Document:

EXHIBIT 10.1

 

 

AMENDMENT NO. 4 TO REVOLVING LOAN AGREEMENT

THIS AMENDMENT is dated April 26, 2017 and made between:

(1) ASTEA   INTERNATIONALINC.,   a   Delaware   corporation, as borrower ("Borrower"); and

(2) ZACK BERGREEN, an individual residing in Gwynedd Valley, Pennsylvania, as lender ("Lender").

WITNESSETH

WHEREAS, Borrower and Lender have entered into a Revolving Loan Agreement, dated as of May 29, 2013 (as amended by that certain Amendment No. 1 to Revolving Loan Agreement, dated March 26, 2014, by and between Borrower and Lender, Amendment No. 2 to Revolving Loan Agreement, dated August 12, 2014 and Amendment No. 3 to Revolving Loan Agreement, dated May 28, 2015 as it may be amended, modified, extended or restated from time to time, the "Loan Agreement");

WHEREAS, the parties hereto desire to amend the Loan Agreement on the terms and subject to the conditions set forth herein;

WHEREAS, pursuant to the Loan Agreement, Borrower issued that certain Revolving Promissory Note (the "Existing Note"), dated March 26, 2014, to Lender in the amount of THREE MILLION DOLLARS ($3,000,000);

WHEREAS, Borrower and Lender entered into a preferred stock purchase agreement (the "Preferred Stock Purchase Agreement"), for a private placement of 797,448 shares of newly designed Series B Convertible Preferred Stock of Borrower in exchange for the cancellation of TWO MILLION DOLLARS ($2,000,000) of the outstanding principal amount owed to Lender under the Existing Note; and

WHEREAS, given the reduction of outstanding debt under the Existing Note pursuant to the Preferred Stock Purchase Agreement, Borrower requested, and Lender agreed, to amend the Loan Agreement to decrease the Maximum Principal Amount (as defined in the Loan Agreement) from Three Million Dollars ($3,000,000) to One Million Dollars ($1,000,000); and

WHEREAS, given the expiration of the Loan Agreement on October 1, 2015; and

WHEREAS, pursuant to Section 6(f) of the Loan Agreement, the amendments requested by Borrower must be contained in a written agreement signed by Borrower and Lender.

 

 

EXHIBIT 10.1

  

AGREEMENT

NOW, THEREFORE, in consideration of the premises set forth above and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

		1.	
Definitions and Interpretation

		1.1.	
Definitions. Capitalized terms used but not defined in this Amendment shall have the meaning ascribed thereto in the Loan Agreement.

		1.2.	
Interpretation. The principles of construction set out in the Loan Agreement shall have effect as if set out in this Agreement.

		2.	
Amendment to the Loan Agreement. The Loan Agreement is hereby amended by replacing the "Maturity Date" and "Maximum Principal Amount" of the Revolving Promissory Note in their entirety with the following:

 

"Maturity Date" means the earliest to occur of (i) termination of the Lender's commitment to make Loan Advances or (ii) or May 1, 2018"; and

"Maximum Principal Amount" means $1,000,000.

		3.	Conditions Precedent.	This Amendment shall become effective upon the date (the "Effective Date") on which Lender shall have received:

		3.1.	
This Amendment, duly executed and delivered by Borrower;

		3.2.	
Such other information and documents as may reasonably be required by Lender in connection with this Amendment.

		4.	
Representations and Warranties. Borrower hereby represents and warrants to Lender (before and after giving effect to this Amendment) that:

		4.1.	
All of the representations and warranties set forth in Section 3 of the Loan Agreement are true and correct in all material respects as of the Effective Date as if made on the Effective Date.

		4.2.	
No Event of Default has occurred and is continuing on the date hereof under the Loan Agreement.

		4.3.	
This Amendment constitutes or will constitute, when issued and delivered, valid and binding obligations of Borrower, enforceable in accordance with its terms, subject to bankruptcy, insolvency and other similar laws affecting the enforcement of creditors' rights in general, and general principles of equity.

 

 

EXHIBIT 10.1

  

		4.4.	
Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. Borrower has the requisite corporate power and authority to execute, deliver and perform this Amendment and to consummate the transactions contemplated thereby. The execution, delivery and performance by Borrower of this Amendment and the consummation of the transactions contemplated thereby have been duly authorized by all necessary corporate action on the part of the Borrower.

		4.5.	
Neither the execution and the delivery of this Amendment, nor the consummation of the transactions contemplated hereby, will (a) violate any injunction, judgment, order, decree, ruling, charge or any provision of Borrower's certificate of incorporation, bylaws or other charter documents, or, to Borrower's knowledge, any restriction of any government, governmental agency or court to which Borrower is subject, or (b) conflict with, result in a material breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, any material agreement, contract, lease, license, instrument, or other arrangement to which Borrower is a party or by which it is bound or to which any of its assets are subject.

		4.6.	
As of the Effective Date, the outstanding principal amount of the Loan Advances is $0.

 

		5.	
Expenses. Borrower agrees to pay or reimburse Lender for all of its reasonable out-of- pocket costs and expenses incurred in connection with this Amendment, any other documents prepared in connection herewith and the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel to Lender.

