Document:

exv4w5

 

Exhibit 4.5

THE RYLAND GROUP, INC.,

as Issuer,

THE GUARANTORS NAMED HEREIN

and

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,

as successor to

Chemical Bank,

as Trustee

FIRST SUPPLEMENTAL INDENTURE

DATED AS OF DECEMBER 22, 2004

TO INDENTURE

DATED AS OF JUNE 28, 1996

Relating To

8% Senior Notes Due 2006

5-3/8% Senior Notes Due 2008

9-3/4% Senior Notes Due 2010

 

 

FIRST SUPPLEMENTAL INDENTURE

     FIRST SUPPLEMENTAL INDENTURE, dated as of December 22, 2004 (the
“Supplemental Indenture”), to the Indenture (as defined below) among The
Ryland Group, Inc. (the “Company”), a Maryland corporation, each of the
Guarantors named herein (the “Guarantors”), and JPMorgan Chase Bank,
National Association, as successor to Chemical Bank, a national banking
association organized under the laws of the United States of America, as
Trustee (the “Trustee”).

RECITALS

     WHEREAS, the Company has heretofore executed and delivered to the Trustee
an Indenture, dated as of June 28, 1996 (the “Indenture”), providing for
the issuance from time to time of its notes and other evidences of senior debt
securities, to be issued in one or more series as therein provided
(“Securities”);

     WHEREAS, pursuant to the Indenture, the Company has heretofore issued
$100,000,000 aggregate principal amount of 8% Senior Notes Due 2006 (the
“2006 Notes”), $150,000,000 aggregate principal amount of 5-3/8% Senior
Notes Due 2008 (the “2008 Notes”) and $147,000,000 aggregate principal
amount 9-3/4% Senior Notes Due 2010 (the “2010 Notes,” and together with
the 2006 Notes and the 2008 Notes, the “Notes”);

     WHEREAS, in order to maintain the relative ranking of the Notes and the
indebtedness under the Company’s Credit Agreement entered into by and among the
Company, Bank One, NA and the lenders party thereto on June 16, 2004 (the
“Credit Agreement”), the Company desires to cause the Notes to be
guaranteed by the Guarantors; and

     WHEREAS, pursuant to Section 901(8) of the Indenture, the Company may
cause the Notes to be guaranteed by the Guarantors without the consent of the
holders of the Securities of any series;

     WHEREAS, all things necessary to cause the Notes to be so guaranteed by
the Guarantors and to make this Supplemental Indenture a valid agreement of the
Company, the Guarantors and the Trustee, in accordance with their and its
terms, have been done.

WITNESSETH:

     NOW, THEREFORE, for and in consideration of the premises contained herein,
each party agrees for the benefit of each other party and for the equal and
ratable benefit of the Holders of the Notes, as follows:

 

 

ARTICLE ONE

DEFINITIONS

     Section 1.01. Capitalized terms used but not defined in this
Supplemental Indenture shall have the meanings ascribed to them in the
Indenture.

     Section 1.02. References in this Supplemental Indenture to section
numbers shall be deemed to be references to section numbers of this
Supplemental Indenture unless otherwise specified.

     Section 1.03. For purposes of this Supplemental Indenture, the
following terms have the meanings ascribed to them as follows:

     (1) “2006 Notes” has the meaning provided in the recitals.

     (2) “2008 Notes” has the meaning provided in the recitals.

     (3) “2010 Notes” has the meaning provided in the recitals.

     (4) “Credit Agreement” has the meaning provided in the recitals.

     (5) “Financial Services Segment” means the business segment of the
Company and its Subsidiaries engaged in mortgage banking (including the title
and escrow businesses), homeowners’ insurance, mortgage servicing, securities
issuance, bond administration and management services and related activities,
which segment currently consists principally of the activities of Ryland
Mortgage Company and its Subsidiaries but excludes the Limited-Purpose
Subsidiaries.

     (6) “Financial Services Subsidiaries” means subsidiaries of the
Company included within the Financial Services Segment.

     (7) “Guarantor” means (a) initially, each of the Guarantors named
on the signature pages of this Supplemental Indenture, and (b) each of the
Company’s Subsidiaries which becomes a guarantor of the Notes pursuant to the
provisions of this Supplemental Indenture, subject, in the case of either (a)
or (b) to release of an entity as a Guarantor as provided in this Supplemental
Indenture.

     (8) “Holder” means a Person in whose name a Note is registered on
the Security Registrar’s books.

     (9) “Homebuilding Segment” means the business segment of the
Company and its Subsidiaries engaged in the construction and sale of
single-family attached and unattached dwellings and related activities,
including all activities of the Company outside the Financial Services Segment
but excluding the Limited-Purpose Subsidiaries.

     (10) “Homebuilding Subsidiaries” means Wholly-Owned Subsidiaries of
the Company included within the Homebuilding Segment.

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     (11) “Indenture” has the meaning provided in the recitals.

     (12) “Limited-Purpose Subsidiaries” means subsidiaries of the
Company included within the Limited-Purpose Subsidiaries Segment.

     (13) “Limited-Purpose Subsidiaries Segment” means the business
segment of the Company and its Subsidiaries which facilitates, through
special-purpose entities created or existing solely for such purpose, the
financing of mortgage loans and mortgage-backed securities and the
securitization of mortgage loans and other related activities.

     (14) “Notes” has the meaning provided in the recitals.

     (15) “Person” means any individual, corporation, limited liability
company, partnership, joint venture, trust, unincorporated organization or
government or any agency or political subdivision of any of the foregoing, or
any other entity.

     (16) “Securities” has the meaning provided in the recitals.

     (17) “Subsidiary” of a Person means (i) any corporation more than
50% of the outstanding securities having ordinary voting power of which shall
at the time be owned or controlled, directly or indirectly, by such Person or
by one or more of its Subsidiaries or by such Person and one or more of its
Subsidiaries, or (ii) any partnership, limited liability company, association,
joint venture or similar business organization more than 50% of the ownership
interests having ordinary voting power of which shall at the time be so owned
or controlled. Unless otherwise expressly provided, all references herein to a
“Subsidiary” shall mean a Subsidiary of the Company.

     (18) “Supplemental Indenture” has the meaning provided in the
preamble.

     (19) “Wholly-Owned Subsidiary” of a Person means (i) any Subsidiary
all of the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by any such Person or one or more
Wholly-Owned Subsidiaries of such Person, or by such Person and one or more
Wholly-Owned Subsidiaries of such Person, or (ii) any partnership, limited
liability company, association, joint venture or similar business organization
all of the ownership interests (having ordinary voting power) of which shall at
the time be owned or controlled, directly or indirectly, by any such Person or
one or more Wholly-Owned Subsidiaries of such Person, or by such Person and one
or more Wholly-Owned Subsidiaries of such Person.

ARTICLE TWO

ADDITIONAL COVENANTS

     Section 2.01. Future Subsidiaries.

     The Company shall promptly secure the execution and delivery to the
Trustee of a Guarantee in substantially the form of Exhibit A hereto
with respect to the Notes, from each

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Subsidiary whether now existing or formed and organized after the
date hereof, if such Subsidiary (a) is a Wholly-Owned Subsidiary of the
Company, (b) is included in the Homebuilding Segment and (c) guarantees any
indebtedness of the Company, or guarantees obligations of any other Subsidiary
as a guarantor of any indebtedness of the Company; provided that a Subsidiary
whose sole purpose is to serve as a joint venturer, partner, member or
shareholder in a joint venture, partnership, limited liability company or
corporation that includes one or more joint venturers, partners, members or
shareholders that are not Affiliates of the Company shall not be required to
deliver a Guarantee. Each such Subsidiary that does not deliver a Guarantee on
the date hereof shall execute and deliver a Guarantee in accordance with
Section 3.02 within 30 days after it meets the criteria set forth in the
preceding sentence and the Company shall furnish to the Trustee an Officers’
Certificate stating that all conditions precedent, if any, provided for in the
Indenture and this Supplemental Indenture relating to the proposed action have
been complied with, and an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.
Thereafter, such Subsidiary shall (unless released in accordance with the terms
hereof) be a Guarantor for all purposes hereof with respect to the Notes.

     Section 2.02. Homebuilding Subsidiaries.

     The Company shall not cause or permit the voting securities or other
ownership interests of any Homebuilding Subsidiary to be less than 100% owned
and controlled, directly or indirectly, by the Company except for a legitimate
business purpose unrelated to whether such Subsidiary is required to be a
Guarantor hereunder.

ARTICLE THREE

GUARANTEE OF NOTES

     Section 3.01. Guarantee.

     Subject to Section 3.08, each of the Guarantors hereby absolutely
and unconditionally guarantees, as primary obligor and not as surety, the full
and punctual payment (whether at stated maturity, upon acceleration or early
termination or otherwise, and at all times thereafter, at the time and place
and in the manner provided for herein and in the Indenture) and performance of
each series of the Notes and all other amounts due from the Company under the
Indenture (collectively with respect to each series of Notes, the
“Guaranteed Obligations”). Upon failure by the Company to pay
punctually any such amount, each of the Guarantors agrees that it shall
forthwith on demand pay to the Trustee for the benefit of the Holders of the
applicable series of Notes, the amount not so paid at the place and in the
manner specified herein and in the Indenture. This Article Three is a
continuing guaranty of payment and not of collection. Each of the Guarantors
waives any right to require any of the Holders to sue the Company, any other
guarantor, or any other Person obligated for all or any part of the Guaranteed
Obligations, or otherwise to enforce its payment against any collateral
securing all or any part of the Guaranteed Obligations.

     Section 3.02. Execution and Delivery of Guarantee.

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     To further evidence the Guarantee set forth in Section 3.01, each
Guarantor hereby agrees to execute and deliver to the Trustee a Guarantee in
substantially the form of Exhibit A hereto with respect to each series
of the Notes. Such Guarantee shall be executed on behalf of each Guarantor by
either manual or facsimile signature of an officer of each Guarantor, each of
whom, in each case, shall have been duly authorized to so execute by all
requisite corporate action. The validity and enforceability of any Guarantee
shall not be affected by the fact that it is not affixed to any Note or Notes.

     Section 3.03. Guarantee Unconditional.

