UNIT PURCHASE AGREEMENT
This Unit Purchase Agreement is made as of October 29, 2024 (this “Agreement”), by and among (a) Medical Practice Holding Company, LLC, a Delaware limited liability company (the “Purchaser”), (b) RRD Healthcare, LLC, a Florida limited liability company (the “Seller”), (c) solely for purposes of Articles IV, V and VII and Sections 2.2 and 6.2, Rodolfo Rodriguez-Duret, (d) solely for purposes of Articles IV, V and VII and Sections 2.3 and 6.2, Graciela Victorero and (e) solely for purposes of Articles IV and VII and Sections 6.2, 6.5 and 6.6, NeueHealth, Inc. (formerly known as Bright Health Group, Inc.), a Delaware corporation (the “Parent”) and the Company (defined below).
W I T N E S S E T H:
WHEREAS, the Seller owns 2,500 Class A Units of Centrum Medical Holdings, LLC, a Delaware limited liability company (the “Company” and together with the Purchaser, the “Purchaser Related Parties”);
WHEREAS, on the terms and subject to the conditions set forth herein, the Purchaser hereby desires to purchase, and the Seller hereby desires to sell to the Purchaser all of its Class A Units of the Company, free and clear of all Encumbrances (defined below), other than Permitted Encumbrances (defined below), for the consideration as set forth below;
WHEREAS, Rodolfo Rodriguez-Duret and Graciela Victorero are the owners of a majority of the equity interests of the Seller, and they acknowledge and agree that they will receive good and valuable consideration from the Seller’s entry into this Agreement and the consummation of the transactions contemplated hereby;
WHEREAS, as a condition to the Purchaser’s obligation to consummate the Closing, each of Rodolfo Rodriguez-Duret and Graciela Victorero has agreed to enter into this Agreement solely for purposes of Articles IV, V and VII and Sections 2.2, 2.3 and 6.2, as applicable;
WHEREAS, Parent is the indirect owner of all of the equity interests of the Purchaser, and Parent acknowledges and agrees that it will receive good and valuable consideration from the Purchaser’s entry into this Agreement and the consummation of the transactions contemplated hereby;
WHEREAS, as a condition to the Seller’s obligation to consummate the Closing, the Parent has agreed to enter into this Agreement solely for purposes of Articles IV and VII and Sections 6.5 and 6.6;
WHEREAS, concurrently with the execution of this Agreement, the following agreements have been, or will be, executed and delivered by the applicable parties thereto: (i) the Secured Promissory Note in the form attached hereto as Exhibit A (the “Note”) in the amount of $63,950,000.00 (the “Note Amount”) and the other Loan Documents (as such term is defined in the Note) contemplated therein, (ii) the Subordination Agreement, in the form attached hereto as Exhibit B, (iii) the Class P Unit Cancellation and Release Agreement, by and among the Seller, the Parent and each of the holders of the Class P Units (as defined in the Seller Limited Liability Company Agreement) of the Seller, in the form attached hereto as Exhibit C (each a “Class P Cancellation Agreement” and collectively the “Class P Cancellation Agreements”), (iv) the Second Amended and Restated Limited Liability Company Agreement (the “Company 2nd A&R LLCA”) of the Company in the form attached hereto as Exhibit D, (v) the Noncompetition and Nonsolicitation Agreement, by and among the Purchaser, the Company and the Parent, on the one hand, and each of Graciela Victorero and Rodolfo Rodriguez-Duret, on the other hand, in the form attached hereto as Exhibit E, (vi) those certain lease amendments, by and among certain Affiliates of the Seller, as landlords, and the Company and its certain Affiliates, as tenants, with respect to existing leases for facilities listed on Exhibit F and (vii) the Second Amended and Restated Limited Liability Company Agreement (the “Seller 2nd A&R LLCA”) of the Seller in the form attached hereto as Exhibit G;
NOW, THEREFORE, in order to implement the foregoing and in consideration of the mutual representations, warranties, covenants and agreements contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
SALE AND PURCHASE OF THE PURCHASED UNITS
1.1Sale and Purchase of the Purchased Units. On the terms and subject to the conditions of this Agreement, at the Closing (defined below), the Purchaser hereby agrees to purchase from the Seller, and Seller hereby agrees to sell to the Purchaser, 2,500 Class A Units of the Company (collectively, the “Purchased Units”) for the following consideration: (i) $30,000,000 in cash (the “Cash Amount”), (ii) the Note and (iii) subject to Article VI, the right to receive an aggregate amount of cash equal to the aggregate Future Payments (as defined in the Class P Cancellation Agreements), on such future dates and in such amounts on Annex A, as set forth in the Class P Cancellation Agreements (in the aggregate, the “Future Payments Amount”).
1.2Closing.
(a)The closing of the sale and purchase contemplated by this Agreement (the “Closing”) shall occur at 9:00 am New York City time (or such other time as may be mutually agreed) on the date hereof. At the Closing, the Purchaser shall deliver (or cause to be delivered) to the Seller payment of the Cash Amount by wire transfer of immediately available U.S. dollar denominated funds to such account or accounts designated in writing (prior to the date hereof) by the Seller.
(b)The Seller agrees, pursuant to Article 16 of the Company Limited Liability Company Agreement, that it approves and consents to the Company 2nd A&R LLCA in the form attached hereto as Exhibit D. Notwithstanding anything to the contrary in this Agreement or the Company 2nd A&R LLCA, the Purchaser agrees that all rights to indemnification, advancement of expenses and exculpation by the Company now existing in favor of any Seller Released Party who is now, or has been at any time prior to the Closing and the consummation of the Company 2nd A&R LLCA, a member, officer or manager of the Company, as provided in the Company Limited Liability Company Agreement, as in effect immediately prior to the effectiveness of the Company 2nd A&R LLCA, shall survive the Closing and the consummation of the Company 2nd A&R LLCA and shall continue in full force and effect in accordance with their respective terms. Such rights shall not be terminated or modified in such a manner as to adversely affect in any material respect any such Seller Released Party without the written consent of such Person (it being understood that the Seller approving and consenting to the Company 2nd A&R LLCA pursuant to this Section 1.2(b) shall not be deemed such a consent by the Seller on behalf of itself or any other Person).
(c)The Purchaser agrees, pursuant to Section 1.11 of the Company Limited Liability Company Agreement, that it approves and consents to the Seller 2nd A&R LLCA in the form attached hereto as Exhibit G.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
2.1The Seller hereby makes the following representations and warranties to the Purchaser, each and all of which shall be true and correct as of the date hereof:
(a)Organization, Good Standing. The Seller is duly organized, validly existing and in good standing in the State of Florida. The Seller has all requisite corporate power and authority necessary to own, operate and lease its properties, rights and assets and to carry on its business as currently conducted. The Seller is qualified to do business in every jurisdiction in which its ownership of property, rights or assets or the conduct of business as now conducted requires it to qualify. Each of Rodolfo Rodriguez-Duret and Graciela Victorero is competent to, and has sufficient capacity to execute and deliver this Agreement and the agreements contemplated hereby to which he or she is, or is specified to be, a party and to perform his or her obligations hereunder and thereunder.
(b)Authorization. Each of the Seller, Rodolfo Rodriguez-Duret and Graciela Victorero has all requisite power and authority to execute and deliver this Agreement and any other agreement, instrument or document entered into or required to be delivered in connection with the transactions contemplated hereby (collectively, the “Transaction Documents”) to which it, he or she is, or is specified to be, a party, and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the other Transaction Documents
to which any of the Seller, Rodolfo Rodriguez-Duret and/or Graciela Victorero is, or is specified to be, a party, and the performance by the Seller, Rodolfo Rodriguez-Duret and Graciela Victorero of its, his or her obligations hereunder and thereunder, have been duly authorized by all necessary action on the part of the Seller, Rodolfo Rodriguez-Duret and Graciela Victorero, as applicable, and no other action on the part of such Person is necessary to authorize the execution and delivery of this Agreement and the other Transaction Documents to which it, he or she is, or is specified to be, a party, or to perform its, his or her obligations hereunder or thereunder. Each of the Seller, Rodolfo Rodriguez-Duret and Graciela Victorero has duly executed and delivered this Agreement, and, assuming due authorization, execution and delivery of this Agreement by other parties hereto, this Agreement constitutes, and the other Transaction Documents to which such Person is, or is specified to be, a party, when executed and delivered (assuming in each case due authorization, execution and delivery by each of the other parties thereto) will constitute, the valid and binding obligation of the Seller, Rodolfo Rodriguez-Duret and Graciela Victorero, enforceable in accordance with its terms, except as enforcement hereof may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws relating to or affecting enforcement of creditors’ rights generally and except as enforcement hereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).
(c)No Violation. Neither the execution and delivery of this Agreement and/or the other Transaction Documents to which it, he or she is, or is specified to be, a party, by the Seller, Rodolfo Rodriguez-Duret and/or Graciela Victorero nor the consummation of the transactions contemplated hereby or thereby, (i) violates, breaches or would result in default (with or without notice or lapse of time, or both) under the organizational documents of the Seller, (ii) violates any law, order, writ, injunction or decree applicable to the Seller, Rodolfo Rodriguez-Duret or Graciela Victorero or any of their material assets (which do not include the Company and its direct and indirect subsidiaries), or (iii) violates, breaches, conflicts with or results in a default (with or without notice or lapse of time, or both) (or gives rise to any right of termination, amendment, cancellation or acceleration) under any material agreement, lease or other instrument or obligation to which the Seller, Rodolfo Rodriguez-Duret or Graciela Victorero is a party or by which any of its, his or her material assets (which do not include the Company and its direct and indirect subsidiaries) is bound, except for such defaults (or rights of termination, amendment, cancellation or acceleration) as to which requisite waivers or Consents have been obtained and are in full force and effect or which individually and in the aggregate would not reasonably be expected to materially and adversely affect the ability of the Seller, Rodolfo Rodriguez-Duret or Graciela Victorero to consummate the transactions contemplated hereby. No Consent (other than Consents that have been obtained) is required to be obtained or made by or with respect to the Seller or any of its Affiliates or Rodolfo Rodriguez-Duret or Graciela Victorero in connection with the execution and delivery of this Agreement and the other Transaction Documents to which it, he or she is, or is specified to be, a party, or the performance by the Seller or such Affiliate, or Rodolfo Rodriguez-Duret or Graciela Victorero of its, his or her obligations hereunder or thereunder.
(d)Ownership of Purchased Units. The Purchased Units are owned, of record and beneficially, by the Seller, free and clear of all claims, charges, leases, covenants, easements, encumbrances, pledges, security interests, liens, options, pledges, rights of others, mortgages, deeds of trust, hypothecations, conditional sales or restrictions (whether on voting, sale, transfer, disposition or otherwise), whether imposed by contract or law (each, an “Encumbrance”), other than Permitted Encumbrances, which in the aggregate constitute all of the issued and outstanding equity interests (of any kind) in the Company of the Seller or any of its Affiliates. Except as set forth in this Agreement, the other Transaction Documents, the Company Limited Liability Company Agreement and the Seller Limited Liability Company Agreement, there are no agreements or other rights or arrangements existing which provide for the sale, purchase, exchange or other transfer by the Seller of any equity, or beneficial ownership of any equity, in the Company owned by the Seller or any of its Affiliates. The Seller has the power and authority to sell, transfer, assign and deliver the Purchased Units as provided in this Agreement and the other Transaction Documents to which the Seller is, or is specified to be, a party, and such delivery will convey to the Purchaser good and marketable title to such Purchased Units, free and clear of any and all Encumbrances, other than Permitted Encumbrances. Immediately following the Closing, the Purchaser shall be the owner of, and shall have good and marketable title to, all of the Purchased Units, free and clear of any and all Encumbrances, other than Permitted Encumbrances.
(e)Certain Acknowledgments. Each of the Seller, Rodolfo Rodriguez-Duret and Graciela Victorero (i) has such knowledge and experience in business, financial and investment matters as to be capable of evaluating the merits, risks and suitability of the transactions contemplated by this Agreement and the other
Transaction Documents, (ii) has considered the suitability of such transactions in light of its own circumstances and financial condition and (iii) is consummating such transactions with a full understanding of all of the terms, conditions and risks and willingly assumes those terms, conditions and risks. Each of the Seller, Rodolfo Rodriguez-Duret and Graciela Victorero has had access to all information that it, he or she and its, his or her advisers deem appropriate and necessary to make an informed decision to enter into the transactions contemplated by this Agreement and the other Transaction Documents and has reviewed all such information. Each of the Seller, Rodolfo Rodriguez-Duret and Graciela Victorero has evaluated the merits, risks and consequences of consummating the transactions contemplated by this Agreement and the other Transaction Documents based exclusively on its, his or her own independent review and consultations with such investment, legal, tax, accounting and other advisers as it, he or she deemed appropriate and has made its, his or her own decision concerning such transactions, without reliance on any representation or warranty of, information provided by, or advice from, the Company, except that each of the Seller, Rodolfo Rodriguez-Duret and Graciela Victorero are relying on the representations, warranties, covenants and other agreements of the Purchaser and its Affiliates expressly set forth in this Agreement and the other Transaction Documents. None of the Seller, Rodolfo Rodriguez-Duret or Graciela Victorero is relying (or will at any time rely) on any communication (written or oral) of the Company, or omission on the part of the Company to communicate any particular piece of information, as investment advice or as a recommendation to sell the Purchased Units, except that each of the Seller, Rodolfo Rodriguez-Duret and Graciela Victorero are relying on the representations, warranties, covenants and other agreements of the Purchaser and its Affiliates expressly set forth in this Agreement and the other Transaction Documents.
(f)Finders’ or Advisors’ Fees. None of the Seller nor any of its Affiliates or its or their respective directors, members, officers, managers, employees or agents, and/or Rodolfo Rodriguez-Duret or Graciela Victorero has employed any broker or finder or incurred any liability for any investment banking fees, brokerage fees, commissions or finders’ fees in connection with the transaction contemplated hereby.
(g)No Other Representations. The Seller acknowledges and agrees that except for the representations and warranties contained in Article III and the representations and warranties expressly contained in the other Transaction Documents, none of the Purchaser Related Parties nor any other Person makes, or has made, any other express or implied representation or warranty to the Seller or its Affiliates or Representatives (defined below) or Rodolfo Rodriguez-Duret or Graciela Victorero with respect to the Purchaser Related Parties or any of the subsidiaries of the Company in connection with the transactions contemplated by this Agreement. The Seller (on its behalf and on behalf of Rodolfo Rodriguez-Duret and Graciela Victorero) specifically acknowledges and agrees to the Purchaser Related Parties’ express disavowal and disclaimer of any other representations or warranties made to the Seller or its Affiliates or Representatives or Rodolfo Rodriguez-Duret or Graciela Victorero in connection with the transactions contemplated by this Agreement, whether made by any of the Purchaser Related Parties or any of their respective Affiliates, or any of their respective partners, members, officers, directors, employees, agents or representatives, and of all liability and responsibility for any other representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to any of the Seller or its Affiliates, shareholders, equityholders, directors, officers, employees or other representatives (in their capacities as such) (collectively, “Representatives”) or Rodolfo Rodriguez-Duret or Graciela Victorero in connection with the transactions contemplated by this Agreement (including any opinion, information, projection, or advice that may have been provided to any of the Seller or its Affiliates or Representatives or Rodolfo Rodriguez-Duret or Graciela Victorero by any partner, member, director, officer, employee, agent, consultant, or representative of any of the Purchaser Related Parties or any of their respective Affiliates or representatives). The Seller (on its behalf and on behalf of Rodolfo Rodriguez-Duret and Graciela Victorero) acknowledges and agrees that each of the Seller, Rodolfo Rodriguez-Duret and Graciela Victorero (i) has conducted to its, his or her satisfaction its, his or her own independent investigation of the condition, operations and business of the Company and the subsidiaries of the Company and (ii) in making its, his or her determination to proceed with the transactions contemplated by this Agreement, has relied on the results of its, his or her own independent investigation. In furtherance of the foregoing, and not in limitation thereof, the Seller (on its behalf and on behalf of Rodolfo Rodriguez-Duret and Graciela Victorero) specifically acknowledges and agrees that, in connection with the transactions contemplated by this Agreement, none of the Purchaser Related Parties makes, nor has made, any representation or warranty, express or implied, to any of the Seller or its Affiliates or Rodolfo Rodriguez-Duret or Graciela Victorero with respect to (x) any financial projection or forecast delivered to any of the Seller or its Affiliates or Representatives and/or Rodolfo Rodriguez-Duret or Graciela Victorero or (y) the performance of any of the Company or the subsidiaries of the Company whether before, on or after the date of
Closing. The Seller (on its behalf and on behalf of Rodolfo Rodriguez-Duret and Graciela Victorero) specifically acknowledges and agrees that, in connection with the transactions contemplated by this Agreement, none of the Purchaser Related Parties make, nor has made (nor has authorized any other Person to make on its behalf), any representations or warranties to the Seller or Rodolfo Rodriguez-Duret or Graciela Victorero regarding the probable success or profitability of the Company or the subsidiaries of the Company. Notwithstanding anything to the contrary in this Agreement, none of the Seller, its Affiliates, Rodolfo Rodriguez-Duret or Graciela Victorero disavows, disclaims or otherwise waives any rights or claims expressly set forth in this Agreement or the other Transaction Documents, including, without limitation, with respect to any representations, warranties, covenants and other agreements of the Purchaser Released Parties set forth herein or therein.
(h)Legal Proceedings. There are no actions, suits, claims, investigations or other legal proceedings pending or, to Seller’s knowledge, threatened against or by the Seller or any of its Affiliates or Rodolfo Rodriguez-Duret or Graciela Victorero that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement and the other Transaction Documents.
2.2Rodolfo Rodriguez-Duret hereby represents and warrants to Purchaser that, as of the date hereof, he has not breached or violated his Noncompetition and Nonsolicitation Agreement, dated July 1, 2021, with the Company.
2.3Graciela Victorero hereby represents and warrants to Purchaser that, as of the date hereof, she has not breached or violated her Noncompetition and Nonsolicitation Agreement, dated July 1, 2021, with the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
3.1The Purchaser hereby makes the following representations and warranties to the Seller, each and all of which shall be true and correct as of the date hereof:
(a)Organization, Good Standing. Each of the Purchaser and the Parent is duly organized, validly existing and in good standing in the State of Delaware. The Purchaser has all requisite corporate power and authority necessary to own, operate and lease its properties, rights and assets and to carry on its business as currently conducted. The Purchaser is qualified to do business in every jurisdiction in which its ownership of property, rights or assets or the conduct of business as now conducted requires it to qualify.
(b)Authorization. Each of the Purchaser and the Parent has all requisite power and authority to execute and deliver this Agreement and any other Transaction Documents to which it is, or is specified to be, a party, and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the other Transaction Documents to which any of the Purchaser and/or the Parent is, or is specified to be, a party, and the performance by the Purchaser and the Parent of their respective obligations hereunder and thereunder, have been duly authorized by all necessary action on the part of the Purchaser and the Parent and no other action on the part of such Person is necessary to authorize the execution and delivery of this Agreement and the other Transaction Documents to which it is, or is specified to be, a party, or to perform its obligations hereunder or thereunder. Each of the Purchaser and the Parent has duly executed and delivered this Agreement, and, assuming due authorization, execution and delivery of this Agreement by other parties hereto, this Agreement constitutes, and the other Transaction Documents to which such Person is, or is specified to be, a party, when executed and delivered (assuming in each case due authorization, execution and delivery by each of the other parties thereto) will constitute, the valid and binding obligation of the Purchaser and the Parent, enforceable in accordance with its terms, except as enforcement hereof may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws relating to or affecting enforcement of creditors’ rights generally and except as enforcement hereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law).
(c)No Violation. Neither the execution and delivery of this Agreement and/or the other Transaction Documents to which it is, or is specified to be, a party, by the Purchaser and/or the Parent nor the consummation of the transactions contemplated hereby or thereby, (i) violates, breaches or would result in default (with or without notice or lapse of time, or both) under the organizational documents of the Purchaser or the Parent,
(ii) violates any law, order, writ, injunction or decree applicable to the Purchaser or the Parent or any of the their respective material assets (which include the Company and its direct and indirect subsidiaries), or (iii) violates, breaches, conflicts with or results in a default (with or without notice or lapse of time, or both) (or gives rise to any right of termination, amendment, cancellation or acceleration) under any material agreement, lease or other instrument or obligation to which the Purchaser or the Parent is a party or by which any of their respective material assets (which include the Company and its direct and indirect subsidiaries) is bound, except for such defaults (or rights of termination, amendment, cancellation or acceleration) as to which requisite waivers or Consents have been obtained and are in full force and effect or which individually and in the aggregate would not reasonably be expected to materially and adversely affect the ability of the Purchaser or the Parent to consummate the transactions contemplated hereby. No Consent (other than Consents that have been obtained) is required to be obtained or made by or with respect to the Purchaser, the Parent or any of their respective Affiliates in connection with the execution and delivery of this Agreement and the other Transaction Documents to which it is, or is specified to be, a party, or the performance by the Purchaser, the Parent or such Affiliate of its obligations hereunder or thereunder.
(d)Finders’ or Advisors’ Fees. Neither the Purchaser, the Parent nor any of their respective Affiliates or its or their respective directors, members, officers, managers, employees or agents has employed any broker or finder or incurred any liability for any investment banking fees, brokerage fees, commissions or finders’ fees in connection with the transaction contemplated hereby.
(e)Certain Acknowledgments. Each of the Purchaser and the Parent (i) has such knowledge and experience in business, financial and investment matters as to be capable of evaluating the merits, risks and suitability of the transactions contemplated by this Agreement and the other Transaction Documents, (ii) has considered the suitability of such transactions in light of its own circumstances and financial condition and (iii) is consummating such transactions with a full understanding of all of the terms, conditions and risks and willingly assumes those terms, conditions and risks. Each of the Purchaser and the Parent has had access to all information that it and its advisers deem appropriate and necessary to make an informed decision to enter into the transactions contemplated by this Agreement and the other Transaction Documents and has reviewed all such information. Each of the Purchaser and the Parent has evaluated the merits, risks and consequences of consummating the transactions contemplated by this Agreement and the other Transaction Documents based exclusively on its own independent review and consultations with such investment, legal, tax, accounting and other advisers as it deemed appropriate and has made its own decision concerning such transactions, without reliance on any representation or warranty of, information provided by, or advice from, the Seller, Rodolfo Rodriguez-Duret, Graciela Victorero or their respective Affiliates, except that each of the Purchaser and the Parent are relying on the representations, warranties, covenants and other agreements of the Seller, Rodolfo Rodriguez-Duret, Graciela Victorero and their respective Affiliates expressly set forth in this Agreement and the other Transaction Documents. Neither the Purchaser nor the Parent is relying on (and will not at any time rely on) any communication (written or oral) of the Seller, Rodolfo Rodriguez-Duret, Graciela Victorero or their respective Affiliates, or omission on the part of any such Person to communicate any particular piece of information, as investment advice or as a recommendation to purchase the Purchased Units, except that each of the Purchaser and the Parent are relying on the representations, warranties, covenants and other agreements of the Seller, Rodolfo Rodriguez-Duret, Graciela Victorero and their respective Affiliates expressly set forth in this Agreement and the other Transaction Documents.
(f)Legal Proceedings. There are no actions, suits, claims, investigations or other legal proceedings pending or, to Purchaser’s knowledge, threatened against or by the Purchaser or any of its Affiliates that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement and the other Transaction Documents.
