required by a governmental body,
standards organization or regulatory agency having jurisdiction over it to have
an audit or inspection of the Services being provided by Greenway under this
Agreement, and so long as Client is receiving and has paid for Support Services
and is otherwise in material compliance with the terms of this Agreement and for
a term of one (1) year after termination of the Support Services, Greenway shall
allow the governmental body, standards organization or regulatory agency to
conduct such an audit or inspection as it relates to Greenway’s provision of the
Services, or such information concerning Client held by Greenway under this
Agreement. Client agrees to take all commercially reasonable actions in
cooperation with Greenway to (i) avoid and/or minimize the extent of such audit
or inspection and the impact on Greenway’s business, and (ii) to minimize the
disclosure of Greenway Confidential Information, including assistance to
Greenway to seek an appropriate protective order. 

13. GENERAL PROVISIONS 

13.1 Applicable Law. This Agreement and all
matters arising out of or relating to this Agreement shall be governed by the
substantive laws of the State of New York, without reference to its conflict of
laws principles 

13.2 Client Policies. Whenever Greenway
personnel are present on Client’s premises, Greenway shall use reasonable
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governing on-site work, including Client’s safety
and security, and data protection, policies and procedures, and all reasonable
instructions and directions issued by Client. At Client’s request and expense,
Greenway will cause all Greenway personnel performing Services to attend one or
more Client training sessions with respect to Client’s on-site rules of
behavior, work schedule, security procedures and such other of Client policies
and procedures as Client, in its sole discretion, may deem appropriate.

13.3 Equal Employment Opportunity Compliance.
In connection with its performance of the Agreement, Greenway shall comply
with the applicable provisions of Executive Order 11246 and the
regulations issued pursuant thereto (generally Part 60-1 of Title 41 of the Code
of Federal Regulations), unless exempted by said regulations,
particularly the provisions of the Equal Opportunity Clause (41 CFR Section
60-1.4(a)), which are incorporated herein by reference. In addition, Greenway
shall comply with the provisions of the Affirmative Action Clause for Workers
with Disabilities (41 CFR Section 60-741.5), and for Special Disabled Veterans
and Veterans of the Vietnam Era, and other covered Veterans (41 CFR Section
60-250.5 and 41 CFR Section 60-300.5), which are also incorporated herein by
reference. Also, incorporated herein by reference are the Employee Notice Clause
provisions of 29 C.F.R. Part 471, Appendix A to Subpart A. 

13.4 Continuity of Services. Greenway
acknowledges that the timely and complete performance of its obligations
pursuant to this Agreement is critical to the business and operations of Client.
Accordingly, in the event of any dispute arising under or related to this
Agreement, Greenway will continue to perform all of its obligations under this
Agreement in good faith during the resolution of such dispute unless and until:
(i) authority to discontinue is granted by Client or conferred by a court of
competent jurisdiction, or (ii) the applicable Task Order and/or this Agreement
is terminated in accordance with the provisions hereof, and then only after the
completion of any termination assistance services. 

13.5 Assignment. Neither party may assign
its rights, duties or obligations under this Agreement to any person or entity,
in whole or in part, without the prior written consent of the other party.
Notwithstanding the foregoing, a party shall have the right without any
requirement to obtain consent hereunder, to assign this Agreement to a
subsidiary or affiliate, or a successor by merger, acquisition or consolidation,
or to an acquirer of all or substantially all of the assets of such party, its
subsidiary or affiliate. Any prohibited assignment is void. 

13.6 [CONFIDENTIAL MATERIAL REDACTED AND
FILED SEPARATELY WITH THE COMMISSION] 

13.7 Notice. All notices sent under this
Agreement shall be to the respective addresses set forth above on the first page
of the Agreement. All notices hereunder shall be in writing and shall be deemed
to have been duly given as of the business day delivered personally or by
facsimile (with confirmation of receipt), as of one business day after delivery
to an internationally recognized overnight delivery service (e.g., FEDEX,
DHL, etc.) charges prepaid, or as of three business days after being sent by
registered or certified mail, postage prepaid, to Greenway and to Client as set
forth below: 

Walgreen Co. 
200 Wilmot Road 
MS# 225B 
Attn:
Director, Technology Purchasing 
Deerfield, Illinois 60015 

With a copy to: 

Walgreen Co. 
104 Wilmot Road, MS 1425 
Deerfield,
Illinois, 60015 
Attention: Commercial Transactions Law 

Greenway Medical Technologies, Inc. 
121 Greenway Blvd.

Carrollton, GA 30117 

Attention: General Counsel 

13.8 Force Majeure. Neither party shall be
deemed in default of this Agreement to the extent that performance of their
obligations or attempts to cure any breach are delayed or prevented by reason of
any act of God, fire, natural disaster, accident, act of government, shortages
of materials or supplies, or any other cause beyond the control of such party
provided that such party gives the other party written notice thereof promptly
and, in any event, within fifteen (15) days of discovery thereof and uses its
best efforts to cure the delay. 

13.9 Entire Agreement/Miscellaneous. This
Agreement, and all schedules, Order Forms, and statements of work, constitute
the sole and entire agreement of the parties with respect to the subject matter
hereof and supersede any prior oral or written promises or agreements. There are
no promises, covenants, or undertakings other than those expressly set forth in
this Agreement, and all schedules, Order Forms, and statements of work. The
headings and other captions in this Agreement are for convenience and reference
only and shall not be used in interpreting, construing or enforcing any of the
provisions of this Agreement. This Agreement may not be modified or amended
except by a writing, which is signed by authorized representatives of each of
the parties. The failure of either party to exercise any right or the waiver by
either party of any breach, shall not prevent a subsequent exercise of such
right or be deemed a waiver of any subsequent breach of the same or of any other
term of the Agreement. If any provision of this agreement is held to be invalid
or unenforceable, the remaining provisions of this Agreement will remain in full
force. In the event of any conflict between the provisions in the main body of
this Agreement, any Schedules, Order Forms, Statements of Work and any other
forms, documents and acknowledgements exchanged by the parties, the order of
precedence, unless otherwise mutually agreed to specifically in writing on the
conflicting document executed by both parties, shall be as follows: (i) the main
body of this Agreement, (ii) the Schedules hereto and Order Forms or Statements
of Work entered into as of the Effective Date, (iii) any future Order Form or
Statement of Work, and (iv) any other forms, documents and acknowledgements
exchanged by the parties. 