     Subject to Section 3.08, the obligations of each of the Guarantors
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by: (1) any extension, renewal, settlement, compromise, waiver or
release in respect of any of the Guaranteed Obligations, by operation of law or
otherwise, or any obligation of any other guarantor of any of the Guaranteed
Obligations, or any default, failure or delay, willful or otherwise, in the
payment or performance of the Guaranteed Obligations; (2) any modification or
amendment of or supplement hereto or to the Indenture; (3) any change in the
corporate existence, structure or ownership of the Company or any other
guarantor of any of the Guaranteed Obligations, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Company, or any other
guarantor of the Guaranteed Obligations, or its assets or any resulting release
or discharge of any obligation of the Company or any other guarantor of any of
the Guaranteed Obligations; (4) the existence of any claim, setoff or other
rights which the Guarantors may have at any time against the Company or any
other guarantor of any of the Guaranteed Obligations, whether in connection
herewith or any unrelated transactions; (5) any invalidity or unenforceability
relating to or against the Company, or any other guarantor of any of the
Guaranteed Obligations, for any reason related hereto or to the Indenture or
any provision of applicable law or regulation purporting to prohibit the
payment by the Company, or any other guarantor of the Guaranteed Obligations,
of the principal of or interest on any Note or any other amount payable by the
Company hereunder or under the Indenture; (6) any law, regulation or order of
any jurisdiction, or any other event affecting any term of any Guaranteed
Obligation or any Holder’s rights with respect thereto; or (7) any other act or
omission to act or delay of any kind by the Company, any other guarantor of the
Guaranteed Obligations or any other circumstance whatsoever which might, but
for the provisions of this paragraph, constitute a legal or equitable discharge
of any Guarantor’s obligations hereunder.

     Section 3.04. Discharge, Release and Reinstatement of Guarantee
In Certain Circumstances.

     (1) Subject to Section 3.04(2), each of the Guarantor’s obligations
hereunder with respect to any series of Notes shall remain in full force and
effect until all Guaranteed Obligations with respect to such series of Notes
shall have been indefeasibly paid in full. If at any time any payment of the
principal of or interest on any Note or any other amount payable by the Company
or any other party hereunder or under the Indenture is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, each of the Guarantor’s obligations
hereunder with respect to such payment shall be reinstated as though such
payment had been due but not made at such time.

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     (2) In the event that any Guarantor ceases to be a Wholly-Owned Subsidiary
of the Company in the Homebuilding Segment, such Guarantor shall be released
and discharged from all obligations under this Article Three without any
further action required on the part of the Trustee or any Holder; provided that
at the time of and immediately after such Guarantor ceases to be a Wholly-Owned
Subsidiary of the Company in the Homebuilding Segment, no Default or Event of
Default shall have occurred and be continuing with respect to any series of
Notes. The Trustee shall, at the sole cost and expense of the Company and upon
receipt of an Opinion of Counsel that the provisions of this Section
3.04(2) have been complied with, deliver an appropriate instrument
evidencing such release upon receipt of a request by the Company accompanied by
an Officers’ Certificate certifying as to the compliance with this Section
3.04(2). Any Guarantor not so released remains liable for the full amount
of principal of and interest on the Notes and the other obligations of the
Company hereunder as provided in this Article Three.

     Section 3.05. Waivers.

     Each of the Guarantors irrevocably waives acceptance hereof, presentment,
demand, protest and, to the fullest extent permitted by law, any notice not
provided for herein, as well as any requirement that at any time any action be
taken by any Person against the Company, any other guarantor of any of the
Guaranteed Obligations, or any other Person.

     Section 3.06. Subordination; Subrogation.

     Each of the Guarantors hereby subordinates to the Guaranteed Obligations
all indebtedness or other liabilities of the Company or of any other Guarantor
to such Guarantor. Each of the Guarantors hereby further agrees not to assert
any right, claim or cause of action, including, without limitation, a claim for
subrogation, reimbursement, indemnification or otherwise, against the Company
arising out of or by reason of this Article Three or the obligations
hereunder, including, without limitation, the payment or securing or purchasing
of any of the Guaranteed Obligations by any of the Guarantors unless and until
the Guaranteed Obligations are indefeasibly paid in full.

     Section 3.07. Stay of Acceleration.

     If acceleration of the time for payment of any of the Guaranteed
Obligations is stayed upon the insolvency, bankruptcy or reorganization of the
Company, all such amounts otherwise subject to acceleration under the terms
hereof or the Indenture shall nonetheless be payable by each of the Guarantors
hereunder forthwith on demand by the Holders.

     Section 3.08. Limitation on Obligations.

     (1) The provisions of this Article Three are severable, and in any
action or proceeding involving any state corporate law, or any state, federal
or foreign bankruptcy, insolvency, reorganization or other law affecting the
rights of creditors generally, if the obligations of any Guarantor under this
Article Three would otherwise be held or determined to be avoidable,
invalid or unenforceable on account of the amount of such Guarantor’s liability
under this Article Three, then, notwithstanding any other provision of
this Article Three to the contrary, the amount of such liability shall,
without any further action by the Guarantors or the Holders, be

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automatically limited
and reduced to the highest amount that is valid and enforceable as determined
in such action or proceeding (such highest amount determined hereunder being
the relevant Guarantor’s “Maximum Liability”). This Section
3.08(1) with respect to the Maximum Liability of the Guarantors is intended
solely to preserve the rights of the Holders to the maximum extent not subject
to avoidance under applicable law, and neither the Guarantor nor any other
person or entity shall have any right or claim under this Section
3.08(1) with respect to the Maximum Liability, except to the extent
necessary so that the obligations of the Guarantors hereunder shall not be
rendered voidable under applicable law.

     (2) Each of the Guarantors agrees that the Guaranteed Obligations may at
any time and from time to time exceed the Maximum Liability of each Guarantor,
and may exceed the aggregate Maximum Liability of all other Guarantors, without
impairing this Article Three or affecting the rights and remedies of the
Holders hereunder. Nothing in this Section 3.08(2) shall be construed
to increase any Guarantor’s obligations hereunder beyond its Maximum Liability.

     (3) In the event any Guarantor (a “Paying Guarantor”) shall make
any payment or payments under this Article Three or shall suffer any
loss as a result of any realization upon any collateral granted by it to secure
its obligations under this Article Three, each other Guarantor (each a
“Non-Paying Guarantor”) shall contribute to such Paying Guarantor an
amount equal to such Non-Paying Guarantor’s “Pro Rata Share” of such
payment or payments made, or losses suffered, by such Paying Guarantor. For
the purposes hereof, each Non-Paying Guarantor’s “Pro Rata Share” with
respect to any such payment or loss by a Paying Guarantor shall be determined
as of the date on which such payment or loss was made by reference to the ratio
of (i) such Non-Paying Guarantor’s Maximum Liability as of such date (without
giving effect to any right to receive, or obligation to make, any contribution
hereunder) or, if such Non-Paying Guarantor’s Maximum Liability has not been
determined, the aggregate amount of all monies received by such Non-Paying
Guarantor from the Company after the date hereof (whether by loan, capital
infusion or by other means) to (ii) the aggregate Maximum Liability of all
Guarantors hereunder (including such Paying Guarantor) as of such date (without
giving effect to any right to receive, or obligation to make, any contribution
hereunder), or to the extent that a Maximum Liability has not been determined
for any Guarantors, the aggregate amount of all monies received by such
Guarantors from the Company after the date hereof (whether by loan, capital
infusion or by other means). Nothing in this Section 3.08(3) shall
affect any Guarantor’s several liability for the entire amount of the
Guaranteed Obligations (up to such Guarantor’s Maximum Liability). Each of the
Guarantors covenants and agrees that its right to receive any contribution
under this Article Three from a Non-Paying Guarantor shall be
subordinate and junior in right of payment to all the Guaranteed Obligations.
The provisions of this Section 3.08(3) are for the benefit of both the
Holders and the Guarantors and may be enforced by any one, or more, or all of
them in accordance with the terms hereof.

     Section 3.09. Default and Enforcement.

     If any Guarantor fails to pay in accordance with Section 3.01, the
Trustee may proceed in its name as trustee hereunder in the enforcement of the
Guarantee of any such
Guarantor and such Guarantor’s obligations thereunder and hereunder by any
remedy provided by law, whether by legal proceedings or otherwise, and to
recover from such Guarantor the obligations.

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     Section 3.10. Amendment, Etc.

     No amendment, modification or waiver of any provision of this Supplemental
Indenture relating to any Guarantor or consent to any departure by any
Guarantor or any other Person from any such provision will in any event be
effective unless it is signed by such Guarantor and the Trustee.

     Section 3.11. Acknowledgment.

     Each Guarantor hereby acknowledges communication of the terms of this
Supplemental Indenture, the Indenture and the Notes and consents to and
approves of the same.

     Section 3.12. Costs and Expenses.

     Each Guarantor shall pay on demand by the Trustee any and all costs, fees
and expenses (including, without limitation, legal fees and disbursements)
incurred by the Trustee, its agents, advisors and counsel or any of the Holders
in enforcing any of their rights under any Guarantee.

     Section 3.13. No Merger or Waiver; Cumulative Remedies.

     No Guarantee shall operate by way of merger of any of the obligations of a
Guarantor under any other agreement, including, without limitation, this
Supplemental Indenture. No failure to exercise and no delay in exercising, on
the part of the Trustee or the Holders, any right, remedy, power or privilege
hereunder or under the Indenture or the Notes, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power
or privilege hereunder or under the Indenture or the Notes preclude any other
or further exercise thereof or the exercise of any other right, remedy, power
or privilege. The rights, remedies, powers and privileges in the Guarantee and
under this Supplemental Indenture, the Notes and any other document or
instrument between a Guarantor and/or the Company and the Trustee are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

     Section 3.14. Guarantee in Addition to Other Obligations.

     The obligations of each Guarantor under its Guarantee and this
Supplemental Indenture are in addition to and not in substitution for any other
obligations to the Trustee or to any of the Holders in relation to this
Supplemental Indenture or the Notes and any guarantees or security at any time
held by or for the benefit of any of them.

     Section 3.15. Severability.

     Any provision of this Article Three which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining provisions
and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in
any other jurisdiction unless its removal would substantially defeat the
basic intent, spirit and purpose of this Supplemental Indenture and this
Article Three.

     Section 3.16. Successors and Assigns.