(g)No Other Representations. The Purchaser acknowledges and agrees that except for the representations and warranties contained in Article II and the representations and warranties expressly contained in the other Transaction Documents, none of the Seller, Rodolfo Rodriguez-Duret or Graciela Victorero nor any other Person makes, or has made, any other express or implied representation or warranty to the Purchaser or its Affiliates or Representatives with respect to the Seller, Rodolfo Rodriguez-Duret or Graciela Victorero in connection with the transactions contemplated by this Agreement. The Purchaser (on its behalf and on behalf of the Parent and the Company) specifically acknowledges and agrees to the Seller, Rodolfo Rodriguez-Duret or Graciela Victorero’s express disavowal and disclaimer of any other representations or warranties made to the Purchaser or its Affiliates in
connection with the transactions contemplated by this Agreement, whether made by any of the Seller, Rodolfo Rodriguez-Duret or Graciela Victorero or any of their respective Affiliates, or any of their respective partners, members, officers, directors, employees, agents or representatives, and of all liability and responsibility for any other representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to any of the Purchaser or its Affiliates or Representatives in connection with the transactions contemplated by this Agreement (including any opinion, information, projection, or advice that may have been provided to the Purchaser or Representatives by any partner, member, director, officer, employee, agent, consultant, or representative of any of the Seller, Rodolfo Rodriguez-Duret or Graciela Victorero or any of their respective Affiliates or representatives). The Purchaser (on its behalf and on behalf of the Parent and the Company) acknowledges and agrees that it (i) has conducted to its satisfaction its own independent investigation of the condition, operations and business of the Company and the subsidiaries of the Company and (ii) in making its determination to proceed with the transactions contemplated by this Agreement, has relied on the results of its own independent investigation. In furtherance of the foregoing, and not in limitation thereof, the Purchaser (on its behalf and on behalf of the Parent and the Company) specifically acknowledges and agrees that, in connection with the transactions contemplated by this Agreement, none of the Seller, Rodolfo Rodriguez-Duret or Graciela Victorero makes, nor has made, any representation or warranty, express or implied, to the Purchaser with respect to (x) any financial projection or forecast delivered to any of the Purchaser or its Affiliates or Representatives or (y) the performance of any of the Company or the subsidiaries of the Company whether before, on or after the date of Closing. The Purchaser (on its behalf and on behalf of the Parent and the Company) specifically acknowledges and agrees that, in connection with the transactions contemplated by this Agreement, none of the Seller or Rodolfo Rodriguez-Duret or Graciela Victorero make, nor has made (nor has authorized any other Person to make on his or her behalf), any representations or warranties to the Purchaser, the Parent or the Company regarding the probable success or profitability of the Company or the subsidiaries of the Company. Notwithstanding anything to the contrary in this Agreement, none of the Purchaser or its Affiliates disavows, disclaims or otherwise waives any rights or claims expressly set forth in this Agreement or the other Transaction Documents, including, without limitation, with respect to any representations, warranties, covenants and other agreements of the Seller Released Parties set forth herein or therein.
ARTICLE IV
RELEASE
4.1Subject to the receipt by the Seller of the consideration pursuant to Section 1.1 above by virtue of executing this Agreement (including, without limitation, the Seller’s receipt of the Cash Amount on the date hereof) and the consummation of the transactions contemplated by this Agreement, effective upon the Closing, each of the Seller, Rodolfo Rodriguez-Duret and Graciela Victorero, each on behalf of itself, himself or herself and its, his or her successors, assigns, heirs, estate and past and present shareholders, equityholders, directors, managers, officers, employees and representatives (in their capacities as such) and Affiliates (collectively, the “Seller Releasing Parties”), does hereby unconditionally and irrevocably waive, release and discharge the Purchaser, the Company and each of their (a) predecessors, successors, Affiliates and subsidiaries, (b) the respective past and present shareholders, equityholders, directors, officers, employees and representatives (in their capacities as such) of such predecessors, successors, Affiliates and subsidiaries, and (c) assigns and past and present shareholders, equityholders, directors, managers, officers, employees and representatives (in their capacities as such) and Affiliates (collectively, the “Purchaser Released Parties”), from any and all loss, liability, obligations, claims, debts, accounts, covenants, contracts and judgments of every kind, in connection with any transaction or occurrence arising prior to and including the Closing (including, without limitation, relating to (i) the operation, or information provided with respect thereto, of any of the Purchaser Related Parties or the subsidiaries of the Company or their respective businesses or by virtue of or based upon the business, projections or forecasts, the ownership, operation, management, use or control of the business (or information provided with respect to any of the foregoing and (ii) for the avoidance of doubt, the Company Limited Liability Company Agreement, including with respect to any RRD Put Option as set forth in Section 9.6 thereof or that certain Amendment No. 4, dated as of October 13, 2024, thereto (“Amendment No. 4”)) of any of the Purchaser Related Parties or the subsidiaries of the Company, any of their assets or any actions or omissions at or prior to the Closing), whether in law, equity or otherwise, known or unknown, suspected or unsuspected (including any fiduciary duty claims against the Purchaser Released Parties) that any Seller Releasing Party now has, has had or could have asserted against any of the Purchaser Released Parties prior to the Closing (collectively, the “Seller Released Claims”); provided, however, that this waiver and release shall not apply to, and the Seller Released Claims shall not include, (i) any rights or claims of any Seller Releasing Party set forth in or arising under this Agreement or any other Transaction Document, (ii) any obligations of any Purchaser Released Parties set forth in or arising under this Agreement or any other Transaction Document, (iii) any rights to indemnification or exculpation of the Seller Releasing Parties provided for in the organizational documents of the Purchaser Released Parties, or claims
with respect thereto, (iv) claims under any insurance policy of the Purchaser Released Parties to which any Seller Releasing Party is a beneficiary, (v) any rights with respect to compensation or benefits earned by any Seller Releasing Party in its capacity as an employee of any Purchaser Released Party prior to and including the Closing or (vi) any rights or claims of any Seller Releasing Party with respect to any Fraud, willful misconduct, intentional misrepresentation or violation of law by any Purchaser Released Party. Each such Seller Releasing Party hereby irrevocably agrees to refrain from, directly or indirectly, asserting any claim or demand or any proceeding against any Purchaser Released Party based upon any Seller Released Claim.
4.2Subject to the receipt by the Purchaser of the consideration pursuant to Section 1.1 above by virtue of executing this Agreement and the consummation of the transactions contemplated by this Agreement, effective upon the Closing, each of the Parent, the Purchaser and the Company, on behalf of itself and its successors, assigns, and past and present shareholders, equityholders, directors, managers, officers, employees and representatives (in their capacities as such) and Affiliates (collectively, the “Company Releasing Parties”), does hereby unconditionally and irrevocably waive, release and discharge the Seller, Rodolfo Rodriguez-Duret and Graciela Victorero and each of their (a) predecessors, successors, Affiliates and subsidiaries, (b) the respective past and present shareholders, equityholders, directors, officers, employees, and representatives (in their capacities as such) of such predecessors, successors, Affiliates and subsidiaries, and (c) assigns and past and present shareholders, equityholders, directors, managers, officers, employees and representatives (in their capacities as such) and Affiliates (collectively, the “Seller Released Parties”), from any and all loss, liability, obligations, claims, debts, accounts, covenants, contracts and judgments of every kind, in connection with any transaction or occurrence arising prior to and including the Closing (including, without limitation, relating to (i) the operation, or information provided with respect thereto, of any of the Company or the subsidiaries of the Company or their respective businesses or by virtue of or based upon the business, projections or forecasts, the ownership, operation, management, use or control of the business (or information provided with respect to any of the foregoing and (ii) for the avoidance of doubt, the Company Limited Liability Company Agreement, including with respect to any RRD Put Option as set forth in Section 9.6 thereof or Amendment No. 4) of any of the Company or the subsidiaries of the Company, any of their assets or any actions or omissions at or prior to the Closing), whether in law, equity or otherwise, known or unknown, suspected or unsuspected (including any fiduciary duty claims against the Seller Released Parties) that any Company Releasing Party now has, has had or could have asserted against any of the Seller Released Parties prior to the Closing (collectively, the “Company Released Claims”); provided, however, that this waiver and release shall not apply to, and the Company Released Claims shall not include, (i) any rights or claims of any Company Releasing Party set forth in or arising under this Agreement or any other Transaction Document, (ii) any obligations of any Seller Released Parties set forth in or arising under this Agreement or any other Transaction Document, (iii) any rights to indemnification or exculpation of the Company Releasing Parties provided for in the organizational documents of the Seller Released Parties, or claims with respect thereto, (iv) claims under any insurance policy of the Seller Released Parties to which any Company Releasing Party is a beneficiary, (v) any rights with respect to compensation or benefits earned by any Company Releasing Party in its capacity as an employee of any Seller Released Party prior to and including the Closing or (vi) any rights or claims of any Company Releasing Party with respect to any Fraud, willful misconduct, intentional misrepresentation or violation of law by any Seller Released Party. Each such Company Releasing Party hereby irrevocably agrees to refrain from, directly or indirectly, asserting any claim or demand or any proceeding against any Seller Released Party based upon any Company Released Claim.
4.3It is the intention of the parties that this Agreement shall, at the Closing, be effective as a full and final accord and satisfaction, and release of the Seller Released Claims and the Company Released Claims, and that the releases herein extend to any and all Seller Released Claims and Company Released Claims of whatever kind or character, known or unknown. Accordingly, in furtherance of this intention, each of the parties expressly waives any and all rights under Section 1542 of the Civil Code of the State of California (or any similar law) with respect to the Seller Released Claims and the Company Released Claims which states in full as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
ARTICLE V
PUBLICITY
5.1Unless and only to the extent, disclosure is required by applicable law (including any communications with any regulator or regulatory body) or under the rules of any securities exchange on which the securities of such party or any of its Affiliates are listed, none of the Purchaser, the Seller nor any of their respective Affiliates or representatives or Rodolfo Rodriguez-Duret or Graciela Victorero may make any press release or other public disclosure regarding the existence of this Agreement or the other Transaction Documents, its or their contents,
or the transactions contemplated hereby or thereby without the written consent of the Purchaser and the Seller, in any case, as to the form, content, and timing and manner of distribution or publication of such press release or other public disclosure; provided that, for the avoidance of doubt, the Seller acknowledges and agrees that (i) the Parent is a public company and Parent and its subsidiaries operate in a regulated industry and, in each case, will be required to make certain disclosures with respect to this Agreement and the other Transaction Documents as a result thereof, which disclosures will not require the consent of the Seller and (ii) if Parent, Purchaser or the Company make any press release or other public disclosure that is substantially consistent with any previously made public disclosure (which was permitted to be made in accordance with this Section 5.1), such subsequent press release or other public disclosure will not require the consent of the Seller. Subject to the immediately preceding sentence, each of the Purchaser, Rodolfo Rodriguez-Duret, Graciela Victorero and the Seller shall hold confidential the terms and provisions of this Agreement and the other Transaction Documents and the terms of the transactions contemplated hereby or thereby (collectively, the “Confidential Information”); provided, that, if any such Person or any of its Representatives is requested or required by law, regulation (including the rules of any securities exchange), legal or judicial process or audit or inquiries by a regulator, bank examiner or self-regulatory organization to disclose any Confidential Information, such Person or such Representative, as applicable, may disclose such Confidential Information solely to the extent requested or required; provided, further, that, the Purchaser, Rodolfo Rodriguez-Duret, Graciela Victorero and the Seller may disclose Confidential Information to their respective Affiliates, Representatives, advisors, consultants, prospective investors and current or prospective financing sources to the extent that such Person is (i) informed by the disclosing Person of the confidential nature of the Confidential Information and (ii) agrees to adhere to the confidentiality terms hereof as if it were a party hereto or is otherwise bound by contractual or professional confidentiality obligations with respect to the Confidential Information. Any press release or other disclosure regarding the existence of this Agreement or the other Transaction Documents, its or their contents, or the transactions contemplated by this Agreement or the other Transaction Documents shall be approved in writing by the Purchaser and the Seller, such approval not to be unreasonably withheld, conditioned or delayed, other than any disclosure required under applicable law or under the rules of any securities exchange on which the securities of such party or any of its Affiliates are listed, which disclosure shall not require such approval.
ARTICLE VI
COVENANTS
6.1The Purchaser and the Seller agree that, effective as of the Closing, the Seller Limited Liability Company Agreement is amended and restated by the Seller 2nd A&R LLCA and, effective immediately prior to the Closing, the Class P Cancellation Agreements provide that the holders of the Class P Units of the Seller agree to cancel their Class P Units and all rights of such holders with respect to such Class P Units in exchange for the right of each such holder to receive (a) his or her Initial Payment (as defined in such holder’s Class P Cancellation Agreement), if any, (b) his or her Contingent Payments (as defined in such holder’s Class P Cancellation Agreement), if any, and (b) his or her applicable portion of the Future Payments Amount as set forth on such holder’s Class P Cancellation Agreement (each, an “Individual Future Payments Amount”).
6.2The Purchaser and the Seller agree that, effective as of immediately prior to the Closing, the Class P Cancellation Agreements provide that the holders of the Class P Units of the Seller have all right, title and interest in the Future Payments Amount. The Seller hereby irrevocably directs the Purchaser to pay, on behalf of the Seller, each of the holders of the Class P Units his or her Individual Future Payments Amount, and the Purchaser irrevocably agrees to, and the Parent irrevocably agrees to cause the Purchaser to, make all such payments on behalf of the Seller. For the avoidance of doubt, pursuant to and subject to the terms and conditions of this Agreement, including Section 1.1 above, the Purchaser will be deemed to pay the Seller the Future Payments Amount and the Seller will be deemed to pay the Future Payments Amount to the applicable holders of the Class P Units of the Seller, in each case solely after the Purchaser actually makes such payments directly to the applicable holders of the Class P Units of the Seller. Notwithstanding anything to the contrary in this Agreement or any other Transaction Document, none of the Seller, Rodolfo Rodriguez-Duret, Graciela Victorero or any of their respective Affiliates shall in any event be required to pay to any holders of the Class P Units (i) the Future Payments Amount or any portion thereof, (ii) any Individual Future Payments Amount or any portion thereof, or (iii) any amounts payable under the Class P Cancellation Agreement (other than the Initial Payment and the Contingent Payments, if any, as such terms are defined therein).
6.3The Purchaser and the Seller agree that each of the holders of the Class P Units has, as of the date hereof, executed and delivered to the Purchaser a Class P Cancellation Agreement with the Seller and the Purchaser substantially in the form attached hereto as Exhibit C, which provides that (i) all Class P Units are cancelled effective as of immediately prior to the Closing, (ii) such holder is entitled to the payments described in Section 2 therein and (iii) such holder shall not have any further right or claim of any kind against the Seller or the Purchaser (other than as specifically set forth in Section 3 therein).
6.4Each of the Seller and the Purchaser agree that, for U.S. federal (and applicable state and local) income tax purposes, the transactions contemplated by this Agreement shall be treated, consistent with Revenue Ruling 99-6, Situation 1, as a sale of partnership interests under Section 741 of the Code by the Seller and as a
purchase of a portion of the assets of the Company by Purchaser. For purposes of determining the income tax consequences of the transactions contemplated hereby, the amount realized (as determined for federal income tax purposes) shall be allocated among the assets of the Company in a manner consistent with Section 1060 of the Code and the Treasury Regulations thereunder and the methodologies on Schedule 6.4. The Purchaser shall deliver to the Seller a draft statement (the “Draft Purchase Price Allocation”) within 90 days following the date of Closing, setting forth the Purchaser’s good faith determination of such allocation in accordance with the preceding sentence. The Seller shall notify the Purchaser in writing within thirty (30) days of receipt of such Draft Purchase Price Allocation of any disputes with respect to such Draft Purchase Price Allocation, and if the Seller fails to notify the Purchaser of any disputes within such period, the Draft Purchase Price Allocation shall be deemed final. The Purchaser and the Seller shall negotiate in good faith for thirty (30) days (or longer, if mutually agreed to by the parties) to resolve any dispute with respect to the Draft Purchase Price Allocation; provided, however, if the Purchaser and the Seller are unable to resolve any dispute with respect to the Draft Purchase Price Allocation within such time, the Purchaser and the Seller shall submit the disputed items to Grant Thornton LLP or such other mutually acceptable dispute resolution group of an independent accounting firm or financial consulting firm, other than the accountants of the Purchaser, the Seller or their respective Affiliates (the “Accounting Firm”) for review and resolution of any and all matters that remain in dispute (and as to no other matter), and the Accounting Firm shall reach a final, binding resolution of all matters that remain in dispute (the Draft Purchase Price Allocation as finalized under this Section 6.4, the “Final Purchase Price Allocation”). The Accounting Firm’s resolution of the disputed items and its adjustments to Draft Purchase Price Allocation, shall be conclusive and binding upon the parties. The Purchaser and the Seller further agree to file all income tax returns and any other tax filings required in a manner consistent with the Final Purchase Price Allocation and shall take no contrary position prior to a final “determination” by a Governmental Entity within the meaning of Section 1313 of the Code.
6.5The Company shall, at the Company’s sole cost and expense, prepare and timely file, or cause to be prepared and timely filed, all income tax returns of the Company for any taxable period (or portion thereof) ending on or before the date of Closing (a “Pre-Closing Tax Period”) that is due after the Closing (after taking into account extensions of the due date for the filing of any such tax returns). Such tax returns shall be prepared and signed by Agreda & Company CPA under the direction of, and as determined by, the Company in manner consistent with the past practices of the Company (except as to the allocation of expenses and except that such tax returns shall be prepared in accordance with Amendment No. 4 to the Amended and Restated Limited Liability Agreement of the Company) unless otherwise required by applicable law. The Purchaser shall submit such tax return to the Seller at least thirty (30) calendar days prior to the due date (including extensions) of such tax return for the Seller’s review and comment. The Purchaser shall reasonably consider in good faith any comments made by the Seller with respect to such tax returns.
6.6To the extent the following actions could reasonably be expected to increase the tax liability of Rodolfo Rodriguez-Duret or Graciela Victorero, the Parent and the Purchaser covenant that they shall not cause or permit the Company or any of its Affiliates to, and the Company agrees not to (a) take any action on the date of Closing after the Closing other than in the ordinary course of business; (b) make, change or revoke any income tax election or deemed income tax election or change any accounting period for income tax purposes (including for non-U.S. tax reporting purposes) that would be effective for any Pre-Closing Tax Period; (c) except as provided in Section 6.5, file or amend or otherwise modify any income tax return of the Company relating to a Pre-Closing Tax Period (provided that for the avoidance of doubt, this Section 6.6(c) shall not apply to actions in response to an audit or other examination initiated by any taxing authority other than an election to make a “push-out” election pursuant to Section 6226 of the Code); or (d) extend or waive the applicable statute of limitations with respect to any income tax return of the Company relating to a Pre-Closing Tax Period, in each case, without the consent of the Seller (such consent not to be unreasonably withheld, conditioned or delayed).
6.7Rodolfo Rodriguez-Duret and Graciela Victorero hereby resign as employees, officers, managers and directors of the Company, which resignations shall be effective as of the Closing. The Purchaser shall, or shall cause the Company to, reimburse Rodolfo Rodriguez-Duret for the monthly Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) premium paid by or on behalf of Rodolfo Rodriguez-Duret for himself and his dependents for the period beginning on the date hereof and ending on April 30, 2026.
6.8Promptly after the Closing, the parties will use reasonable efforts to, in good faith, negotiate and finalize documents with respect to Buildco that are consistent with the terms set forth in the LOI, including the Buildco MSA (as defined the LOI), and such other terms as may be agreed by the parties.
ARTICLE VII
OTHER MATTERS
7.1Amendments and Waivers. Amendments or modifications to this Agreement may only be made, and compliance with any term, covenant, agreement, condition or provision set forth herein may only be
omitted or waived (either generally or in a particular instance and either retroactively or prospectively), upon the written consent of each of the parties hereto. This Agreement constitutes the full and complete agreement of the parties with respect to the subject matter hereof.
7.2Further Assurances. From time to time, the Seller, Rodolfo Rodriguez-Duret, Graciela Victorero, the Parent, the Company and the Purchaser will execute and deliver, or cause to be executed and delivered, all such documents and instruments as may be reasonably necessary to consummate the transactions contemplated by this Agreement.
7.3Notices. All notices and other communications hereunder shall be in writing and shall be deemed given (i) upon the earlier of delivery thereof if by hand (with written confirmation of receipt); (ii) on the second day (not including a Saturday, Sunday or other day on which banking institutions in the City of New York, New York shall be permitted or required by law or executive order to be closed) after deposit if sent by a recognized overnight delivery service; or (iii) upon transmission if sent by electronic mail (with non-automated confirmation of receipt), as follows:
If to the Purchaser, the Parent or the Company:
℅ NeueHealth, Inc.
8000 Norman Center Drive, Suite 900
Minneapolis, MN 55437
Attention: General Counsel
Email: jcraig@neuehealth.com
with a copy to:
Simpson Thacher & Bartlett LLP
2475 Hanover Street
Palo Alto, CA 94304
Attention: Atif Azher
Email: aazher@stblaw.com
If to the Seller, Rodolfo Rodriguez-Duret or Graciela Victorero:
RRD Healthcare, LLC
13051 Mar Street
Coral Gables, FL 33156
Attention: Rodolfo Rodriguez-Duret and Graciela Victorero
Email: rudy@rodriguez-duret.com and cti3400@yahoo.com
with a copy to:
Holland & Knight LLP
701 Brickell Avenue, Suite 3300
Miami, Florida 33131
Attention: Roberto Pupo and Daniel Ramos
Email: roberto.pupo@hklaw.com and daniel.ramos@hklaw.com
7.4Governing Law. This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the State of Delaware.
7.5Enforcement. The parties hereto agree that irreparable damage for which monetary damages, even if available, would not be an adequate remedy, would occur in the event that the parties hereto breach or otherwise do not fully and timely perform their respective obligations under or in connection with the provisions of this Agreement in accordance with their specific terms or otherwise breach such provisions. It is accordingly agreed that each party hereto shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically all terms and provisions hereof (in each case without any
requirement to provide any bond or other security in connection therewith), this being in addition to any other remedy to which they are entitled at law or in equity. Each of the parties hereto agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief permitted by this Section 7.5.
7.6Submission to Jurisdiction. Each of the parties hereto irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement brought by any party or its successors or assigns against any other party shall be brought and determined in the Court of Chancery of the State of Delaware or in any federal court located in the State of Delaware. Each of the parties hereto hereby irrevocably submits to the exclusive jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this Agreement and the transactions contemplated hereby. Each of the parties hereto agrees not to commence any action, suit or proceeding relating thereto except in the courts described above in Delaware, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in Delaware as described herein. Each of the parties hereto further agrees that notice as provided herein shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient. Each of the parties hereto hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, (a) any claim that such party is not personally subject to the jurisdiction of the courts in Delaware as described herein for any reason, (b) that such party or its/his/her property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
7.7Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
7.8Defined Terms.
(a)“Affiliate” means, with regard to any specified Person, a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified Person. A Person shall be deemed to control another Person if such first Person possesses, directly or indirectly, the power to direct, or cause the direction of, the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise. For the avoidance of doubt, the Company and its direct and indirect subsidiaries are Affiliates of the Parent and the Purchaser and are not Affiliates of the Seller, Rodolfo Rodriguez-Duret or Graciela Victorero.
(b)“Buildco” means an entity to be formed by the Seller or its Affiliates that is reasonably acceptable to the Buyer.
(c)“Code” means the Internal Revenue Code of 1986, as amended.