		6.	
Miscellaneous.

		6.1.	
Except as expressly amended, amended and restated, supplemented or otherwise modified by this Amendment, all of the terms, provisions, and conditions of the Loan Agreement and the other Loan Documents are and shall remain unchanged and in full force and effect. Except as specifically amended, amended and restated, supplemented or otherwise modified by this Amendment, the Loan Agreement and the other Loan Documents are (a) hereby ratified and confirmed by the parties and (b) shall remain in full force and effect according to their terms. The amendments contained herein shall not be construed as a waiver or amendment of any other provision of the Loan Agreement or the other Loan Documents or for any purpose except as expressly set forth herein or a consent to any further or future action on the part of Borrower that would require the waiver or consent of Lender.

		6.2.	
Each of Borrower and Lender designate this Amendment as a Loan Document.

		7.	
Severability of Provisions. Each provision of this Amendment is severable from every other provision of this Amendment in determining the enforceability of any provision.

 

 

EXHIBIT 10.1

  

		8.	
Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and permitted assigns.

		9.	
GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE SUBSTANTIVE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO ANY CONFLICTS OF LAW CONCEPTS WHICH WOULD APPLY THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION.

		10.	
Counterparts. This Amendment may be executed in one or more counterparts, all of which when taken together shall constitute but one instrument, and in the event any signature is delivered by facsimile or "pdf" transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or "pdf" were an original thereof.

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written.

	 	
ASTEA INTERNATIONAL INC.

	 	
as Borrower

	 	 	 
	 	 	 
	 	
By:  /s/Rick Etskovitz

	 	 	
Name:  Rick Etskovitz

	 	 	
Title:    Chief Financial Officer

	 	 	 
	 	 	 
	 	 	 
	 	
ZACK BERGREEN,

	 	
as Lender

	 	 	 
	 	
By: /s/Zack BergreenExhibit 10.1

 

Execution Version

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into on April 1, 2017, (the “Effective Date”) by and between Tabula Rasa HealthCare, Inc., a Delaware corporation (the “Company”) and Calvin H. Knowlton (the “Executive”), collectively referred to herein as the “Parties.”

 

WHEREAS, the Parties desire to enter into this Agreement to reflect the Executive’s position and role in the Company’s business and to provide for the Executive’s employment by the Company, upon the terms and conditions set forth herein;

 

WHEREAS, the Executive has agreed to certain confidentiality, non-competition and non-solicitation covenants contained hereunder, in consideration of the benefits provided to the Executive under this Agreement; and

 

WHEREAS, this Agreement replaces and supersedes all previous employment agreements between the Executive and the Company.

 

NOW, THEREFORE, in consideration of the premises and of the mutual promises and covenants contained herein, the Company and the Executive, intending to be legally bound, hereby agree as follows:

 

1.                                      Employment.

 

(a)                                 Term.  This Agreement shall commence on the Effective Date and shall continue until the third anniversary of the Effective Date, unless sooner terminated pursuant to the terms of this Agreement (the “Term”).  The Term shall be automatically extended and renewed for a period of one (1) year from the end of the Term (the “Renewal Date”) unless either the Company or the Executive gives written notice of non-renewal to the other Party at least ninety (90) days prior to the end of the Term, in which event this Agreement shall terminate at the end of the Term.  Subject to the termination provisions contained herein, if this Agreement is renewed on the Renewal Date for an additional one (1) year period, it will automatically be renewed on the anniversary of the Renewal Date and each subsequent year thereafter (the “Annual Renewal Date”) for a period of one (1) year, unless either Party gives written notice of non-renewal to the other at least ninety (90) days prior to any Annual Renewal Date, in which case the Agreement will terminate on the Annual Renewal Date immediately following such notice.

 

(b)                                 Duties.  During the Term, the Executive shall be employed by the Company as its Chief Executive Officer and shall serve the Company faithfully and to the best of the Executive’s ability.  The Executive shall devote the Executive’s full time, attention, skill and efforts to the performance of the duties required by or appropriate for the Executive’s position with the Company.  The Executive shall report to the Board of Directors of the Company (the “Board”) and shall perform such duties commensurate with the Executive’s office as contained in the bylaws of the Company or as the Executive shall reasonably be directed by the Board.  The Executive shall perform such services at the Company’s headquarters and the Executive

 

 

shall engage in such reasonable business travel as may be required to perform the Executive’s duties.  The Company acknowledges that the Executive currently serves on the Board.

 

(c)                                  Best Efforts.  Except for vacation, absences due to temporary illness and absences resulting from Disability (as hereinafter defined), the Executive shall devote the Executive’s business time, attention and energies on a full-time basis to the performance of the duties and responsibilities referred to in subsection (b) above.  The Executive shall not during the Term be engaged in any other business activity which, in the reasonable judgment of the Company, would conflict with the ability of the Executive to perform the Executive’s duties under this Agreement, whether or not such activity is pursued for gain, profit or other pecuniary advantage.  Nothing in this Section shall prevent Executive from engaging in additional activities in connection with personal investments and community affairs, including serving on corporate, civic, or charitable boards, subject to the approval by the Company, that are not materially inconsistent with Executive’s duties under this Agreement.