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     Each Guarantee shall be binding upon and inure to the benefit of each
Guarantor and the Trustee and the Holders and their respective successors and
permitted assigns, except that no Guarantor may assign any of its obligations
hereunder or thereunder.

     Section 3.17. Acknowledgement under Trust Indenture Act.

     Each Guarantor acknowledges that, by virtue of its Guarantee, it is
becoming an “obligor” on indenture securities under the Trust Indenture Act.

ARTICLE FOUR

MISCELLANEOUS

     Section 4.01. Trust Indenture Act Controls.

     If any provision hereof limits, qualifies or conflicts with the duties
imposed by Section 310 through 317 of the Trust Indenture Act, the imposed
duties shall control.

     Section 4.02. Conflict with Indenture.

     To the extent not expressly amended or modified by this Supplemental
Indenture, the Indenture shall remain in full force and effect. If any
provision of this Supplemental Indenture relating to the Notes is inconsistent
with any provision of the Indenture, the provision of this Supplemental
Indenture shall control.

     Section 4.03. Governing Law.

     THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW. The Company and each of the Guarantors submit
to the jurisdiction of the courts of the State of New York sitting in the
Borough of Manhattan, City of New York, and of the United States District Court
for the Southern District of New York, in any action or proceeding to enforce
any of their obligations under this Supplemental Indenture, and agree not to
seek a transfer of any such action or proceeding on the basis of inconvenience
of the forum or otherwise (but neither the Company nor any of the Guarantors
shall be prevented from removing any such action or proceeding from a state
court to the United States District Court for the Southern District of New
York). The Company and each of the Guarantors agree that process in any such
action or proceeding may be served upon it by registered mail or in any other
manner permitted by the rules of the court in which the action or proceeding is
brought.

     Section 4.04. Successors.

     All agreements of the Company in the Indenture, this Supplemental
Indenture and the Notes shall bind its successors. All agreements of the
Trustee in the Indenture and this Supplemental Indenture shall bind its
successors.

     Section 4.05. Counterparts.

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     This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

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     IN WITNESS WHEREOF, the parties to this Supplemental Indenture have caused
it to be duly executed as of the day and year first above written.

	 	 	 	 	 
	 	 	THE RYLAND GROUP, INC.
	 
	 	 	 	 
	

	 	By:	 	 /s/ Gordon A. Milne
	

	 	 	 	
 
	

	 	 	 	Name: Gordon A. Milne
	

	 	 	 	Title: Executive Vice
President and Chief

          Financial
Officer
	 
	 	 	 	 
	 	 	JPMORGAN CHASE BANK, NATIONAL

ASSOCIATION, as Trustee
	 
	 	 	 	 
	

	 	By:	 	 /s/ James D. Heaney
	

	 	 	 	
 
	

	 	 	 	Name: James D. Heaney
	

	 	 	 	Title: Vice President

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	GUARANTORS:

	 

	CONVEST MANAGEMENT CORPORATION (1)

	MOORE’S ORCHARD, LLC (2)

	RH AT EMORY GROVE, LLC (3)

	RH AT MOUNT HEBRON, LLC (2)

	RH BUILDERS OF INDIANA, INC. (1)

	RH INVESTMENT OF INDIANA, INC. (1)

	RH OF INDIANA, L.P. (4)

	RH OF MARYLAND, LLC (5)

	RH OF TEXAS LIMITED PARTNERSHIP (6)

	RH ORGANIZATION, INC. (1)

	RYLAND COMMUNITIES, INC. (1)

	RYLAND GOLF COURSE AT THE COLONY, INC. (1)

	RYLAND HOMES INVESTMENT-TEXAS, INC. (1)

	RYLAND HOMES NEVADA, LLC (7)

	RYLAND HOMES OF TEXAS, INC. (1)

	RYLAND HOMES OF ARIZONA, INC. (1)

	RYLAND HOMES OF CALIFORNIA, INC. (1)

	RYLAND ORGANIZATION COMPANY (1)

	RYLAND VENTURES, INC. (1)

	RYLAND VENTURES II, INC. (1)

	RYLAND VENTURES III, INC. (1)

	RYLAND VENTURES IV, INC. (1)

	THE REGENCY ORGANIZATION, INC. (1)

	THE RYLAND CORPORATION (1)

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	 	 	(1) By:	 	          /s/ Cathey S. Lowe
	 	 	 	 	

	 	 	 	 	Name: Cathey S. Lowe
	 	 	 	 	Title: Treasurer
	 
	 	 	 	 	 	 
	 	 	(2) By:	 	Ryland Ventures III, Inc.
	 
	 	 	 	 	 	 
	 	 	 	 	Its: General Manager
	 
	 	 	 	 	 	 
	

	 	 	 	By:
	 	          /s/ Cathey S. Lowe
	

	 	 	 	 	 	

	

	 	 	 	 	 	Name: Cathey S. Lowe
	

	 	 	 	 	 	Title: Treasurer
	 
	 	 	 	 	 	 
	 	 	(3) By:	 	Ryland Ventures III, Inc.

Its: Managing Member
	 
	 	 	 	 	 	 
	

	 	 	 	By:
	 	          /s/ Cathey S. Lowe
	

	 	 	 	 	 	

	

	 	 	 	 	 	Name: Cathey S. Lowe
	

	 	 	 	 	 	Title: Treasurer
	 
	 	 	 	 	 	 
	 	 	(4) By:	 	RH Builders of Indiana, Inc.

Its: General Partner
	 
	 	 	 	 	 	 
	

	 	 	 	By:
	 	          /s/ Cathey S. Lowe
	

	 	 	 	 	 	

	

	 	 	 	 	 	Name: Cathey S. Lowe
	

	 	 	 	 	 	Title: Treasurer
	 
	 	 	 	 	 	 
	 	 	(5) By:	 	Ryland Ventures, Inc.

Its: General Manager
	 
	 	 	 	 	 	 
	

	 	 	 	By:
	 	          /s/ Cathey S. Lowe
	

	 	 	 	 	 	

	

	 	 	 	 	 	Name: Cathey S. Lowe
	

	 	 	 	 	 	Title: Treasurer
	 
	 	 	 	 	 	 
	 	 	(6) By:	 	Ryland Homes of Texas, Inc.

Its: General Partner
	 
	 	 	 	 	 	 
	

	 	 	 	By:
	 	          /s/ Cathey S. Lowe
	

	 	 	 	 	 	

	

	 	 	 	 	 	Name: Cathey S. Lowe
	

	 	 	 	 	 	Title: Treasurer

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	 	 	(7) By:	 	The Ryland Group,
Inc.

Its: General Partner
	 
	 	 	 	 	 	 
	

	 	 	 	By:
	 	          /s/ Cathey S. Lowe
	

	 	 	 	 	 	

	

	 	 	 	 	 	Name: Cathey S. Lowe
	

	 	 	 	 	 	Title: Treasurer

- 14 -

 

EXHIBIT A

GUARANTEE

     For value received, each of the undersigned hereby fully and
unconditionally guarantees, on a senior and unsubordinated basis, as principal
obligor and not only as a surety, to the Holders of the [8% Senior Notes Due
2006/5-3/8% Senior Notes Due 2008/9-3/4% Senior Notes Due 2010] (the
“Notes”) issued pursuant to the indenture dated as of June 28, 1996 (the
“Indenture”) by and between The Ryland Group, Inc. (the
“Company”) and JPMorgan Chase Bank, National Association (successor to
Chemical Bank), as trustee (the “Trustee”), cash payments in United
States Dollars of any amounts due with respect to the Notes in the amounts and
at the times when due and interest on all overdue amounts, if lawful, and the
payment or performance of all other obligations of the Company under the
Supplemental Indenture (as defined below), the Indenture or the Notes, to the
Holders of Notes and the Trustee, all in accordance with and subject to the
terms and limitations of the Notes, the Indenture, the Supplemental Indenture
and this Guarantee. This Guarantee will become effective in accordance with
Article Three of the Supplemental Indenture and its terms shall be evidenced
therein. The validity and enforceability of any Guarantee shall not be
affected by the fact that it is not affixed to any particular Note.

     Capitalized terms used but not defined herein shall have the meanings
ascribed to them in the First Supplemental Indenture, dated as of December 22,
2004, among the Company, the Guarantors named therein and the Trustee, as
amended or supplemented (the “Supplemental Indenture”) or the Indenture,
as the case may be.

     The obligations of each of the undersigned to the Holders of Notes and to
the Trustee pursuant to this Guarantee are expressly set forth in Article Three
of the Supplemental Indenture and reference is hereby made to the Supplemental
Indenture for the precise terms of the provisions of the Indenture to which
this Guarantee relates.

     THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS
OF LAW. Each of the Guarantors submit to the jurisdiction of the courts of the
State of New York sitting in the Borough of Manhattan, City of New York, and of
the United States District Court for the Southern District of New York, in any
action or proceeding to enforce any of their obligations under this Guarantee,
and agree not to seek a transfer of any such action or proceeding on the basis
of inconvenience of the forum or otherwise (but the Guarantors shall not be
prevented from removing any such action or proceeding from a state court to the
United States District Court for the Southern District of New York). Each of
the Guarantors agree that process in any such action or proceeding may be
served upon it by registered mail or in any other manner permitted by the rules
of the court in which the action or proceeding is brought.

     This Guarantee is subject to release upon the terms set forth in the
Supplemental Indenture.

A-1

 

     The undersigned acknowledges that this Guarantee is subject to the Trust
Indenture Act and the undersigned agrees to discharge its duties under the
Trust Indenture Act .

A-2

 

     IN WITNESS WHEREOF, each Guarantor has caused this Guarantee to be duly
executed.