(d)“Company Limited Liability Company Agreement” means that certain Amended and Restated Limited Liability Company Agreement of the Company, dated as of July 1, 2021, as it has been amended, restated, supplemented or modified from time to time prior to the date hereof.
(e) “Consent” means any consent, approval, authorization or permit of, or any filing with or notification to, any Governmental Entity or any third party.
(f)“Fraud” means an actual and intentional common law fraud (but not constructive or equitable) committed by a party.
(g)“Governmental Entity” means any federal, national, state, territorial, commonwealth, provincial, local or other government or any governmental, regulatory, self-regulatory or administrative authority, agency, bureau, board, commission, court, judicial or arbitral body, department, political subdivision, tribunal or other instrumentality thereof.
(h)“LOI” means that certain Confidential and Non-Binding Amended and Restated Letter of Intent, by and between the Seller and the Purchaser, dated as of May 20, 2024.
(i)“Permitted Encumbrances” means (i) restrictions under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, or under the securities laws of any state or other jurisdiction, (ii) Encumbrances created pursuant to the Company Limited Liability Company Agreement, (iii) Encumbrances created pursuant to this Agreement or any other Transaction Documents and (iv) Encumbrances created by the Parent, the Purchaser or any of their respective Affiliates.
(j)“Person” means an association, a corporation, an individual, a partnership, a limited liability company, a trust, or any other entity or organization, including a Governmental Entity.
(k)“Seller Limited Liability Company Agreement” means that certain Amended and Restated Limited Liability Company Agreement of the Seller, dated as of July 1, 2021, as it has been amended, restated, supplemented or modified from time to time prior to the date hereof.
7.9Assignment. None of the parties hereto may assign or otherwise transfer any of such party’s rights or delegate any of such party’s obligations to any other Person without the prior written consent of the other parties hereto. This Agreement shall be binding upon and accrue to the benefit of each of the parties hereto and each of their respective successors and permitted assigns. Notwithstanding the foregoing, the Purchaser may, without obtaining any Person’s prior written consent, (A) assign this Agreement (in whole but not in part) to one or more of its Affiliates (provided, however, that no such assignment shall relieve the Purchaser of its obligations under this Agreement), (B) collaterally assign its rights hereunder to any lender or debt financing source of the Purchaser or any of its Affiliates and/or (C) assign this Agreement (in whole but not in part) to any purchaser of all or substantially all of the assets or stock of the Purchaser or the Parent, solely after the Closing.
7.10Damages Cap. Other than in the event of Fraud with respect to the making of the representations and warranties set forth in this Agreement, the aggregate amount of all losses, damages, liabilities, deficiencies, actions, judgments, interest, awards, penalties, fines, costs or expenses of whatever kind (collectively, “Losses”) for which (a) the Purchaser, on the one hand, or (b) the Seller, Rodolfo Rodriguez-Duret and Graciela Victorero, on the other hand, shall be liable resulting from or arising out of any breach of, or inaccuracy in, any of the representations or warranties set forth in this Agreement shall not exceed an amount equal to the sum of the Cash Amount plus the Note Amount; provided that if the Seller, Rodolfo Rodriguez-Duret or Graciela Victorero breach any of the representations or warranties set forth in this Agreement (or such representations or warranties are inaccurate) and Purchaser or its Affiliates or Representatives suffer Losses in respect thereof for which Seller, Rodolfo Rodriguez-Duret or Graciela Victorero are finally determined to be liable, then the amount of such Losses shall first be set-off against the outstanding obligations of the Purchaser and its Affiliates under the Note and the other Loan Documents until such obligations are reduced to zero as follows: first against any fees or charges outstanding thereunder, second against accrued and unpaid interest thereunder, and third against the principal amount outstanding thereunder.
7.11Counterparts. This Agreement may be executed in multiple counterparts (including via electronic signature and any of which may be delivered by .pdf or other electronic transmission), each of which shall be deemed an original, but all of which together shall constitute one and the same agreement.
7.12Headings. The article and section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties hereto and shall not affect in any way the meaning or interpretation of this Agreement.
7.13Severability. In case any provision in this Agreement shall be held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and the remaining provisions shall not in any way be affected or impaired thereby.
7.14Waiver of Compliance. No waiver or failure to insist upon strict compliance with any obligation, covenant, agreement or condition hereunder shall operate as a waiver of, or estoppel with respect to, any other failure.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement on the date first written above.
Purchaser
Medical Practice Holding Company, LLC
__________________________________________
Name: [●]
Title: [●]
Parent (solely for purposes of Articles IV and VII and Sections 6.2, 6.5 and 6.6)
NeueHealth, Inc.
__________________________________________
Name: [●]
Title: [●]
Company (solely for purposes of Articles IV and VII and Sections 6.2, 6.5 and 6.6)
Centrum Medical Holdings, LLC
__________________________________________
Name: [●]
Title: [●]
14
[Signature Page to Unit Purchase Agreement]
Seller
RRD Healthcare, LLC
By:
Name: Rodolfo Rodriguez-Duret
Title: Manager
solely for purposes of Articles IV, V and VII and Sections 2.2 and 6.2:
Rodolfo Rodriguez-Duret
solely for purposes of Articles IV, V and VII and Sections 2.3 and 6.2:
Graciela Victorero
15
[Signature Page to Unit Purchase Agreement]
ANNEX A
| | | | | |
Holder | Individual Future Payments Amount ($) |
Alexis Manuel Agreda | $ |
Joaquin Baralt | $ |
Carlos A. Fernandez | $ |
Nicolas Lievano | $ |
Arturo Diaz | $ |
Tomas I. Orozco | $ |
EXHIBIT A
Form of Note
(See attached)
EXHIBIT B
Form of Subordination Agreement
(See attached)
EXHIBIT C
Form of Class P Unit Cancellation and Release Agreement
(See attached)]
EXHIBIT D
Form of Second Amended and Restated Limited Liability Company Agreement of
Centrum Medical Holdings, LLC
(See attached)
EXHIBIT E
Form of Noncompetition and Nonsolicitation Agreement
(See attached)
EXHIBIT F
Leases
1.7200 NW 7th St., Ste. 100, Miami, FL 33126
2.7200 NW 7th St., Ste. 150, Miami, FL 33126
3.7200 NW 7th St., Ste. 200, Miami, FL 33126
4.7200 NW 7th St., Ste. 201, Miami, FL 33126
5.7200 NW 7th St., Ste. 202, Miami, FL 33126
6.7200 NW 7th St., Ste. 204, Miami, FL 33126
7.7200 NW 7th St., Ste. 206, Miami, FL 33126
8.7200 NW 7th St., Ste. 320, Miami, FL 33126
9.900 W. 49th St., Ste. 206, Hialeah, FL 33012
10.900 W. 49th St., Ste. 304, Hialeah, FL 33012
11.900 W. 49th St., Ste. 308, Hialeah, FL 33012
12.900 W. 49th St., Ste. 500, Hialeah, FL 33012
13.4218 E. 4th Ave., Hialeah, FL 33013
14.4767 NW 183rd St., Miami Gardens, FL 33055
15.434 SW 12th Ave., Ste. 100, Miami, FL 33130
16.10980 SW 184th St., Miami, FL 33157
17.28610 SW 157th Ave., Miami, FL 33033
EXHIBIT G
Form of Second Amended and Restated Limited Liability Company Agreement of
RRD Healthcare, LLC
(See attached)
SCHEDULE 6.4
Allocation Methodologies
| | | | | |
Class | Methodology |
Class I (cash and cash equivalent) | The book value of Class I assets as of the Closing Date. |
Class II (highly liquid assets) | None. |
Class III (accounts receivable) | The net book value of Class III assets as of the Closing Date. |
Class IV (inventory) | None. |
Class V (other tangible assets) | The net book value of Class V assets as of the Closing Date. |
Class VI & VII (§197 intangibles and goodwill and going concern value) | Any remaining amount. |
SECURED PROMISSORY NOTE
$63,950,000.00 October 29, 2024
FOR VALUE RECEIVED, and subject to the terms and conditions set forth herein, Medical Practice Holding Company, LLC, a Delaware limited liability company (“MPHC” or the “Borrower”), hereby unconditionally promises to jointly and severally pay to the order of RRD Healthcare, LLC, a Florida limited liability company (together with its successors or assigns, the “Noteholder,” and together with the other Persons party to this Note, the “Parties”), the principal amount of Sixty-Three Million Nine Hundred Fifty Thousand and No/100 Dollars ($63,950,000.00) (the “Loan”), together with all accrued interest thereon and all other amounts owing hereunder from time to time, as provided in this Secured Promissory Note (this “Note”).
This Note is executed and delivered pursuant to, and in connection with, that certain Equity Purchase Agreement, dated as of the date hereof, by and among MPHC, the Noteholder and the other parties thereto (as so amended or otherwise modified from time to time pursuant to its terms, the “Purchase Agreement”).
1. Interpretation. For purposes of this Note (a) the words “include,” “includes,” and “including” shall be deemed to be followed by the words “without limitation”; (b) the word “or” is not exclusive; and (c) the words “herein,” “hereof,” “hereby,” “hereto,” and “hereunder” refer to this Note as a whole. The definitions given for any defined terms in this Note shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine, and neuter forms. Unless the context otherwise requires, references herein to: (i) Schedules, Exhibits, and Sections mean the Schedules, Exhibits, and Sections of this Note; (ii) an agreement, instrument, or other document means such agreement, instrument, or other document as amended, supplemented, and modified from time to time to the extent permitted by the provisions thereof; (iii) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time; (iv) any Default or Event of Default that has occurred shall be deemed to be continuing until it has been waived by Noteholder in accordance with the terms of this Note or, in the case of a Default, cured; (v) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all real and personal property and tangible and intangible assets and properties, including, for the avoidance of doubt, any cash, securities, accounts and contract rights and any “fixtures” or the like; and (vi) unless otherwise expressly provided herein or in any other Loan Document, the “discretion” of the Noteholder shall mean its sole and absolute discretion. This Note shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.
2. Defined Terms. The following capitalized terms used in this Note have the meanings defined or referenced below. Terms used but not defined herein shall have the meaning given such terms in the Purchase Agreement. Certain other capitalized terms used only in specific sections of this Note may be defined in such sections.
“Acceptable Definitive Purchase Agreement” means, collectively, a binding definitive purchase agreement and related purchase documents providing for an Acceptable Sale that can be consummated on or before the last day of the Negotiation Period.
“Acceptable Sale” means a sale to any Person(s) of all or, subject to Noteholder’s prior written consent (not to be unreasonably withheld, conditioned or delayed), a subset of the Centrum Assets in one transaction or a series of simultaneous transactions (whether consummated as an asset sale or sale of Equity Interests, or both), it being understood and agreed that any such sale shall result in Payment in Full without any liability or obligation to the Noteholder or its Affiliates.
“ACO REACH Model” means the Accountable Care Organization Realizing Equity, Access and Community Health Model implemented by CMS under section 1115A of the Social Security Act.
“Acquisition” means any transaction or series of related transactions (including without limitation by way of merger or in licensing arrangement) for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any business, line of business, product line or division or other unit of operation of a Person, or (b) the acquisition of fifty percent (50%) or more of the Equity Interests of any Person, whether or not involving a merger, consolidation or similar transaction with such other Person, or otherwise causing any Person to become a Subsidiary of any Loan Party.
“Affiliate(s)” means, with respect to any Person, (x) another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified and/or (y) such person’s immediate family members, partners, equityholders, members or parent and subsidiary corporations.
“Anti-Corruption Laws” means all Laws of any jurisdiction applicable to the Restricted Group from time to time concerning or relating to bribery or corruption.
“Applicable Rate” means 6% per annum.
“Approved Investment Banker” means an investment banker chosen by the Loan Parties and approved by the Noteholder (which approval shall (x) be deemed to be given if Noteholder has not delivered notice of objection within 5 Business Days of receipt by Lender of prior written notice thereof from Borrower and (y) not be unreasonably withheld, conditioned or delayed), with it being understood that any Person that is a nationally recognized investment bank identified to and approved by the Noteholder prior to the Effective Date shall be deemed reasonable), in each case, to be retained by the Borrower on terms reasonably acceptable to the Noteholder (which acceptance shall (x) be deemed to be given if Noteholder has not delivered notice of objection within 5 Business Days of receipt by Lender of prior written notice thereof from the Borrower and (y) not be unreasonably withheld, conditioned or delayed; provided that such terms shall be on customary terms and conditions for transactions of this type) to provide investment banking services as part of the Sale Process.
“Bessemer” means Bessemer Venture Partners and its Affiliates (other than any portfolio company).
“Board” means, in respect of any Person, such person’s board of directors, board of managers or any similar governing body.
“Bright Health” means Bright Health Services, Inc., a Delaware corporation.
“Business Day” means any day other than a Saturday or Sunday or any other day
on which banking institutions in the State of Delaware, the State of Florida or the State of California are generally authorized or required by law or executive order to be closed.
“CalSTRS” means California State Teachers’ Retirement System.
“Capital Lease Obligations” of any Person shall mean all obligations of such Person to pay rent or other amounts under any lease (or other arrangement conveying the right to use) of real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“Centrum” means Centrum Medical Holdings, LLC, a Delaware limited liability
company.
“Centrum Assets” means, collectively, the Equity Interests in Centrum and in each of Centrum’s direct and indirect Subsidiaries and all of the assets of Centrum and of its direct and indirect Subsidiaries from time to time.
“CFC” means a Subsidiary that is a “controlled foreign corporation” within the meaning of Section 957 of the Code and which is owned, within the meaning of Section 958(a) of the Code, by a United States shareholder within the meaning of Section 951(b) of the Code.
“CFC Holdco” means a Subsidiary that has no material assets other than the Equity Interests or the Equity Interests and Indebtedness of one or more CFCs or CFC Holdcos.
“Change of Control” means the occurrence of any one or more of the following events:
(a)the sale, exchange or other disposition of substantially all of the assets of Centrum or any of its Subsidiaries, taken as a whole, other than in the ordinary course of its business and other than any transaction expressly permitted by Section 9.4; or
(b)any person or Persons constituting a “group” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any Permitted Holder and any employee benefit plan of such person and its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13(d)- 3 and 13(d)-5 under such Act), directly or indirectly, of Equity Interests representing more than fifty percent (50%) of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of Parent; or
(c)Parent shall cease to directly own 100% of the voting and non-voting Equity Interests of Bright Health; or
(d)Bright Health shall cease to directly own 100% of the voting and non-voting Equity Interests of Borrower; or
(e)Borrower shall cease to directly own 100% of the voting and non-voting Equity Interests of Centrum; or
(f)Centrum shall cease to directly or indirectly (as the case may be) own 100% of the voting and non-voting Equity Interests of each of its direct and indirect Subsidiaries, except as expressly permitted pursuant to Section 9.4; or
(g)any “change of control” or similar event occurs under the Permitted Senior Debt or any refinancing or replacement thereof.
“Cigna” means The Cigna Group and its Subsidiaries.
“CMS” means The Centers for Medicare and Medicaid Services, or any successor Governmental Authority thereto.
“Code” means the Internal Revenue Code of 1986, as amended.
“Collateral” has the meaning set forth in the Security Agreement.
“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any Indebtedness, lease (excluding operating leases of real property), dividend, letter of credit or other payment obligation of another Person, including any such payment obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any obligations with respect to undrawn letters of credit, corporate credit cards or merchant services issued for the account of that Person; and (iii) all obligations arising under any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Contingent Obligation shall be deemed, without duplication of the primary obligation, to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support arrangement.
“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Control Investment Affiliate” means, as to any Person, any other Person that (a) directly or indirectly, is in Control of, is Controlled by, or is under common Control with, such Person and (b) is organized by such Person primarily for the purpose of making equity or debt investments in one or more companies.
“Copyright License” means any written agreement granting any right to use any Copyright or Copyright registration, now owned or hereafter acquired by a Loan Party or in which a Loan Party now holds or hereafter acquires any interest.
“Copyrights” means all copyrights, whether registered or unregistered, arising under the laws of the United States of America or of any other country.
“Debtor Relief Laws” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions (foreign or otherwise) from time to time in effect and affecting the rights of creditors generally.
“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
“Default Rate” means the Applicable Rate plus 8% per annum.
“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction or any issuance of Equity Interests, in each case, whether consummated in a single transaction or in a series of transactions and whether effected pursuant to a Division or otherwise) of any property by any member of the Restricted Group, including the Equity Interests of any Subsidiary and the sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.
“Disqualified Equity Interests ” mean any Equity Interests that, by their terms (or by the terms of any security or other Equity Interests into which they are convertible or for which they are exchangeable) or upon the happening of any event or condition, (a) mature or are mandatorily redeemable (other than solely for Equity Interest that is not Disqualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full in cash of all amounts owing under this Note resulting in Payment in Full), (b) are redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests) (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of all amounts owing under this Note resulting in Payment in Full), in whole or in part, (c) provide for the scheduled payment of dividends or other distributions in cash or other assets, or (d) are or become convertible into, or
exchangeable for, Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case of clauses (a) through (d), prior to the date that is 180 days after the Maturity Date.
“Distributions” means (a) any dividend, distribution or other payment (whether in cash, securities, or other assets and including any sinking fund or similar deposit), directly or indirectly, on account of any shares (or equivalent) of any class of Equity Interests, now or hereafter outstanding, (b) any redemption, retirement, cancellation, termination sinking fund or similar payment, purchase or other acquisition for value, directly or indirectly, of any shares (or equivalent) of any class of Equity Interests, now or hereafter outstanding, (c) any payment (i) of any management fees or similar fees to any of its equity holders, or (ii) made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of Equity Interests, now or hereafter outstanding, or (d) any payment or prepayment of principal of, premium, if any, or interest on, redemption, purchase, retirement, defeasance, sinking fund or similar payment with respect to, any Indebtedness.
“Dividing Person” has the meaning assigned to it in the definition of “Division”.
“Division” means the division of the assets, liabilities and/or obligations of a Person (the “Dividing Person”) among two or more Persons (whether pursuant to a “plan of division” or similar arrangement), which may or may not include the Dividing Person and pursuant to which the Dividing Person may or may not survive.
“Domestic Subsidiary” means any Subsidiary organized under the laws of the United States of America, any State thereof or the District of Columbia.
“Effective Date” means October 29, 2024.
“Equity Interests” means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated) of corporate stock, membership interests in a limited liability company, partnership interests (general or limited), beneficial interests in a trust or other equity ownership interests in a Person, or any warrants, options or other rights to acquire such interests or other ownership interests of such Person.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.
“Event of Default” shall have the meaning in Section 10.
“Excluded Subsidiary” means any direct or indirect Subsidiary of any Loan Party that is (a) a Foreign Subsidiary that is a CFC or any Subsidiary that is a direct or indirect Subsidiary of a CFC, or a CFC Holdco, in each case to the extent that: (x) the pledge of all of the Equity Interests of such Subsidiary as Collateral, (y) the guarantee by such Subsidiary of the Obligations, or (z) the execution of a Joinder Agreement by such Subsidiary, would result in material adverse tax consequences to the Loan Party taken as a whole (as reasonably determined by Borrower in good faith), (b) a non-profit, or (c) an Insurance Subsidiary.
“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.
“GAAP” mean generally accepted accounting principles in effect in the United States of America set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination.
“Governmental Approval” means any consent, authorization, approval, order, license, franchise, permit, certificate, accreditation, or registration, required by or issued by or from any Governmental Authority.
“Governmental Authority” means the government of the United States of America or of any other country or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“Guarantee” means, with respect to any Person, each obligation and liability of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other monetary obligation of any other Person in a manner, which directly or indirectly, including any obligations of such Person, directly or indirectly, (i) to purchase, repurchase, or otherwise acquire any debt or other monetary obligation of any other Person or any property or assets constituting security therefor, (ii) to advance or provide funds for the payment or discharge of any debt or other monetary obligation of any other Person (whether in the form of loans, advances, stock purchases, capital contributions or otherwise), or to maintain solvency, assets, level of income, working capital or other financial condition of any other Person, (iii) to lease property or to purchase securities, property or services from such other Person with the purpose of assuring the owner of such indebtedness or monetary obligation of the ability of such other Person to make payment of the indebtedness or obligation, (iv) which induces the issuance of, or in connection with the issuance of, any letter of credit for the benefit of such other Person or (v) to assure a creditor against loss: provided that the term Guarantee shall not include endorsement of instruments in the course of collection or deposit or customary and reasonable indemnity obligations in effect on the Effective Date or entered into in connection with any acquisition or disposition of assets permitted under this Note (other than such obligations with respect to Indebtedness). The amount of any Guarantee shall (subject to any limitation set forth herein) be deemed to be the outstanding principal amount (or maximum stated principal amount, if larger) of the indebtedness, obligation or other liability guaranteed or supported thereby.
“Guarantors” means Centrum and each of Centrum’s direct and indirect Subsidiaries party to the Guaranty Agreement from time to time. As of the date hereof, the Guarantors include all of the entities set forth on Schedule 7.10.
“Guaranty Agreement” means that certain Guaranty of Payment, dated as of the date hereof, by and among Parent and the Guarantors party thereto from time to time in favor of the Noteholder.
“Healthcare Laws” means all applicable healthcare and health insurance Laws governing the operations, activities or services of the business of the Loan Parties or any Subsidiary, including without limitation: (a) all applicable Laws relating to: (i) billing and collection and utilization review practices relating to the payment for and provision of healthcare services, or (ii) operation and management of a managed care entity, an accountable care organization, independent practice association or equivalent provider network organization, value- based enterprise, risk-bearing entity, risk-sharing models or equivalent models that engage in provider rate negotiation or provider network development, including 42 C.F.R. Part 425, any mandatory guidance and instructions in respect of the ACO REACH Model, and applicable healthcare and insurance Laws related to the same; (b) all applicable Laws governing the corporate practice of medicine, patient brokering, patient healthcare, patient abuse, clinical personnel and fee splitting, (c) all applicable federal and state fraud and abuse laws, including, the federal Anti- Kickback Statute (42 U.S.C. §1320a-7b(b)), the Stark Law (42 U.S.C. §1395nn), the civil False Claims Act (31 U.S.C. §3729 et seq.), the administrative False Claims Law (42 U.S.C. § 1320a- 7b(a)), the Anti-Inducement Law (42 U.S.C. § 1320a-7a(a)(5)), the exclusion laws (42 U.S.C. § 1320a-7), and the Civil Monetary Penalties Law (42 U.S.C. § 1320a-7a); (d) HIPAA; 42 CFR Part 2, and any applicable equivalent state counterpart thereof the purpose of which is to ensure the privacy and security of individually identifiable health information or patient healthcare information; (e) applicable Laws governing government healthcare programs, including the Medicare Regulations and the Medicaid Regulations; (f) applicable Laws regulating pharmacies and the practice of pharmacy; (g) applicable state controlled substance Laws, the Controlled Substances Act, 21 U.S.C. § 801 et seq.; (h) the Clinical Laboratory Improvement Act (42 U.S.C.
§§ 263a et seq.); (i) applicable Laws regulating the provision of free or discounted healthcare or health services; (j) healthcare quality and safety Laws of HHS and other applicable state Governmental Authorities; (k) all applicable Laws pursuant to which Healthcare Permits are issued; each of (a) through (k) as may be amended from time to time and the regulations promulgated pursuant to each such law.
“Healthcare Permit” means all Governmental Approvals, variances, certifications, or other authorization or approval by a Governmental Authority required under Healthcare Laws applicable to the business of any member of the Restricted Group.
“Hedging Agreement” means any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement designated to protect Borrower or its Subsidiaries against fluctuation in interest rates, currency exchange rates or commodity price.
