Item 1.01 Entry into a Material Definitive Agreement.
On May 8, 2023, Babylon Acquisition Corp., a Delaware corporation and recently formed, wholly owned, indirect subsidiary of MultiPlan ("Buyer"), Benefits Science LLC, a Texas limited liability company ("Benefits Science Technologies" or "BST"), the sellers listed on the signature pages thereto ("Sellers"), MultiPlan, solely for purposes of Section 2.2(a)(ii), MultiPlan, Inc., a New York corporation, solely for purposes of Section 2.2(f)(ii)(x), and WT Representative LLC, solely in its capacity as representative to the Sellers, entered into that certain Unit Purchase Agreement (the "Purchase Agreement") pursuant to which, on May 8, 2023, Buyer purchased all of the issued and outstanding equity interests of Benefits Science Technologies (the "Acquisition") for aggregate consideration of $160.0 million paid at the closing of the Acquisition in the form of (i) cash consideration in an aggregate amount of approximately $140.8 million, subject to customary adjustments for working capital, cash, indebtedness and transaction expenses set forth in the Purchase Agreement; and (ii) stock consideration of 21,588,658 shares of Company Class A common stock, par value $0.0001 per share (the "Company Common Stock"). Upon the closing, Benefits Science Technologies became a wholly owned, indirect subsidiary of MultiPlan.
The Purchase Agreement contains customary representations, warranties and covenants of the parties. The representations, warranties and covenants contained in the Purchase Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to the Purchase Agreement, and are subject to limitations set forth in the Purchase Agreement.
The issuance and sale of the Company Common Stock pursuant to the Purchase Agreement has not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws. The Company Common Stock issued and sold to the Sellers was issued and sold in reliance on the exemption from the registration provisions of Section 4(a)(2) of the Act relating to sales by an issuer not involving any public offering.
The Company Common Stock may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities laws. Pursuant to certain registration rights granted to Sellers in the Purchase Agreement, the Company is required to file a shelf registration statement registering the resale of the shares of the Company Common Stock after the closing.
Following the consummation of the transactions contemplated by the Purchase Agreement, the co-founders of BST and certain of its other employees and service providers who will be employed or engaged by MultiPlan will be eligible to participate in a long-term incentive and retention program, to be established by MultiPlan for their benefit and for the benefit of certain other employees of MultiPlan. Pursuant to this incentive and retention program, cash payments will be made to each participant if: (i) subject to limited exceptions, such participant remains employed or engaged by the Company through the date of payment; and (ii) certain threshold, target and maximum annual recurring revenue targets relating to the business of BST are met over the course of five years, weighted towards the years 2024-2026. The aggregate potential cash payments under this plan are $66.0 million if the target annual recurring revenue targets are achieved, with additional aggregate potential cash payments of $16.5 million if the maximum annual recurring revenue targets are achieved.
The foregoing description of the Purchase Agreement is a summary and does not purport to be a complete description of all terms and conditions of the Purchase Agreement, which is attached hereto as Exhibit 2.1, and is incorporated herein by reference.