Dated:                                       

	 
	GUARANTORS:

	 

	CONVEST MANAGEMENT CORPORATION (1)

	MOORE’S ORCHARD, LLC (2)

	RH AT EMORY GROVE, LLC (3)

	RH AT MOUNT HEBRON, LLC (2)

	RH BUILDERS OF INDIANA, INC. (1)

	RH INVESTMENT OF INDIANA, INC. (1)

	RH OF INDIANA, L.P. (4)

	RH OF MARYLAND, LLC (5)

	RH OF TEXAS LIMITED PARTNERSHIP (6)

	RH ORGANIZATION, INC. (1)

	RYLAND COMMUNITIES, INC. (1)

	RYLAND GOLF COURSE AT THE COLONY, INC. (1)

	RYLAND HOMES INVESTMENT-TEXAS, INC. (1)

	RYLAND HOMES NEVADA, LLC (7)

	RYLAND HOMES OF TEXAS, INC. (1)

	RYLAND HOMES OF ARIZONA, INC. (1)

	RYLAND HOMES OF CALIFORNIA, INC. (1)

	RYLAND ORGANIZATION COMPANY (1)

	RYLAND VENTURES, INC. (1)

	RYLAND VENTURES II, INC. (1)

	RYLAND VENTURES III, INC. (1)

	RYLAND VENTURES IV, INC. (1)

	THE REGENCY ORGANIZATION, INC. (1)

	THE RYLAND CORPORATION (1)

A-3

 

	 	 	 	 	 	 	 
	

	 	(1) By:	 	 	 	 
	 	 	 	 	

	 	 	 	 	Name: Cathey S. Lowe
	 	 	 	 	Title: Treasurer
	 
	 	 	 	 	 	 
	 	 	(2) By:	 	Ryland Ventures III, Inc.

Its: General Manager
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	

	

	 	 	 	 	 	Name: Cathey S. Lowe
	

	 	 	 	 	 	Title: Treasurer
	 
	 	 	 	 	 	 
	 	 	(3) By:	 	Ryland Ventures III, Inc.

Its: Managing Member
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	

	

	 	 	 	 	 	Name: Cathey S. Lowe
	

	 	 	 	 	 	Title: Treasurer
	 
	 	 	 	 	 	 
	 	 	(4) By:	 	RH Builders of Indiana, Inc.

Its: General Partner
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	

	

	 	 	 	 	 	Name: Cathey S. Lowe
	

	 	 	 	 	 	Title: Treasurer
	 
	 	 	 	 	 	 
	 	 	(5) By:	 	Ryland Ventures, Inc.

Its: General Manager
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	

	

	 	 	 	 	 	Name: Cathey S. Lowe
	

	 	 	 	 	 	Title: Treasurer
	 
	 	 	 	 	 	 
	 	 	(6) By:	 	Ryland Homes of Texas, Inc.

Its: General Partner
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	

	

	 	 	 	 	 	Name: Cathey S. Lowe
	

	 	 	 	 	 	Title: Treasurer

A-4

 

	 	 	 	 	 	 	 
	 	 	(7) By:	 	The Ryland Group, Inc.

Its: General Partner
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	

	 	 	 	 	 	

	

	 	 	 	 	 	Name: Cathey S. Lowe
	

	 	 	 	 	 	Title: Treasurer

A-5exv10w1

 

Exhibit 10.1

Execution Copy

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into by and between ECLIPSYS
CORPORATION, a Delaware corporation (the “Company”), and JOHN A. ADAMS, an individual (the
“Executive”), effective December 20, 2004.

WITNESSETH:

     WHEREAS, the Company desires to employ the Executive, and the Executive desires to be employed
by the Company;

     NOW THEREFORE, in consideration of the mutual covenants and promises contained in this
Agreement, and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties to this Agreement, the parties agree as follows:

     Section 1 — Employment.

	 	(a)	 	The Company agrees to employ the Executive as its Executive Vice President and
Chief Administrative Officer, and the Executive shall have the customary powers,
responsibilities and authorities of a Chief Administrative Officer and such other
powers, responsibilities and authorities as may be delegated to Executive from time to
time. In this capacity, the Executive shall report to the Chief Executive Officer of
the Company. The Executive agrees to devote his reasonable best efforts to the
performance of his duties and responsibilities hereunder, subject at all times to
review and control of the Chief Executive Officer.
	 
	 	(b)	 	Nothing in this Agreement shall preclude the Executive from engaging in
charitable and community affairs, from managing any passive investment (i.e., an
investment with respect to which the Executive is in no way involved with the
management or operation of the entity in which the Executive has invested) made by him
in publicly traded equity securities or other property (provided that no such
investment may exceed five percent (5%) of the equity of any entity, without the prior
approval of the Board) or from serving, as a member of boards of directors or as a
trustee of any other corporation, association or entity, to the extent that any of the
above activities do not interfere with his ability to discharge his duties hereunder
and the subject entity does not directly compete with the Company.
	 
	 	(c)	 	The Executive currently resides in California, and shall not be required to
relocate his residence outside of Orange County, California.

     Section 2 - Term of Employment. The Executive’s term of employment under this
Agreement (“Term of Employment”) will commence on December 20, 2004 (the “Commencement

 

 

Date”) and, subject to the terms hereof, shall terminate on the date that either party
terminates the Executive’s employment in accordance with Section 6 of this Agreement.

     Section 3 - Compensation.

	 	(a)	 	Salary. During the period from the Commencement Date through December
31, 2005 (the “Initial Period”), the Company shall pay the Executive at the
annualized rate of $450,000.00 (“Base Salary”), in bi-weekly payments of
$17,307.69. Base Salary shall be payable in accordance with the ordinary payroll
practices of the Company and shall be subject to all applicable federal, state and
local withholding and reporting requirements. The Executive’s Base Salary shall not be
decreased during the Initial Period. During the Term of Employment, the Board of
Directors of the Company (the “Board”) or the Compensation Committee of the
Board shall review, and may, subject to the immediately preceding sentence, adjust the
Executive’s Base Salary annually, in accordance with the Company’s customary procedures
and practices for reviewing compensation of senior executives. In the event the Base
Salary is so adjusted, the adjusted amount shall become the Base Salary for purposes of
this Agreement.
	 
	 	(b)	 	Bonus Plan. The Executive shall be eligible to participate in the
Company’s executive bonus plan, subject to all the terms and conditions of such plan,
as such plan may be modified from time to time, with the actual bonus earned being
based on achieving such performance targets and management objectives as may be
established by the Chief Executive Officer, the Board or the Compensation Committee of
the Board each year as contemplated by the bonus plan; provided, however, that the
Executive’s annual target bonus (the “Target Bonus”) shall be at least
$200,000.00 for calendar 2005; and further provided that the Executive shall be
guaranteed a bonus of at least $100,000.00 for calendar 2005. The guaranteed portion
of the bonus for 2005 shall be paid in 26 consecutive bi-weekly installments of
$3,846.15 beginning on the first regular pay day following the Commencement Date in
accordance with the ordinary payroll practices of the Company, provided that the
Executive is employed on each such payment date. All bonus payments shall be subject
to all applicable federal, state and local withholding and reporting requirements.
	 
	 	(c)	 	Signing Bonus. The Executive shall receive a one-time signing bonus at
an annualized rate of $140,000, which shall be paid in 26 consecutive bi-weekly
installments of $5,384.62 beginning on the first regular pay day following the
Commencement Date in accordance with the ordinary payroll practices of the Company,
provided that the Executive is employed on each such payment date, and
which shall be subject to all applicable federal, state and local withholding and
reporting requirements.

2

 

     Section 4 - Employee Benefits.

	 	(a)	 	Employee Retirement Benefit Programs, Welfare Benefit Programs, Plans and
Practices. The Company shall provide the Executive with coverage during the Term of
Employment under any retirement benefit programs, welfare benefit programs, and other
compensatory and benefit programs, plans and practices, that the Company makes
available to its senior executives, including, but not limited to, its life and short-
and long-term disability insurance, hospitalization and major medical insurance, the
Company’s 401(k) Plan, Employee Stock Purchase Plan, dental insurance, directors and
officers liability insurance, and any other nonqualified compensation program
(including deferred compensation or supplemental retirement programs) as in effect from
time to time.
	 
	 	(b)	 	Vacation. The Executive shall be entitled to five weeks of paid
vacation each calendar year, which shall be taken at such times as are consistent with
the Executive’s responsibilities hereunder; provided, however, subject to applicable
law, that the Executive shall not be entitled to carry over unused vacation from year
to year in an amount exceeding that which the Executive would be entitled to carry over
in accordance with the Company’s standard vacation policy as applied to employees of
the Executive’s longevity with the Company.
	 
	 	(c)	 	Stock Options and Restricted Stock Grants. Upon the Commencement Date,
the Company will grant to the Executive (1) a non-qualified stock option to purchase
400,000 shares of the Company’s common stock at an exercise price equal to the closing
price of the common stock on Nasdaq on the Commencement Date and (2) a restricted stock
grant of 100,000 shares of the Company’s common stock, for which the Executive will pay
an initial price of $.01 per share, both such grants to vest over a period of five
years, and to be substantially in the forms of Exhibit B and Exhibit C
attached hereto. These grants will be “inducement grants” under Nasdaq rules and as
such will be made outside of the Company’s existing equity incentive plan.
	 
	 	(d)	 	Other Benefits. The Executive will be entitled to reimbursement of up
to $25,000 each calendar year for expenses incurred by him for tax or estate planning.
The Executive will also be entitled to reimbursement of reasonable expenses incurred by
him for an annual physical examination, to the extent such an examination is not
otherwise covered or provided by the health insurance or health benefits provided by
the Company to the Executive pursuant to Section 4(a) above.

     Section 5 - Expenses. Subject to prevailing Company policy or such guidelines
as may be
established by the Chief Executive Officer or the Board from time to time, the Company shall
reimburse the Executive for all reasonable expenses incurred by the Executive in carrying out his
duties, including without limitation reasonable travel and housing expenses incurred by the

3

 

Executive in connection with commuting between his home in California and the Company’s
headquarters in Florida or other Company facilities other than any Company facility in Orange
County, California.

     Section 6 - Termination of Employment.

	 	(a)	 	Termination Without Cause or Termination for Good Reason. If the
Executive’s employment is terminated by the Company for any reason other than Cause (as
defined in Section 6(c) hereof), the Executive’s Disability (as defined in Section
6(e) hereof), or the Executive’s death, or if the Executive’s employment is terminated
by the Executive for Good Reason (as defined in Section 6(a)(2) hereof), then the
Company shall pay the Executive (x) the Accrued Amounts (as defined below) and (y)
subject to the following sentence, the Severance Package. The payment of the Severance
Package to the Executive under this Section 6(a) shall (i) be contingent upon the
execution by the Executive of a general release in favor of the Company, which shall be
similar in scope to the Company’s current standard release agreement form attached
hereto as Exhibit D, as it may be amended from time to time to reflect changes
or expansions of relevant laws and regulations and as reflected in updates to the
Company’s standard release agreement form (the “Release”)and (ii) constitute the
sole remedy of the Executive in the event of a termination of the Executive’s
employment in the circumstances set forth in this Section 6(a). Except as expressly
provided herein or in another agreement between the Company and the Executive, the
Severance Package shall not be subject to any duty to mitigate damages by the
Executive, nor any set off or reduction due to the Executive’s post-termination
employment, provided such post-termination employment does not contravene any agreement
between the Company and the Executive. The Accrued Amounts shall be payable in a lump
sum within ten (10) days of termination of employment.