“Hercules Agent” means Hercules Capital, Inc., a Maryland corporation.
“Hercules Credit Agreement” means the Loan and Security Agreement, dated as of June 21, 2024 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time) by and among Parent, the guarantors from time to time party thereto and the several banks and other financial institutions or entities from time to time party thereto.
“Hercules Debt” means the Indebtedness under the Hercules Credit Agreement or any other “Loan Document” as defined in the Hercules Credit Agreement.
“HHS” has the meaning set forth in the definition of “OIG.”
“HIPAA” means, collectively, the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic Clinical Health (HITECH) Act and the implementing regulations thereto.
“Indebtedness” means, without duplication: (a) all indebtedness for borrowed money or the deferred purchase price of property or services (excluding trade credit entered into in the ordinary course of business due within ninety (90) days), including reimbursement and other obligations with respect to surety bonds, banker’s acceptances or similar instruments and letters of credit, (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all Capital Lease Obligations, (d) all obligations to purchase, redeem, retire or defease Disqualified Equity Interests, (e) “earnouts”, purchase price adjustments, profit sharing arrangements, deferred purchase money amounts and similar payment obligations or continuing obligations of any nature arising out of purchase and sale contracts (to the extent such obligation is reflected as a liability on the balance sheet in accordance with GAAP (other than those arising in the ordinary course of business, and excluding (i) customary indemnification obligations in connection with Permitted Investments, and (ii) ordinary course compensation related arrangements entered into with any physician group)), (f) net obligations in respect of Hedging Agreements, (g) non-contingent obligations to reimburse any bank or Person in respect of amounts paid under a letter of credit, banker’s acceptance or similar instrument, and (h) all Contingent Obligations (in the case of letters of credit, to the extent drawn upon).
“Insurance Subsidiary” means each of the Borrower’s Affiliates listed on Annex A attached hereto.
“Intellectual Property” means all of a Restricted Group member’s Copyrights, Trademarks, Patents, in-bound Licenses, trade secrets and inventions, and mask works, all of a Restricted Group member’s applications therefor and reissues, extensions, or renewals thereof, together with such Restricted Group member’s rights to sue for past, present and future infringement of Intellectual Property.
“Intercreditor Agreement” means that certain Subordination Agreement, dated as of the date hereof, by and among the Hercules Agent, the Noteholder and the other parties thereto.
“Investment” means directly or indirectly (a) ownership (including stock, partnership interests, limited liability company interests, or other Equity Interests or ownership) of or in any Person, (b) any loan, advance or capital contribution to any Person or (c) any direct or indirect Acquisition.
“Involuntary Disposition” means any loss of, damage to or destruction of, or any condemnation or other taking for public use of, any property of any member of the Restricted Group or any other event, including with respect to which any property or casualty insurance claim is made.
“Joinder Agreements” means, for each Subsidiary required to join as a Guarantor, a completed and executed Joinder Agreement in substantially the form reasonably satisfactory to the Noteholder.
“Laws” means, as to any Person, the certificate of incorporation and by-laws or other Organizational Documents of such Person, and any law (including common law), statute, ordinance, treaty, rule, regulation, order, decree, judgment, writ, injunction, settlement agreement, requirement or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“License” means any Copyright License, Patent License, Trademark License or other license of rights or interests in Intellectual Property.
“Lien” means, with respect to any asset, any mortgage, deed of trust, lien (statutory or otherwise), pledge, hypothecation, encumbrance, assignment, deposit arrangement, charge, preference, priority or other security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any Capital Lease Obligations having substantially the same economic effect as any of the foregoing) in, on or of such asset.
“Loan Document” means this Note, the Security Agreement, the Guaranty Agreement and any related loan documents or instruments designated as a “Loan Document” by Noteholder and Borrower.
“Loan Parties” means the Borrower and the Guarantors. For the avoidance of doubt, Parent is not a Loan Party.
“Material Adverse Effect” means a material adverse effect upon: (i) the business, operations, properties, assets or financial condition of Loan Parties or Subsidiaries of the Loan Parties, taken as a whole; or (ii) the ability of the Loan Parties (taken as a whole) to perform or pay the Obligations in accordance with the terms of this Note or any other Loan Documents, or
(iii) the ability of Noteholder to enforce any material portion of its rights or remedies, taken as a whole, with respect to the Obligations; or (iv) a material part of the Noteholder’s Liens on the Collateral or the priority of such Liens other than, in the case of the preceding clause (iii) and this clause (iv), to the extent resulting solely from any actions or inactions on the part of Noteholder (where applicable, despite timely receipt of information regarding any Loan Party as required by this Note).
“Material Amount” means $500,000.
“Material Default” means those Events of Default set forth in Section 10.1(a), Section 10.1(b) (provided that that amount of all such defaulted interest (taken as a whole) exceeds $1,918,500.00), Section 10.2, Section 10.3, Section 10.4, Section 10.5, Section 10.9 and Section 10.10.
“Maturity Date” means October 29, 2028.
“Medicaid Regulations” means, collectively, (i) all federal statutes (whether set forth in Title XIX of the Social Security Act or elsewhere) affecting the medical assistance program established by Title XIX of the Social Security Act and any statutes succeeding thereto; (ii) all applicable provisions of all federal regulations, and orders of all federal Governmental
Authorities promulgated pursuant to or in connection with the statutes described in clause (i) above; and (iii) all state statutes, and plans for medical assistance enacted in connection with the statutes and provisions described in clauses (i) and (ii) above; and (iv) all applicable provisions of all state regulations and orders of all state Governmental Authorities promulgated pursuant to or in connection with the statutes described in clause (iii) above, in each case as may be amended, supplemented or otherwise modified from time to time.
“Medicare Regulations” means, collectively, (i) all federal statutes (whether set forth in Title XVIII of the Social Security Act or elsewhere) affecting the health insurance program for the aged and disabled established by Title XVIII of the Social Security Act and any statutes succeeding thereto; and (ii) all applicable provisions of all regulations, manuals, bulletins, and orders promulgated by the applicable Governmental Authorities (including the CMS, the OIG, HHS, or any Governmental Authority that is a successor agency to CMS, OIG or HHS) pursuant to the statutes described in clause (i) above or otherwise having the force of law, as each may be amended, supplemented or otherwise modified from time to time.
“Molina Agreement” means that certain Stock Purchase Agreement, dated as of June 29, 2023, by and among Bright Health Company of California, Inc., Universal Care, Inc., Central Health Plan of California, Inc., Parent and Molina Healthcare, Inc., as amended by that certain Amendment to Stock Purchase Agreement, dated as of December 13, 2023, by and among Bright Health Company of California, Inc., Universal Care, Inc., Central Health Plan of California, Inc., Parent and Molina Healthcare, Inc.
“NEA” means NEA Management Company, LLC, a Delaware limited liability company and its Control Investment Affiliates.
“Negotiation Period” means the period beginning on the date on which the Noteholder delivers written notice of the occurrence of a Material Default and ending on the date that is six (6) months immediately thereafter (the “Outside Date”); provided that, if as of the Outside Date, (i) an Acceptable Definitive Purchase Agreement has been fully executed with respect to an Acceptable Sale but the transactions contemplated therein are not reasonably expected to be consummated as of the Outside Date despite the reasonable best efforts of the Borrower and its Affiliates, (ii) no party thereto is in material breach of their respective obligations thereunder as of such date, and (iii) all of the closing conditions therein are reasonably expected to be fully satisfied within the three (3) month period immediately following the Outside Date, then the Borrower may, upon written notice to the Noteholder no earlier than 15 days prior to the Outside Date and no later than 5 days prior the Outside Date (which written notice shall include a certification that the foregoing (i) through (iii) are true and correct as of the delivery date and the Outside Date), extend the Negotiation Period until the date that is three (3) months immediately following the Outside Date.
“Obligations” means, collectively, all amounts owing by the Loan Parties to the Noteholder pursuant to or in connection with this Note and each other Loan Document, including without limitation, all principal, interest (including any interest accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to any Loan Party or any Affiliate thereof, whether or not a claim for post-filing or post- petition interest is allowed or allowable in such proceeding), all reimbursement obligations, fees
(including any fees accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to any Loan Party or any Subsidiary thereof, whether or not a claim for post-filing or post-petition fees is allowed in such proceeding), expenses (including all fees and expenses of counsel to Noteholder incurred pursuant to this Note or any other Loan Document), indemnification and reimbursement payments, and costs and expenses, whether direct or indirect, absolute or contingent, liquidated or unliquidated, due or to become due, now existing or hereafter arising hereunder or thereunder.
“OIG” means The Office of Inspector General of the United States Department of Health and Human Services (“HHS”) and any successor thereof.
“Organization Documents” shall mean, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.
“Parent” means NeueHealth, Inc., a Delaware corporation (formerly known as, Bright Health Group, Inc.).
“Patent License” means any written agreement granting any right with respect to any invention on which a Patent is in existence or a Patent application is pending, in which agreement a Restricted Group member now holds or hereafter acquires any interest.
“Patents” means all letters patent of, or rights corresponding thereto, in the United States of America or in any other country, all registrations and recordings thereof, and all applications for letters patent of, or rights corresponding thereto, in the United States of America or any other country.
“Payment in Full” means the payment in full in cash of the total amount owing under this Note and under any other Loan Document, including any and all accrued and unpaid interests and all other fees, expenses and indemnification obligations owed or owing hereunder or thereunder (other than contingent amounts for which a claim has not been made or asserted).
“Permitted Holder” means each of Bessemer, CalSTRS, Cigna, NEA and StepStone.
“Permitted Indebtedness” means
(a)Obligations under this Note and the other Loan Documents;
(b)Indebtedness under the Hercules Credit Agreement in an aggregate
principal amount outstanding not to exceed at any time the sum of $150,000,000 minus the amount
of any prepayments thereunder, plus the amount of any accrued interest that is paid in kind or capitalized pursuant to the terms of the Hercules Credit Agreement as in effect on the date hereof;
(c)(A) hedging obligations incurred so long as of the time of incurrence they were entered into in the ordinary course of business for bona fide hedging purposes and not for speculation and (B) Indebtedness incurred in the ordinary course of business in respect of netting services, overdraft protections, automatic clearinghouse arrangements, and other similar cash management arrangements;
(d)Indebtedness in an aggregate principal amount of up to Four Million Dollars ($4,000,000) outstanding at any time secured by a Lien described in clause (c) of the defined term of “Permitted Liens,” provided such Indebtedness does not exceed the cost of the Equipment, software or other Intellectual Property financed with such Indebtedness;
(e)Indebtedness consisting of (i) guarantees incurred in the ordinary course of business with respect to surety and appeal bonds, performance bonds, bid bonds, appeal bonds, completion guarantees, letters of credit and similar obligations and (ii) obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, entered into in the ordinary course of business;
(f)Intercompany Indebtedness of any Loan Party owing to another Loan Party to the extent put in place in the ordinary course of business of the Loan Parties;
(g)Indebtedness of the Borrower or any Subsidiary that is subordinated in right of payment and security in all respects to the Obligations in form and substance acceptable to the Noteholder in its reasonable discretion;
(h)Indebtedness incurred in the ordinary course of business with corporate credit cards, credit card processing services, employee credit card programs, debit cards, stored value cards, purchase cards (including so “P-cards”) or other similar cash management services in an aggregate principal outstanding amount not to exceed Two Million Dollars ($2,000,000) at any time;
(i)Indebtedness consisting of financing of insurance premiums in the ordinary course of business;
(j)[reserved];
(k)Indebtedness that also constitutes a Permitted Investment or is secured by a Permitted Lien;
(l)[reserved];
(m)Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of business;
(n)Indebtedness owed to any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance, pursuant
to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business;
(o)extensions, refinancings and renewals of any items of Permitted Indebtedness, provided that (i) the principal amount is not increased, other than the amount of accrued interest, fees and premiums, if any, (ii) the terms are not modified to impose materially more burdensome terms upon any Loan Party or their respective Subsidiaries, as the case may be, and subject to any limitations on the aggregate amount of such Indebtedness) and (iii) any such indebtedness is subordinated (in right of payment and/or security, as the case may be) to the Obligations at least to the same extent, if any, as the Indebtedness being extended, renewed, replaced, modified, exchanged or refinanced (and unsecured if the extended, renewed, replaced, modified, exchanged or refinanced Indebtedness is unsecured);
(p)accrued expenses, deferred rent expense, deferred revenue, deferred Taxes and deferred compensation and customary obligations under employment arrangements in each case incurred in the ordinary course of business;
(q)customary payables with respect to money orders or wire transfers; and
(r)the mark-to-market value of obligations under any Hedging Agreements incurred in the ordinary course of business; and
(s)obligations under the Unit Purchase Agreement, dated as of the date hereof and as amended, supplemented or otherwise modified from time to time, by and among Medical Practice Holding Company, LLC, RRD Healthcare, LLC, Rodolfo Rodriguez- Duret, Graciela Victorero and NeueHealth, Inc.
“Permitted Investments” means:
(a)Investments by (i) Borrower in any Loan Party, and (ii) any Subsidiary in any Loan Party;
(b)(i) marketable direct obligations issued or unconditionally guaranteed by the United States of America or any agency or any State thereof maturing within one year from the date of acquisition thereof currently having a rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service, (ii) commercial paper maturing no more than one year from the date of creation thereof and currently having a rating of at least A-2 or P-2 from either Standard & Poor’s Corporation or Moody’s Investors Service, (iii) certificates of deposit issued by any bank with assets of at least Five Hundred Million Dollars ($500,000,000) maturing no more than one year from the date of investment therein, and (iv) money market accounts;
(c)Guarantee Obligations constituting Permitted Indebtedness, provided that if the Indebtedness being Guaranteed is subordinated to the Obligations, such Guarantee shall be subordinated to the Guarantee of the Obligations on terms at least as favorable to the Noteholder as those contained in the subordination of such Indebtedness;
(d)Investments (including debt obligations) received in connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising, in each case in the ordinary course of business;
(e)Investments consisting of: (i) travel advances and employee relocation loans in the ordinary course of business, and (ii) loans to employees, officers, managers or directors relating to the purchase of equity securities of Borrower pursuant to employee stock purchase plans or agreements approved by Borrower’s board of directors or similar governing body, provided that the foregoing shall not exceed One Million Dollars ($1,000,000) in the aggregate for (i) and (ii), collectively, at any time;
(f)Investments held by a Subsidiary acquired after the Effective Date in accordance with the terms of this Note or of a Person merged or consolidated with or into the Borrower or a Subsidiary after the Effective Date in accordance with the terms of this Note, to the extent that such Investments were not made in contemplation of, or in connection with, such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;
(g)[reserved];
(h)Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business, provided that this subsection (h) shall not apply to Investments of any Loan Party in any Subsidiary of a Loan Party;
(i)[reserved];
(j)Investments (A) by a Loan Party in or to another Loan Party, and (B) by any Loan Party in any Subsidiaries (other than Excluded Subsidiaries), provided that each such Subsidiary becomes a Guarantor pursuant to Section 8.11;
(k)[reserved];
(l)[reserved];
(m)Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of the Loan Parties;
(n)the extent constituting Investments, transactions permitted under clauses (c)(B),(f),(i) and (but only in relation to the preceding clauses) (o) of the definition of Permitted Indebtedness;
(o)Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and suppliers who are not Affiliates, in the ordinary course of business;
(p)[reserved]; and
(q)to the extent constituting Investments, deposits made in connection with the occurrence of actions permitted under clause (g) and (k) of the definition of Permitted Liens.
“Permitted Liens” means:
(a)Liens in favor of the Noteholder;
(b)[Reserved];
(c)Liens on Equipment or software or other intellectual property constituting purchase money Liens and other Liens in connection with capital leases securing Indebtedness permitted in clause (d) of “Permitted Indebtedness”;
(d)Liens for Taxes, fees, assessments or other governmental charges or levies, either not yet due or that are being contested in good faith by appropriate proceedings diligently conducted; provided, that adequate reserves are maintained therefor on Borrower’s books in accordance with GAAP;
(e)Liens securing claims or demands of materialmen, artisans, mechanics, carriers, warehousemen, landlords and other like Persons arising in the ordinary course of business which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto;
(f)Liens arising from judgments, decrees or attachments in circumstances which do not constitute an Event of Default hereunder;
(g)the following deposits, to the extent made in the ordinary course of business: deposits under worker’s compensation, unemployment insurance, social security and other similar laws, or to secure the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure indemnity, performance or other similar bonds for the performance of bids, tenders or contracts (other than for the repayment of borrowed money) or to secure statutory obligations (other than Liens arising under ERISA or environmental Liens) or surety or appeal bonds, or to secure indemnity, performance or other similar bonds;
(h)leasehold interests in leases or subleases and licenses granted in the ordinary course of business and not interfering in any material respect with the business of the licensor;
(i)Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of custom duties that are promptly paid on or before the date they become due;
(j)Liens on insurance proceeds securing the payment of financed insurance premiums that are paid on or before the date they become due and payable (provided that such Liens extend only to such insurance proceeds and not to any other property or assets);
(k)statutory and common law rights of set-off and other similar rights as to deposits of cash and securities in favor of banks, other depository institutions and brokerage firms;
(l)easements, servitudes, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business so long as they do not materially impair the value or marketability of the related property;
(m)Liens imposed by Laws or deposits to secure the performance of bids, tenders, trade contracts (other than for borrowed money), leases (including leases, sub-leases and licenses of real property), government contracts, statutory obligations, surety, stay, customs and appeal bonds, performance and return of money bonds and other obligations of a like nature incurred in each case in the ordinary course of business;
(n)Liens arising from precautionary UCC financing statements relating to operating leases, finance leases and similar arrangements;
(o)Liens incurred in connection with the extension, renewal or refinancing of the Indebtedness secured by Liens of the type described in clauses (a) through (n) above; provided, that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the Indebtedness being extended, renewed or refinanced (as may have been reduced by any payment thereon) does not increase and is otherwise incurred under and in accordance with clause (o) of the definition of Permitted Indebtedness;
(p)Liens securing obligations to vendors entered into in the ordinary course of business; provided that (A) such Liens attach to specific, and not substantially all of the, assets of Borrower or, as applicable, its Subsidiary, and the aggregate principal amount of outstanding Indebtedness or other obligations secured by such Liens does not exceed Two Hundred Fifty Thousand Dollars ($250,000) at any time; and
(q)Liens securing the Indebtedness permitted under and in accordance with clauses (b) and (e) of the definition of Permitted Indebtedness.
“Permitted Senior Debt” means the Hercules Debt pursuant to the terms of the Hercules Credit Agreement.
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Positive Adjustment Amount” has the meaning set forth in the Molina Agreement.
“Prospect” means a third party prospective buyer of the Centrum Assets in connection with the Sale Process that (a) the Approved Investment Banker contacts regarding the Sale Process, (b) signs a confidentiality or similar agreement in connection with the Sale Process, (c) receives a confidential information memorandum or similar materials in connection with the Sale Process and (d) provides a written letter of intent or other similar written indication of interest with respect to the Centrum Assets in connection with the Sale Process.
“Qualified Equity Interests” means any Equity Interests that is not Disqualified Equity Interests.
“Restricted Group” means the Borrower, each Guarantor, and Centrum and each of Centrum’s direct and indirect Subsidiaries. For the avoidance of doubt, Parent is not a member of the Restricted Group.
“Sanctions” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State, or (b) the United Nations Security Council, the European Union, any European Union member state, or His Majesty’s Treasury of the United Kingdom or any other relevant sanctions authority.
“Sale and Leaseback Transaction” means, with respect to any member of the Restricted Group, any arrangement, directly or indirectly, with any Person whereby such member of the Restricted Group shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter it or any of its Affiliates rent or lease such property or other property that they intend to use for substantially the same purpose or purposes as the property being sold or transferred.
“Security Agreement” means that certain Security and Pledge Agreement dated as of the Effective Date executed in favor of the Noteholder by each of the Loan Parties and their Affiliates party thereto from time to time.
“Solvent” means, with respect to any Person on a particular date, that on such date (a) the fair value of the assets of such Person exceed its liabilities, including contingent liabilities, (b) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liabilities of such Person or its debts as they become absolute and matured, (c) the remaining capital of such Person is not unreasonably small to conduct its business, and (d) such Person will not have incurred debts and does not have the present intent to incur debts, beyond its ability to pay such debts as they mature.
“StepStone” means StepStone Group LP and its Affiliates (other than any portfolio
company).
“Subsidiary” means with respect to any Person, any corporation, limited liability company, association or other business entity in which a majority of the outstanding Equity Interest is directly or indirectly owned by such Person.
“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax, or penalties applicable thereto.
“Trademark License” means any written agreement granting any right to use any Trademark or Trademark registration, now owned or hereafter acquired by a Restricted Group member or in which a Restricted Group member now holds or hereafter acquires any interest.
“Trademarks” means all trademarks (registered, common law or otherwise) and any applications in connection therewith, including registrations, recordings and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States
of America, any State thereof or any other country or any political subdivision thereof, and all goodwill associated therewith or symbolized thereby.
“Wholly-Owned Subsidiary” means, as to any Person, a Subsidiary all of the Equity Interests of which (except directors’ qualifying Equity Interests) are at the time directly or indirectly owned by such Person and/or another Wholly-Owned Subsidiary of such Person.
3.Repayment; Prepayment.
3.1Payment on Maturity Date. This Note shall be paid in full in cash in an amount equal to $63,950,000 (plus all accrued and unpaid interest in respect thereof and plus any fees or other amounts owing hereunder) on the Maturity Date, unless any such amounts are paid in cash at an earlier date pursuant to Section 3.3, Section 11 or otherwise.
3.2Voluntary Prepayment. The Borrower may prepay all or any portion of this Note in whole or in part at any time and from time to time without penalty or premium by paying the principal amount to be prepaid, together with any accrued interest and all other amounts due hereunder through and including the date of prepayment. No prepaid amount may be reborrowed.
3.3Mandatory Prepayment.
(a)Positive Adjustment Proceed. If the Parent or any member of the Restricted Group or any of their respective Affiliates or Subsidiaries, including Bright Health Company of California, Inc. and any other party to the Molina Agreement receives, directly or indirectly, any proceeds in respect of, or in connection with, any Positive Adjustment Amount from time to time (any such proceeds, “Positive Adjustment Amount Proceeds”), 100% of all such proceeds received shall promptly (and, in any event, within two (2) Business Days) be applied as follows: (i) the first $15 million of Positive Adjustment Amount Proceeds shall be retained by Parent, Borrower or any of their respective affiliates; (ii) the next $15 million of Positive Adjustment Amount Proceeds shall be turned over to the Noteholder in full in immediately available cash and applied to prepay this Note; and (iii) following the application pursuant to the preceding clauses (i) and (ii), 50% of all additional Positive Adjustment Amount Proceeds thereafter shall promptly (and, in any event, within two (2) Business Days) be turned over to the Noteholder in full in immediately available cash and applied to prepay this Note; provided that the total payment to Noteholder under this Section 3.3(a) shall not exceed
$20,000,000. Each such prepayment to be applied in accordance with Section 5.2.
(b)Dispositions and Involuntary Dispositions. The Loan Parties shall prepay the amount outstanding under this Note in an aggregate amount equal to 100% of the proceeds (net of any taxes and reasonable out of pocket costs and expenses related thereto) of any Disposition or Involuntary Disposition (other than Dispositions under Section 9.8) by any member of the Restricted Group, each such prepayment to be applied in accordance with Section 5.2.
(c)Incurrence of Indebtedness. The Loan Parties shall prepay the amount outstanding under this Note in an aggregate amount equal to 100% of the proceeds from
the issuance or incurrence of any Indebtedness by any member of the Restricted Group to the extent such Indebtedness does not constitute Permitted Indebtedness.