 

2.                                      Base Salary.  During the Term, the Company shall pay to the Executive a base salary of $500,000 annually, which shall be subject to review and, at the option of the Compensation Committee of Directors of the Company (the “Committee”), subject to increase (such salary, as the same may be increased from time to time as aforesaid, being referred to herein as the “Base Salary”).  The Base Salary shall be reviewed on an annual basis for increases in accordance with the review process for senior level executives of the Company.  The Base Salary shall be payable in accordance with the Company’s normal payroll practices.

 

3.                                      Incentive Compensation

 

(a)                                 Annual Incentive Compensation.  The Executive shall be entitled to participant in an annual bonus program established by the Company with a target annual bonus amount measured as a percentage of the Executive’s Base Salary and established for this position, subject in all respects to achievement of performance goals to be established by the Company.  Any bonus earned by the Executive shall be paid after the end of the fiscal year to which it relates, at the same time and under the same terms and conditions as other executives of the Company; provided that in no event shall the Executive’s bonus be paid later than March 15 of the fiscal year following the fiscal year for which it was earned.

 

(b)                                 Long-Term Incentive Compensation.  The Executive shall be eligible to participate in all equity compensation plans and programs in place at the Company and shall receive such grants as may be provided from time to time by the Company to its officers.  Any equity awards made by the Company to the Executive shall be subject to the terms and conditions set forth in the Company’s equity compensation plan and form of grant agreement, as may be amended from time to time.

 

4.                                      Benefits.  During the Term, the Executive shall be eligible to participate in certain retirement and welfare benefit plans and programs made available to the Company’s executives as a group, as such retirement and welfare plans may be in effect from time to time and subject to the eligibility requirements of such plans.  Nothing in this Agreement or otherwise shall prevent the Company from amending or terminating any incentive, equity compensation, retirement,

 

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welfare or other employee benefit plans, programs, policies or perquisites from time to time as the Company deems appropriate.

 

5.                                      Vacation.  During the Term, the Executive shall be entitled to vacation, holiday, and sick leave, in accordance with the Company’s vacation, holiday, and other pay-for-time-not-worked policies.

 

6.                                      Reimbursement of Expenses.  During the Term, the Company shall reimburse the Executive, in accordance with the policies and practices of the Company in effect from time to time, for all reasonable and necessary traveling expenses and other disbursements incurred by the Executive’s for or on behalf of the Company in connection with the performance of the Executive’s duties hereunder upon presentation by the Executive to the Company of appropriate documentation therefore.

 

7.                                      Termination Without Cause; Resignation for Good Reason.  If the Executive’s employment is terminated by the Company without Cause (as defined below) or by the Executive for Good Reason (as defined below), the provisions of this Section 7 shall apply.

 

(a)                                 The Company may terminate the Executive’s employment with the Company at any time without Cause upon not less than thirty (30) days’ prior written notice to the Executive and the Executive may resign for Good Reason (as defined below).

 

(b)                                 Unless the Executive complies with the provisions of Section 7(c) below, upon termination under Section 7(a) above, no other payments or benefits shall be due under this Agreement to the Executive, but the Executive shall be entitled to any amounts earned, accrued and owing, but not yet paid under Section 2 and any benefits accrued and due in accordance with the terms of any applicable benefit plans and programs of the Company (the “Accrued Obligations”).

 

(c)                                  Notwithstanding the provisions of Section 7(b), upon termination under Section 7(a) above, if the Executive executes and does not revoke a written release of any and all claims against the Company or its affiliates, with respect to all matters arising out of the Executive’s employment with the Company, in such form as provided by the Company in its sole discretion (the “Release”), and so long as the Executive continues to comply with the provisions of Section 14 below, in addition to the Accrued Obligations, the Executive shall be entitled to receive the following:

 

(i)                                     Continuation of the Executive’s Base Salary for eighteen (18) months (the “Severance Term”), at the rate in effect for the year in which the Executive’s date of termination occurs, which amount shall be paid in regular payroll installments over the applicable period following the Executive’s termination date; and

 

(ii)                                  If the Executive timely and properly elects health continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), then continued health (including hospitalization, medical, dental, vision etc.) insurance coverage substantially similar in all material respects as the coverage provided to the Company’s then other active senior executives for the Severance Term; provided that the Executive shall pay an

 

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amount equal to the amount active employees pay for such coverage as of the date of the Executive’s termination (the “Monthly COBRA Costs”) and the period of COBRA health care continuation coverage provided under section 4980B of the Internal Revenue Code, as amended (the “Code”) shall run concurrently with the period; provided further that, notwithstanding the foregoing, the amount of any benefits provided by this subsection (c)(ii) shall be reduced or eliminated to the extent the Executive becomes entitled to duplicative benefits by virtue of the Executive’s subsequent or other employment; and provided further that, notwithstanding the foregoing, if the Company’s making payments under this Section 7(c)(ii) would violate any nondiscrimination rules applicable to the Company’s group health plan under which such coverage is made available, or result in the imposition of penalties under the Code or the Affordable Care Act, the Parties agree to reform this Section 7(c)(ii) in a manner as is necessary to comply with such requirements and avoid such penalties.