	 	(1)	 	For purposes of this Agreement, the “Accrued Amounts”
shall mean the Executive’s Base Salary, any declared but unpaid bonus, any
accrued but unused vacation and any other earned but unpaid amounts payable to
him hereunder, in each case as accrued through the last day of his actual
employment by the Company.
	 
	 	(2)	 	For purposes of this Agreement, a termination of employment
by the Executive for “Good Reason” shall be a termination by the
Executive following the occurrence of any of the following events unless the
Company has cured as provided below:

	 	(A)	 	Removal from the position of Executive Vice
President and Chief Administrative Officer of the Company prior to a
Change of Control (as defined in Section 6(d)(4)), except for Cause or
following the Executive’s death or Disability;

4

 

	 	(B)	 	Prior to or following a Change of Control, any
material diminution in the Executive’s duties, responsibilities,
authority, or participation in management, except for Cause or
following the Executive’s death or Disability; or
	 
	 	(C)	 	Prior to a Change of Control, a reduction in
the Base Salary then in effect or a material reduction in the other
benefits (other than the Target Bonus) provided to the Executive by the
Company; or
	 
	 	(D)	 	Following a Change of Control, a reduction in
the Base Salary then in effect or Target Bonus then in effect, a
material change in the criteria for measuring the amount of bonus the
Executive will be entitled to, or a material reduction in the other
benefits provided to the Executive by the Company;
	 
	 	(E)	 	Any material breach by the Company of this
Agreement or any other legal obligation owed by the Company to the
Executive;
	 
	 	(F)	 	Failure of any successor of the Company to
assume this Agreement as required by Section 11;
	 
	 	(G)	 	Prior to or following a Change of Control, a
required relocation of the Executive’s primary residence, or
	 
	 	(H)	 	Following a Change of Control, a requirement
that Executive’s primary place of work be at a location outside of
Florida or California.

	 	 	 	Executive must notify the Company in writing specifically identifying any
event constituting Good Reason within thirty (30) days after the Executive
becomes aware of such event or such event shall not constitute Good Reason
for purposes of this Agreement; provided that the Company shall have thirty
(30) days from the date of such notice to cure the Good Reason event. A
termination by the Executive following cure shall not be a termination for
Good Reason. A failure of the Executive to notify the Company after the
first occurrence of an event constituting Good Reason shall not preclude any
subsequent occurrences of such event (or similar event) from constituting
Good Reason.

	 	(3)	 	For purposes of this Agreement, “Severance Package” shall mean:

5

 

	 	(A)	 	Base Salary continuation for eighteen (18)
months following the date of termination at the Executive’s annual Base
Salary rate in effect on the date of termination, subject to all
applicable federal, state and local withholding and reporting
requirements. These salary continuation payments shall be paid in
accordance with usual Company payroll practices;
	 
	 	(B)	 	A bonus equal to one hundred fifty percent
(150%) of the Executive’s Target Bonus in effect on the date of
termination, payable in equal installments over the eighteen (18) month
period described in Section 6(a)(3)(A) above, subject to the same
withholding and reporting requirements. In addition, to the extent not
included in the Accrued Amounts, the Executive shall receive a pro rata
bonus for the bonus period during which the date of termination occurs
calculated at one hundred percent (100%) of the Target Bonus then in
effect, multiplied by a fraction the numerator of which is the number
of days that the Executive was employed during such bonus term and the
denominator of which is 365. Such prorated bonus shall be paid in
accordance with the Company’s customary practices for payment of
executive bonuses but with no additional performance requirements or
contingencies;
	 
	 	(C)	 	For the avoidance of confusion, the parties
acknowledge that in the event the Executive terminates his employment
for Good Reason as a result of a decrease in his Base Salary or Target
Bonus as contemplated in clauses (C) or (D) of Section 6(a)(2), then
the Base Salary and Target Bonus used for purposes of the calculation
of the Severance Package shall be the Salary and Target Bonus in
effect immediately prior to such reduction.
	 
	 	(D)	 	The Executive shall be entitled to twelve (12)
months of additional vesting of all stock and stock options granted to
him, other than those granted pursuant to Section 4(c) (the
“Contemporaneous Grants”) and other than any grants that include
provisions similar in effect to those provisions included in Section 4
of Exhibit B and Section 2.1(a) of Exhibit C attached hereto that refer
to Section 6(a) of this Agreement.
For the avoidance of confusion, it is agreed that the Contemporaneous
Grants already include provisions designed to effectuate this
benefit, which are identified in the prior sentence, and that the
Company would expect to include similar provisions in future grants.
In the case of the Contemporaneous Grants and any such future grants
that include similar provisions, this paragraph (D)

6

 

	 	 	 	is not intended
to provide additional benefits beyond those included in such
provisions.
	 
	 	(E)	 	Continuation of benefits under any life, group
health, and dental insurance benefits substantially similar to those
which the Executive (and, if applicable, his family) was receiving
immediately prior to termination of employment until the earlier of:

	 	(i)	 	the end of the eighteen (18)
month period following the date of termination, or
	 
	 	(ii)	 	the date on which the Executive
becomes eligible to receive substantially similar benefits under
any plan or program of any other employer.

	 	 	 	The continuing coverage provided under this Section 6(a)(3)(E) is
subject to the availability of such continuation under the terms of
the applicable plan documents and all provisions of applicable law.
If the Executive is not eligible for such continued coverage under
one of the Company-provided benefit plans noted in this paragraph (E)
that he was participating in during his employment, the Company shall
pay the Executive the cash equivalent of the cost of replacement
insurance for the duration of the applicable period, which payments
shall be made pro-rata in accordance with the Company’s customary
payroll practices.

	 	(4)	 	To the extent that this Employment Agreement is treated as a
nonqualified deferred compensation arrangement within the meaning of Section
409A of the Internal Revenue Code (“Section 409A”), neither the Company nor
the Executive may accelerate the timing of the payments under this Section
6(a) (for example, no part of the Severance Package may be paid in a lump sum
at the time of termination). In addition, to the extent that this Employment
Agreement is treated as a nonqualified deferred compensation arrangement
within the meaning of Section 409A and the Treasury Regulations to be issued
under Section 409A require a six month delay in the commencement of the
payments under the Severance Package due to the Executive’s status as a
“specified employee”, the Severance Package payments shall be paid on the
schedule set forth in this Section 6(a) commencing six months following the
Executive’s termination of employment.

	 	(b)	 	Voluntary Termination by Executive Without Good Reason. If the
Executive terminates his employment with the Company without Good Reason, then the

7

 

	 	 	 	Company shall pay the Executive the Accrued Amounts in a lump sum within ten (10) days
of termination of employment.
	 
	 	(c)	 	Termination for Cause. If the Executive’s employment is terminated for
Cause, the Company shall pay the Executive the Accrued Amounts in a lump sum within ten
(10) days of termination of employment. As used herein, the term “Cause” shall
be limited to:

	 	(1)	 	Executive’s conviction of or plea of guilty or nolo contendere
to a felony under the laws of the United States or any state thereof or any
other jurisdiction in which the Company conducts business;
	 
	 	(2)	 	Executive’s willful misconduct or gross negligence in the
performance of his duties that causes material harm to the Company;
	 
	 	(3)	 	Executive’s willful and continued failure to follow the
reasonable and lawful instructions of the Company’s Chief Executive Officer or
Board;
	 
	 	(4)	 	Executive’s willful and continued neglect of duties (other than
any such neglect resulting from incapacity of the Executive due to physical or
mental illness); or
	 
	 	(5)	 	a material breach of this Agreement by the Executive;

	 	 	 	provided, however, that Cause shall arise under items (2), (3), (4) or (5) only
following thirty (30) days written notice thereof from the Company which
specifically identifies such misconduct, failure, neglect or breach and only if the
Executive continues to engage in or fails to cure such misconduct, failure, neglect
or breach during such notice period, and further provided that Cause under items
(3), (4) and (5) shall be subject to the last sentence of Section 8(b) hereof.
During any such notice period, the Executive shall have the right to be heard before
the full Board and Cause shall not be deemed to exist without a finding by the Board
that Cause exists and has not been cured during the thirty (30) day cure period. A
termination by the Company after cure shall not be a termination for cause. A
failure of the Company to notify the Executive after the first occurrence of an
event constituting Cause shall not preclude any subsequent occurrences of such event
(or similar event) from constituting Cause.

	 	(d)	 	Certain Terminations Following a Change of Control. In the event the
Executive’s employment with the Company or its successor terminates by reason of a
Qualifying Termination (as defined below) within two (2) years after a Change of
Control of the Company (as defined below) that occurs during the Term of Employment,
then the Company shall pay to the Executive (x) the Accrued Amounts in a lump sum
within

8

 

	 	 	 	ten (10) days of termination of employment and (y), in lieu of the Severance
Package, and subject to the limitations described in Section 7 below and subject to the
following two sentences, the Company shall provide the Executive the Change of Control
Benefits (as defined below). The provision of the Change of Control Benefits to the
Executive under this Section 6(d) shall (i) be contingent upon the execution by the
Executive of the Release or a release in another form reasonably acceptable to the
Company and the Executive and (ii) constitute the sole remedy of the Executive in the
event of a termination of the Executive’s employment in the circumstances set forth in
this Section 6(d). In addition, all payments under this Section 6(d) are subject to the
timing rules, calculations and adjustments described in Section 7. Anything in this
Agreement to the contrary notwithstanding, if (q) a Change of Control occurs, (r) the
Executive’s employment with the Company is terminated within 180 days prior to the date
on which the Change of Control occurs, and (s) it is reasonably demonstrated by the
Executive that such termination of employment (i) was at the request of a third party
who has taken steps reasonably calculated to effect a Change of Control or (ii)
otherwise arose in connection with or in anticipation of a Change of Control, then for
all purposes of this Agreement such Change of Control shall be deemed to have occurred
during the Term of Employment.