13.10 Relationship. Greenway is an
independent contractor in the performance of this Agreement, and nothing
contained in this Agreement may be construed to create or constitute a joint
venture, partnership, agency, franchise, lease, or any other arrangement other
than as expressly granted in this Agreement. Greenway is responsible for its own
operation. Greenway shall exercise control over its employees, agents,
representatives, subcontractors, and suppliers and is solely responsible for the
verification of identity and employment eligibility, for the payment of any
wages, salaries, or other remuneration of Greenway personnel, and for the
payment of any payroll taxes, contributions for unemployment or workers
compensation, social security, pensions, or annuities that are imposed as a
result of the employment of Greenway’s personnel, agents, representatives,
subcontractors and suppliers. Greenway may not pledge credit, incur any
obligation or liability, hire any employee, nor purchase any merchandise or
services in the name of Client or any subsidiary or affiliate thereof. Unless
otherwise provided in this Agreement, all costs, charges, and expenses incurred
in connection with Greenway’s performance of this Agreement must be borne by
Greenway. 

13.11 Equitable Remedies. The parties
recognize that money damages shall not be an adequate remedy for any breach or
threatened breach of any obligation hereunder by Client involving, without
limitation, intellectual property, Confidential Information, or use of the
Software beyond the scope of the license granted by this Agreement. The parties
therefore agree that in addition to any other remedies available hereunder, at
law or otherwise, Greenway shall be entitled to an injunction against any such
continued breach of such obligations. 

13.12 Third Party Beneficiary. No person
shall be deemed an intended beneficiary of this Agreement. 

13.13 Export Regulations. Client shall not
export, re-export, or transfer the Software or Documentation, except as
authorized by Greenway and in accordance with the U.S. export control
regulations and other applicable laws. Client is advised that the Software and
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Documentation are subject to the U.S. Export
Administration Regulations. Client agrees not to export, re-export, import, or
transfer the Software or the Documentation contrary to U.S. or other applicable
laws, whether directly or indirectly, or assist or facilitate others in doing
any of the foregoing. Client represents and warrants that (a) neither the United
States Bureau of Export Administration nor any other federal agency has
suspended, revoked, or denied its export privileges, (b) Client is not a
government end user, and (c) Client is not located in, a resident of, or a
citizen of, Cuba, Iran, Iraq, Libya, North Korea, Sudan, Syria or any other
country to which the United States has embargoed goods. Client agrees not to use
or transfer the Software for end use relating to any nuclear, chemical or
biological weapons, or missile technology unless authorized by the U.S.
Government by regulation or specific license. 

13.14 Hardware. Greenway will not bring any
hardware or software onto Client’s premises unless such items are necessary for
Greenway to perform Services under this Agreement. All such hardware and
software may be inspected/scanned by Client, at Client’s discretion, before
Greenway may use said items on Client’s premises. Greenway will ensure that the
project manager is contacted in order that such inspecting/scanning will be
performed. Greenway will obtain approval and comply with the directives of the
project manager and Client security management prior to connecting any hardware
to the Client network. 

13.15 Compliance. Greenway is responsible
for complying with all federal, state, and local laws, rules, and regulations
applicable to this Agreement or to the performance thereof. Without limiting the
generality of the foregoing, Greenway warrants to the best of its knowledge that
Greenway is in full compliance with the immigration laws of the United States
relating to Greenway’s personnel assigned by Greenway to perform services for
Client. Greenway further warrants to the best of its knowledge that all of
Greenway’s personnel are authorized by law to work in the United States, and
that Greenway’s personnel have presented documentation to Greenway that
establishes both identity and work authorization in accordance with applicable
immigration regulations. Greenway certifies that to the best of Greenway’s
knowledge, information and belief, after due inquiry, the documentation
presented to Greenway is genuine and accurate. Greenway further certifies that
all Greenway’s employees assigned to perform Services hereunder are United
States citizens or otherwise authorized to work in the United States (except for
individuals performing development outside the United States). Greenway further
certifies that, to the best of its knowledge, Greenway complies with all
federal, state and local labor and employment laws, and wage and hour laws, as
these laws may relate to Greenway’s Personnel performing services for Client.

13.16 Insurance. 

(i) Minimum Coverage.Greenway will maintain at its
expense the following insurance during the term of this Agreement: 

          (A) Workers’
Compensation in the statutory limits required by the state of Greenway’s
domicile (including other states endorsement) and Employers’ Liability with
limits of $1,000,000; 

          (B)
Commercial General Liability with minimum limits of $1,000,000 per occurrence
(to include contractual liability on a blanket basis for liability assumed
hereunder) and $2,000,000 in the aggregate; 

          (C) Business
Automobile Liability insurance for owned, non-owned and hired vehicles, with
limits of not less than $1,000,000 per occurrence for bodily injury and property
damage combined; 

          (D) Excess
Liability insurance with minimum limits of $4,000,000 in the aggregate; and

          (E)
Professional Liability (errors & omissions) with minimum limits of
$2,000,000. 

(ii) A certificate of insurance evidencing the
above must be presented and satisfactory to Client prior to commencement of the
Services. 

(iii) All policies will be primary and at
Greenway’s sole expense. Client will be included as an additional insured on all
coverage listed above with the exception of Workers’ Compensation and
Professional Liability. Greenway shall provide copies of its policies upon
request by Client. All policies will include provisions that the insurers waive
the rights of recovery or subrogation against Client. This certificate must
provide for sixty (60) days notice to Client in the event of a material change
or cancellation of such coverage and ten (10) days in the event of non-payment
of premium; and, Greenway shall notify Client in the event of material change or
cancellation. Insurance coverage will be in a form and carrier acceptable to
Client with a minimum A.M. Best rating of A-/IX or higher. Within two (2) days
of a request by Client, Greenway shall provide certified copies of the actual
policies of insurance including all endorsements and riders 

13.17 Travel Expenses. All travel expenses
incurred by Greenway in connection with the Services performed hereunder must
comply with Client’s travel and expense policy attached hereto as Schedule J,
which may be updated from time to time by Client.