 

8.                                      Voluntary Termination.  The Executive may voluntarily terminate the Executive’s employment for any reason upon thirty (30) days’ prior written notice.  In such event, after the effective date of such termination, no payments shall be due under this Agreement, except that the Executive shall be entitled to the Accrued Obligations.

 

9.                                      Death; Disability.  If the Executive’s employment is terminated by the Company by reason of death or, subject to the requirements of applicable law, Disability (as defined below), upon the Executive’s date of termination or death, no payments shall be due under this Agreement, except that the Executive (or in the event of the Executive’s death, the Executive’s executor, legal representative, administrator or designated beneficiary, as applicable), shall be entitled to the Accrued Obligations.

 

10.                               Cause.  The Company may terminate the Executive’s employment at any time for Cause upon written notice to the Executive, in which event all payments under this Agreement shall cease, except for the Accrued Obligations.

 

11.                               Change in Control.

 

(a)                                 Termination without Cause or Resignation for Good Reason Within Sixty (60) Days Before or Twelve (12) Months Following a Change of Control.  Notwithstanding anything to the contrary herein, if there is both a Change in Control and the Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason within sixty (60) days before or within twelve (12) months following such Change in Control (a “CIC Termination”), then, in addition to the Accrued Obligations, the Executive shall be entitled to receive the following:

 

(i)                                     Severance benefits in an amount equal to two (2) times the sum of the Executive’s Base Salary plus the Executive’s Target Incentive Bonus in effect immediately prior to the Executive’ termination date, which amount shall be paid in regular payroll installments over the applicable twenty-four (24) month period following the Executive’s termination date;

 

(ii)                                  COBRA continuation benefits as set forth in Section 7(c)(ii), except that the Severance Term shall be twenty-four (24) months; provided, that, following the

 

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foregoing eighteen (18) month period, if the Executive secures an individual policy for health coverage (including for Executive’s spouse and dependents where applicable), the Company will reimburse the Executive for the monthly cost of such coverage for the period commencing on the first day following the eighteen (18) month period and ending after twenty-four (24) months; provided that the amount for any month will not exceed the Monthly COBRA Costs; and

 

(iii)                               All outstanding equity grants held by the Executive immediately prior to the CIC Termination which vest based upon the Executive’s continued service over time shall accelerate, become fully vested and/or exercisable, as the case may be, as of the date of the CIC Termination and all outstanding equity grants held by the Executive immediately prior to the CIC Termination which vest based upon attainment of performance criteria shall remain subject to the terms and conditions of the agreement evidencing such performance-based award.  The foregoing severance benefits shall be subject to the Executive’s execution and non-revocation of the Release and the Executive’s continued compliance with the provisions of Section 14 below.

 

(b)                                 Application of Section 280G.  If any of the payments or benefits received or to be received by the Executive (including, without limitation, any payment or benefits received in connection with a Change in Control or the Executive’s termination of employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement, or otherwise) (all such payments collectively referred to herein as the “280G Payment”) constitute “parachute payments” within the meaning of Code Section 280G and will be subject to the excise tax imposed under Code Section 4999 (the “Excise Tax”), then the 280G Payment shall be equal to the Reduced Amount.  The “Reduced Amount” shall be either (i) the largest portion of the 280G Payment that would result in no portion of the 280G Payment being subject to the Excise Tax, or (ii) the largest portion of the 280G Payment, up to and including the total 280G Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes and the Excise Tax (all computed at the highest applicable marginal rate), results in the Executive’s receipt, on an after-tax basis, of the greater amount of the 280G Payment, notwithstanding that all or some portion of the 280G Payment may be subject to the Excise Tax.  In making the determination described above, the Company, in its sole and absolute discretion, shall make a reasonable determination of the value to be assigned to any restrictive covenants in effect for the Executive, and the amount of the 280G Payment shall be reduced by the value of those restrictive covenants to the extent consistent with Code Section 280G.  If a reduction in payments or benefits constituting “parachute payments” is necessary so that the 280G Payment equals the Reduced Amount, the amounts payable or benefits to be provided to the Executive shall be reduced such that the economic loss to the Executive as a result of the “parachute payment” elimination is minimized. In applying this principle, the reduction shall be made in a manner consistent with the requirements of Code Section 409A and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but not below zero.  All determinations to be made under this Section 11 shall be made by an independent accounting firm, consulting firm or other independent service provider selected by the Company immediately prior to the Change in Control (the “Firm”), which shall provide its determinations and any supporting calculations both to the Company and the Executive within ten (10) days of the Change in Control.  Any such determination by the Firm shall be binding upon the Company and the

 

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Executive.  All of the fees and expenses of the Firm in performing the determinations referred to in this Section 11 shall be borne solely by the Company.