	 	(1)	 	“Change of Control Benefits” shall mean:

	 	(A)	 	Base Salary continuation for twenty four (24)
months following the date of termination at the Executive’s annual Base
Salary rate in effect on the date of termination, subject to all
applicable federal, state and local withholding and reporting
requirements. These salary continuation payments shall be paid in
accordance with usual Company payroll practices;
	 
	 	(B)	 	A bonus equal to two hundred percent (200%) of
the Executive’s Target Bonus in effect on the date of termination,
payable in equal installments over the twenty four (24) month period
described in Section 6(d)(1)(A) above, subject to the same withholding
and reporting requirements. In addition, to the extent not included in
the Accrued Amounts, the Executive shall receive a pro rata bonus for
the bonus period during which the date of termination occurs calculated
at one hundred percent (100%) of the Target Bonus then in effect,
multiplied by a fraction the numerator of which is the number of days
that the Executive was employed during such bonus term and the
denominator of which is 365. Such prorated bonus shall be paid in
accordance with the Company’s customary practices for payment of
executive bonuses but with no additional performance requirements or
contingencies;

9

 

	 	(C)	 	Acceleration in full of the vesting of all Restricted Stock Awards and
Option Awards; and
	 
	 	(D)	 	Continuation of life, group health and dental
insurance benefits substantially similar to those which the Executive
(and, if applicable, his family) was receiving immediately prior to the
Qualifying Termination until the earlier of:

	 	(i)	 	the end of the twenty four (24)
month period following the Executive’s termination of
employment, or
	 
	 	(ii)	 	the date on which the Executive
becomes eligible to receive substantially similar benefits under
any plan or program of any other employer.

	 	 	 	The continuing coverage provided under this Section 6(d)(1)(D) is
subject to the availability of such continuation under the terms of
the applicable plan documents and all provisions of applicable law.
If the Executive is not eligible for such continued coverage under
one of the Company-provided benefit plans noted in this paragraph (D)
that he was participating in during his employment, the Company shall
pay the Executive the cash equivalent of the cost of replacement
insurance for the duration of the applicable period which payments
shall be made pro-rata in accordance with the Company’s customary
payroll practices.

	 	(2)	 	Qualifying Termination. For purposes of this Agreement,
the term “Qualifying Termination” means a termination by the Company or
its successor or by the Executive of the Executive’s employment with the
Company or its successor for any reason other than:

	 	(A)	 	death;
	 
	 	(B)	 	Disability, as defined herein;
	 
	 	(C)	 	Cause, as defined herein; or
	 
	 	(D)	 	A termination by the Executive without Good Reason, as defined herein.

	 	(3)	 	Change of Control Defined. For purposes of this
Agreement, a “Change of Control” shall have the meaning set forth in
Exhibit A attached hereto.
	 
	 	(4)	 	To the extent that this Employment Agreement is treated as a
nonqualified

10

 

	 	 	 	deferred compensation arrangement within the meaning of Section
409A, neither the Company nor the Executive may accelerate the timing of the
payments under this Section 6(d) (for example, no part of the Change in Control
Benefits may be paid in a lump sum at the time of termination). In addition,
to the extent that this Employment Agreement is treated as a nonqualified
deferred compensation arrangement within the meaning of Section 409A and the
Treasury Regulations to be issued under Section 409A require a six month delay
in the commencement of the payments under the Change in Control Benefits due to
the Executive’s status as a “specified employee”, the Change in Control Benefit
payments shall be paid on the schedule set forth in this Section 6(d)
commencing six months following the Executive’s termination of employment.

	 	(e)	 	Disability. In the event that the Executive suffers a Disability, the Company
may, in its discretion, terminate the Executive’s employment hereunder. For purposes of
this Agreement, “Disability” shall be defined to occur at such time as the Executive
becomes eligible to receive benefits under the terms of the Company’s then applicable
long-term disability policy, or, in the absence of such policy, shall be defined as a
physical or mental disability that prevents the Executive from performing his duties under
this Agreement for ninety (90) consecutive days or more, or for an aggregate of one hundred
twenty (120) days in any period of twelve (12) months. The Company may only terminate the
Executive on account of Disability after giving due consideration to whether reasonable
accommodations can be made under which the Executive is able to fulfill his duties under
this Agreement. The commencement date and expected duration of any physical or mental
condition that prevents the Executive from performing his duties hereunder shall be
determined by a medical doctor mutually acceptable to the Executive and the Company. In
the event the Executive’s employment is terminated by the Company pursuant to this Section
6(e), then the Company shall pay the Executive the Accrued Amounts in a lump sum within ten
(10) days of termination of employment. In addition, to the extent not included in the
Accrued Amounts, the Executive shall receive a pro rata bonus for the bonus period during
which the date of termination pursuant to this Section 6(e) occurs calculated at one
hundred percent (100%) of the Target Bonus then in effect, multiplied by a fraction the
numerator of which is the number of days that the Executive was employed during such bonus
term and the denominator of which is 365. Such prorated bonus shall be paid in accordance
with the Company’s customary
practices for payment of executive bonuses but with no additional performance
requirements or contingencies, provided, however, that to the extent that this
Employment Agreement is treated as a nonqualified deferred compensation arrangement
under Section 409A, the payment of such bonus may not be accelerated by either the
Company or the Executive unless such acceleration does not trigger the application of
interest and penalty taxes under Section 409A.

11

 

	 	(f)	 	Death. In the event of the Executive’s death during the Term of Employment, all
obligations of the Company to make any further payments, including the obligation to pay
the Accrued Amounts, shall be paid to the Executive’s estate, and in any event all Accrued
Amounts shall be paid in a lump sum within ten (10) days of the Executive’s death. In
addition, to the extent not included in the Accrued Amounts, the Executive’s estate shall
receive a payment or payments reflecting a pro rata bonus for the Executive for the bonus
period during which the date of termination pursuant to this Section 6(f) occurs calculated
at one hundred percent (100%) of the Target Bonus then in effect, multiplied by a fraction
the numerator of which is the number of days that the Executive was employed during such
bonus term and the denominator of which is 365. Such prorated bonus shall be paid in
accordance with the Company’s customary practices for payment of executive bonuses but with
no additional performance requirements or contingencies, provided, however, that to the
extent that this Employment Agreement is treated as a nonqualified deferred compensation
arrangement within the meaning of Section 409A, the payment of such bonus may not be
accelerated by either the Company or the Executive unless such acceleration does not
trigger the application of interest and penalty taxes under Section 409A.
	 
	 	(g)	 	Payments as Compensable Compensation. Any participation by the Executive in,
and any terminating distributions and vested rights under, Company-sponsored retirement or
deferred compensation plans, regardless of whether such plans are qualified or nonqualified
for tax purposes, shall be governed by the terms of those respective plans.
	 
	 	(h)	 	Executive’s Duty to Provide Materials. Upon the termination of the Term of
Employment for any reason, the Executive or his estate shall surrender to the Company all
correspondence, letters, files, contracts, mailing lists, customer lists, advertising
material, ledgers, supplies, equipment, checks, and all other materials and records of any
kind that are the property of the Company or any of its subsidiaries or affiliates, that
may be in the Executive’s possession or under his control, including all copies of any of
the foregoing.

     Section 7 — Gross-up Payments.

	 	(a)	 	If the Executive becomes obligated to pay any excise tax on excess parachute payments
under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) or
any similar or successor law or regulation, whether as a result of benefits provided to
the Executive under this Agreement or another agreement by or plan of the Company, the
Company shall pay an additional amount (the “Gross-Up Payment”) to the Executive at the
time specified in the following paragraph. The Gross-Up Payment shall be equal to the
amount necessary so that the net amount retained by the Executive, after subtracting the
parachute excise tax imposed by Section 4999 of the Code or any successor statute then
in effect (the “Excise Tax”), and after also subtracting all federal, state or local
income tax, FICA tax and Excise Tax on the Gross-Up Payment, shall be equal to the net

12

 

	 	 	 	amount the Executive would have retained if no Excise Tax had been imposed and no
Gross-Up Payment had been paid. The amount of the Gross-Up Payment shall be determined
in good faith by independent accountants or tax counsel selected by the Company and
acceptable to the Executive, who shall apply the following assumptions: (i) the
Executive shall be treated as paying federal income taxes at the highest marginal rate
in the calendar year in which the Gross-Up Payment is made, and (ii) the Executive shall
be treated as paying state and local income taxes at the highest marginal rate(s) in the
calendar year in which the Gross-Up Payment is made in the locality of the Executive’s
residence as of the effective date of the Executive’s termination or resignation, net of
the maximum reduction in federal income taxes that could be obtained from deducting
those state and local taxes.
	 
	 	(b)	 	The Gross-Up Payment shall be made within thirty days after the event that
triggered the Company’s obligation to provide the benefits upon which taxes as described
in this Section 7 are payable (the “Triggering Event”), provided that if the Gross-Up
Payment cannot be determined within that time, the Company shall pay the Executive within
that time an estimate, determined in good faith by the Company, of the minimum amount of
the Gross-Up Payment and shall pay the remainder (plus interest at the rate provided in
Section 1274(b)(2)(B) of the Code) as soon as the amount can be determined but in no
event later than the 60th day after the Triggering Event. If the estimated payment is
more than the amount later determined to have been due, the excess (plus interest at the
rate provided in Section 1274(b)(2)(B) of the Code) shall be repaid by the Executive
within five business days after written demand.
	 
	 	(c)	 	If the actual Excise Tax imposed is less than the amount that was taken into
account in determining the amount of the Gross-Up Payment, the Executive shall repay at
the time that the amount of the reduced Excise Tax is finally determined the portion of
the Gross-Up Payment attributable to that reduction (plus the portion of the Gross-Up
Payment attributable to the Excise Tax, FICA tax and federal, state and local income tax
imposed on the portion of the Gross-Up Payment being repaid by the Executive, to the
extent the repayment results in a reduction in or refund of the Excise Tax, FICA tax or
federal, state or local income tax), plus interest on the amount of the repayment at the
rate provided in Section 1274(b)(2)(B) of the Code. If the actual Excise Tax imposed is
more than the amount that was taken into account in determining the amount of the
Gross-Up Payment,
the Company shall make an additional gross-up payment in respect of such excess (plus
interest at the rate provided in Section 1274(b)(2)(B) of the Code) at the time that the
amount of the excess is finally determined.
	 