14. DEFINITIONS 
The following definitions shall apply
to this Agreement, including all schedules, Order Forms, and Statements of
Work:

“Acceptance Date” shall mean the date on
which Client accepts the applicable Module of the Software or on which the
Software is deemed accepted. 

“Acceptance Period” shall mean the thirty
(30) day period after the Testing Period during which Client may test and
evaluate the applicable Module of the Software delivered by Greenway for Errors.

“Authorized Hardware” shall mean the
computer hardware either purchased from Greenway or that meets the current
minimum hardware specifications required by Greenway as provided by Greenway to
Client. 

“Authorized Location” shall mean the
location of the Software server as set forth in the Order Form. 

“Authorized Users” shall mean employees of
Client. For each Authorized User permitted to use the Software pursuant to the
license granted hereunder, Client has the right to one unique named user in the
database. The foregoing notwithstanding, Client affiliates and agents who are
under a confidentiality obligation with Client that protects Greenway
Confidential Information to the same extent as such is protected hereunder can
constitute Authorized Users.” 

“Claim” shall mean any third party demand,
or any civil, criminal, administrative, or investigative claim, action, or
proceeding (including arbitration) asserted, commenced or threatened against an
entity or person. 

“Content” shall mean all system master
files, templates, and reports that constitute a part of the PrimeSuite Software,
and the electronic documents, files, data, forms, and other materials contained
in such master files and templates, including those from Greenway’s Content
library, whether or not they are subsequently modified by Client, and any such
Content created after the Effective Date by or for Client in accordance with the
terms of this Agreement or any related agreement. Content does not include
patient specific health information or data. 

“Competitor” shall mean the
following companies: [CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH
THE COMMISSION].Client shall provide written notice of its desire to add a third
party to the definition of “Employer Competitor” and Greenway may accept or
reject after reasonable discussion with Client such additional party in its
reasonable discretion.

“Confidential Information” shall mean any
information relating to, or disclosed in the course of, this Agreement, which is
designated as ‘confidential’ or ‘proprietary’ or some similar designation or
information which is or should be reasonably understood to be confidential or

	
       
	
       

	 
  
	
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proprietary to the disclosing party. Confidential
Information includes but is not limited to the Software, the Documentation, the
Content, the terms and pricing under this Agreement, business strategies,
specifications, technical data, and all Order Forms. Confidential Information
shall not include information (a) already known to either party at the time of
receipt thereof from the other; (b) that was readily available to the general
public at the time of receipt thereof from the other; (c) that subsequently
becomes known to the general public through no fault or omission on the part of
the party receiving such information; (d) that is subsequently disclosed by a
third party which has a bona fide and legal right to make such disclosure; or
(e) that is required to be disclosed by a court of competent jurisdiction or
other governmental authority or pursuant to applicable law, provided that the
receiving party shall give prompt notice to the disclosing party prior to any
such disclosure and reasonably assist the disclosing party in seeking a
protective order. 

[CONFIDENTIAL MATERIAL REDACTED AND FILED
SEPARATELY WITH THE COMMISSION]

“Deployment Services” shall mean the
hardware staging, data migration, deployment, and training services set forth in
Schedule B and the applicable Order Form. 

“Discontinues” shall mean discontinues or
ceases for a period of longer than sixty (60) consecutive days. 

“Documentation” shall mean the user
manual(s) for use of the Software. Documentation is provided in electronic form,
incorporated into the Software. 

“Enhancements” shall mean updates or
modifications to functionalities contained within Modules then currently.

“Error” shall mean any reproducible failure
or inability of the Software to perform any material function set forth in the
Documentation when the Software is used on the Authorized Hardware. 

[CONFIDENTIAL MATERIAL REDACTED AND FILED
SEPARATELY WITH THE COMMISSION]

“Fee(s)” shall mean any and all fees for
licensing Software and purchasing Services, hardware, third party software, and
third party databases, as specified in an Order Form or Statement of Work.

“Losses” shall mean all losses,
liabilities, damages, liens, and claims, and all related costs, expenses, and
other charges suffered or incurred as a result of or in connection with a Claim,
including reasonable attorneys’ fees and disbursements, costs of investigation,
litigation, settlement, and judgment, and any taxes, interest, penalties, and
fines with respect to any of the foregoing.

“Material Support Failure” shall mean (i) a
material breach of Greenway’s Support Services obligations under this Agreement,
which breach has not been cured within sixty (60) days of written notice thereof 

by Client or (ii) Greenway’s refusal to renew the term of the Support Services
after Client’s payment of fees for renewal thereof, provided that Client is not
in breach of any payment obligations set forth in the Agreement or any Statement
of Work or Order Form and is otherwise not violating any material term of this
Agreement, including the licensing terms and restrictions, Greenway’s
intellectual property rights or Client’s confidentiality obligations.

“Module’ shall mean [CONFIDENTIAL MATERIAL
REDACTED AND FILED SEPARATELY WITH THE COMMISSION]

“Order Form” shall mean the order form
provided by Greenway to Client pursuant to which Client orders Software,
Services, hardware, third party software, or third party databases under this
Agreement. 

“Release” shall mean any version, update,
release, patch, or enhancement of the Software, including any software provided
for the purpose of improving the functions or performance of the Software,
changing the intellectual property contained in the Software, expanding the
capability or ease of operation of the Software, or for the purpose of fixing
errors in program logic, together with Documentation. 

“Services” shall mean any professional
services set forth in a Statement of Work or Order Form, provided by Greenway to
Client, including, but not limited to, Deployment Services, Support Services,
Transaction Services, and interface development. 

“Software” shall mean the machine-readable
object code of the computer software program or programs described in the Order
Form or Statement of Work (including the Content and any modifications thereto)
and any additional Releases and shall include each Module. 

“Subsidiaries” shall mean direct and
indirect wholly-owned subsidiaries of the Client.. 

“Support Services” shall mean the support
services for the Software set forth in Schedule A and the applicable Order Form.

“Test Period” shall mean a test period, not
to exceed 60 days, which shall include beta site, pilot sites, and expanded
pilot sites, which period shall begin on the date that is the later of the date
on which (i) the applicable Module is activated at the pilot sites or (ii) the
applicable Module has been returned to Client and is activated at the pilot
sites after an Error has been corrected.