 

12.                               Definitions.

 

(a)                                 Cause.  For purposes of this Agreement, “Cause” shall mean any of the following grounds for termination of the Executive’s employment listed: (i) the Executive’s knowing and material dishonesty or fraud committed in connection with the Executive’s employment; (ii) theft, misappropriation or embezzlement by the Executive of the Company’s funds; (iii) the Executive repeatedly negligently performing or failing to perform, or willfully refusing to perform, the Executive’s duties to the Company (other than a failure resulting from Executive’s incapacity due to physical or mental illness); (iv) the Executive’s conviction of or a plea of guilty or nolo contendere to any felony, a crime involving fraud or misrepresentation, or any other crime (whether or not connected with his employment) the effect of which is likely to adversely affect the Company or its affiliates; (v) a material breach by the Executive of any of the provisions or covenants set forth in this Agreement; or (vi) a material breach by the Executive of the Company’s Code of Conduct and Business Ethics.  Prior to any termination for Cause pursuant to each such event listed in (i), (iii), (v) or (vi) above, to the extent such event(s) is capable of being cured by the Executive, the Company shall give the Executive written notice thereof describing in reasonable detail the circumstances constituting Cause and the Executive shall have the opportunity to remedy same within thirty (30) days after receiving written notice.

 

(b)                                 Change in Control.  For purposes of this Agreement, a “Change in Control” shall have the same meaning ascribed to such term under the Company’s 2016 Omnibus Incentive Compensation Plan, as in effect on the date hereof and as may be amended from time to time, or such successor plan.

 

(c)                                  Disability.  For purposes of this Agreement, “Disability” shall mean shall mean the Executive has been unable to perform the essential functions of the Executive’s position with the Company by reason of physical or mental incapacity for a period of six consecutive months, subject to any obligations or limitations imposed by federal, state or local laws, including any duty to accommodate Executive under the federal Americans with Disabilities Act.

 

(d)                                 Good Reason.  For purposes of this Agreement, “Good Reason” shall mean the occurrence of one or more of the following, without the Executive’s consent: (i) material diminution of the Executive’s authority, duties or responsibilities; (ii) a material change in the geographic location at which Executive must perform the Executive’s services under this Agreement (which, for purposes of this Agreement, means relocation of the offices of the Company at which the Executive is principally employed to a location more than thirty-five (35) miles from the location of such offices immediately prior to the relocation); (iii) a material diminution in the Executive’s Base Salary; (iv) non-renewal of this Agreement; or (v) any action or inaction that constitutes a material breach by the Company of a material provision of this Agreement.  The Executive must provide written notice of termination for Good Reason to the Company within thirty (30) days after the event constituting Good Reason first occurs, which notice shall state such Good Reason in reasonable detail.  The Company shall have a period of thirty (30) days in which it may correct the act or failure to act that constitutes the grounds for

 

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Good Reason as set forth in the Executive’s notice of termination.  If the Company does not correct the act or failure to act, the Executive must terminate the Executive’s employment for Good Reason within sixty (60) days after the end of the cure period, in order for the termination to be considered a Good Reason termination.

 

(e)                                  Target Incentive Bonus.  For purposes of this Agreement, “Target Incentive Bonus” shall mean the Executive’s target annual incentive bonus amount (measured at the target level, identified “goal” target or other similar target, without taking into account any incentive override for above goal performance, or any project-specific or other non-standard incentives) as in effect under the Company’s applicable annual incentive plan for the year of termination.  In the event that the Company has notified the Executive in writing that the Executive will be eligible for a Target Incentive Bonus for the year of termination, but a plan has not yet been put into effect, the Target Incentive Bonus shall be the prior year’s target annual incentive bonus amount.

 

13.                               Representations, Warranties and Covenants of the Executive.

 

(a)                                 Restrictions. The Executive represents and warrants to the Company that:

 

(i)                                     There are no restrictions, agreements or understandings whatsoever to which the Executive is a party which would prevent or make unlawful the Executive’s execution of this Agreement or the Executive’s employment hereunder, which is or would be inconsistent or in conflict with this Agreement or the Executive’s employment hereunder, or would prevent, limit or impair in any way the performance by the Executive of the obligations hereunder; and

 

(ii)                                  The Executive has disclosed to the Company all restraints, confidentiality commitments, and other employment restrictions that the Executive has with any other employer, person or entity.

 

(b)                                 Obligations to Former Employers.  The Executive covenants that in connection with the Executive’s provision of services to the Company, the Executive shall not breach any obligation (legal, statutory, contractual, or otherwise) to any former employer or other person, including, but not limited to, obligations relating to confidentiality and proprietary rights.

 

(c)                                  Obligations Upon Termination.  Upon and after the Executive’s termination or cessation of employment with the Company and until such time as no obligations of the Executive to the Company hereunder exist, the Executive shall (i) provide a complete copy of this Agreement to any person, entity or association which the Executive proposes to be employed, affiliated, engaged, associated or to establish any business or remunerative relationship prior to the commencement of any such relationship and (ii) shall notify the Company of the name and address of any such person, entity or association prior to the commencement of such relationship.

 

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14.                               Restrictive Covenants.