4.Interest.
4.1Interest Rate. Subject to Section 4.2, the outstanding amount owing under this Note (which, as of the Effective Date, is $63,950,000) shall bear interest at a rate per annum equal to the Applicable Rate from and including the Effective Date hereof until, but not including, the date on which this Note (together with all accrued and unpaid interest and any other amounts owing hereunder) is paid in full in cash, whether at maturity, upon acceleration, by prepayment or otherwise.
4.2Default Interest. If any amount payable hereunder is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration, or otherwise, or an Event of Default (as defined below) has occurred and is continuing and the Noteholder in its sole discretion has elected to impose the Default Rate retroactive to the date of the Event of Default, then the outstanding principal amount of this Note shall bear interest at the Default Rate from and including the date of such non-payment or Event of Default, as the case may be. It being understood and agreed that, if mutually agreed to in writing by Noteholder and Borrower, any Default Rate interest shall be permitted to be paid-in-kind by the issuance to Noteholder of additional Equity Interests in Parent, provided that, if the terms of such issuance cannot be mutually agreed to in writing or if either party rejects for any reason the issuance of Equity Interests in Parent in lieu of cash-pay, then, in either case, the Default Rate shall remain payable in cash.
4.3Interest Payment Dates. The Borrower shall pay interest monthly, in arrears to the Noteholder on the last Business Day of each calendar month, commencing on the first such date to occur after the execution of this Note (i.e., October 31, 2024).
4.4Computation of Interest. All computations of interest shall be made on the basis of a year of 365 days (or 366 days, in the event of a leap year) and the actual number of days elapsed.
4.5Interest Rate Limitation. If at any time and for any reason whatsoever, the interest rate payable on this Note shall exceed the maximum rate of interest permitted to be charged by the Noteholder to the Borrower under applicable law, that portion of each sum paid attributable to that portion of such interest rate that exceeds the maximum rate of interest permitted by applicable law shall be deemed a prepayment of principal.
5.Payment Mechanics.
5.1Manner of Payments. All payments of interest and principal shall be made in lawful money of the United States of America no later than 2:00 p.m. (Eastern time) on the date on which such payment is due by wire transfer of immediately available funds to the Noteholder’s account at City National Bank of Florida described on Exhibit B attached hereto.
5.2Application of Payments. All payments made hereunder shall be applied first to the payment of any fees or charges outstanding hereunder, second to accrued and unpaid interest, and third to the payment of the principal amount outstanding under this Note.
5.3Business Day Convention. Whenever any payment to be made hereunder shall be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension will be taken into account in calculating the amount of interest payable under this Note.
5.4Rescission of Payments; Reinstatement. If at any time any payment made by any Loan Party under this Note or any other Loan Document is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy or reorganization of any Loan Party or any of its affiliates or otherwise for whatever reason, such Loan Party’s obligation to make such payment shall be reinstated in full as though such payment had not been made.
6.Security Agreement and Guaranty Agreement. The Loan Parties and their Affiliates party to the Security Agreement from time to time have agreed to pledge their respective assets constituting Collateral from time to time pursuant to the Security Agreement to secure this Note and all other Obligations and other liabilities arising hereunder and under each other Loan Document from time to time. Moreover, this Note and all of the other Obligations and other liabilities arising hereunder and under each other Loan Document from time to time shall be guaranteed in full by the Guaranty Agreement.
7.Representations and Warranties. The Loan Parties hereby represent and warrant to the Noteholder on the date hereof as follows:
7.1Existence; Power and Authority; Compliance with Laws. Each Loan Party, Parent and Bright Health (a) is a limited liability company or corporation (as the case may be) duly organized, validly existing, and in good standing under the laws of the state of organization, incorporation or formation, as the case may be, (b) has the requisite power and authority (i) to own, lease, and operate its properties and assets and to conduct its business as it is now being conducted and (ii) to execute and deliver this Note and each other Loan Document, and to perform its obligations hereunder and thereunder, and (c) is in compliance with all applicable material laws, rules, regulations except with respect to clauses (b)(i) as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
7.2Authorization; Execution and Delivery. The execution and delivery of this Note and each other Loan Document by each Loan Party party thereto, Parent to the extent a party thereto and Bright Health to the extent a party thereto, and the performance of their respective obligations hereunder and thereunder have been duly authorized by all necessary limited liability company and corporate action in accordance with all applicable laws. Each Loan Party, Parent and Bright Health shall have duly executed and delivered this Note and each other Loan Document to which it is a party.
7.3No Approvals. No consent or authorization of, filing with, notice to, any Governmental Authority or any other Person (other than any consent or approval which has been obtained or filing or notice which has been made) is required in order for the Loan Parties, Parent
and Bright Health to execute, deliver, or perform any of their respective obligations under this Note and each other Loan Document to which it is party.
7.4No Violations. The execution and delivery of this Note and the other Loan Documents and the consummation by the Loan Parties, Parent and Bright Health of the transactions contemplated hereby and thereby do not and will not (a) violate any material Law applicable to the Loan Parties, Parent and Bright Health or by which any of its properties or assets may be bound; or (b) constitute a default under any material agreement or contract by which any Loan Party, Parent or Bright Health may be bound or in respect of which any of the Loan Parties, Parent or Bright Health is a guarantor, including any default under the Permitted Senior Debt or any refinancing or replacement thereof. This Note, each other Loan Document and the transactions contemplated hereunder and thereunder are all permitted by (and will not result in a breach or violation of) the Permitted Senior Debt and any refinancing or replacement thereof.
7.5Enforceability. This Note and each other Loan Document is a valid, legal, and binding obligation of each Loan Party, Parent and Bright Health to the extent such Person is a party thereto, enforceable against each Loan Party party thereto, Parent to the extent a party thereto and Bright Health to the extent a party thereto in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
7.6No Litigation. No action, suit, litigation, investigation, or proceeding of, or before, any arbitrator or governmental authority is pending or, to the knowledge of Loan Party, threatened by or against any member of the Restricted Group or any of their respective property or assets (a) with respect to the Note, any other Loan Document, or any of the transactions contemplated hereby or thereby or (b) in a manner that could be expected to materially adversely affect the Borrower’s, any other Loan Party’s, Parent’s or Bright Health’s financial condition or the ability of any Loan Party, Parent or Bright Health to perform its obligations under this Note or any other Loan Document.
7.7Place of Business; Real Property; Names. Schedule 7.7 sets out for each Loan Party, in each case as of the Effective Date (a) the location of its principal place of business and chief executive office, which is also the location of its books and records, (b) [reserved], and all of the real property owned or leased by it. Other than as disclosed in writing to Noteholder, during the preceding five (5) years, no Loan Party nor any Subsidiary thereof has (i) been known as or used any other corporate, fictitious or trade name, (ii) been the surviving entity of a merger or consolidation or (iii) acquired all or substantially all of the assets of any Person.
7.8Insurance. The properties of the Loan Parties are insured with financially sound and reputable insurance companies (none of which are Affiliates of the Loan Parties), in such amounts as consistent with past practice).
7.9Taxes. The Loan Parties have filed all federal, state and other material tax returns and reports required to be filed (after giving effect to any amendments thereto), and have paid all federal, state and other material taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise due and payable, except any such taxes, assessments, fees or charges which are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books and except in each case as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
7.10Subsidiaries. Set forth on Schedule 7.10 is a complete and accurate list of the name and jurisdiction of organization, formation or incorporation (as the case may be) of each Loan Party and each Subsidiary as of the Effective Date, together with (a) the number of shares of each class of Equity Interest of any Loan Party outstanding as of the Effective Date and (b) the number and percentage of outstanding shares of each class owned (directly or indirectly) by any Loan Party as of the Effective Date. As of the Effective Date, except as disclosed in the company’s filings or furnished documents with the Securities and Exchange Commission, none of the shares of Equity Interest of any Loan Party is subject to any outstanding options, warrants, rights of conversion or purchase and all other similar rights with respect thereto. The outstanding Equity Interest of each Loan Party is validly issued, and, in the case of any Loan Party that is a corporation, fully paid and non-assessable. No Subsidiary of the Borrower has outstanding any shares of Disqualified Equity Interests.
7.11Investment Company Act. None of the Loan Parties or any Person controlling any Loan Party is or is required to be registered as an “investment company” under the Investment Company Act of 1940.
7.12[Reserved].
7.13Compliance with Laws. To the Loan Parties’ knowledge, each of the Loan Parties, Parent and Bright Health is in compliance with the requirements of all applicable Laws except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
7.14Legal Name. The exact legal name of each Loan Party is as set forth on the signature pages hereto as of the Effective Date.
7.15Solvency. Both before and after giving effect to this Note, the fair salable value of the Loan Parties’ consolidated assets (including goodwill minus disposition costs) exceeds the fair value of the Loan Parties’ consolidated liabilities; the Loan Parties, taken as a whole, are not left with unreasonably small capital after the transactions in this Note and the Loan Parties and their Subsidiaries, on a consolidated basis are able to pay their debts (including trade debts) as they mature in the ordinary course. The amount of any contingent liability at any time shall be computed as the amount that would reasonably be expected to become an actual and matured liability.
8.Affirmative Covenants. Until all amounts owing under this Note and the other Loan Documents have been paid in full in cash, the Loan Parties shall and shall cause each member of the Restricted Group to:
8.1Financial Information and Reporting. Furnish to Noteholder the following information within the time periods set forth below:
(a)Quarterly Statements. Promptly when available and in any event within
sixty (60) days after the end of each quarterly fiscal period of Parent (or such later date as may be permitted by the SEC for the filing of the quarterly report on Form 10-Q by Parent with the SEC), copies of the unaudited, consolidated balance sheet, income statement, and statement of cash flows of Parent and its direct and indirect Subsidiaries for such quarter, prepared in accordance with GAAP applicable to quarterly financial statements generally; provided that the Loan Parties shall be deemed to have delivered and certified the information required in this Section 8.1(a) to the extent, and on the date, that such information is posted at Parent’s website, at www.sec.gov, or at such other website identified by Parent.
(b)Annual Statements. Within 120 days after the end of each fiscal year of Parent (or such later date as may be permitted by the SEC for the filing of the annual report on Form 10-K by Parent with the SEC), copies of the audited, consolidated balance sheet, income statement, statement of owners’ equity and statement of Parent and its direct and indirect Subsidiaries, setting forth in each case in comparative form the figures for the previous fiscal year, prepared in accordance with GAAP, and accompanied by an opinion thereon of independent public accountants; provided that the Loan Parties shall be deemed to have delivered and certified the information required in this Section 8.1(b) to the extent, and on the date, that such information is posted at Parent’s website, at www.sec.gov, or at such other website identified by Parent.
(c)Requested Information. With reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of or related to the ability of member of the Restricted Group to perform their obligations under any Loan Documents to which they are a party as from time to time may be reasonably requested by the Noteholder to the chief financial officer or general counsel of Parent or, in their absence, any other senior officer of Parent.
(d)Notices of Adverse Events. Promptly (and in any event within five (5) Business Days) after acquiring knowledge thereof, notice of: (i) the institution of any claim, litigation, investigation or proceeding involving any Loan Party or Subsidiary or their respective assets which (A) seeks liabilities, damages or the like in excess of the Material Amount, (B) seeks injunctive relief, (C) is asserted or instituted against any ERISA plan, its fiduciaries, or its assets, (D) involves suspicion of criminal misconduct by any Loan Party or Subsidiary or its respective officers, (E) involves suspicion of the violation of, or seeks to impose remedies under, any environmental law, or seeks to impose environmental liability, or (F) asserts liability on the part of any Loan Party or Subsidiary in excess of the Material Amount in respect of any Tax, fee, assessment, or other governmental charge; (ii) any claim, action or proceeding challenging a Lien granted to Noteholder or affecting title to all or any material portion of the Collateral (as defined in the Security Agreement); (iii) any claims or demands by any Governmental Authority or Person with respect to any environmental law involving any Loan Party or any property thereof; or (iv) any event which has caused or would reasonably expected to result in a Material Adverse Effect.
(e)Notice of Changes by a Loan Party. Prior written notice of (i) any relocation of any Loan Party’s chief executive office or principal place of business, (ii) a change of any Loan Party’s name, Organization Documents, jurisdiction of organization, formation or incorporation, or type of organization and (iii) any acquisition or creation of a Subsidiary by any
Loan Party or Subsidiary, or that any Person has become a Subsidiary of any Loan Party or Subsidiary.
8.2Maintenance of Existence. (a) Unless otherwise expressly permitted by Section 9.4, preserve, renew, and maintain in full force and effect its corporate or organizational existence and (b) take all reasonable action to maintain all rights, privileges, and franchises necessary or desirable in the normal conduct of its business, except in respect of clause (b) where the failure to do so could not reasonable be expected to have, individually or in the aggregate, a Material Adverse Effect.
8.3Compliance. (a) Comply with all Laws applicable to it and its business except where failure to comply could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and (b) maintain in effect and enforce policies and procedures reasonably designed to achieve compliance in all material respects by each Loan Party and its directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.
8.4Payment Obligations; Tax Returns.
(a)Pay, discharge, or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all its obligations of whatever nature, except where the amount or validity thereof is currently being contested in good faith by appropriate proceedings, and reserves in conformity with GAAP with respect thereto have been provided on its books or where the failure to pay could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(b)Timely file or cause to be timely filed all federal, and state and other tax returns and are required to be filed, except as would not reasonably be expected to have a Material Adverse Effect.
8.5Preservation of Material Contracts; Maintenance of Properties. Except as would not reasonably be expected to have a Material Adverse Effect:
(a)maintain, preserve and protect all of its property owned or used in the operation of its business in good working order and condition, ordinary wear and tear excepted;
(b)make all necessary repairs thereto and renewals and replacements thereof; and
(c)use the standard of care typical in the industry in the operation and maintenance of its facilities and real properties owned, leased, managed or operated by any Loan Party.
8.6Compliance with Laws. Except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect comply, and shall cause each of its Subsidiaries to comply, with the requirements of all Laws and governmental approvals applicable to it and all orders, writs, injunctions and decrees applicable to it or to its business or property.
8.7Notice of Events of Default. As soon as possible and in any event within five (5) Business Days after any officer or director of any Loan Party acquires knowledge that a
Default or Event of Default has occurred in respect of this Note, any other Loan Document or any documents in respect of the Permitted Senior Debt or any refinancing or replacement thereof, notify the Noteholder in writing of the nature and extent of such Default or Event of Default and the action, if any, it has taken or proposes to take with respect to such Default or Event of Default.
8.8Notices from Governmental Authority. Promptly, and in any event within thirty (30) days of receipt thereof, provide copies of any notice to any Loan Party or any Subsidiary thereof from any Governmental Authority relating to any order, ruling, statute or other law or regulation that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
8.9Maintenance of Liens. At its own expense, take or cause to be taken, all action reasonably required to maintain and preserve the perfection and priority of the Lien (subject to Permitted Liens) granted under the Security Agreement (including without limitation filing all Uniform Commercial Code continuation statements as appropriate).
8.10[Reserved].
8.11Additional Subsidiaries. Promptly (and, in any event, within thirty (30) days) after the creation or acquisition of any Subsidiary by any member of the Restricted Group or any other event resulting in the existence of any Subsidiary of any member of the Restricted Group or as of the date of any Investment in a Subsidiary as contemplated under clause (j)(B) of the definition of Permitted Investment or if any Excluded Subsidiary ceases to constitute an Excluded Subsidiary, (I) the Loan Parties shall deliver (and shall cause to be delivered) all security documents (or joinders thereto) to Noteholder pledging one hundred percent (100%) of the total outstanding Equity Interests of any such Subsidiary to the extent not already pledged and not constituting Excluded Assets and (II) such Subsidiary (other than an Excluded Subsidiary for so long as it constitutes such) shall (and the Loan Parties shall cause such Subsidiary to) (a) become a Guarantor party to the Guaranty Agreement by delivering to Noteholder a duly executed joinder to the Guaranty Agreement and a joinder to this Note and such other applicable Loan Documents, all in form and substance reasonably acceptable to Noteholder, (b) deliver to Noteholder such original certificated Equity Interests or other certificates and stock evidencing the Equity Interests of such Subsidiary (together with stock powers or similar transfer powers or the equivalent thereof pursuant to the laws and practices of any relevant foreign jurisdiction), other than any Excluded Assets, all in form and substance reasonably acceptable to Noteholder, (c) deliver to Noteholder such updated Schedules to the Loan Documents as requested by Noteholder with respect to such Subsidiary and its assets, all in form and substance reasonably acceptable to Noteholder, and (d) deliver to Noteholder such documents and certificates as may be reasonably requested by Noteholder, all in form and substance reasonably acceptable to Noteholder.
8.12Books and Records. Each Loan Party will maintain, and will use commercially reasonable efforts to cause each Subsidiary to maintain, proper books of record and account in which full, true, and correct entries in conformity with GAAP shall be made of all dealings and transactions in relation to its business and activities.
8.13Pledged Assets. To the extent not delivered to the Noteholder on or before the Effective Date (including in respect of after-acquired property), the Loan Parties will
promptly (and in any event within ten (10) Business Days (or such longer period as may be approved in writing by the Noteholder at its sole option)) execute and deliver to the Noteholder supplements and joinder documents as required under the Security Agreement, in each case in form and substance reasonably satisfactory to the Noteholder to the extent reasonably necessary to grant to the Noteholder a valid and enforceable security interest in all of its property, including all of its Equity Interests, as security for the Obligations, in each case, except for any Excluded Assets for so long as it constitutes such.
8.14Sale Process. The Loan Parties shall:
(a)on or prior to twenty (20) Business Days of the date on which the Noteholder delivers written notice of the occurrence of a Material Default, have engaged an Approved Investment Banker (such 20th day, the “Sale Process Commencement Date”);
(b)commencing on the Sale Process Commencement Date, with the assistance of the Approved Investment Banker, (x) run a sale process to sell the Centrum Assets (whether as an equity transaction and/or a sale of all of their assets) (such sale process, the “Sale Process”), and (y) negotiate, document and seek to consummate an Acceptable Sale to be evidenced by Acceptable Definitive Purchase Agreement, in each case, as soon as reasonably practicable in the good faith judgment of the Loan Parties, provided that such Acceptable Sale shall be fully consummated no later than the last day of the Negotiation Period.
In furtherance of the foregoing:
(i)At the request of the Noteholder in its sole discretion, and subject to the Noteholder and its representatives entering into a customary confidentiality agreement substantially in the form attached hereto as Exhibit A (“Approved Confidentiality Terms”), at any time after the Sale Process Commencement Date (but not more than once per calendar week), management of the Loan Parties (together with the Approved Investment Banker) shall hold telephonic meetings with the Noteholder, at which telephonic meeting(s) the Loan Parties and/or the Approved Investment Banker shall discuss the status of, and any developments with respect to, the Sale Process (including, without limitation, the number of prospective purchasers with whom the Approved Investment Banker or the Loan Parties have discussed potential terms in respect of the proposed sale, the number of executed non-disclosure agreements with potential purchasers, the number of prospective purchasers with access to a data room, materials or information in connection with such Persons’ due diligence of the potential transaction and the number of executed proposal letters, letters of intent, term sheets or other equivalent documentation received thus far).
(ii)At all times on and after the Sale Process Commencement Date, and subject to the Noteholder and its representatives entering into Approved Confidentiality Terms, the Loan Parties hereby irrevocably authorize (and shall instruct) the Approved Investment Banker to (and the Loan Parties shall): (A) disclose to the Noteholder and its representatives material developments in connection with the Sale Process at the telephonic meetings referenced in subclause (i) above or, if earlier, within three (3) Business Days of such event, (B) regularly consult with, and respond to the inquiries of, the Noteholder and its representatives concerning marketing and sale process in connection with the Sale Process and the Approved Investment
Banker’s activities related thereto (including, without limitation, communications with the Approved Investment Banker outside the presence of any representatives of any Loan Party), and C) share any information reasonably requested by the Noteholder in respect of the Sale Process, including copies of any proposal letters, letters of intent, term sheets or other equivalent documentation received thus far; provided, however, that the Noteholder and its representatives shall not be permitted to have any direct or indirect communications about the Sale Process (or otherwise interfere) with any Prospect.
Notwithstanding anything in this Note or in any other document or otherwise to the contrary, the Loan Parties hereby agree that no material portion of the Centrum Assets shall be Disposed of in whole or in part unless such Disposition results in Payment in Full unless otherwise consented to by Noteholder in its sole discretion.
Notwithstanding anything in this Note or in any other document or otherwise to the contrary, Noteholder does not have a right to receive competitively sensitive information about the Sale Process while participating in the Sale Process to the extent (i) prohibited by applicable law or (i) such information is also withheld (and only for so long as such information is withheld) from all other prospective buyers in the process (it being understood that designated representatives of Noteholder may review such information in a clean room subject to a customary clean team agreement), provided that the foregoing restriction does not apply to information already in Noteholder’s possession.
Noteholder shall not, and shall cause its Affiliates and direct or indirect equityholders not to, without the prior written consent of the Borrower (which consent shall not be unreasonably withheld, conditioned or delayed), engage in any contact or communications with any Prospect with respect to the Sale Process; provided that the foregoing shall not in any way prevent or be construed to prevent Noteholder and/or its Affiliates from directly or indirectly exercising its rights to credit bid or otherwise purchase the Centrum Assets as contemplated by this Agreement.
8.15Further Assurances. Upon the reasonable request of the Noteholder, promptly execute and deliver such further documents and/or instruments and do or cause to be done such further acts as may be necessary to carry out the intent and purposes of this Note and the other Loan Documents.
9.Negative Covenants. Until all amounts outstanding under this Note and the other Loan Documents have been paid in full in cash, no Loan Party shall, nor shall it permit any member of the Restricted Group to:
9.1Limitation on Indebtedness. Create, incur, assume, guarantee, permit or otherwise suffer to exist any Indebtedness, except for Permitted Indebtedness.
9.2Limitation on Liens. Incur, assume, create, permit or otherwise suffer to exist any Lien on any assets whether now owned or hereafter acquired or created, except for the Permitted Liens.
9.3Limitation on Investments. Make, directly or indirectly, any Investments, except Permitted Investments.
9.4Fundamental Changes. (a) Directly or indirectly merge, combine or consolidate with any Person; provided that any Subsidiary may merge with or into Borrower or any other Loan Party, so long as the Loan Party is the surviving entity, provided that, if any such transaction involves the Borrower, the Borrower shall be the surviving Person, (b) amend or otherwise modify its Organization Documents in a manner adverse to Noteholder; or (c) liquidate, wind up, dissolve or divide (or suffer any liquidation, winding-up, dissolution or division) except any Subsidiary may liquidate, dissolve or wind-up if the board of directors or similar governing body of Borrower determines in good faith that such liquidation, dissolution or windup is in the best interests of the Borrower and its Subsidiaries and is not materially disadvantageous to the Noteholder and, substantially concurrently therewith, all assets of such Person that is liquidating, winding up, dissolving or dividing are transferred directly to a Loan Party.