	 	(d)	 	Notwithstanding anything to the contrary herein, the parties agree that if the
payments under this Section 7 are treated as nonqualified deferred compensation under
Section 409A of the Code, the parties will negotiate this section in good faith to avoid
adverse tax consequences to the Executive.

13

 

     Section 8  —  Other Agreements. 

	 	(a)	 	Non-Solicitation; Non-Disclosure, etc. On this date, and in consideration for
the provisions of this Agreement, among other things, Executive the Executive has
separately executed a Non-Competition and Non-Solicitation Agreement (the “Standard
Agreement”). The Executive hereby reaffirms his agreement to the terms and conditions
set forth in the Standard Agreement.
	 
	 	(b)	 	No Violation of Other Agreements. The Executive hereby represents that he is
not bound by the terms of any agreement with any previous employer or other party to
refrain from using or disclosing any trade secret or confidential or proprietary
information in the course of his employment with the Company or to refrain from competing,
directly or indirectly, with the business of such previous employer or any other party,
except for any such agreement that have been disclosed to the Company and that could not
reasonably be expected to compromise the Executive’s ability to perform his duties as Chief
Administrative Officer of the Company. The Executive further represents that, to his
knowledge and belief, he has not breached any agreement not to compete or any agreement to
keep in confidence proprietary information, knowledge or data acquired by him in confidence
or in trust prior to his employment with the Company, and the Executive acknowledges the
Company’s desire and direction that he not breach any such agreement in the performance of
his services hereunder. Accordingly, the Company agrees that any failure or refusal of the
Executive to perform his duties as Chief Administrative Officer of the Company shall not
constitute “Cause” to the extent such failure or refusal is attributable to the Executive’s
compliance with such agreements.

     Section 9 - Notices. All notices or communications hereunder shall be in
writing, addressed as follows:

	 	 	 	 	 
	

	 	To the Company:
	 	Eclipsys Corporation
	

	 	 	 	1750 Clint Moore Road
	

	 	 	 	Boca Raton, FL 33487
	

	 	 	 	ATTN: Chief Executive Officer
	 
	 	 	 	 
	

	 	with a copy to:
	 	Brent B. Siler
	

	 	 	 	Wilmer Cutler Pickering Hale and Dorr LLP
	

	 	 	 	1455 Pennsylvania Avenue, NW
	

	 	 	 	Washington, DC 20004

14

 

	 	 	 	 	 
	

	 	To the Executive:
	 	John A. Adams
	 
	 	 	 	 
	

	 	with a copy to:
	 	Joseph B. Farrell, Esq.
	

	 	 	 	Latham & Watkins LLP
	

	 	 	 	650 Town Center Drive, 20th Floor
	

	 	 	 	Costa Mesa, CA 92626-1925

Any such notice or communication shall be delivered by hand or sent certified or registered mail,
return receipt requested, postage prepaid, or by reputable overnight courier addressed as above (or
to such other address as such party may designate in a notice duly delivered as described above),
and the time of actual delivery, if delivered by hand, the next business day, if sent by overnight
courier, or the third (3rd) business day after the actual date of mailing, if sent by
mail, shall constitute the time at which notice was given.

     Section 10 - Separability. If any provision of this Agreement shall be declared
to be invalid or unenforceable, in whole or in part, such invalidity or unenforceability shall not
affect the remaining provisions hereof which shall remain in full force and effect.

     Section 11 - Assignment and Assumption. This contract shall be binding upon and
inure to the benefit of the heirs and representatives of the Executive and the assigns and
successors of the Company, but neither this Agreement nor any rights or obligations hereunder shall
be assignable or otherwise subject to hypothecation by the Executive (except by will or by
operation of the laws of interstate succession) or by the Company, except that the Company may
assign this Agreement to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock,
assets or business of the Company and shall cause such successor to assume this Agreement, which
assumption shall not relieve the Company of its obligations to the Executive hereunder unless so
agreed in writing by Executive.

     Section 12 - Amendment. This Agreement may only be amended by written agreement
of the parties hereto.

     Section 13 — Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations. The provisions of this Section 13 are in addition to
the survivorship provisions of any other section of this Agreement.

     Section 14 - Governing Law; Venue and Jurisdiction. This Agreement shall be
governed by and construed under and in accordance with the laws of the State of Florida (without
reference to the conflicts of law provisions thereof). If any judicial or administrative
proceeding or claim

15

 

relating to or pertaining to this Agreement is initiated by either party
hereto, such proceeding or claim shall and must be filed in a state or federal court located in
Palm Beach County, Florida, and the Company and the Executive each consents to the jurisdiction of
such a court.

     Section 15 - Prior Agreement; Coordination of Benefits. This Agreement
including the exhibits hereto, along with the Standard Agreement, contains the entire understanding
between the parties hereto regarding terms of the Executive’s employment and supersedes in all
respects any prior or other employment agreement or understanding, both written and oral. In the
event of a conflict between this Agreement and any policy or plan that applies generally to
employees or executives of the Company regarding compensation, employee benefits, performance
bonuses, healthcare, retirement, severance, change of control, relocation, or equity programs such
as Restricted Stock or Option awards, this Agreement shall control unless the generally applicable
plan or program would provide a greater benefit or award to the Executive, in which case the terms
of such plan or program shall control over this Agreement.

     Section 16 - Withholding. The Company shall be entitled to withhold from
payment any amount of withholding required by law.

     Section 17 — Section Headings and Construction. The headings of sections in
this Agreement are provided for convenience only and will not effect its construction or
interpretation. All references to “Section” or “Sections” refer to the corresponding section or
sections of this Agreement unless otherwise specified. All words used in this Agreement will be
construed to be of such gender or number as circumstances require.

     Section 18 - Counterparts. This Agreement may be executed in one (1) or more
counterparts, each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same Agreement.

     Section 19 — Acknowledgement. The Executive states and represents that he has
had an opportunity to fully discuss and review the terms of this Agreement with an attorney. The
Executive further states and represents that he has carefully read this Agreement, understands the
contents herein, freely and voluntarily assents to all of the terms and conditions hereof, and
signs his name of his own free act.

     Section 20 — Attorneys’ Fees. In the event that either party brings a legal
action against the other in connection with the employment relationship between them, including
without limitation an action to enforce this Agreement, the Standard Agreement or the Release, the
party, if either, that is judicially determined to be the prevailing party in such action shall be
entitled to recover his or its reasonable attorney’s fees and legal costs incurred in connection
with such action.

16

 

     Intending to be legally bound hereby, the parties have executed this Agreement on the date set
forth above.

COMPANY

ECLIPSYS CORPORATION

By:   /s/ Paul L. Ruflin                     

          Paul L. Ruflin,

          Chief Executive Officer

EXECUTIVE

/s/ John A. Adams                    

John A. Adams

17

 

EXHIBIT A

     “Change in Control” means an event or occurrence set forth in any one or more of
subsections (a) through (d) below (including an event or occurrence that constitutes a Change in
Control under one of such subsections but is specifically exempted from another such subsection)
that occurs during the Term of Employment:

               (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a
“Person”) of beneficial ownership of any capital stock of the Company if, after such
acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) 30% or more of either (x) the then-outstanding shares of common stock of the Company
(the “Outstanding Company Common Stock”) or (y) the combined voting power of the
then-outstanding securities of the Company entitled to vote generally in the election of directors
(the “Outstanding Company Voting Securities”); provided, however, that for
purposes of this subsection (a), the following acquisitions shall not constitute a Change in
Control: (i) any acquisition directly from the Company (excluding an acquisition pursuant to the
exercise, conversion or exchange of any security exercisable for, convertible into or exchangeable
for common stock or voting securities of the Company, unless the Person exercising, converting or
exchanging such security acquired such security directly from the Company or an underwriter or
agent of the Company), (ii) any acquisition by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company, (iv) any acquisition by any corporation pursuant to a transaction which
complies with clauses (i) and (ii) of subsection (c) below; or (v) any acquisition by General
Atlantic Partners 28, L.P., General Atlantic Partners 38, L.P., General Atlantic Partners 47, L.P.,
GAP Coinvestment Partners, L.P., General Atlantic Partners, LLC, and any person directly or
indirectly controlled (within the meaning of Rule 12b-2 promulgated under the Exchange Act) by any
of the foregoing entities described in this clause (v) (each such party is referred to herein as an
“Exempt Person”) of any shares of Common Stock; or

               (b) such time as the Continuing Directors (as defined below) do not constitute a majority of
the Board (or, if applicable, the Board of Directors of a successor corporation to the Company),
where the term “Continuing Director” means at any date a member of the Board (i) who was a
member of the Board on the date of the execution of this Agreement or (ii) who was nominated or
elected subsequent to such date by at least a majority of the directors who were Continuing
Directors at the time of such nomination or election or whose election to the Board was recommended
or endorsed by at least a majority of the directors who were Continuing Directors at the time of
such nomination or election; provided, however, that there shall be excluded from
this clause (ii) any individual whose initial assumption of office occurred as a result of an
actual or

18

 

threatened election contest with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents, by or on behalf of a person other than the Board;
or

               (c) the consummation of a merger, consolidation, reorganization, recapitalization or statutory
share exchange involving the Company or a sale or other disposition of all or substantially all of
the assets of the Company in one or a series of transactions (a “Business Combination”),
unless, immediately following such Business Combination, each of the following two conditions is
satisfied: (i) all or substantially all of the individuals and entities who were the beneficial
owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or indirectly, more than
50% of the then-outstanding shares of common stock and the combined voting power of the
then-outstanding securities entitled to vote generally in the election of directors, respectively,
of the resulting or acquiring corporation in such Business Combination (which shall include,
without limitation, a corporation which as a result of such transaction owns the Company or
substantially all of the Company’s assets either directly or through one or more subsidiaries)
(such resulting or acquiring corporation is referred to herein as the “Acquiring
Corporation”) in substantially the same proportions as their ownership, immediately prior to
such Business Combination, of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, respectively; and (ii) no Person (excluding the Acquiring Corporation, any employee
benefit plan (or related trust) maintained or sponsored by the Company or by the Acquiring
Corporation, or any Exempt Person) beneficially owns, directly or indirectly, 30% or more of the
then outstanding shares of common stock of the Acquiring Corporation, or of the combined voting
power of the then-outstanding securities of such corporation entitled to vote generally in the
election of directors (except to the extent that such ownership existed prior to the Business
Combination); or

               (d) approval by the stockholders of the Company of a complete liquidation or dissolution of
the Company.