 

(a)                                 Non-Competition and Non-Solicitation.  The Executive acknowledges and recognizes that during the Term, the Executive will be privy to confidential information of the Company. Accordingly, in consideration of the promises contained herein and the consideration to be received by the Executive hereunder (including, without limitation, the severance compensation described in Sections 7 and 11, if any), without the prior written consent of the Company, the Executive shall not, at any time during the Term or during the Restriction Period (as defined below), (i) directly or indirectly engage in, represent in any way, or be connected with, any Competing Business (as hereinafter defined) directly competing with the business of the Company or any direct or indirect subsidiary or affiliate thereof in the United States, whether such engagement shall be as an officer, director, owner, employee, partner, affiliate or other participant in any Competing Business, (ii) assist others in engaging in any Competing Business in the manner described in clause (i) above, (iii) induce or solicit other employees of the Company or any direct or indirect subsidiary or affiliate thereof to terminate their employment with the Company or any such direct or indirect subsidiary or affiliate or to engage in any Competing Business or (iv) induce any entity or person with which the Company or any direct or indirect subsidiary or any affiliate thereof has a business relationship to terminate or alter such business relationship.  As used herein, “Competing Business” shall mean any firm or business organization that competes (i) with the Company in the development and/or commercialization of data-driven technology and solutions or pharmacy services to the types of entities now served or proposed to be served by the Company or (ii) in a business area planned in writing by the Company before the Executive’s termination date for entry within twelve (12) months of the termination date at the time of the Executive’s termination of employment with the Company.  Notwithstanding the foregoing restrictions, it shall not be a violation of this Section 14(a) for the Executive to own a five (5%) percent or smaller interest in any corporation required to file period reports with the United States Securities and Exchange Commission, so long as Executive performs no services or lends any assistance to such corporation.  For purposes of this Section 14(a), the Restriction Period shall be (i) the twenty-four (24) month period after a CIC Termination and (ii) the eighteen (18) month period after the termination of the Executive’s employment for any reason other than a CIC Termination.

 

(b)                                 The Executive understands that the foregoing restrictions may limit the Executive’s ability to earn a livelihood in a business similar to the business of the Company or any subsidiary or affiliate thereof, but the Executive nevertheless believes that the Executive has received and will receive sufficient consideration and other benefits as an employee of the Company and as otherwise provided hereunder to justify clearly such restrictions which, in any event (given the Executive’s education, skills and ability), the Executive does not believe would prevent the Executive from earning a living.

 

(c)                                  Non-Disparagement.  The Executive shall not disparage the Company or their respective officers, directors, investors, employees, and affiliates or make any public statement reflecting negatively on the Company or their respective officers, directors, investors, employees, and affiliates, including (without limitation) any matters relating to the operation or management of the Company, irrespective of the truthfulness or falsity of such statement.  The Company shall instruct and take all reasonable steps to cause its officers and members of the Board not to disparage the Executive on any matters relating to the Executive’s services to the Company, business, professional or personal reputation or standing in the pharmacy industry,

 

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irrespective of the truthfulness or falsity of such statement. Nothing in the section shall prohibit the Parties from testifying truthfully in any forum or to any governmental agency.

 

(d)                                 Proprietary Information.  At all times the Executive shall hold in strictest confidence and will not disclose, use, lecture upon or publish any Proprietary Information (defined below) of the Company, except as such disclosure, use or publication may be required in connection with the Executive’s work for the Company, or unless the Company expressly authorizes such disclosure in writing or it is required by law or in a judicial or administrative proceeding in which event the Executive shall promptly notify the Company of the required disclosure and assist the Company if a determination is made to resist the disclosure.  For purposes of this Section 14(d), “Proprietary Information” shall mean any and all confidential and/or proprietary knowledge, data or information of the Company or its respective affiliated entities, including (without limitation) any information relating to financial matters, investments, budgets, business plans, marketing plans, personnel matters, business contacts, products, processes, know-how, designs, methods, improvements, discoveries, inventions, ideas, data, programs, and other works of authorship; provided, that it shall not include any information that is known to the Company to be publicly available.

 

(e)                                  Invention Assignment.  All inventions, innovations, improvements, developments, methods, designs, analyses, reports, and all similar or related information which relates to either the Company’s actual or anticipated business, research and development or existing or future products or services and which are conceived, developed or made by Executive while employed by the Company (the “Work Product”) belong to the Company and not to the Executive.  The Executive shall promptly disclose such Work Product to the Board and perform all actions reasonably requested by the applicable Board (whether during or after the Term of this Agreement) to establish and confirm such ownership (including, without limitation, assignments, consents, powers of attorneys and other instruments).

 

(f)                                   Return of Property.  Upon termination of the Executive’s employment with the Company for any reason, voluntarily or involuntarily, and at any earlier time the Company requests, the Executive will deliver to the person designated by the Company all originals and copies of all documents and property of the Company in the Executive’s possession, under the Executive’s control or to which the Executive may have access.  The Executive will not reproduce or appropriate for the Executive’s own use, or for the use of others, any property, Proprietary Information or Work Product.

 

15.                               Miscellaneous Provisions.

 

(a)                                 Entire Agreement; Amendments.

 

(i)                                     This Agreement and the other agreements referred to herein contain the entire agreement between the Parties hereto and supersede any and all prior agreements and understandings concerning the Executive’s employment by the Company.