“Transaction Services” shall mean the
services set forth in Schedule A and the applicable Order Form. 

“Updates” shall mean updates, upgrades,
modifications or new releases of software, and updates to the documentation or
content that a party makes generally available to its customers at no additional
charge in relation to comparable services. 

“Warranty Period” shall mean the ninety
(90) day period following the Acceptance Date. 

	
       
	
       

	 
  
	
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CONFIDENTIAL

SCHEDULE A - SUPPORT SERVICES
AGREEMENT

[CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION]

	
       
	
       

	 
  
	
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SCHEDULE B

BUSINESS ASSOCIATE AGREEMENT

          THIS HIPAA
BUSINESS ASSOCIATE CONTRACT ADDENDUM (the “Addendum”) supplements and is
made a part of the Services Agreement (the “Agreement”) by and between
WALGREEN CO., on behalf of itself and/or its subsidiaries (“Covered
Entity”), and Greenway Medical Technologies, inc.,, a Business Associate
(“BA”), and is effective as of February 25, 2011 (the “Addendum Effective
Date”). 

          Covered
Entity and BA have entered into this Addendum whereby BA provides certain
software and related professional services to Covered Entity; 

          Covered
Entity wishes to disclose certain information to BA pursuant to the terms of
this Addendum, some of which may constitute Protected Health Information, as
defined below (“PHI”), and the Parties wish to establish satisfactory assurances
that BA will appropriately safeguard this PHI; 

          Covered
Entity and BA intend to protect the privacy and provide for the security of PHI
disclosed to BA pursuant to this Addendum in compliance with the Health
Insurance Portability and Accountability Act of 1996, Public Law 104-191
(“HIPAA”), and regulations promulgated thereunder by the U.S. Department of
Health and Human Services (collectively referred to as “HIPAA Regulations”)
including the Standards for Privacy of Individually Identifiable Health
Information at 45 C.F.R. Part 160 and Part 164 of the Code of Federal
Regulations (“C.F.R.”), Subparts A & E (“Privacy Rule”), the Security
Standards for the Protection of Electronic Protected Health Information at 45
C.F.R. Part 160 and Part 164, Subparts A and C (“Security Rule”), the
requirements of the Health Information Technology for Economic and Clinical
Health Act, as incorporated in the American Recovery and Reinvestment Act of
2009 and the implementing regulations, as issued and amended by the Secretary
(“HITECH”), that are applicable to business associates, and other applicable
laws; and 

          The
purpose of this Addendum is to satisfy certain standards and requirements of
HIPAA and the HIPAA Regulations, including, but not limited to, 45 C.F.R. §
164.504(e) and § 164.314(a), as the same may be amended from time to time.

          For
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties, intending to be legally bound, hereby agree as
follows: 

          A.
Definitions. For the purposes of this Addendum, terms used, but not
otherwise defined, shall have the meaning as those in 45 C.F.R. §§ 160.103,
164.304, 164.501, and 164.504, and the following terms have the definitions set
forth below:

          (1)
“Disclosure,” with respect to PHI, means the release, transfer, provision of,
access to or divulging in any other manner of PHI outside the entity holding the
PHI. 

          (2)
“Individual” shall mean the person who is the subject of the PHI. 

          (3)
“Parties”shall mean Covered Entity and BA. 

          (4)
“Protected Health Information” or “PHI” means any information created or
received by Covered Entity, whether oral, electronic, or recorded in any other
form or medium: (i) that relates to the past, present or future physical or
mental condition of an Individual; the provision of health care to an
Individual; or the past, present or future payment for the provision of health
care to an Individual, and (ii) that identifies the Individual or with respect
to which there is a reasonable basis to believe the information can be used to
identify the Individual. 

          (5) “Security
Incident” means the attempted or successful unauthorized access, use,
disclosure, modification, or destruction of information or interference with
system operations in an information system. 

          B.
Stated Purpose for Which BA May Use or Disclose PHI. The Parties hereby
agree that except as otherwise limited in this Addendum, BA shall be permitted
to use or disclose PHI provided or made available from Covered Entity to perform
any function, activity or service for, or on behalf of, Covered Entity as
specified in this Addendum, provided that such use or disclosure would not
violate the HIPAA Regulations if done by Covered Entity. 

          C.
BA Obligations. BA covenants and agrees that it shall:

          (1) Only use
and disclose PHI if such use or disclosure is in compliance with each applicable
requirement of 45 C.F.R. § 164.504(e) of the Privacy Rule and not use or further
disclose PHI other than as permitted or required under this Addendum or as
Required By Law. 

          (2) Use
appropriate safeguards, including but not limited to written policies and
procedures, as necessary to prevent the use or disclosure of PHI other than as
permitted under this Addendum or as Required By Law. 

          (3) Fully
comply with the requirements under the Privacy Rule and the Security Rule
applicable to “business associates” as that term is defined in the Privacy Rule
and the Security Rule. BA acknowledges that 45 C.F.R. §§ 164.308 (Administrative
Safeguards), 164.310 (Physical Safeguards), 164.312 (Technical Safeguards), and
164.316 (Policies and Procedures and Documentation Requirements) of the Security
Rule apply to BA, and BA agrees to fully comply with these regulations.

          (4) Mitigate
and establish procedures for mitigating, to the greatest extent possible, any
deleterious effects from use and/or disclosure of PHI by BA in violation of this
Addendum and/or the Privacy Rule and/or the Security Rule. 

          (5) Report,
in writing, to the designated privacy or security official, as such position is
defined in the Privacy Rule and the Security Rule, of Covered Entity, any use
and/or disclosure of PHI or electronic PHI that is not permitted or required by
this Addendum of 

	
       
	
       

	  	  
	
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CONFIDENTIAL

which BA becomes
aware, or should have been aware, within three (3) business days of BA’s
discovery of such unauthorized use and/or disclosure, with supplemental notice
by facsimile, email, and/or telephone should be made as soon as practicable to:

	
       
	
       

	
       
	
      Privacy & Security: 

	
       
	
      Walgreen Privacy Office 

	
       
	
      200 Wilmot Road, MS 9000 

	
       
	
      Deerfield, Illinois 60015 

	
       
	
      Phone: (847) 236-6518 

	
       
	
      Fax: (847) 236-0862 

	
       
	
      Email: privacy.office@walgreens.com
  

	
       
	
      Attn: Privacy Official 

          BA is
responsible for ensuring that its agents or subcontractors, or other third
parties, with which BA does business that are provided, maintain, create, and/or
receive PHI or electronic PHI on behalf of Covered Entity, report to BA
immediately any use and/or disclosure of PHI or electronic PHI that is not
permitted or required by this Addendum in order for BA to comply with the
provisions of this section. 