19

 

EXHIBIT B

[form of option agreement]

20

 

EXHIBIT C

[form of restricted stock agreement]

21

 

EXHIBIT D

GENERAL RELEASE 

     This GENERAL RELEASE is made and entered into by and between Eclipsys Corporation and its
affiliated, direct and indirect subsidiary corporations and each of such corporations’ employees,
officers, and Board of Directors (individually and collectively “Eclipsys”) and John A. Adams,
[CURRENT ADDRESS] (“you”, “your” or “Adams”).

WITNESSETH

     WHEREAS, you and Eclipsys are party to an Employment Agreement dated as of December ___, 2004
(the “Employment Agreement”);

     WHEREAS, the Employment Agreement contemplates that you will be paid certain severance
benefits specified therein under specified circumstances, provided that you execute this General
Release;

WHEREAS, your termination from your position as [TITLE] of Eclipsys will be effective [date];

     WHEREAS, Eclipsys and you desire to settle fully and finally any and all differences between
ourselves including, but in no way limited to, differences arising out of your employment and
circumstances giving rise to your departure from Eclipsys;

     NOW THEREFORE, in consideration of the premises and mutual promises herein contained and
Eclipsys’ agreement to provide you with certain severance benefits pursuant to the Employment
Agreement, Eclipsys and you agree as follows:

     FIRST: You acknowledge that Eclipsys’ execution of this General Release and its compliance
with terms herein shall not in any way be construed as an admission by Eclipsys, of any acts of
discrimination or improper or unlawful treatment of you. Eclipsys has entered into this General
Release to avoid the potential expenses and inconvenience of litigation, and specifically disclaims
any liability to or discrimination against you on the part of Eclipsys.

     SECOND: You represent and agree that your employment with Eclipsys will be terminated
effective [DATE], and that you are eligible for reemployment only by mutual agreement and consent
of yourself and Eclipsys in the future.

     THIRD: Unless otherwise required by law, Eclipsys agrees in the future to articulate that the
reason for your termination was the pursuit of other interests. Eclipsys further agrees that any
inquiry about your employment will be referred to a representative of the Human Resources

22

 

Department, who will state the reasons for your termination as articulated in the preceding
sentence. However, it is understood that you may direct inquiries regarding personal references to
other employees of Eclipsys, but it is further understood that Eclipsys will not be liable for
reference information provided by such persons.

     FOURTH: You understand, acknowledge and agree that, under the stock option agreements that
you signed with Eclipsys, and subject to specified conditions, you have a specified period from
the day of the termination of your employment to exercise any stock option awards that you received
from Eclipsys and that are vested as of the date of termination. Because you will not be an
employee of Eclipsys from and after your termination, you acknowledge and agree to retain separate
counsel and/or advice regarding whether you hold “material non-public information” regarding
Eclipsys and whether it is legal, permissible or in your best interest for you to exercise your
stock options and sell Eclipsys stock under the applicable laws, rules ore regulations of the
Securities and Exchange Commission or any other applicable Federal or state laws. Eclipsys is not,
nor will be, responsible for any decisions that you make.

     FIFTH: You represent and warrant that you have not filed any lawsuit, complaint or charge
against Eclipsys, with any local, state, or federal agency or court of whatever jurisdiction, that
you will not do so at any time hereafter, and that if any agency or court were to assume
jurisdiction on your behalf for any such complaint or charge against Eclipsys, or any of them, you
would request such agency or court to withdraw from the matter.

     SIXTH: You represent that you have not filed any complaints or charges against Eclipsys with
the Equal Employment Opportunity Commission, or with any other local, state or federal agency or
court, that you will not do so at any time hereafter, and that if any such agency or court assumes
jurisdiction of any complaint or charge against Eclipsys on behalf of you, you will request such
agency or court to withdraw from the matter.

     SEVENTH: As a material inducement to Eclipsys to enter into the General Release and to
provide you the severance benefits provided in the Employment Agreement, you hereby irrevocably and
unconditionally release, acquit, and forever discharge Eclipsys, and its predecessors, successors,
assigns and any persons acting by, through, under or in concert with any of them (Releasees) from
any and all charges, complaints, claims, liabilities, obligations, promises or any other cause of
action of any nature whatsoever, known or unknown, which you now have, own, or hold, or claim to
have had, owned, or held, or which you at any time heretofore had, owned, or held against each or
any of the Releasees.

Further, you expressly waive and relinquish all rights, claims and benefits afforded you by Title
VII of the Civil Rights Act of 1964 (Title VII), as amended, and the Age Discrimination in
Employment Act (ADEA) as amended, and do so understanding and acknowledging the

23

 

significance and consequence of such a waiver of rights, claims and benefits under Title VII and
the ADEA (as applicable); provided, however, that this General Release does not release Eclipsys
from its obligations to you as set-forth herein or in the Employment Agreement.

     EIGHTH: You are hereby informed that you have twenty-one (21) calendar days to consider the
terms of this General Release and you are encouraged to discuss the terms with an attorney of your
choice. The twenty-one calendar days shall expire on [DATE] and, in addition, you understand that
this General Release may be revoked within seven (7) days of the signing date set forth below. In
the event you do not execute this General Release or you subsequently revoke it within the
seven-day period specified above, you agree that Eclipsys shall not be obligated to provide
severance benefits to you under the Employment Agreement or otherwise.

     NINTH: As further consideration and material inducement for Eclipsys to enter into this
Agreement, you agree not to disclose, orally or in writing, to any person, corporation, firm,
business, entity, court or governmental authority (a) the terms and provisions of this Agreement
including, but not limited to, the amounts paid pursuant to this Agreement; (b) any documents,
files, records, or any other information related to this Agreement; or (c) the claims asserted in
this case, without the prior written consent of Eclipsys or its successors or assigns. In the event
that you are subpoenaed to provide testimony concerning matters that are of a confidential nature
regarding Eclipsys, you agree to provide Eclipsys with prompt notice of such subpoena or request,
and Eclipsys agrees that you will not be in breach of this Agreement by providing such testimony if
legally required to do so, provided that you have provided prompt notice to Eclipsys as set-forth
above. You also agree that you will not make any unfavorable, disparaging, or negative comment,
remark or statement, whether written or oral, about Eclipsys, any of its affiliates, or any of
their respective offices, directors, or employees.

     TENTH: You acknowledge that you signed one or more confidentiality agreements while at
Eclipsys that govern your use of Eclipsys’ confidential, proprietary and trade secret information.
You agree that after your departure from Eclipsys, you will maintain and preserve the
confidentiality of such information and that, among other things, you will abide by and honor the
terms of such agreements which, by their terms, remain in full force and effect following the
termination of your employment with Eclipsys.

     ELEVENTH: It is the desire of the parties that if any of the provisions of this Agreement are
adjudicated to be invalid or unenforceable, or if compliance with any provision is restrained
pending a final determination as to its legality, such deletion or restraint will apply only to the
operation of the provisions deemed invalid, unenforceable or restrained. To the extent any
provision of this Agreement is deemed invalid, unenforceable or restrained, the remaining agreement
provisions will be valid and enforceable to the fullest extent possible.

     TWELFTH: You represent and agree that in executing this General Release you do not rely and
have not relied upon any representation or statement made by Eclipsys, or by any of

24

 

Eclipsys’ agents, representatives or attorneys with regard to the subject matter, bases, or effect
of this General Release.

     THIRTEENTH: This General Release shall be binding upon you and upon your administrators,
representatives, successors and assigns and shall inure to the benefit of Eclipsys, and to
Eclipsys’ representatives, successors, and assigns.

     FOURTEENTH: This General Release is made and entered into in the State of Florida and shall
in all respects be interpreted in force and governed under the laws of the State of Florida.

     FIFTEENTH: This General Release sets forth the entire Agreement between you and Eclipsys and
fully supersedes any and all prior agreements or understandings between the parties pertaining to
the subject matter hereof.

NOTICE TO EMPLOYEE — PLEASE READ CAREFULLY BEFORE SIGNING:

     THIS LETTER AND GENERAL RELEASE IS A LEGALLY BINDING DOCUMENT WITH IMPORTANT LEGAL
CONSEQUENCES, INCLUDING A RELEASE OF ALL CLAIMS, KNOWN AND UNKNOWN. YOU ARE ENTITLED TO A PERIOD
OF NOT LESS THAN TWENTY-ONE (21) CALENDAR DAYS IN WHICH TO REVIEW AND CONSIDER THIS DOCUMENT BEFORE
SIGNING IT. YOU ALSO HAVE THE RIGHT TO REVOKE THIS AGREEMENT WITHIN SEVEN (7) CALENDAR DAYS AFTER
SIGNING IT, BY DELIVERING WRITTEN NOTICE OF REVOCATION TO:

Mr. Mark Green

Vice President, Human Resources

Eclipsys Corporation

Human Resources Department

200 Ashford Center North

Atlanta, GA 30338

WITHIN SUCH SEVEN (7) DAY PERIOD. IT IS RECOMMENDED THAT YOU CONSULT YOUR OWN ATTORNEY BEFORE
SIGNING THIS DOCUMENT. BY SIGNING BELOW YOU ACKNOWLEDGE THAT YOU HAVE READ, FULLY UNDERSTAND, AND
VOLUNTARILY AGREE TO ALL OF THE PROVISIONS CONTAINED IN THIS LETTER AND GENERAL RELEASE.

25

 

     EXECUTED at _______________, _________
this ______
day of ________________, 200__.

I, _______________________________, hereby accept

and agree to all provisions of the above letter and

General Release.

	 	 	 
	Witness:

	 	__________________________________________

Employee Signature

____________________________

____________________________

Eclipsys Corporation:

Signed: _____________________________

By: ________________________________

Title: ______________________________

Date: ______________________________

PLEASE FORWARD THE SIGNED RELEASE AGREEMENT TO MARK GREEN, HUMAN RESOURCES, ECLIPSYS CORPORATION,
200 ASHFORD CENTER NORTH, ATLANTA, GA 30338

26

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