 

(ii)                                  This Agreement shall not be altered or otherwise amended, except pursuant to an instrument in writing signed by each of the Parties hereto

 

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(b)                                 Descriptive Headings.  Descriptive headings are for convenience only and shall not control or affect the meaning or construction of any provisions of this Agreement. When the context admits or requires, words used in the masculine gender shall be construed to include the feminine, the plural shall include the singular, and the singular shall include the plural.

 

(c)                                  Notices.  All notices or other communications pursuant to this Agreement shall be in writing and shall be deemed to be sufficient if delivered personally, telecopied, sent by nationally-recognized, overnight courier or mailed by registered or certified mail (return receipt requested), postage prepaid, to the Parties at the following addresses (or at such other address for a party as shall be specified by like notice):

 

(i)                                     if to the Company, to:

 

Tabula Rasa HealthCare, Inc.

110 Marter Avenue, Suite 309

Moorestown, NJ 08057

Attention: Brian W. Adams

 

with a copy to:

 

Morgan, Lewis & Bockius LLP

1701 Market Street

Philadelphia, PA 19103-2921

Attention: Jeff Bodle

 

(ii)                                  if to the Executive, to the address in the Company’s personnel records.

 

All such notices and other communications shall be deemed to have been delivered and received (A) in the case of personal delivery, on the date of such delivery, (B) in the case of delivery by telecopy, on the date of such delivery, (C) in the case of delivery by nationally-recognized, overnight courier, on the Business Day following dispatch, and (D) in the case of mailing, on the third Business Day following such mailing.  As used herein, “Business Day” shall mean any day that is not a Saturday, Sunday or a day on which banking institutions in the Commonwealth of Pennsylvania are not required to be open.

 

(d)                                 Counterparts.  This Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement.  This Agreement may be executed and delivered by facsimile.

 

(e)                                  Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania applicable to contracts made and performed wholly therein without regard to rules governing conflicts of law.

 

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(f)                                   Non-Exclusivity of Rights; Resignation from Boards; Clawback.

 

(i)                                     Nothing in this Agreement shall prevent or limit the Executive’s continuing or future participation in or rights under any benefit, bonus, incentive or other plan or program provided by the Company and for which the Executive may qualify; provided, however, that if the Executive becomes entitled to and receives the severance payments described in Sections 7 or 11 of this Agreement, the Executive hereby waives the Executive’s right to receive payments under any severance plan or similar program applicable to employees of the Company.

 

(ii)                                  If the Executive’s employment with the Company terminates for any reason, the Executive shall immediately resign from all boards of directors of the Company, any Affiliates and any other entities for which the Executive serves as a representative of the Company and any committees thereof.

 

(iii)                               The Executive agrees that the Executive will be subject to any compensation clawback, recoupment and anti-hedging policies that may be applicable to the Executive as an executive of the Company, as in effect from time to time and as approved by the Board or a duly authorized committee thereof.

 

(g)                                  Benefits of Agreement; Assignment.  All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, executors, administrators, legal representatives, successors and assigns of the Parties hereto, except that the duties and responsibilities of the Executive under this Agreement are of a personal nature and shall not be assignable or delegable in whole or in part by the Executive.  The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company, within fifteen (15) days of such succession, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform if no such succession had taken place and the Executive acknowledges that in such event the obligations of the Executive hereunder, including but not limited to those under Sections 13 or 14, will continue to apply in favor of the successor.

 

(h)                                 Waiver of Breach.  No delay or omission by a party in exercising any right, remedy or power under this Agreement or existing at law or in equity shall be construed as a waiver thereof, and any such right, remedy or power may be exercised by such party from time to time and as often as may be deemed expedient or necessary by such party in its sole discretion.

 

(i)                                     Severability.  In the event that any provision of this Agreement is determined to be partially or wholly invalid, illegal or unenforceable in any jurisdiction, then such provision shall, as to such jurisdiction, be modified or restricted to the extent necessary to make such provision valid, binding and enforceable, or if such provision cannot be modified or restricted, then such provision shall, as to such jurisdiction, be deemed to be excised from this Agreement; provided, however, that the binding effect and enforceability of the remaining provisions of this Agreement, to the extent the economic benefits conferred upon the Parties by virtue of this Agreement remain substantially unimpaired, shall not be affected or impaired in any manner, and any such invalidity, illegality or unenforceability with respect to such provisions shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

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(j)                                    Remedies.  All remedies hereunder are cumulative, are in addition to any other remedies provided for by law and may, to the extent permitted by law, be exercised concurrently or separately, and the exercise of any one remedy shall not be deemed to be an election of such remedy or to preclude the exercise of any other remedy.  The Executive acknowledges that in the event of a breach of any of the Executive’s covenants contained in Sections 13 or 14, the Company shall be entitled to immediate relief enjoining such violations in any court or before any judicial body having jurisdiction over such a claim.

 

(k)                                 Survival.  The respective rights and obligations of the Parties hereunder shall survive the termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations.