9.5Transactions with Affiliates. Enter into, directly or indirectly, any transaction or series of related transactions with any of its Affiliates on terms which are outside of the ordinary course of business or that are less favorable to such Loan Party or such Subsidiary, as the case may be, than the terms that are obtainable from a Person that is not an Affiliate of such Loan Party in an arm’s length transaction other than (a) [reserved], (b) subordinated indebtedness or equity investments by Parent’s investors in such Loan Party or its Subsidiaries, provided that such equity investment does not constitute a Change in Control and to the extent otherwise permitted by this Agreement, (c) transactions between Loan Parties and transactions between Subsidiaries which are not Loan Parties, otherwise permitted by this Note,
(d) to the extent approved by such Loan Party’s board of directors or a duly authorized committee thereof or a duly authorized officer of such Loan Party, reasonable and customary expenses, severance, or employee benefit arrangements for directors and officers of such Loan Party, (e) to the extent approved by such Loan Party’s board of directors or a duly authorized committee thereof or a duly authorized officer of such Loan Party, compensation and benefits arrangements for directors, officers and other employees of the Loan Parties and their Subsidiaries entered into in the ordinary course of business, (f) transactions consisting of (i) payment of directors’ and officers’ fees and reimbursement of costs and expenses incurred in connection with attending board of director (or comparable governing body) meetings in respect of the Loan Parties entered in the ordinary course of business, (ii) reimbursement of out-of-pocket costs and expenses of directors, officers and employees incurred in the ordinary course of business or consistent with past practice and (iii) customary indemnities to officers and directors, (g) Permitted Investments and Permitted Indebtedness, (h) sales of stock in such Loan Party to Affiliates of such Loan Party not otherwise prohibited by the Loan Documents (including under Section 9) and the granting of registration and other customary rights in connection therewith, and (i) transactions with customers, clients, suppliers or joint ventures purchasers, sellers of goods or services or providers of employees or other labor entered into in the ordinary course of business, which are fair to Borrower and/or its applicable Subsidiary in the good faith determination of the board of directors (or similar governing body) of Borrower or the senior management thereof, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party.
9.6Change of Control. Permit any Change of Control to occur.
9.7Change of Nature of Business. Engage in any business other than those businesses conducted by such Loan Party and its Subsidiaries on the Effective Date or any businesses that are similar, reasonably related, corollary, ancillary, complementary or incidental thereto or in support thereof or representing a reasonable expansion or development thereof.
9.8Dispositions. Make, directly or indirectly, any Disposition, or enter into any agreements to make any Dispositions (whether in one or a series of related transactions), of any assets other than in the ordinary course of business of the applicable member of the Restricted Group.
9.9Distributions. Declare or make, or agree to declare or make, directly or indirectly, any Distributions; provided that this Section 9.9 shall not prohibit cash Distributions so long as, in each case, (i) no Material Default then exists or would result therefrom and (ii) Centrum maintains unrestricted cash on hand at all times (including before and after giving effect to any Distribution under this Section 9.9) in an amount not less than the least amount needed to fund all payroll and payroll related expenses of the Restricted Group for no less than four (4) consecutive calendar weeks.
9.10Organization Documents; Fiscal Year; Legal Name, State of Formation and Form of Entity.
(a)Amend, modify or change its Organization Documents in a manner which could be adverse to the interests of Noteholder.
(b)Change its Fiscal Year.
(c)Change its name or its state of formation or form of organization without providing thirty (30) days (or such shorter period as may be approved in writing by the Noteholder at its sole option) prior written notice to Noteholder, provided that nothing herein shall permit any Loan Party to change its state of formation in a state or jurisdiction outside the United States.
(d)Make any significant change in accounting treatment or reporting practices, except as required by GAAP.
9.11 Ownership of Subsidiaries. (i) Permit any Person (other than any Loan Party or any wholly owned Subsidiary thereof) to own any Equity Interests of any member of the Restricted Group or (ii) permit any member of the Restricted Group to issue or have outstanding any shares of Disqualified Equity Interests.
9.12Sale and Leaseback Transactions. Enter into any Sale and Leaseback Transaction.
9.13Limitations on Borrower. Permit Borrower to (a) engage in any business or activity or own any assets (including cash and cash equivalents) other than (i) holding 100% of the Equity Interests of Centrum and (ii) performing its obligations and activities incidental thereto and (iii) performing its Obligations under the Loan Documents and under the loan
documents in respect of the Permitted Senior Debt or any refinancing or replacement thereof, or (b) consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets to, any Person.
9.14Burdensome Agreements. Enter into or permit to exist any Contractual Obligation that encumbers or restricts the ability of any member of the Restricted Group to (i) pay dividends or make any other distributions to any Loan Party on its Equity Interests or with respect to any other interest or participation in, or measured by, its profits, (ii) pay any Indebtedness or other obligation owed to any Loan Party, (iii) make loans or advances to any Loan Party, (iv) sell, lease or transfer any of its property to any Loan Party, (v) grant any Lien on any of its property to secure the Obligations pursuant to the Loan Documents or any renewals, refinancings, exchanges, refundings or extension thereof or (vi) act as a Loan Party pursuant to the Loan Documents or any renewals, refinancings, exchanges, refundings or extension thereof, except (in respect of any of the matters referred to in clauses (i)-(vi) above) for (A) this Note and the other Loan Documents and the loan documents in respect of the Permitted Senior Debt, (B) any document or instrument governing Indebtedness incurred pursuant to clause (d) of the definition of Permitted Indebtedness, provided that any such restriction contained therein relates only to the asset or assets constructed or acquired in connection therewith, (C) any Permitted Lien or any document or instrument governing any Permitted Lien, provided that any such restriction contained therein relates only to the asset or assets subject to such Permitted Lien, and (D) customary restrictions on assignment contained in leases, licenses and other contracts entered into in the ordinary course of business with third parties and not for the purpose of circumventing any provision of this Note.
10.Events of Default. The occurrence of any of the following shall constitute an “Event of Default” hereunder:
10.1Failure to Pay. Any Loan Party fails to pay (a) any principal amount under this Note when due, including, without limitation, any mandatory prepayment pursuant to Section 3.3, (b) interest under this Note when due and such failure continues for ten (10) days after the due date thereof, or (c) any other amount hereunder or under any other Loan Document when due and such failure continues for ten (10) days after the due date hereof or thereof.
10.2Bankruptcy, Insolvency, etc.:
a)any member of the Restricted Group (other than any Insurance Subsidiary), Parent or Bright Health commences any case, proceeding, or other action (i) under any existing or future Law relating to bankruptcy, insolvency, reorganization, or other relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition, or other relief with respect to it or its debts or (ii) seeking appointment of a receiver, trustee, custodian, conservator, or other similar official for it or for all or any substantial part of its assets, or any member of the Restricted Group, Parent or Bright Health makes a general assignment for the benefit of its creditors;
b)There is commenced against any member of the Restricted Group (other than any Insurance Subsidiary), Parent or Bright Health any case, proceeding, or other
action of a nature referred to in Section a) which (i) results in the entry of an order for relief or any such adjudication or appointment and (ii) remains undismissed, undischarged, or unbonded for a period of 45 days;
c)There is commenced against any member of the Restricted Group (other than any Insurance Subsidiary), Parent or Bright Health any case, proceeding, or other action seeking issuance of a warrant of attachment, execution, or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which has not been dismissed, discharged or bonded for a period of 45 days; or
d)any member of the Restricted Group (other than any Insurance Subsidiary), Parent or Bright Health takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in Section a), Section b), or Section
c) above.
10.3Change of Control. A Change of Control occurs.
10.4Cross-Default. The occurrence of any default under any agreement or obligation of Parent, Bright Health or any member of the Restricted Group with a third party involving any Indebtedness in excess of One Million Dollars ($1,000,000) (other than a Loan Document) resulting in a right by such third party, whether or not exercised, to accelerate the maturity of such Indebtedness.
10.5Breach of Negative Covenants and Certain Reporting Items. (a) Any member of the Restricted Group fails to perform, observe or comply with (i) any provisions in Section 8.1, Section 8.2, Section 8.5, Section 8.9, Section 8.11, Section 8.13 and/or Section 8.14 or (ii) any covenant or agreement in Section 9 or (b) there is a failure to perform, observe or comply with Section 24 of the Security Agreement.
10.6Parent and Bright Health. Parent or Bright Health shall repudiate or revoke (or attempt to repudiate or revoke) the Guaranty Agreement or any of their respective obligations thereunder.
10.7Breach of Representations and Warranties. Any representation or warranty made or deemed made by or on behalf of any member of the Restricted Group, Parent, or Bright Health or their Affiliates party to the Loan Documents in connection with this Note, any other Loan Document or the Purchase Agreement, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Note, any other Loan Document or Purchase Agreement, shall prove to have been materially incorrect when made or deemed made.
10.8Breach of Covenants. Parent, Bright Health or any member of the Restricted Group or any of their Affiliates party to the Loan Documents fail to observe or perform in any material respect (or in all respects if already qualified by materiality) any covenant, obligation, condition or agreement contained in this Note (other than those specified in Section 10.5) or in any other Loan Document to which it is a party or in the Purchase Agreement and such failure continues for thirty (30) days after notice thereof to any such Person by the Noteholder.
10.9Invalidity. Any Loan Document for any reason ceases to be in full force and effect or, as applicable, ceases to give the Noteholder a valid and perfected lien in any Collateral purported to be covered by the Loan Documents with the priority required by the relevant Loan Document; or Parent, Bright Health or any member of the Restricted Group or any other Affiliate of such Person contests in any manner the validity or enforceability of any Loan Document; or Parent, Bright Health or any member of the Restricted Group or any other Affiliate of such Person denies that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any Loan Document.
10.10Judgments. One or more fines, penalties or final judgments, orders or decrees for the payment of money in an amount, individually or in the aggregate, of at least One Million Dollars ($1,000,000) (not covered by independent third-party insurance as to which liability has not been rejected by such insurance carrier) shall be rendered against Parent, Bright Health or any member of the Restricted Group by any Governmental Authority, and the same are not, within forty-five (45) days after the entry, assessment or issuance thereof, discharged, vacated, or after execution thereof, or stayed pending appeal, or such judgments are not discharged prior to the expiration of any such stay (provided that no advances shall be made prior to the discharge, or stay of such fine, penalty, judgment, order or decree).
10.11Purchase Agreement. (a) Parent or any member of the Restricted Group
(i) breaches any of their respective payment obligations under the Purchase Agreement in any material respect, (ii) breaches any representation or warranty made in Sections 3.1(a), (b), (c)(i), (d), (e) or (f) of the Purchase Agreement in any material respect (except that the aforesaid materiality limitation shall not apply with respect to breaches of such representations or warranties that are subject to materiality qualifications or limitations), (iii) breaches the last sentence of Section 4.2 of the Purchase Agreement, (iv) breaches Article VI of the Purchase Agreement in any material respect (except that the aforesaid materiality limitation shall not apply with respect to breaches of provisions in such Article VI that are subject to materiality qualifications or limitations), (v) breaches Section 7.9 of the Purchase Agreement or (vi) seeks recourse in excess of the limitations set forth in Section 7.10 of the Purchase Agreement, in each case of this Section 10.11(a) after all applicable grace, notice or cure periods expressly set forth in the Purchase Agreement have expired; provided that none of the foregoing breaches referenced in this Section 10.11(a) shall constitute an Event of Default to extent cured within any applicable cure period expressly set forth in the Purchase Agreement; or (b) Section 4.2 of the Purchase Agreement (including any waivers or releases therein) for any reason ceases to be in full force and effect or any Company Releasing Parties (as defined in the Purchase Agreement) contest in any manner the validity or enforceability of Section 4.2 (including any waivers or releases therein) or purport to revoke, terminate or rescind Section 4.2 (including any waivers or releases therein).
11.Remedies.
11.1Remedies Upon Event of Default.
(a)If an Event of Default has occurred under Section 10.2, the unpaid principal amount of this Note, and all accrued and unpaid interest and fees hereunder and under any other Loan Document, shall automatically become due and payable without any action of
any kind by Noteholder or any other Person, in each case, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Loan Parties.
(b)If an Event of Default has occurred and is continuing, the Noteholder shall have the right to do any one or more of the following: (i) so long as the Event of Default(s) at issue constitute(s) a Material Default, declare all or any portion of the unpaid principal amount of this Note immediately due and payable, including all or any portion of interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document whereupon such amount(s) shall be immediately due and payable, in each case, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Loan Parties; (ii) exercise any rights of set-off or credit bid; (iii) subject to Section 11.1(c) below, foreclose on any Lien granted to Noteholder to secure payment and performance of the Obligations; and (iv) exercise any and all other rights (whether legal or equitable) afforded by any of the Loan Documents or by any applicable Law(s).
(c)Notwithstanding the foregoing, during the Negotiation Period, the Noteholder agrees that it will not foreclose on the Collateral or commence other actions against Parent or the Borrower with respect to the obligations under this Note (provided such right to do so is reserved in all respects and provided further that Noteholder shall be permitted to take such actions as may be reasonably necessary to preserve the status quo or protect Noteholder’s interest in the Collateral (other than foreclosure)) so long as (x) the Sale Process is being progressed by the Loan Parties in a commercially reasonable manner as reasonably determined by the Noteholder, and (y) the Loan Parties are complying with their contractual obligations (including Section 8.14) and their obligations under applicable Law in respect of the Sale Process (it being understood and agreed that any Default or Event of Default arising out of any violation or non- compliance with Section 8.14 shall be deemed a failure to comply with clauses (x) and (y) of this paragraph), provided that, this paragraph (c) shall not in any respect prevent the Noteholder from (x) taking any and all actions necessary to preserve any of its rights, including any interest in the Collateral and (y) credit bidding as contemplated in the final paragraph of this Section 11. For the avoidance of doubt, the limitations in this paragraph (c) shall not apply at any time after the end of the Negotiation Period.
(d)Noteholder’s election to take any such actions (or not to take such actions) following an Event of Default shall be in its sole and absolute discretion, and the Noteholder shall have no liability or obligation to any Loan Party as a result of its election to take or not take any such action.
(e)In addition to, and without limiting, the foregoing in this Section 11, upon the occurrence of any Material Default and at any time thereafter during the continuance of such Material Default, (x) the Loan Parties shall commence the Sale Process in accordance with Section 8.14, and (y) the Noteholder shall have the right to appoint (and replace), subject to the Parent’s reasonable consent not to be unreasonably withheld, conditioned or delayed, a member of the Board of Parent, which shall be a Person who is unaffiliated with Noteholder and who has reasonable experience serving in similar capacities for similarly situated companies.
Notwithstanding anything herein or otherwise to the contrary, the Noteholder shall have the right (whether directly or indirectly through a vehicle created for this purpose) to bid (including
by credit bidding all or any portion of the Obligations) on any portion of the Centrum Assets as part of any sale thereof and nothing herein or otherwise shall be deemed to limit such right to bid (including by credit bid or similar transaction), whether consummated before, during or after any proceedings under any Debtor Relief Law.
12.Miscellaneous.
12.1Successors and Assigns. This Note may not be assigned or transferred by the Noteholder to any other Person (other than an Affiliate of the Noteholder) without the consent of the Borrower (which shall not be unreasonably withheld, conditioned or delayed) and any purported assignment or transfer not in compliance with the foregoing shall be null and void; provided that the Borrower shall be deemed to have given consent unless a written objection is delivered to Noteholder within thirty (30) days after Borrower’s receipt of notice of such proposed assignment; provided further that, if a Material Default occurs and is continuing, this Note and the other Loan Documents may be assigned or transferred by the Noteholder to any other Person without the consent of the Borrower or any other Person. Neither the Borrower, any other Loan Party, Parent nor Bright Health may assign or transfer this Note or any of its rights hereunder or under any other Loan Document without the prior written consent of the Noteholder in its sole discretion and any purported assignment or transfer not in compliance with the foregoing shall be null and void. This Note shall inure to the benefit of, and be binding upon, the Parties and their permitted successors and assigns.
12.2Legal Tender of United States. All payments hereunder shall be made in legal tender in the United States of America for public and private debts.
12.3Notices. All notices, requests, demands, claims and other communications required or permitted hereunder shall be in writing and shall be sent by nationally recognized overnight courier. Any notice, request, demand, claim or other communication required or permitted hereunder will be deemed duly delivered and received one (1) Business Day (or five
(5) Business Days of being sent internationally) after being sent by nationally recognized commercial overnight courier service, with confirmation of receipt, to the Borrower or the Noteholder at the following addresses (or at such other addresses for the Borrower or the Noteholder as shall be specified upon like notice):
(a)if to the Noteholder:
RRD Healthcare, LLC
13051 Mar Street
Coral Gables, FL 33156
Attention: Rodolfo Rodriguez-Duret and Graciela Victorero
and a copy to (which shall not constitute notice):
Holland & Knight LLP
Attention: Roberto Pupo and Daniel Ramos
701 Brickell Avenue, Suite 3300, Miami, FL 33131
(b)if to any Loan Party, Parent or Bright Health:
c/o NeueHealth, Inc.
8000 Norman Center Drive, Suite 900
Minneapolis, MN 55437
Attention: General Counsel
and a copy to (which shall not constitute notice):
Simpson Thacher & Bartlett LLP
2475 Hanover Street
Palo Alto, CA 94304
Attention: Atif Azher
Notwithstanding the foregoing, any Party may send any notice, request, demand, claim, or other communication required or permitted hereunder to the intended recipient at the address set forth above using any other means (including personal delivery, messenger service, facsimile transmission, ordinary mail or electronic mail); provided, however, that no such notice, request, demand, claim, or other communication will be deemed to have been duly delivered or received unless (i) if given by facsimile, when such notice is transmitted to the facsimile number specified by this Section and the sender receives a confirmation of transmission from the sending facsimile machine, (ii) if given by e-mail or other electronic submissions, when either (x) the sender receives an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgment) or (y) the sender sends the e-mail (as recorded on the device from which the sender sent such e-mail) unless the sender received an automated message of non-delivery or (iii) if given by mail, prepaid overnight courier or any other means, when received at the applicable address specified by this Section. Any Party may change the address to which notices, requests, demands, claims, and other communications required or permitted hereunder are to be delivered by giving the other Parties notice in the manner herein set forth.
12.4Governing Law. This Note, the Security Agreement, the Guaranty Agreement, each other Loan Document and any claim, controversy, dispute, or cause of action (whether in contract or tort or otherwise) based upon, arising out of, or relating to any such Loan Documents, and the transactions contemplated hereby and thereby shall be governed by the laws of the State of Delaware.
12.5Submission to Jurisdiction.
(a)Noteholder and each Loan Party, Parent and Bright Health hereby irrevocably and unconditionally (i) agrees that any legal action, suit, or proceeding arising out of or relating to this Note, the Security Agreement, the Guaranty Agreement or any other Loan Document may be brought in the courts of the State of Delaware or any federal court of
competent jurisdiction in the State of Delaware and (ii) submits to the exclusive jurisdiction of any such court in any such action, suit, or proceeding. Final judgment in any action, suit, or proceeding shall be conclusive and may be enforced in any other jurisdiction by suit on the judgment.
(b)Nothing in this Section 12.6 shall affect the right of the Noteholder to (i) commence legal proceedings or otherwise sue any Loan Party, Parent or Bright Health in any other court having jurisdiction over any Loan Party, Parent or Bright Health or (ii) serve process upon any Loan Party, Parent or Bright Health in any manner authorized by the laws of any such jurisdiction.
12.6Venue. Noteholder and each Loan Party, Parent and Bright Health, irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Note or any other Loan Document in any court referred to in Section 12.6 and the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
12.7Waiver of Jury Trial. NOTEHOLDER, EACH LOAN PARTY, PARENT AND BRIGHT HEALTH HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY RELATING TO THIS NOTE, THE SECURITY AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER THEORY.
12.8Waiver of Indirect Damages, Etc. Notwithstanding anything to the contrary, no party hereto shall be liable for any punitive, special, indirect or consequential damages (including any lost profits) relating to this Note or any other Loan Document or arising out of its activities in connection herewith or therewith or connection with any of the transaction contemplated herein or therein (whether arising or occurring before or after the date hereof).
12.9No Third Party Beneficiary. This Note is made for the sole benefit of the Parties, and no other Person (other than Indemnified Parties as set forth herein) shall be deemed to have any privity of contract hereunder nor any right to rely hereon to any extent or for any purpose whatsoever, nor shall any other Person have any right of action of any kind hereon or be deemed to be a third party beneficiary hereunder.
12.10Headings. The headings of the various Sections and subsections herein are for reference only and shall not define, modify, expand or limit any of the terms or provisions hereof.
12.11Waiver of Notice. Each Loan Party, Parent and Bright Health, hereby waives demand for payment, presentment for payment, protest, notice of payment, notice of dishonor, notice of nonpayment, notice of acceleration of maturity, and diligence in taking any action to collect sums owing hereunder.
12.12Amendments and Waivers. No term of this Note may be waived, modified or amended except by an instrument in writing signed by the Noteholder and the Borrower. Any waiver of the terms hereof shall be effective only in the specific instance and for the specific purpose given.
12.13No Waiver; Cumulative Remedies. No failure to exercise (and no delay in exercising on the part of the Noteholder) any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
12.14Severability. If any term or provision of this Note or any other Loan Document is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Note or any other Loan Document or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the Parties hereto shall negotiate in good faith to modify this Note or such other Loan Document so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.
12.15Expenses; Indemnity. The Loan Parties shall reimburse the Noteholder on demand for all reasonable and documented out-of-pocket costs, expenses, and fees (including reasonable and out of pocket expenses and fees of its external counsel) incurred by the Noteholder in connection with the enforcement of the Noteholder’s rights or an exercise of remedies by Noteholder under this Note or any other Loan Document in whatever form. Furthermore, each Loan Party agrees that its will indemnify and hold harmless the Indemnified Parties (defined below) from any claims, damages, losses, liabilities, judgments, or related costs and expenses of any kind reasonably incurred by such Indemnified Party relating to or arising directly or indirectly out of any litigation, proceeding or cause of action related to or arising out of (a) this Note or any other Loan Document, (b) any credit extended by the Noteholder to the Borrower hereunder, and (c) any of the transactions contemplated hereby or thereby, whether brought by a Loan Party, Parent, Bright Health or any other Person, provided that such indemnity shall not be available to any Indemnified Party to the extent that such claims, damages, losses, liabilities, judgments, or related costs and expenses are determined by a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Indemnified Party as determined by a court of competent jurisdiction in a final, non-appealable order. This indemnity includes, but is not limited to, reasonably incurred attorneys’ fees. This indemnity extends to each Noteholder and its affiliates and its and its affiliates’ shareholders, parent, subsidiaries and all of their directors, officers, employees, agents, successors, attorneys, and assigns (the “Indemnified Parties”). This indemnity will survive Payment in Full.
12.16Integration. This Note and the other Loan Documents constitute the entire contract between the Parties with respect to the subject matter hereof and supersede all previous agreements and understandings, oral or written, with respect thereto.
12.17Electronic Execution. The words “execution,” “signed,” “signature,” and words of similar import in this Note shall be deemed to include electronic or digital signatures or electronic records, each of which shall be of the same effect, validity, and enforceability as manually executed signatures or a paper-based record-keeping system, as the case may be, to the extent and as provided for under applicable law, including the Electronic Signatures in Global and National Commerce Act of 2000 (15 U.S.C. §§ 7001 to 7031), the Uniform Electronic Transactions Act (UETA), or any state law based on the UETA, including the Delaware Uniform Electronic Transactions Act.