          BA further
agrees to promptly furnish to Covered Entity all known details and assist
Covered Entity in investigating and/or preventing the reoccurrence of such
unpermitted possession, use, knowledge, disclosure, or loss of protected health
information in any form.

          (6) Not
directly or indirectly receive remuneration in exchange for any PHI of an
Individual that is disclosed, provided, or made available to BA from Covered
Entity.

          (7) Maintain
a written information security program that includes implementation of
administrative, physical, and technical safeguards that reasonably and
appropriately protect the confidentiality, integrity, and availability of
electronic PHI created, received, maintained, or transmitted by BA on behalf of
Covered Entity. This includes using technology commercially available to BA to
protect PHI against any reasonably anticipated threats or hazards. BA
understands it has an affirmative duty to perform a regular review or assessment
of security risks, conduct active management, and supply best efforts to assure
that only authorized persons and devices access its computing systems and
information storage and that only authorized transactions are allowed. BA will
maintain appropriate documentation of its compliance with the Privacy Rule and
the Security Rule including, but not limited to, policies, procedures, records
of training, and sanctions of members of the workforce. 

(8) Secure all PHI by a technology standard that renders PHI
unusable, unreadable, or indecipherable to unauthorized individuals and is
developed or endorsed by a standards developing organization that is accredited
by the American National Standards Institute and is consistent with any guidance
and/or standards issued by the Secretary specifying the technologies and
methodologies that render PHI unusable, unreadable, or indecipherable to
unauthorized individuals including, but not limited to, standards developed
pursuant to HITECH. 

(9) Notwithstanding requirement C(8), to the extent that any PHI
cannot be secured as described in C(8), report, in writing, to the designated
privacy official, whose contact information is provided in Section C(5) above,
of Covered Entity any breach of unsecured PHI, as defined in § 13402(h)(1)(A) of
the HITECH, within three (3) business days of when the breach is known to BA or
should reasonably have been known by BA to have occurred. Such notification to
Covered Entity shall include the identification of each Individual whose
unsecured PHI has been, or is reasonably believed by BA to have been accessed,
acquired, or disclosed during such breach. BA shall implement policies and
procedures regarding this notification process and shall fully document any and
all information related to the breach and notification of Covered Entity and
shall retain such documentation for a minimum of six (6) years. BA shall fully
cooperate with Covered Entity to provide all information in a timely manner and
as needed for Covered Entity to make, or direct BA to make, any legally required
notifications to any Individuals affected by a breach of unsecured PHI, or to
HHS and/or the media, if applicable. BA shall not make any notifications to
Individuals, HHS, or media without prior approval from Covered Entity. BA shall
pay costs and expenses associated with such notifications and remediation,
including reasonable legal fees.

(10) Require any of its agents or subcontractors, or other third
parties with which BA does business that are provided, maintain, create, and/or
receive PHI or electronic PHI on behalf of Covered Entity, to agree, in a
written contract executed by all parties, to implement reasonable and
appropriate safeguards and to adhere to the same restrictions, conditions and
obligations with respect to the use, disclosure, protection, custody and/or
creation of, or access to, PHI and/or electronic PHI that apply to BA under this
Addendum. Such written agreement shall identify Covered Entity as a third party
beneficiary with rights of enforcement and indemnification from such
subcontractors or agents in the event of any violation of the written
agreement.

          (11) Make
available to Covered Entity, within five (5) days of receiving an oral or
written request from Covered Entity, such information as is necessary to fulfill
Covered Entity’s obligations to provide PHI: (a) pursuant to an Individual’s
right to obtain a copy of his or her PHI under 45 C.F.R. § 164.524(a); and (b)
that may be related to an Individual’s right to amend his or her PHI under 45
C.F.R. § 164.526. BA shall also, as directed by Covered Entity, incorporate any
amendments to PHI into copies of such PHI maintained by BA. 

          (12) Provide
an accounting of disclosures of PHI and information related to such disclosures
to the Walgreen Privacy Office, as identified in Section C(5) above, in
accordance with 45 C.F.R. § 164.528(b), for disclosures, except for those
outlined in 45 C.F.R. § 164.528(a)(1): 

	
           
	
       
	
       

	
            
	
         (i)
	
           to carry out treatment,
      payment and health care operations as provided in § 164.506;
  

	
       
	
         (ii)
	
           to individuals of protected
      health information about them as provided in § 164.502; 

	
       
	
         (iii)
	
           incident to a use or
      disclosure otherwise permitted or required by this subpart, as provided in
      § 164.502; 

	
       
	
         (iv)
	
           pursuant to an authorization
      as provided in § 164.508; 

	
       
	
         (v)
	
           for national security or
      intelligence purposes as provided in § 164.512(k)(2); 

	
       
	
         (vi)
	
           to correctional institutions
      or law enforcement officials as provided in § 164.512(k)(5);
  

	
       
	
         (vii)
	
           as part of a limited data
      set in accordance with § 164.514(e); or

	 
    	 
    
	
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CONFIDENTIAL

	
       
	
       
	
       

	
       
	
      (viii)
	
      that occurred prior to the compliance date for Covered
      Entity. 

               In
the event that there are modifications to HIPAA, BA will assist Covered Entity
with developing a process for accounting of disclosures for the purposes
including treatment, payment and healthcare operations at the time of each
disclosure, if an electronic health record is used or maintained. 

               Regardless
of whether an electronic health record is used or maintained, BA further agrees
to document and retain documentation related to the accounting of such
disclosures as required by 45 C.F.R. § 164.530(j) including, but not limited to,
the information required to be included in the accounting, the written
accounting that is provided, and the titles of the persons or offices
responsible for receiving and processing requests for an accounting. BA further
agrees to provide to Covered Entity, in the time and manner designated by
Covered Entity, information collected in accordance with this Addendum to permit
Covered Entity to respond to a request by an Individual for an accounting of
disclosures of PHI in accordance with 45 C.F.R. § 164.528 and/or any related
regulations related thereto.