 

(l)                                     Jurisdiction.  Each of the Parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any Commonwealth of Pennsylvania state court or federal court of the United States of America sitting in the Commonwealth of Pennsylvania, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any related agreement or for recognition or enforcement of any judgment.  Each of the Parties hereto hereby irrevocably and unconditionally agrees that jurisdiction and venue in such courts would be proper, and hereby waive any objection that such courts are an improper or inconvenient forum.  Each of the Parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Each of the Parties hereto irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any related agreement in any Commonwealth of Pennsylvania state or federal court.  Each of the Parties hereto irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

(m)                             Withholding.  All payments under this Agreement shall be made subject to applicable tax withholding, and the Company shall withhold from any payments under this Agreement all federal, state and local taxes as the Company is required to withhold pursuant to any law or governmental rule or regulation.  The Executive shall bear all expense of, and be solely responsible for, all federal, state and local taxes due with respect to any payment received under this Agreement.

 

(n)                                 Compliance with Section 409A of the Code.

 

(i)                                     This Agreement is intended to comply with Section 409A of the Code and its corresponding regulations, to the extent applicable.  Severance benefits under the Agreement are intended to be exempt from Section 409A of the Code under the “short term deferral” exemption, to the maximum extent applicable, and then under the “separation pay” exemption, to the maximum extent applicable.  Notwithstanding anything in this Agreement to the contrary, payments may only be made under this Agreement upon an event and in a manner permitted by Section 409A of the Code, to the extent applicable.  As used in the Agreement, the term “termination of employment” shall mean the Executive’s separation from service with the Company within the meaning of Section 409A of the Code and the regulations promulgated

 

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thereunder.  In no event may the Executive, directly or indirectly, designate the calendar year of a payment.  For purposes of Section 409A of the Code, each payment hereunder shall be treated as a separate payment and the right to a series of payments shall be treated as the right to a series of separate payments.  All reimbursements and in-kind benefits provided under the Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code. Notwithstanding any provision of this Agreement to the contrary, in no event shall the timing of the Executive’s execution of the Release, directly or indirectly, result in the Executive designating the calendar year of payment, and if a payment that is subject to execution of the Release could be made in more than one taxable year, payment shall be made in the later taxable year.

 

(ii)                                  Notwithstanding anything herein to the contrary, if, at the time of the Executive’s termination of employment with the Company, the Company has securities which are publicly traded on an established securities market and the Executive is a “specified employee” (as such term is defined in section 409A of the Code) and it is necessary to postpone the commencement of any payments or benefits otherwise payable under this Agreement as a result of such termination of employment to prevent any accelerated or additional tax under section 409A of the Code, then the Company will postpone the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to the Executive) that are not otherwise paid within the ‘short-term deferral exception’ under Treas. Reg. §1.409A-1(b)(4), and the ‘separation pay exception’ under Treas. Reg. §1.409A-1(b)(9)(iii), until the first payroll date that occurs after the date that is six months following the Executive’s “separation of service” (as such term is defined under code section 409A of the Code) with the Company.  If any payments are postponed due to such requirements, such postponed amounts will be paid in a lump sum to the Executive on the first payroll date that occurs after the date that is six months following Executive’s separation of service with the Company.  If the Executive dies during the postponement period prior to the payment of postponed amount, the amounts withheld on account of section 409A of the Code shall be paid to the personal representative of the Executive’s estate within sixty (60) days after the date of the Executive’s death.

 

(o)                                 Full Settlement.  In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced as a result of a mitigation duty whether or not the Executive obtains other employment.

 

(p)                                 Indemnification. The Company hereby agrees, to the maximum extent permitted by law, to indemnify and hold the Executive harmless against any costs and expenses, including reasonable attorneys’ fees, judgments, fines, settlements and other amounts incurred in connection with any proceeding arising out of, by reason of or relating to the Executive’s good faith performance of the Executive’s duties and obligations with the Company.  The Company shall also provide the Executive with coverage as a named insured under a directors and officers liability insurance policy maintained for the Company’s directors and officers.  This obligation to provide insurance and indemnify the Executive shall survive expiration or termination of this Agreement with respect to proceedings or threatened proceedings based on acts or omissions of the Executive occurring during the Executive’s employment with the Company or with any of its

 

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affiliates.  Such obligations shall be binding upon the Company’s successors and assigns and shall inure to the benefit of the Executive’s heirs and personal representatives.

 

(q)                                 Government Agency Exception. Nothing in this Agreement is intended to prohibit or restrict the Executive from: (i) making any disclosure of information required by process of law; (ii) providing information to, or testifying or otherwise assisting in any investigation or proceeding brought by, any federal or state regulatory or law enforcement agency or legislative body, or any self-regulatory organization; or (iii) filing, testifying, participating in, or otherwise assisting in a proceeding relating to an alleged violation of any federal, state, or municipal law relating to fraud or any rule or regulation of the Securities and Exchange Commission or any self-regulatory organization. In addition, this Agreement does not bar the Executive’s right to file an administrative charge with the Equal Employment Opportunity Commission (“EEOC”) and/or to participate in an investigation by the EEOC.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date and year first above written.

 

	
 
    	
TABULA RASA   HEALTHCARE, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 /s/ Brian W. Adams
    
	
 
    	
Name: Brian W. Adams
    
	
 
    	
Title: Chief Financial   Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 /s/ Calvin H. Knowlton
    
	
 
    	
Calvin H. Knowlton
    

 

[Signature Page to Employment Agreement]

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