12.18Counterparts. This Note may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
12.19Waivers by each Loan Party. Each Loan Party expressly waives all rights it may have now or in the future under any statute, or at common law, or at law or in equity, or otherwise, to compel the Noteholder to marshal assets or to proceed in respect of the Obligations guaranteed hereunder against any Guarantor, any other party or against any security for the payment and performance of the Obligations before proceeding against, or as a condition to proceeding against, the Borrower. Each Loan Party consents and agrees that the Noteholder may, at any time and from time to time, without notice or demand, whether before or after an actual or purported termination, repudiation or revocation of this Note by the Borrower, and without affecting the enforceability or continuing effectiveness hereof as to the Borrower: (i) waive, approve or consent to any action, condition, covenant, default, remedy, right, representation or term of this Note or any other Loan Document; (ii) accept partial payments; (iii) release, reconvey, terminate, waive, abandon, fail to perfect, subordinate, exchange, substitute, transfer or enforce any security or guarantees, and apply any security and direct the order or manner of sale thereof as the Noteholder in its sole discretion may determine; (iv) release any person from any personal liability with respect to this Note or any part thereof; (v) settle, release on terms satisfactory to the Noteholder or by operation of applicable Laws or otherwise liquidate or enforce any security or guaranty in any manner, consent to the transfer of any security and bid and purchase at any sale; or (vi) consent to the merger, change or any other restructuring or termination of the corporate or partnership existence of the Borrower or any other person, and correspondingly restructure the Obligations evidenced hereby, and any such merger, change, restructuring or termination shall not affect the liability of the Loan Parties or the continuing effectiveness hereof, or the enforceability hereof with respect to all or any part of the Obligations evidenced hereby. It is agreed among the Loan Parties and the Noteholder that the foregoing consents and waivers are of the essence of the transaction contemplated by this Note and the other Loan Documents.
12.20Waiver of Subrogation, Etc. Notwithstanding anything to the contrary in this Note or in any other Loan Document, each Loan Party hereby expressly and irrevocably waives any and all rights at law or in equity to subrogation, reimbursement, exoneration, contribution, indemnification or set off and any and all defenses available to a surety, guarantor or accommodation co-obligor, including any defense based upon any statute or rule of law that provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal, and any defense of the statute of limitations in any
action hereunder or in any action for the collection or performance of any Obligations hereby guaranteed.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Loan Parties, Parent and Bright Health have executed this Note as of the date first written above.
BORROWER:
MEDICAL PRACTICE HOLDING COMPANY, LLC
By: /s/ Jeff Craig Name: Jeff Craig
Title: Secretary
ACKNOWLEDGED AND AGREED BY:
NEUEHEALTH, INC.
By: /s/ Jeff Craig Name: Jeff Craig
Title: General Counsel and Corporate Secretary
BRIGHT HEALTH SERVICES, INC. CENTRUM MEDICAL HOLDINGS, LLC
CENTRUM MEDICAL CENTER – AIRPORT, LLC CENTRUM MEDICAL CENTER – EAST HIALEAH, LLC CENTRUM MEDICAL CENTER – WEST HIALEAH, LLC CENTRUM MEDICAL CENTER – MIAMI GARDENS, LLC CENTRUM MEDICAL CENTER – SOUTH DADE, LLC CENTRUM MEDICAL CENTER – WESTCHESTER, LLC
CENTRUM MEDICAL CENTER – LITTLE HAVANA 27 AVE, LLC CENTRUM MEDICAL CENTER – LITTLE HAVANA 12 AVE, LLC CENTRUM MEDICAL CENTERS OF CORAL SPRINGS, LLC CENTRUM MEDICAL CENTERS OF MARGATE, LLC CENTRUM MEDICAL CENTERS OF DAVIE, LLC
CENTRUM MEDICAL CENTERS OF HALLANDALE, LLC CENTRUM MEDICAL CENTERS OF LIGHTHOUSE POINT, LLC CENTRUM MEDICAL CENTERS OF FORT LAUDERDALE, LLC CENTRUM MEDICAL CENTERS OF SHERIDAN, LLC CENTRUM MEDICAL CENTERS OF MIRAMAR, LLC CENTRUM MEDICAL CENTER – HOMESTEAD, LLC CENTRUM MEDICAL HOLDINGS OF TEXAS, LLC
CENTRUM PHARMACY, LLC CENTRUM SPECIALTY NETWORK, LLC MED CARE CENTERS, LLC
MED CARE EXPRESS, LLC
MEDLIFE WELLNESS CENTERS, LLC CENTRUM HEALTH IP, LLC
MED PLAN CLINIC, LLC
MEDCARE QUALITY MEDICAL CENTERS, LLC
By: /s/ Jeff Craig Name: Jeff Craig
Title: Secretary
ANNEX A
ORIGINAL INSURANCE SUBSIDIARIES
1.Bright Health Insurance Company of Florida, a Florida corporation.
2.Bright Health Insurance Company of Illinois, an Illinois corporation.
3.Bright HealthCare Insurance Company of Texas, a Texas corporation (in receivership).
4.Bright Health Company of Arizona, an Arizona corporation.
5.Bright Health Company of Georgia, a Georgia domestic insurance company.
6.Bright Health Company of North Carolina, a North Carolina corporation.
7.Bright Health Company of South Carolina, Inc., a South Carolina corporation.
8.Bright Health Insurance Company, a Colorado corporation.
9.Bright Health Insurance Company of New York, a New York corporation.
10.Bright Health Insurance Company of Ohio, Inc., an Ohio corporation.
11.Bright Health Insurance Company of Tennessee, a Tennessee corporation.
12.True Health New Mexico, Inc., a New Mexico corporation.
SCHEDULE 7.7
Place of Business; Real Property; Names
1.Place of Business
| | | | | |
Loan Party | Location of Chief Executive Office/Primary Place of Business/Headquarters/Primary Residence (Street address) |
All Loan Parties | 9250 NW 36th ST., Ste. 420 Doral, FL 33178 |
2.Owned Real Property
| | | | | |
Loan Party (Owner) | Location of Real Property (Street address) |
N/A | N/A |
3.Leased Real Property
| | | | | |
Loan Party (Owner) | Location of Real Property (Street address) |
Centrum Medical Holdings, LLC | 1801 N University Dr., Suite 101, Coral Springs, Broward County, FL, 33071 |
Centrum Medical Holdings, LLC | 8844A West State Road 84, Suite G10, Davie, Broward County, FL, 33324 |
Centrum Medical Holdings, LLC | 9250 NW 36th Street, Suite 410, Doral, Miami- Dade County, FL, 33178 |
Centrum Medical Holdings, LLC | 9250 NW 36th Street, Suite 420, Doral, Miami- Dade County, FL, 33178 |
Centrum Medical Holdings, LLC | 3690 Davie Blvd., Fort Lauderdale, Broward County, FL, 33312 |
Centrum Medical Holdings, LLC | 1460 E. Hallandale Beach Blvd., Hallandale Beach, Broward County, FL, 33009 |
Centrum Medical Center - East Hialeah, LLC | 4218 E. 4th Ave., Hialeah, Miami-Dade County, FL, 33013 |
Med Plan Clinic, LLC | 900 W 49th Street, Suite 206, Hialeah, Miami- Dade County, FL, 33012 |
| | | | | |
Centrum Medical Center - West Hialeah, LLC | 900 W 49th Street, Suite 304, Hialeah, Miami- Dade County, FL, 33012 |
Med Care Centers, LLC | 900 W 49th Street, Suite 308, Hialeah, Miami- Dade County, FL, 33012 |
Medlife Wellness Center, LLC | 900 W 49th Street, Suite 500, Hialeah, Miami- Dade County, FL, 33012 |
Centrum Medical Holdings, LLC | 2229 Sheridan Street, Hollywood, Broward County, FL, 33020 |
Centrum Medical Center - Homestead, LLC | 28610 SW 157th Ave, Homestead, Miami-Dade County, FL, 33033 |
Centrum Medical Holdings, LLC | 3130-3138 North Federal Highway, Lighthouse Point, Broward County, FL, 33064 |
Centrum Medical Holdings, LLC | 612 S. State Road 7, Suite 612 & 614, Margate, Broward County, FL, 33068 |
Centrum Medical Center - South Dade, LLC | 10980 SW 184 Street, Miami, Miami-Dade County, FL, 33157 |
Centrum Medical Holdings, LLC | 434 SW 12th Ave, Suite 100, Miami, Miami-Dade County, FL, 33130 |
Centrum Medial Center - Airport, LLC | 7200 NW 7th Street, Suite 150, 100, 110, 120, 200, 201, 203, 204, 205 and 207, Miami, Miami- Dade County, FL, 33126 |
Med Care Centers, LLC | 7200 NW 7th Street, Suite 202, Miami, Miami- Dade County, FL, 33126 |
Centrum Medical Center - Miami Gardens, LLC | 4767 NW 183rd Street, Miami Gardens, Miami- Dade County, FL, 33055 |
Centrum Medical Holdings, LLC | 12709 Miramar Parkway, Miramar, Broward County, FL, 33027 |
Centrum Medical Holdings, LLC | 4700 Little Road, Suite 4700, Arlington, Tarrant County, TX, 76107 |
Centrum Medical Holdings, LLC | 128 W Beltline Road, Suite 1, Cedar Hill, Dallas County, TX, 75104 |
Centrum Medical Holdings, LLC | 17515 Spring Cypress Rd, Suite I, Cypress, Harris County, TX, 77429 |
Centrum Medical Holdings, LLC | 2223 S. Buckner Blvd., Suite 229, Dallas, Dallas County, TX, 75227 |
Centrum Medical Holdings, LLC | 3410 President George Bush Turnpike, Dallas, Dallas County, TX, 75287 |
| | | | | |
Centrum Medical Holdings, LLC | 10455 N. Central Expressway, Suite 110, Dallas, Dallas County, TX, 75231 |
Centrum Medical Holdings, LLC | 5801 Golden Triangle Boulevard, Suite 101, Fort Worth, Tarrant County, TX, 76244 |
Centrum Medical Holdings, LLC | 7664 McCart Ave., Suite 7664, Fort Worth, Tarrant County, TX, 76133 |
Centrum Medical Holdings, LLC | 2380 Firewheel Parkway, Suite 100, Garland, Dallas County, TX, 75040 |
Centrum Medical Holdings, LLC | 2355 E. Grapevine Mills Circle, Grapevine, Tarrant County, TX, 76051 |
Centrum Medical Holdings, LLC | 10725 Eastex Freeway, Houston, Harris County, TX, 77039 |
Centrum Medical Holdings, LLC | 10934 East Freeway, Houston, Harris County, TX, 77029 |
Centrum Medical Holdings, LLC | 1801 N University Dr., Suite 101, Coral Springs, Broward County, FL, 33071 |
Centrum Medical Holdings, LLC | 8844A West State Road 84, Suite G10, Davie, Broward County, FL, 33324 |
Centrum Medical Holdings, LLC | 9250 NW 36th Street, Suite 410, Doral, Miami- Dade County, FL, 33178 |
Centrum Medical Holdings, LLC | 9250 NW 36th Street, Suite 420, Doral, Miami- Dade County, FL, 33178 |
Centrum Medical Holdings, LLC | 3690 Davie Blvd., Fort Lauderdale, Broward County, FL, 33312 |
Centrum Medical Holdings, LLC | 1460 E. Hallandale Beach Blvd., Hallandale Beach, Broward County, FL, 33009 |
Centrum Medical Holdings, LLC | 4218 E. 4th Ave., Hialeah, Miami-Dade County, FL, 33013 |
Centrum Medical Holdings, LLC | 900 W 49th Street, Suite 101, Hialeah, Miami- Dade County, FL, 33012 |
Centrum Medical Holdings, LLC | 900 W 49th Street, Suite 206, Hialeah, Miami- Dade County, FL, 33012 |
Centrum Medical Holdings, LLC | 900 W 49th Street, Suite 304, Hialeah, Miami- Dade County, FL, 33012 |
| | | | | |
Centrum Medical Holdings, LLC | 900 W 49th Street, Suite 308, Hialeah, Miami- Dade County, FL, 33012 |
Centrum Medical Holdings, LLC | 900 W 49th Street, Suite 500, Hialeah, Miami- Dade County, FL, 33012 |
4.Corporate/Fictitious/Trade Names
| | | | | | | | |
Entity | Name | Period of Use |
Neuehealth, Inc. | Bright Health, Inc. (prior name) | 2016 - 2021 |
Bright Health Group, Inc. (prior name) | 2021 – 2024 |
NeueHealth Advantage ACO, LLC | Physicians Plus ACO, LLC (prior name) | 2020 – 2022 |
NeueHealth Community ACO, LLC | NeueHealth Partners Community ACO, LLC (prior name) | 2022 |
NeueHealth Partners of California, LLC | Physicians Plus of California, LLC (prior name) | 2020 – 2021 |
NeueHealth Partners of Central Florida, LLC | Physicians Plus of Central Florida, LLC (prior name) | 2020 - 2021 |
NeueHealth Partners of Florida, LLC | Physicians Plus, LLC (prior name) | 2020 |
Physicians Plus of Florida, LLC (prior name) | 2020 - 2021 |
NeueHealth Partners, LLC | National VSO, LLC (prior name) | 2020 |
Physicians Plus, LLC (prior name) | 2020 – 2021 |
NeueHealth Premier ACO, LLC | Pineapple ACO, LLC (prior name) | 2020 - 2022 |
5.Mergers/Consolidations/Acquisitions
| | | | | |
Name of Merged Entity | Year of Merger |
Bright Health Insurance Company of Alabama, Inc. merged into Bright Health Insurance Company | 2021 |
Centrum Health Franchisor merged into Centrum Medical Holdings, LLC | 2022 |
SCHEDULE 7.10
Subsidiaries
| | | | | | | | | | | | | | |
| Loan Party | Subsidiary | Percentage | Certificate d Equity Interests? |
1. | Bright Health Management, Inc. | Bright Health Company of Arizona | 100% | No |
2. | Bright Health Management, Inc. | Bright Health Company of California, Inc. | 100% | No |
3. | Bright Health Management, Inc. | Bright Health Company of Georgia | 100% | No |
4. | Bright Health Management, Inc. | Bright Health Company of North Carolina | 100% | No |
5. | Bright Health Management, Inc. | Bright Health Company of South Carolina, Inc. | 100% | No |
6. | Bright Health Management, Inc. | Bright Health Insurance Company | 100% | No |
7. | Bright Health Management, Inc. | Bright Health Insurance Company of Florida | 100% | No |
8. | Bright Health Management, Inc. | Bright Health Insurance Company of Illinois | 100% | No |
9. | Bright Health Management, Inc. | Bright Health Insurance Company of Ohio, Inc. | 100% | No |
10. | Bright Health Management, Inc. | Bright Health Insurance Company of Tennessee | 100% | No |
11. | Bright Health Management, Inc. | True Health New Mexico, Inc. | 100% | No |
12. | Bright Health Services, Inc. | Medical Practice Holding Company II, LLC | 100% | No |
13. | Bright Health Services, Inc. | Medical Practice Holding Company, LLC | 100% | No |
14. | Bright Health Services, Inc. | NeueHealth Accountable Care, LLC | 100% | No |
15. | Bright Health Services, Inc. | NeueHealth Advantage ACO, LLC | 100% | No |
16. | Bright Health Services, Inc. | NeueHealth Collaborative Care, LLC | 100% | No |
17. | Bright Health Services, Inc. | NeueHealth Community ACO, LLC | 100% | No |
18. | Bright Health Services, Inc. | NeueHealth, LLC | 100% | No |
| | | | | | | | | | | | | | |
| Loan Party | Subsidiary | Percentage | Certificate d Equity Interests? |
19. | Bright Health Services, Inc. | NeueHealth Partners, LLC | 100% | No |
20. | Bright Health Services, Inc. | NeueHealth Premier ACO, LLC | 100% | No |
21. | Centrum Medical Holdings, LLC | Centrum Health IP, LLC | 100% | No |
22. | Centrum Medical Holdings, LLC | Centrum Medical Center – Airport, LLC | 100% | No |
23. | Centrum Medical Holdings, LLC | Centrum Medical Center – East Hialeah, LLC | 100% | No |
24. | Centrum Medical Holdings, LLC | Centrum Medical Center – West Hialeah, LLC | 100% | No |
25. | Centrum Medical Holdings, LLC | Centrum Medical Center – Miami Gardens, LLC | 100% | No |
26. | Centrum Medical Holdings, LLC | Centrum Medical Center – South Dade, LLC | 100% | No |
27. | Centrum Medical Holdings, LLC | Centrum Medical Center – Westchester, LLC | 100% | No |
28. | Centrum Medical Holdings, LLC | Centrum Medical Center – Little Havana 27 Ave, LLC | 100% | No |
29. | Centrum Medical Holdings, LLC | Centrum Medical Center – Little Havana 12 Ave, LLC | 100% | No |
30. | Centrum Medical Holdings, LLC | Centrum Medical Centers of Coral Springs, LLC | 100% | No |
31. | Centrum Medical Holdings, LLC | Centrum Medical Centers of Margate, LLC | 100% | No |
32. | Centrum Medical Holdings, LLC | Centrum Medical Centers of Davie, LLC | 100% | No |
33. | Centrum Medical Holdings, LLC | Centrum Medical Centers of Hallandale, LLC | 100% | No |
34. | Centrum Medical Holdings, LLC | Centrum Medical Centers of Lighthouse Point, LLC | 100% | No |
35. | Centrum Medical Holdings, LLC | Centrum Medical Centers of Fort Lauderdale, LLC | 100% | No |
36. | Centrum Medical Holdings, LLC | Centrum Medical Centers of Sheridan, LLC | 100% | No |
37. | Centrum Medical Holdings, LLC | Centrum Medical Centers of Miramar, LLC | 100% | No |
38. | Centrum Medical Holdings, LLC | Centrum Medical Center – Homestead, LLC | 100% | No |
| | | | | | | | | | | | | | |
| Loan Party | Subsidiary | Percentage | Certificate d Equity Interests? |
39. | Centrum Medical Holdings, LLC | Centrum Medical Holdings of Texas, LLC | 100% | No |
40. | Centrum Medical Holdings, LLC | Centrum Pharmacy, LLC | 100% | No |
41. | Centrum Medical Holdings, LLC | Centrum Specialty Network, LLC | 100% | No |
42. | Centrum Medical Holdings, LLC | Med Care Centers, LLC | 100% | No |
43. | Centrum Medical Holdings, LLC | Med Care Express, LLC | 100% | No |
44. | Centrum Medical Holdings, LLC | Medlife Wellness Centers, LLC | 100% | No |
45. | Med Care Centers, LLC | Med Plan Clinic, LLC | 100% | No |
46. | Med Care Centers, LLC | Medcare Quality Medical Centers, LLC | 100% | No |
47. | Medical Practice Holding Company, LLC | Centrum Medical Holdings, LLC | 75% | No |
48. | NeueHealth, Inc. | Bright Health Management, Inc | 100% | No |
49. | NeueHealth, Inc. | Bright Health Services, Inc. | 100% | No |
50. | NeueHealth Partners, LLC | NeueHealth Networks of Texas, Inc. (non-profit) | 100% | No |
51. | NeueHealth Partners, LLC | NeueHealth Partner Services, LLC | 100% | No |
52. | NeueHealth Partners, LLC | NeueHealth Partners of California, LLC | 100% | No |
53. | NeueHealth Partners, LLC | NeueHealth Partners of Florida RBE, LLC | 100% | No |
54. | NeueHealth Partners, LLC | NeueHealth Partners of Florida, LLC | 100% | No |
55. | NeueHealth Partners, LLC | NeueHealth Partners Texas RBE, LLC | 100% | No |
Exhibit 19.1
NeueHealth, Inc.
Policies and Procedures
Insider Trading Policy
This Insider Trading Policy (“Policy”) contains the following sections:
1.0General
2.0Definitions
3.0Statement of Policy
4.0Certain Exceptions
5.0Pre-clearance of Trades and Other Procedures
6.010b5-1 Plans/Margin Accounts and Pledges/Short Sales
7.0Potential Criminal and Civil Liability and/or Disciplinary Action
8.0Broker Requirements for Section 16 Persons
9.0Confidentiality
10.0Legal Effect of this Policy
1.0 General
1.1This Policy applies to all of the following (collectively, the “Insiders”), each of whom must, at all times, comply with the securities laws of the United States and all other applicable jurisdictions:
▪NeueHealth, Inc. and its subsidiaries (collectively, the “Company”);
▪their directors, officers, employees and any other persons the Company determines should be subject to the Policy, such as contractors and consultants (collectively, “NeueHealth Personnel”);
▪the households of NeueHealth Personnel (including any person who lives in the household of NeueHealth Personnel whether or not a family member), and any family members of NeueHealth Personnel who do not live in their household but whose transactions in Company securities are directed by or subject the influence or control of NeueHealth Personnel (e.g., parents or children who consult with NeueHealth Personnel before they trade in Company securities); and
▪trusts, corporations and other entities controlled by any of such persons.
Notwithstanding anything to the contrary contained herein, no entity will be subject to this Policy if such entity, or an affiliate thereof, is advised or managed by an investment adviser which is, or an affiliate of such investment adviser is, registered with the Securities and Exchange Commission (“SEC”) as a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the “IAA”), or is an exempt reporting advisor pursuant to the Venture Capital Fund Adviser Exemption or the Private Fund Adviser Exemption under the IAA, and, in any case, is subject to policies or procedures designed to ensure compliance with federal securities laws and regulations prohibiting trading in the securities of a company on the basis of material, non-public
information (each such entity, an “Excluded Entity”).
1.2Federal securities laws prohibit trading in the securities of a company on the basis of “inside” information. These transactions are commonly known as “insider trading”. It is also illegal to recommend to others (commonly called “tipping”) that they buy, sell or retain the securities to which such inside information relates. Anyone violating these laws is subject to personal liability and could face criminal penalties, including a jail term. Federal securities law also creates a strong incentive for the Company to deter insider trading by its employees. In the normal course of business, NeueHealth Personnel may come into possession of inside information concerning the Company, transactions in which the Company proposes to engage or other entities with which the Company does business. Therefore, the Company has established this Policy with respect to trading in its securities or securities of another company. Any violation of this Policy could subject you to disciplinary action, up to and including termination. See Section 7.0.
1.3This Policy concerns compliance as it pertains to the disclosure of inside information regarding the Company or another company and to trading in securities while in possession of such inside information. In addition to requiring that Insiders comply with the letter of the law, it is the Company’s policy that Insiders exercise judgment so as to also comply with the spirit of the law and avoid even the appearance of impropriety.
1.4This Policy is intended to protect Insiders and the Company from insider trading violations. However, the matters set forth in this Policy are guidelines only and are not intended to replace your responsibility to understand and comply with the legal prohibition on insider trading. Appropriate judgment should be exercised in connection with all securities trading. If you have specific questions regarding this Policy or applicable law, please contact the General Counsel (or his or her designee).
2.0 Definitions
2.1 Material. Information is generally considered “Material” if a reasonable investor would consider it important in deciding whether to buy, sell or hold a security. The information may concern the Company or another company and may be positive or negative. In addition, it should be emphasized that Material information does not have to relate to a company’s business; information about the contents of a forthcoming publication in the financial press that is expected to affect the market price of a security could well be Material. Employees should assume that information that would affect their consideration of whether to trade, or which might tend to influence the price of the security, is Material.
Examples of Material information could include, but are not limited to:
▪earnings results, estimates and guidance on earnings, changes in previously released earnings results, estimates or guidance and confirmations of previously released guidance;
▪results of AEP/OEP;
▪dividend information or changes in dividend policy;
▪a significant merger, acquisition or divestiture proposal or agreement;
▪investments, joint ventures or changes in assets;
▪significant regulatory events including licensing events, government investigations, audit and/or proceedings;
▪financings and other events involving the Company’s securities (e.g., public or private sales by the Company, its senior management or significant security holders, calls of securities for redemption, share repurchase plans, stock splits and changes to the rights of security holders);
▪acquisition, refinancing or repayment of significant indebtedness or defaults in respect of any indebtedness;
▪developments regarding lines of business and significant new products, partnerships (including Care Partners) and properties, or the acquisition or loss of an important contract or relationship;
▪changes in senior management;
▪a significant disruption in the Company’s operations or loss, potential loss, breach or unauthorized access of its property or assets, including its facilities, data and information technology infrastructure;
▪significant changes in compensation policy;
▪significant write-offs;
▪changes of or disagreements with the Company’s independent registered public accounting firm or notification that the Company may no longer rely on such firm’s report;
▪significant litigation or governmental investigations; and
▪layoffs, furloughs, bankruptcy, corporate restructuring or receivership.