               (13)
Make available to the Secretary of the U.S. Department of Health and Human
Services and/or Covered Entity all internal practices, books and records,
including policies and procedures, relating to the use and disclosure of PHI
received from, or created by, BA on behalf of Covered Entity, for purposes of
determining Covered Entity’s and/or BA’s compliance with the Privacy Rule, the
Security Rule, and/or related statutes and regulations. 

               (14)
During the term of this Addendum and as required by C(5) above, notify Covered
Entity as soon as possible, but not later than three (3) days after discovery,
of any suspected or actual Security Incident, intrusion, breach, or unauthorized
use or disclosure of PHI and/or any actual or suspected use or disclosure of
data in violation of any applicable federal or state laws or regulations. BA
shall also (i) establish policies and procedures for mitigating, to the extent
practicable, any adverse effects from any access, use or disclosure of PHI in a
manner contrary to or inconsistent with this Addendum or the HIPAA Regulations,
and (ii) promptly remedy any violation of any term of this Addendum, and certify
the same to Covered Entity in writing. 

               (15)
Limit any use or disclosure of PHI to its subcontractors, agents or other third
parties, and request from Covered Entity, to only the minimum amount necessary
to perform or fulfill a specific function required or permitted by this Addendum
in accordance with the Privacy Rule and the Security Rule. BA represents that
all of its uses and disclosures of PHI shall be the minimum necessary in
accordance with the Privacy Rule and the Security Rule. 

               (16)
Not use or disclose PHI in any form via any medium with any third party beyond
the boundaries and jurisdiction of the United States without express written
authorization from Covered Entity. 

               (17)
Ensure that members of BA’s workforce (including its agents or subcontractors,
or other third parties with which BA does business) have completed required
training on the policies and procedures with respect to protected health
information and documented that the training has been provided. 

          D.
Permitted Uses and Disclosures. BA agrees that it shall not use or
disclose PHI in any manner, form, or in any means that is contrary to its
obligations under this Addendum. Notwithstanding the foregoing, the Parties
agree that, pursuant to federal law, BA may: 

	
       
	
       

	
       
	
                (1) Use
      PHI in its possession for its proper management and administration and to
      fulfill any of its present or future legal responsibilities provided that
      such uses are permitted under state and federal confidentiality laws.
      

	
       
	
       

	
       
	
                (2) Use
      PHI in its possession to provide data aggregation services relating to the
      health care operations of Covered Entity, as provided for in 45 C.F.R. §
      164.501. 

	
       
	
       

	
       
	
                (3)
      Disclose PHI in its possession to third parties for the purpose of its
      proper management and administration or to fulfill any of its present or
      future legal responsibilities provided that (i) the disclosures are
      Required By Law, as provided for in 45 C.F.R. § 164.103, or (ii) BA has
      received from the third party written assurances that the third party will
      maintain the confidentiality, integrity, and availability of PHI, that the
      PHI will only be used or further disclosed as Required By Law or for the
      purpose for which it was disclosed to the third party, and that the third
      party will notify BA of any instances of which it is aware in which the
      confidentiality, integrity, and/or availability of the information has
      been breached within three (3) business days, as required under 45 C.F.R.
      § 164.504(e)(4). 

          E.
Audits, Inspection, and Enforcement. Upon reasonable notice, Covered
Entity or its agents may inspect the facilities, systems, books, and records of
BA to monitor compliance with this Addendum. The fact that Covered Entity
inspects, or fails to inspect, or has the right to inspect, BA’s facilities,
systems, and procedures does not relieve BA of its responsibility to comply with
this Addendum, nor does Covered Entity’s (i) failure to detect or (ii)
detection, but failure to notify BA or require BA’s remediation of any
unsatisfactory practices, constitute acceptance of such practice or a waiver of
Covered Entity’s enforcement rights under this Addendum. 

          F.
Unilateral Termination. Notwithstanding any other provision under this
Addendum and pursuant to federal law, BA agrees that this Addendum may be
terminated by Covered Entity without penalty should Covered Entity, in its sole
discretion, determine that BA has violated a material obligation under this
Addendum and/or any provision of the Privacy Rule and/or the Security Rule.

          G.
Judicial or Administrative Proceedings. Covered Entity may terminate this
Addendum, effective immediately, if (i) BA is named as a defendant in a criminal
proceeding for a violation of HIPAA or (ii) a finding or stipulation that BA has
violated any standard or requirement of HIPAA or other security or privacy laws
is made in any administrative or civil proceeding in which BA has been joined.

          H.
Return or Destruction of PHI. Upon termination, cancellation, or
expiration of this Addendum, BA shall return to Covered Entity any and all PHI
received from, or created by, BA on behalf of Covered Entity that is maintained
by BA in any form whatsoever, including any copies or replicas. If returning the
PHI to Covered Entity is not feasible, BA shall destroy any and all PHI
maintained by BA in any form whatsoever, including any copies or replicas.

	
       
	
       

	  	  
	
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CONFIDENTIAL

          BA
shall destroy any PHI by shredding, burning, pulverizing, erasing or otherwise
modifying records to make such records undecipherable, regardless of whether
such PHI is contained in electronic, paper or other format. Destruction of PHI
must be in accordance with industry standards and processes for ensuring that
reconstruction, re-use, and/or re-disclosure of PHI is prevented after
destruction, using a method effective on the media in which the PHI is
contained. BA shall complete such return or destruction as promptly as possible,
but not later than thirty (30) days after the effective date of termination,
cancellation, or expiration of this Addendum. 

          Within such
thirty (30) days, BA shall certify in writing to Covered Entity that such return
or destruction has been completed. In the event that BA determines that return
or destruction is infeasible, BA will deliver to Covered Entity the
identification of any PHI for which return or destruction is infeasible, provide
notification of the conditions that make return or destruction infeasible, and,
for that PHI, will certify that it will only use or disclose such PHI for those
purposes that make return or destruction infeasible, for so long as BA maintains
such PHI.

          I.
Amendment to Comply with Law. The Parties acknowledge that state and
federal laws relating to electronic data security and privacy are rapidly
evolving and that amendment of this Addendum may be required to provide for
procedures to ensure compliance with such developments. The Parties agree to
take such action as is necessary to comply with the standards and requirements
of HIPAA, the HIPAA Regulations and other applicable laws relating to the
security or confidentiality of PHI. Upon either Party’s request due to a change
in the law, the other Party agrees to promptly enter into negotiations
concerning the terms of an amendment to this Addendum. The Parties shall comply
with any amendment to the Privacy Rule and the Security Rule and related
statutes or regulations, upon the effective date of such amendment(s),
regardless of whether this Addendum has been formally amended. 

          J.
Assistance in Litigation or Administrative Proceedings. BA shall make
itself, and any subcontractors, employees, or agents assisting BA in the
performance of its obligations under this Addendum, available to Covered Entity,
at no cost to Covered Entity, to testify as witnesses, or otherwise, in the
event of litigation or administrative proceedings being commenced against
Covered Entity, its directors, officers, or employees based upon claimed
violation of HIPAA, the HIPAA Regulations, or other laws relating to security
and privacy, except where BA or its subcontractor, employee, or agent is a named
adverse party. 

          K.
No Third Party Beneficiaries. Nothing express or implied in this Addendum
is intended to confer, nor shall anything herein confer, upon any person other
than Covered Entity, BA, and their respective successors or assigns, any rights,
remedies, obligations, or liabilities whatsoever. 

          L.
Counterparts; Facsimiles. This Addendum may be executed in counterparts,
each of which shall be deemed on original. Facsimile copies hereof shall be
deemed to be originals.

          M.
Term. This Addendum shall become effective on the Addendum Effective Date
and shall expire when all of the PHI, regardless of form, provided by Covered
Entity to BA is destroyed or returned to Covered Entity pursuant to Section H.
The Parties agree that Sections B, C, D, and J of this Addendum shall survive
the termination or expiration of this Addendum. Any prior agreements, documents,
understandings, or representations relating to the subject matter of this
Agreement not expressly set forth herein or referred to or incorporated herein
by reference are of no force or effect. 

          N.
Interpretation. Any ambiguity in this Addendum shall be resolved in favor
of a meaning that permits Covered Entity and BA to comply with the Privacy Rule
and the Security Rule. In the case of any conflict between this Addendum and the
Agreement, this Addendum shall govern. 

     The Parties have caused this
Addendum to be signed and delivered by their duly authorized representatives, as
of the Addendum Effective Date. 

	
       
	
       
	
       
	
       
	
       

	
      COVERED ENTITY: WALGREEN CO.
	
       
	
      BUSINESS ASSOCIATE: GREENWAY MEDICAL TECHNOLOGIES,
      INC.

	
       
	
       
	
       
	
       
	
       

	
      By:
	
      /s/ Tim Theriault
	
       
	
      By:
	
      /s/ William G. Esslinger, Jr.

	
       
	  	
       
	
       
	  
	
       
	
       
	
       
	
       
	
       

	
      Print Name:
	
      Tim Theriault
	
       
	
      Print Name:
	
      William G. Esslinger, Jr.

	
       
	  	
       
	
       
	  
	
       
	
       
	
       
	
       
	
       

	
      Print Title:
	
      Senior Vice President/CIO
	
       
	
      Print Title:
	
      Vice President, General Counsel, &
CPO

	
       
	  	
       
	
       
	 

	
       
	
       

	  	  
	
      Approved by Department

	  	  
	
        Commercial Transactions Law
	
      By:

	  	  
	
       
	
      By:

	  	  
	
       
	
      By:

	  	 

	
       
	
       

	  	  
	
      Greenway Medical Technologies, Inc./Walgreen Co.
      SLSA
	
      Page 14

CONFIDENTIAL

SCHEDULE C

SERVICES SCHEDULE

1. SERVICES 

1.1 Professional Services; Statements of Work. Greenway
shall use its commercially reasonable efforts to provide the Professional
Services set forth in a Statement of Work executed by the Parties from
time-to-time. All Statements of Work will be subject to the terms of the
Agreement and this Schedule and in the event of any conflict or inconsistency
between the terms of a Statement of Work and the Agreement or this Schedule, the
terms of the Agreement and this Schedule shall control and the conflicting or
inconsistent terms of the Statement of Work shall be void and of no effect.
Greenway shall not perform any Professional Services until a written Statement
of Work detailing the Professional Services is executed by the parties. Unless
otherwise agreed by the parties, Statements of Work will set forth: (a) the
Professional Services to be performed by Greenway; (b) the timing for the
Professional Services (including relevant deadlines, milestones and delivery
dates); (c) the specifications, technical standards, protocols or other
requirements for the deliverables; (d) the cost and payment schedule with
respect to such Professional Services; (e) any individuals designated to have
management and/or technical responsibility for the project or otherwise required
to perform the Professional Services (“Project Representatives”); (f) any
assumptions of Greenway and/or requirements or obligations that Client must
fulfill for Greenway’s performance of the Professional Services; and (g) to the
extent necessary and appropriate, additional provisions applicable to the
Professional Services to be provided pursuant to the Statement of Work, which
shall not be inconsistent with the terms of the Agreement. 

1.2 Change Orders. Should either party desire to change
the terms of a Statement of Work, the following will occur: (a) the initiating
party will document the request in writing; (b) authorized representatives of
Greenway and Client will discuss and negotiate the impact of the requested
change(s), including any adjustments to pricing or fees; (c) if both parties
agree to the change, the terms of the change will be documented in a change
order or amendment to the particular Statement of Work (a “Change
Order”); and (d) the change(s) will take effect if (and only if) Greenway
and Client sign the Change Order. No change to a Statement of Work shall be
effective until a Change Order is signed by both parties, and Client shall not
be liable to pay for Services until a Statement of Work or a Change Order
covering such services and associated charges has been executed by the parties.

1.3 Required Reports. Upon Client’s written request,
Greenway shall provide Client a report at the beginning of each month in a form
agreed to by the parties which specifies, for each active Statement of Work for
Professional Services, the activities during the previous month on such
Statement of Work, the time spent and costs incurred to date and during the
previous week on such Statement of Work, percentage progress toward completion
of that project, and estimated time to completion of such Statement of Work.