Information that something is likely to happen or even just that it may happen can be Material. Courts often resolve close cases in favor of finding the information Material. Therefore, Insiders should err on the side of caution. Insiders should keep in mind that the SEC rules and regulations provide that the mere fact that a person is aware of the information is a bar to trading. It is no excuse that such person’s reasons for trading were not based on the information.
2.2 Non-Public Information. For the purpose of this Policy, information is “Non-Public Information” unless and until all three criteria set forth below have been satisfied:
First, the information must have been widely disseminated. Insiders should assume that information has NOT been widely disseminated unless one or more of the following has occurred:
•it has been carried in a “financial” news service such as the Dow Jones Broad Tape; it has been carried in a “general” news service such as the Associated Press or a national television news service; and/or it has appeared in a publicly available filing with the SEC.
Second, the information disseminated must be some form of “official” announcement. In other words, the fact that rumors, speculation, or statements attributed to unidentified sources are public is insufficient to be considered widely disseminated even when the information is accurate.
Third, after the information has been disseminated, a period of time must pass sufficient for the information to be assimilated by the general public. As a general rule, at least 48 hours (several of which must be hours during which the New York Stock Exchange is open for trading) must elapse between the dissemination of information in a national news medium and when that information may be considered public.
2.3 Security or Securities. The term “security” or “securities” is defined very broadly by the securities laws and includes stock (common and preferred), stock options, warrants, bonds, notes, debentures, convertible instruments, put or call options (i.e., exchange- traded options) or other similar instruments.
2.4 Trade or Trading. The term “trade” or “trading” means broadly any purchase, sale or other transaction to acquire, transfer or dispose of securities, including gifts or other contributions,
exercises of stock options granted under the Company’s stock plans, sales of stock acquired upon the exercise of options and trades made under an employee benefit plan such as a 401(k) plan.
3.0 Statement of Policy
3.1 General – NeueHealth. No Insider may buy or sell the Company’s securities at any time when the Insider has Material Non-Public Information concerning the Company.
3.2 Window Periods. Insiders may only trade in the Company’s securities during the four “Window Periods” that occur each fiscal year or in connection with a registered primary or secondary underwritten offering of the Company. Certain Insiders must also receive pre-approval prior to any transaction. For the avoidance of doubt, this Section 3.2 does not apply to Excluded Entities. See Section 5.0.
3.3 General – Other Companies. No Insider may buy or sell securities of another company at any time when the Insider has Material Non-Public Information about that company, including, without limitation, any of our customers or partners, when that information was obtained, in whole or in part, as a result of the Insider’s employment or relationship to the Company.
3.4 Tipping. No Insider may disclose (“tip”) Material Non-Public Information to any other person (including family members), and no Insider may make buy or sell recommendations on the basis of Material Non-Public Information. In addition, Insiders should take care before trading on the recommendation of others to ensure that the recommendation is not the result of an illegal “tip”. Notwithstanding the forgoing, non- employee directors affiliated with Excluded Entities may, unless the Board otherwise determines, disclose Material Non-Public Information to such Excluded Entities on a confidential basis and in accordance with applicable securities laws. For the avoidance of doubt, the foregoing sentence shall not be deemed to supplement or supersede the terms of any confidentiality agreement, non-disclosure agreement, or similar agreement with the Company to which such non-employee director is subject.
3.5 Public Comment. No Insider who receives or has access to the Company’s Material Non-Public Information may comment on stock price movements or rumors of other corporate developments (including discussions on social media, blogs or online comment forums) that are of possible significance to the investing public unless it is part of the Insider’s job (such as Investor Relations) or the Insider has been specifically authorized by the Chief Executive Officer, the Chief Financial Officer or the General Counsel, in each instance. Violations of this section must be reported immediately to the General Counsel (or his or her designee).
3.6 Media/Analyst Inquiries. In addition, it is generally the practice of the Company not to respond to inquiries and/or rumors concerning the Company’s affairs. If you receive inquiries concerning the Company from the media or inquiries from securities analysts or other members of the financial community, you should follow the Company’s external communications policy and refer such inquiries, without comment, to the Head of Investor Relations (or his or her designee) or the General Counsel (or his or her designee).
3.7 Policy Effective Time. For all Insiders, this Policy continues in effect until the opening of the first Window Period after termination of employment or other relationship with the Company, except that the pre-clearance requirements set forth in Section 5.0 continue to apply to Permanent Restricted Persons for six months after the termination of their status as a Permanent Restricted Person. See Section 5.3.
4.0 Certain Exceptions
The prohibition on trading in the Company’s securities set forth in Section 3.0 above does not apply to:
4.1 transferring shares to an entity that does not involve a change in the beneficial ownership of the shares (for example, to certain types of trusts of which you are the sole beneficiary during your lifetime);
4.2 the exercise of stock options to buy and hold the Company’s stock (and not sell) (including any net settled stock option exercise to buy and hold) under our equity incentive plans; however, the sale of any such stock acquired upon such exercise, including as part of a broker-assisted cashless exercise of an option or any other market sale for the purpose of generating the cash needed to pay the exercise price of an option or to satisfy tax withholding requirements, is subject to this Policy;
4.3 the withholding by the Company (whether mandated by the Company or pursuant to a tax withholding right) of shares of restricted stock, shares underlying restricted stock units or shares subject to an option, in each case to satisfy tax withholding requirements;
4.4 the execution of transactions pursuant to a trading plan that complies with SEC Rule 10b5-1 and which has been approved by the Company (see Section 6.1);
4.5 sales of the Company’s securities as selling stockholder in a registered public offering in accordance with applicable securities laws;
4.6 to the extent the Company offers its securities as an investment option in an employee stock purchase plan, the purchase of stock through the Company’s employee stock purchase plan; however, elections to participate in such plan, the sale of any such stock and changing instructions regarding the level of withholding contributions which are used to purchase stock is subject to this Policy; and
4.7 to the extent the Company offers its securities as an investment option in 401(k) plan, the purchase of Company stock through the Company’s 401(k) plan through regular payroll deductions; however, the sale of any such stock and the election to transfer funds into or out of, or a loan with respect to amounts invested in, the stock fund is subject to this Policy.
5.0 Pre-clearance of Trades and Other Procedures
5.1 Permanent Restricted Persons. The following are “Permanent Restricted Persons”:
▪Members of the Board of Directors of NeueHealth, Inc. (the “Board”);
▪Section 16 officers (as may be designated by the Board from time to time) of NeueHealth, Inc. (collectively, “Section 16 Persons”); and
▪all employees of the Company with the title of Senior Vice President or above; and
▪any person who lives in the household whether or not a family member), and any of their family members who do not live in their household but whose transactions in Company securities they direct, influence, or control (e.g., parents or children who consult with NeueHealth Personnel before they trade in Company securities), and any trusts, corporations and other entities controlled by any of such persons (other than Excluded Entities).
Permanent Restricted Persons (as well as certain Other Restricted Persons, as defined in Section 5.2), must obtain the advance approval of the General Counsel or his or her designee in accordance with Section 5.3 before effecting transactions in the Company’s securities, including any exercise of an option (whether cashless or otherwise), gifts, loans, pledges, rights or warrant to purchase or sell such securities, contribution to a trust or other transfers, whether the transaction is for the individual’s own account, one
over which he or she exercises control or one in which he or she has a beneficial interest.
5.2 Other Restricted Persons. From time to time, the Company will notify persons other than Permanent Restricted Persons and Excluded Entities that they are subject to the pre-clearance requirements set forth in Section 5.3 if the Company believes that, in the normal course of their duties, they are likely to have regular access to Material Non- Public Information (“Other Restricted Persons”). Examples of such persons include members of the business development, finance, legal, corporate development, and strategy departments and their households (including any person who lives in the household whether or not a family member), and any of their family members who do not live in their household but whose transactions in Company securities they direct, influence, or control (e.g., parents or children who consult with NeueHealth Personnel before they trade in Company securities), and trusts, corporations and other entities controlled by any of such persons (other than Excluded Entities). Occasionally, certain individuals may have access to Material Non-Public Information for a limited period of time. During such a period, such persons may be notified that they are also Other Restricted Persons who will be subject to the pre-clearance requirements set forth in Section 5.3.
5.3 Procedures. Permanent Restricted Persons and Other Restricted Persons should submit a request for pre-clearance to the General Counsel or his or her designee at least two business days in advance of the proposed transaction (two weeks in the case of using shares as collateral for a loan (see Section 6.3)) and by completing the attached “Request for Approval” form. Approval must be in writing, dated and signed, specifying the securities involved. Approval for transactions and pledges of the Company’s securities will generally be granted only during a Window Period (described in Section 5.4 below) and the transaction may only be performed during the Window Period in which the approval is granted and in any event within two business days from the date of approval. Permanent Restricted Persons must comply with these pre- clearance requirements for six months after the termination of their status as a Permanent Restricted Person.
5.4 Window Periods. The Company has established four “windows” of time during the fiscal year (“Window Periods”) during which Insiders may trade. During Window Periods, Requests for Approval forms and email requests may be approved and transactions and pledges may be performed by Permanent Restricted Persons and Other Restricted Persons, provided such persons do not have access to Material Non-Public Information. All Insiders other than Permanent Restricted Persons and Other Restricted Persons may trade during Window Periods without submitting a Request for Approval, provided such persons do not have access to Material Non-Public Information. Each Window Period begins at the opening of trading on the first trading day after at least one full trading day on the New York Stock Exchange after the day on which the Company issues a public news release of its quarterly or annual earnings for the prior fiscal quarter or year. Assuming the New York Stock Exchange is open each day, the following example illustrates when Insiders may trade after the Company’s public news release of its quarterly or annual earnings for the prior fiscal quarter or year:
Announcement on Tuesday First Day of Trading
Before market opens Wednesday
While market is open Thursday
After market closes Thursday
That same Window Period closes on the 15th day of the last calendar month of the quarter. After the close of the Window Period, except as set forth in Section 4.0 above, Insiders may not trade in any of the Company’s securities. The prohibition against trading while aware of, or tipping of, Material Non-Public Information applies even during a Window Period. For example, if during a Window Period, a Material Non-Public acquisition or divestiture is pending or there is a forthcoming publication of Material Non- Public Information in the financial press, you may not trade in the Company’s securities. You must consult the General Counsel (or his or her designee) whenever you are in doubt.
5.5 Suspension of Trading. From time to time, the Company may require that directors, officers, selected employees and/or others suspend trading in the Company’s securities because of developments that have not yet been disclosed to the public. All those affected shall not trade in our securities while the suspension is in effect, and shall not disclose to others that we have suspended trading for certain individuals. Though these blackouts generally will arise because the Company is involved in a highly- sensitive transaction, they may be declared for any reason. If the Company declares a blackout to which you are subject, a member of the legal department will notify you when the blackout begins and when it ends.
5.6 Notification of Window Periods. In order to assist you in complying with this Policy, the Company intends to deliver an e-mail (or other communication) notifying all Insiders when the Window Period has opened and when the Window Period is about to close. The Company’s delivery or nondelivery of these e-mails (or other communication) does not relieve you of your obligation to only trade in the Company’s securities in full compliance with this Policy.
5.7 Hardship Exemptions. Those subject to the Window Periods or a blackout pursuant to Section 5.5 may request a hardship exemption for periods outside the Window Periods or during a blackout, as applicable, if they are not in possession of Material Non-Public Information and are not otherwise prohibited from trading pursuant to this Policy. Hardship exemptions are granted infrequently and only in exceptional circumstances. Any request for a hardship exemption should be made to the General Counsel (or his or her designee).
6.0 10b5-1 Plans/Hedging/Margin Accounts and Pledges
6.1 10b5-1 Trading Plans. A 10b5-1 trading plan is a binding, written contract between you and your broker that specifies the price, amount, and date of trades to be executed in your account in the future, or provides a formula or mechanism that your broker will follow in executing trades on your account. A 10b5-1 trading plan can only be established when you do not possess Material Non-Public Information. Therefore, Insiders cannot enter into these plans at any time when in possession of Material Non- Public Information and, in addition, persons subject to the pre-clearance requirements of this Policy described in Section 5.0 cannot enter into these plans outside Window Periods. Unless otherwise approved by the General Counsel or his or her designee, plans must provide that no trades can occur until three months after the effectiveness of the plan. In addition, a 10b5-1 trading plan must not permit you to exercise any subsequent influence over how, when or whether the purchases or sales are made.
You have an affirmative defense against any claim by the SEC against you for insider trading if your trade was made under a 10b5-1 trading plan that you entered into when you were not aware of Material Non-Public Information. The rules regarding 10b5-1 trading plans are complex and you must fully comply with them. You should consult with your legal advisor before proceeding.
Each Insider must pre-clear with the General Counsel (or his or her designee) his or her proposed 10b5-1 trading plan prior to the establishment of such plan. The Company reserves the right to withhold pre-clearance of any 10b5-1 trading plan that the Company determines is not consistent with the rules regarding such plans. Notwithstanding any pre-clearance of a 10b5-1 trading plan, the Company assumes no liability for the consequences of any transaction made pursuant to such plan.
If you enter into a 10b5-1 trading plan, your 10b5-1 trading plan should be structured to avoid purchases or sales shortly before known announcements, such as quarterly or annual earnings announcements. Even though transactions executed in accordance with a properly formulated 10b5-1 trading plan are exempt from the insider trading rules, the trades may nonetheless occur at times shortly before we announce Material Non- Public Information, and the investing public and media may not understand the nuances of trading pursuant to a 10b5-1 trading plan. This could result in negative publicity for
you and the Company if the SEC or the New York Stock Exchange were to investigate your trades.
For Insiders, any modification or termination of a pre-approved 10b5-1 trading plan requires pre-approval by the General Counsel (or his or her designee). In addition, any modification of a pre-approved 10b5-1 trading plan must occur before you become aware of any Material Non-Public Information and must comply with the requirements of the rules regarding 10b5-1 trading plans and, if you are subject to Window Period restrictions, during a Window Period. The Company may, in its discretion, require that a minimum amount of time elapse between the effectiveness of any modification and any trades undertaken in accordance with such modification.
Transactions effected pursuant to a pre-cleared 10b5-1 trading plan will not require further pre-clearance at the time of the transaction if the plan specifies the dates, prices (whether the prevailing market price, a specified range or otherwise) and amounts of the contemplated trades, or establishes a formula for determining the dates, prices and amounts.
Finally, if you are a Section 16 Person, 10b5-1 trading plans require special care. Because in a 10b5-1 trading plan you can specify conditions that trigger a purchase or sale, you may not even be aware that a transaction has taken place and you may not be able to comply with the SEC’s requirement that you report your transaction to the SEC within two business days after its execution. Therefore, for Section 16 Persons, a transaction executed according to a 10b5-1 trading plan is not permitted unless the 10b5-1 trading plan requires your broker to notify the Company before the close of business on the day after the execution of the transaction. See Section 8.0.
6.2 No Short Sales, Hedging or Speculative Transactions. No Insider, whether or not he or she possesses Material Non-Public Information, may trade in options, warrants, puts and calls or similar instruments on the Company’s securities or sell such securities “short” (i.e., selling stock that is not owned and borrowing the shares to make delivery). Such activities may put the personal gain of the Insider in conflict with the best interests of the Company and its stockholders or otherwise give the appearance of impropriety. No NeueHealth Personnel may engage in any transactions (including prepaid variable forward contracts, equity swaps, collars and exchange funds) that are designed to hedge or offset any decrease in the market value of the Company’s equity securities.
6.3 Margin Accounts and Pledges. Securities purchased on margin may be sold by the broker without the customer’s consent if the customer fails to meet a margin call. Similarly, securities held in an account which may be borrowed against or are otherwise pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan. Accordingly, if you purchase securities on margin or pledge them as collateral for a loan, a margin sale or foreclosure sale may occur at a time when you are aware of Material Non-Public Information or otherwise are not permitted to trade in our securities. The sale, even though not initiated at your request, is still a sale for your benefit and may subject you to liability under the insider trading rules if made at a time when you are aware of Material Non-Public Information. Similar cautions apply to a bank or other loans for which you have pledged stock as collateral.
Therefore, no NeueHealth Personnel, whether or not in possession of Material Non- Public Information, may purchase the Company’s securities on margin, or borrow against any account in which the Company’s securities are held, or pledge the Company’s securities as collateral for a loan, without first obtaining pre-clearance.
Request for approval must be submitted to the General Counsel (or his or her designee) at least two weeks prior to the execution of the documents evidencing the proposed pledge. The General Counsel is under no obligation to approve any request for pre-
clearance and may determine not to permit the arrangement for any reason. Approvals will be based on the particular facts and circumstances of the request, including, but not limited to, the percentage amount that the securities being pledged represent of the total number of our securities held by the person making the request and the financial capacity of the person making the request. Notwithstanding the pre-clearance of any request, the Company assumes no liability for the consequences of any transaction made pursuant to such request.
7.0 Potential Criminal and Civil Liability and/or Disciplinary Action
7.1 Individual Responsibility. Each Insider is individually responsible for complying with the securities laws and this Policy, regardless of whether the Company has prohibited trading by that Insider or any other Insiders. Trading in securities during the Window Periods and outside of any suspension periods should not be considered a “safe harbor”. We remind you that, whether or not during a Window Period, you may not trade securities on the basis of Material Non-Public Information.
You should also bear in mind that any proceeding alleging improper trading will necessarily occur after the trade has been completed and is particularly susceptible to second-guessing with the benefit of hindsight. Therefore, as a practical matter, before engaging in any transaction you should carefully consider how enforcement authorities and others might view the transaction in hindsight. Further, whether or not you possess Material Non-Public Information, it is advisable that you invest in the Company’s securities or the securities of any company that has a substantial relationship with the Company from the perspective of a long term investor who would like to participate over time in the Company’s or such other company’s earnings growth.
7.2 Controlling Persons. The securities laws provide that, in addition to sanctions against an individual who trades illegally, penalties may be assessed against what are known as “controlling persons” with respect to the violator. The term “controlling person” is not defined, but includes employers (i.e., the Company), its directors, officers and managerial and supervisory personnel. The concept is broader than what would normally be encompassed by a reporting chain. Individuals may be considered “controlling persons” with respect to any other individual whose behavior they have the power to influence. Liability can be imposed only if two conditions are met. First, it must be shown that the “controlling person” knew or recklessly disregarded the fact that a violation was likely. Second, it must be shown that the “controlling person” failed to take appropriate steps to prevent the violation from occurring. For this reason, the Company’s supervisory personnel are directed to take appropriate steps to ensure that those they supervise understand and comply with the requirements set forth in this Policy.
7.3 Potential Sanctions.
(i)Liability for Insider Trading and Tipping. Insiders, controlling persons and the Company may be subject to civil penalties, criminal penalties and/or jail for trading in securities when they have Material Non-Public Information or for improper transactions by any person (commonly referred to as a “tippee”) to whom they have disclosed Material Non-Public Information, or to whom they have made recommendations or expressed opinions on the basis of such information about trading securities. The SEC has imposed large penalties even when the disclosing person did not profit from the trading. The SEC, the stock exchanges and the Financial Industry Regulatory Authority use sophisticated electronic surveillance techniques to uncover insider trading.
(ii)Possible Disciplinary Actions. NeueHealth Personnel who violate this Policy will be subject to disciplinary action, up to and including termination of employment for cause, whether or not the NeueHealth Personnel’s failure to comply results in a violation of law. Needless to
say, a violation of law, or even an SEC investigation that does not result in prosecution, can tarnish one’s reputation and irreparably damage a career.
7.4 Questions and Violations. Anyone with questions concerning this Policy or its application should contact the General Counsel (or his or her designee). Any violation or perceived violation should be reported immediately to the General Counsel (or his or her designee).
8.0 Broker Requirements for Section 16 Persons
The timely reporting of transactions requires tight interface with brokers handling transactions for our directors and Section 16 officers. A knowledgeable, alert broker can also serve as a gatekeeper, helping to ensure compliance with our pre-clearance procedures and helping prevent inadvertent violations. Therefore, in order to facilitate timely compliance by the directors and executive officers of the Company with the requirements of Section 16 of the Securities Exchange Act of 1934, brokers of Section 16 Persons need to comply with the following requirements:
▪not to enter any order (except for orders under pre-approved Rule 10b5-1 plans) without first inquiring with the Company and receiving written verification from the Company that your transaction was pre-cleared and complying with the brokerage firm’s compliance procedures (e.g., Rule 144), and
▪to report before the close of business on the day after the execution of the transaction to the Company by telephone and in writing via e-mail to the General Counsel and any other persons designated in writing by the General Counsel to receive such reports, the complete (i.e., date, type of transaction, number of shares and price) details of every transaction involving the Company’s stock, including sales and purchases, gifts, donations, transfers, pledges and all 10b5-1 transactions.
Because it is the legal obligation of the trading person to cause this filing to be made, you are strongly encouraged to confirm following any transaction that your broker hasimmediately telephoned and e-mailed the required information to the Company.
9.0 Confidentiality
No NeueHealth Personnel should disclose any Non-Public Information to non-NeueHealth Personnel (including to family members), except when such disclosure is needed to carry out the Company’s business and then only when the NeueHealth Personnel disclosing the information has no reason to believe that the recipient will misuse the information. When such information is disclosed, the recipient must be told that such information may be used only for the business purpose related to its disclosure and that the information must be held in confidence. NeueHealth Personnel should disclose Material Non-Public Information to other NeueHealth Personnel only in the ordinary course of business, for legitimate business purposes and in the absence of reasons to believe that the information will be misused or improperly disclosed by the recipient.
Written information should be appropriately safeguarded and should not be left where it may be seen by persons not entitled to the information and Material Non-Public Information should not be discussed with any person within the Company under circumstances where it could be overheard. Notwithstanding the forgoing, non- employee directors affiliated with Excluded Entities may, unless the Board otherwise determines, disclose Material Non-Public Information to such Excluded Entities on a confidential basis and in accordance with applicable securities laws. For the avoidance of doubt, the foregoing sentence shall not be deemed to supplement or supersede the
terms of any confidentiality agreement, non-disclosure agreement, or similar agreement with the Company to which such non-employee director is subject.
In addition to other circumstances where it may be applicable, this confidentiality policy must be strictly adhered to in responding to inquiries about the Company that may be made by the press, securities analysts or other members of the financial community. It is important that responses to any such inquiries be made on behalf of the Company by a duly designated officer. Accordingly, NeueHealth Personnel should not respond to any such inquiries and should refer all such inquiries to the Vice President, Investor Relations (or his or her designee). See Sections 3.5 and 3.6.Legal Effect of this Policy
The Company’s Policy with respect to insider trading and the disclosure of confidential information, and the procedures that implement this Policy, are not intended to serve as precise recitations of the legal prohibitions against insider trading and tipping which are highly complex, fact specific and evolving. Certain of the procedures are designed to prevent even the appearance of impropriety and in some respects may be more restrictive than the securities laws. Therefore, these procedures are not intended to serve as a basis for establishing civil or criminal liability that would not otherwise exist.