1.4 Materials, Facilities and Assistance for Performance of
Services. Greenway shall provide all necessary equipment and related
materials, including specialized equipment and the like, to perform the
Professional Services. Any work space, equipment, materials, training,
supervision or other assistance to be provided by Client in connection with the
Professional Services will be described in the Statement of Work. If Greenway
personnel are providing Professional Services at a Client location, Client
agrees to provide such Greenway personnel with reasonable office space, IT
equipment, Internet connectivity and other resources generally available to
Client personnel. 

1.5 Service Performance Review. Client and Greenway shall
also meet, as determined by the parties, to discuss and assess the delivery of
Professional Services. In the event Client notifies Greenway that the delivery
of Professional Services, as reasonably determined by Client, does not
substantially conform to any requirements or other 

standards set forth in a
Statement of Work; Client shall provide written notice (in reasonable detail) to
Greenway of such non-conformance. Greenway shall then review such notice and the
parties shall meet to discuss a mutually agreeable resolution to such issue.
Greenway shall use reasonable efforts to perform the Professional Services to
accomplish the task that has been impacted by the non-conformance. Such
performance shall by at Greenway’s expense unless the non-conformance is due to
Client’s error, omission or failure to provide requested input or assistance.

1.6 Project Administration. The Project Representatives
for Client shall provide Greenway all assistance and guidance reasonably
requested by Greenway for the performance of the Professional Services. Client
acknowledges that the timely performance of the Professional Services is
dependent both on reasonable access to and assistance by Client personnel and
Project Representatives. 

1.7 Staffing and Continuity. Greenway shall use
reasonable efforts to consult with Client on all personnel decisions which
relate to each project and, at Client’s request, shall submit resumes of any of
its employee that it proposes to assign to perform Services at Client prior to
such employee being assigned to perform such Services pursuant to a Statement of
Work. Client shall have the right to reject any such proposed assignment based
on Client’s reasonable evaluation of such employee’s skill or experience. Client
shall also have the right to reasonably request the replacement of, and Greenway
shall use its reasonable efforts to so replace, any assigned employee of
Greenway. Greenway shall use reasonable efforts to retain and not reassign any
assigned Greenway employee until completion of the Services under a Statement of
Work. Notwithstanding the above, this provision shall not limit Greenway’s
rights to sever its employer/employee relationship with any of its employees or
any employee’s right to sever their employment with the Greenway. In the event
of any staffing changes by Greenway, Greenway shall at its expense arrange for
appropriate knowledge transfer, which arrangement shall be subject to Client’s
review to confirm its sufficiency. 

Greenway shall also identify the project manager who shall be
empowered to act for Greenway in accordance with this Agreement in all matters
relating to the technical administration of Services to be provided. Should the
assigned project manager be unable to complete his/her responsibility for any
reason, Client may, in its discretion, allow Greenway to replace the project
manager with an equally qualified person as a substitute, so long as the
replacement or reassignment of the project manager does not delay the completion
of the project nor cause Client any undue burden or inconvenience. Greenway
shall reasonably attempt to honor Client’s request for specific individuals.

Greenway acknowledges and agrees that, to the extent assigned
personnel are reassigned, Client shall not be responsible for any time needed
for any applicable knowledge transfer to the applicable newly assigned
personnel. Additionally, Greenway shall use commercially reasonable efforts to
keep any team together in order to meet its material obligations with respect to
conversion and new site implementation goals. 

2. COMPENSATION 

Client shall pay Greenway the amounts set forth in the
applicable Statement of Work for the Professional Services according to the
payment terms set forth in Section 3 of the Agreement. 

3. OWNERSHIP 

Greenway shall own all right, title and interest, including all
intellectual property rights, in and to any and all products, programs,
interfaces, 

	
       
	
       

	  	  
	
      Greenway Medical Technologies, Inc./Walgreen Co.
      SLSA
	
      Page 15

CONFIDENTIAL

modifications to programs, reports, inventions, improvements,

developments, discoveries, enhancements, specifications, requirements,

know-how, trade secrets, notes, records, reports, drawings, designs,

data, works of authorship, software, derivative works, or other

deliverables or work product conceived, made, discovered, developed or

delivered by Greenway in the performance of Professional Services.

 

	
       
	
       

	  	  
	
      Greenway Medical Technologies, Inc./Walgreen Co.
      SLSA
	
      Page 16

CONFIDENTIAL

SCHEDULE D

PRICING

[See Attached}

[CONFIDENTIAL MATERIAL REDACTED AND FILED SEPARATELY WITH THE
COMMISSION]

 

	
       
	
       

	  	  
	
      Greenway Medical Technologies, Inc./Walgreen Co.
      SLSA
	
      Page 17

CONFIDENTIAL

SCHEDULE E

TRANSITION SERVICES

In the event the Agreement is terminated, Greenway will, at
Client’s option, continue to provide Services for up to ninety (90) days after
the date of termination in order to facilitate Client’s transition to a new
service provider and Greenway shall provide such reasonable assistance as may be
requested by Client to effectuate such transition at Greenway’s then-current
time and materials rates. Greenway shall provide no less than the following
services: 

	
       
	
       

	
      1.
	
      Responding to questions regarding the Services on an
      as-needed basis; 

	
      2.
	
      Providing other reasonable assistance to Client to
      facilitate a smooth transition; 

	
      3.
	
      Assisting Client with development of a transition plan;
      

	
      4.
	
      Training Client staff or designees to use any equipment,
      software or processes that are subject to the Transition Services; and
      

	
      5.
	
      Cataloging existing applications, system software, data
      files and tape libraries, and update procedures.

Upon termination of the Agreement and request of Client,
Greenway will also provide to Client de-migration file(s) at Greenway’s
then-current time and materials rate. Financial and demographic data will be in
a delimited ASCII file format. Clinical documents will be in Portable Document
Format (.pdf) or Tagged Image File Format (.tif), and clinical data from the
database will be provided in the delimited ASCII file format. 

	
       
	
       

	  	  
	
      Greenway Medical Technologies, Inc./Walgreen Co.
      SLSA
	
      Page 18

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