EXHIBIT 10.37
ESCROW AGREEMENT
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THIS ESCROW AGREEMENT (this "Agreement") is made and entered into as of
this 25/th/ day of January 1999, by and among WebMD, Inc., a Georgia corporation
("WebMD"), SunTrust Bank, Atlanta, a Georgia banking corporation, as the escrow
agent (the "Escrow Agent") and Xxxxxxxx Xxxxxxx, as representative (the
"Representative") appointed by the shareholders ("Shareholders") of Sapient
Health Network, Inc., an Oregon corporation ("Sapient"). As used herein, the
term Corporation shall include Sapient and its Subsidiaries and terms not
otherwise defined herein shall have the meanings set forth in the Merger
Agreement (as defined below).
W I T N E S S E T H :
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WebMD is a party to an Agreement and Plan of Merger with Sapient, dated
January 4, 1999 (the "Merger Agreement"), pursuant to which Sapient has as of
this date merged with and into SHN Merger Corp., a Georgia corporation and
wholly owned subsidiary of WebMD ("Merger Corp."), with Merger Corp. being the
surviving corporation of the Merger. Under the Merger Agreement, a copy of
which is attached, an escrow fund (the "Escrow Fund") will be established
consisting of shares of Series B Preferred Stock of WebMD ("WebMD Series B
Preferred Stock") as provided in Sections 12.1 and 12.8 of the Merger Agreement
to compensate and indemnify WebMD and Merger Corp. and their respective
officers, directors, employees, representatives, agents, shareholders,
controlling persons and affiliates (each an "Indemnitee") against and for any
Loss suffered or incurred by an Indemnitee, as and when due, which arises out of
or results from a breach of any of the representations, warranties, covenants or
agreements of Sapient set forth in the Merger Agreement.
In accordance with the Merger Agreement, the shares of WebMD Series B
Preferred Stock that will constitute the Escrow Fund shall deposited with and
held by the Escrow Agent pursuant to the terms of this Agreement until
termination of this Agreement as provided herein.
NOW, THEREFORE, in c consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
ARTICLE 1
ESTABLISHMENT OF ESCROW
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On this date, WebMD has executed a stock certificate in negotiable form
representing the Escrow Shares and naming the Escrow Agent as the registered
holder for the benefit of the Shareholders. Schedule 1 to this Agreement shows
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for each Shareholder (i) the respective percentage interest (the "Percentage
Interest") of each such Shareholder in the Escrow Shares, and (ii) the
corresponding aggregate maximum number of shares of WebMD Series B Preferred
Stock issuable to each Shareholder, subject to the adjustments provided herein.
The Escrow Agent shall hold the Escrow Shares on behalf of, and as a convenience
to WebMD and the Shareholders with the same force and effect as if such shares
had been delivered by WebMD to each Shareholder and subsequently delivered by
such Shareholder to the Escrow Agent. The Escrow Agent shall hold the Escrow
Shares for the benefit of WebMD and the Shareholders, as the case may be. Any
and all future cash dividends on the Escrow Shares shall be paid in accordance
with this Agreement. From and after the Effective Time, the Escrow Fund shall
be available to compensate and indemnify an Indemnitee against and for any Loss
suffered or incurred by an Indemnitee, as and when due, which arises out of or
results from a breach of any of the representations, warranties, covenants or
agreements of Sapient set forth in the Merger Agreement or in any certificate or
schedule delivered by Sapient pursuant to the Merger Agreement. WebMD shall
promptly provide written notice to Escrow Agent of the Effective Time. An
Indemnitee may not receive any shares from the Escrow Fund unless and until a
Loss Notice or Loss Notices (as defined below) identifying Indemnifiable Losses,
the aggregate amount of which exceed $50,000, have been delivered to the Escrow
Agent pursuant to the terms
hereof; in such case, an Indemnitee may recover from the Escrow Fund its Losses
in excess of $50,000 in accordance with the terms and provisions hereof.
ARTICLE 2
DEFINITIONS
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2.1 Definitions. As used in this Agreement, the following terms shall
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have the following meanings:
(a) "Closing Date" shall mean the date of the closing of the
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transactions contemplated by the Merger, which shall be the date on which the
Effective Time occurs.
(b) "Effective Time" shall mean the time that the Articles of Merger
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reflecting the Merger become effective with the Secretary of State of the State
of Oregon and the Secretary of State of the State of Georgia.
(c) "Disputed Loss Notice" shall mean a Loss Notice that is disputed
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by the Representative by delivery of a Protest Notice.
(d) "Escrow Shares" shall mean 161,866 shares of WebMD Series B
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Preferred Stock resulting from the issuance of WebMD Series B Preferred Stock
for the outstanding shares of Sapient Capital Stock issued and placed in the
Escrow Fund (plus any additional shares as may be issued upon any stock split,
stock dividend or recapitalization and any WebMD Common Stock issued upon
conversion of the Series B Preferred Stock held in the Escrow Fund).
(e) "Indemnifiable Loss" shall mean any Loss for which an Indemnitee
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may be indemnified pursuant to Section 12.1 of the Merger Agreement. The amount
of recovery for an Indemnifiable Loss shall be reduced by any insurance proceeds
received as a result of any such Indemnifiable Loss.
(f) "Indemnitee" shall mean each of WebMD and Merger Corp. and their
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respective officers, directors, employees, representatives, agents,
shareholders, controlling persons and affiliates.
(g) "Loss" shall mean any direct or indirect demand, claim, assessment,
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loss, liability, damage, cost or expense, including without limitation,
penalties, fines or interest on any amount payable to a third party as a result
of the foregoing, and any legal or other expense reasonably incurred in
connection with investigating or defending any claim or action, whether or not
resulting in any liability.
(h) "Loss Notice" shall mean a written notice, as prescribed in Section
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12.3 of the Merger Agreement, provided by WebMD on behalf of an Indemnitee to
the Escrow Agent and the Representative (i) stating the Indemnitee has paid or
properly accrued or reasonably anticipates that it will have to pay or accrue an
Indemnifiable Loss or potential Indemnifiable Loss, (ii) setting forth in
reasonable detail the individual items comprising such Indemnifiable Loss, the
date each such item was paid or properly accrued, or the basis for such
anticipated liability, and the nature of the misrepresentation, breach of
warranty or covenant to which such item is related, and (iii) to the extent the
amount of the Indemnifiable Loss or potential Indemnifiable Loss is reasonably
calculable, an estimate of the number of Escrow Shares to be delivered to an
Indemnitee with respect to such Indemnifiable Loss or potential Indemnifiable
Loss.
(i) "Representative Expenses" shall mean expenses, including reasonable
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attorneys fees and other expenses, of the Representative, in an amount up to
$10,000, incurred in connection with his obligations under this Agreement and
the Merger Agreement.
(j) "Protest Notice" shall mean a written notice, as prescribed in
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Section 2.3 hereof, provided by the Representative to an Indemnitee and the
Escrow Agent if he disputes any Loss Notice received from an Indemnitee.
(k) "Shareholders" shall mean the former holders of the issued and
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outstanding shares of capital stock of Sapient.
(l) "Value Per Share" shall mean the Series B Price as determined in
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accordance with the Merger Agreement. If the Series B Price as determined in
accordance with the Merger Agreement is not $20.00 per share, WebMD and the
Representative shall give written notice to the Escrow Agent of the Series B
Price by January 31, 1999 or written notice that the Series B Price is still
being determined. If the Series B Price is not determined by January 31, 1999,
the Representative and WebMD shall give notice to the Escrow Agent of the Series
B Price promptly after such price is determined in accordance with the Merger
Agreement.
ARTICLE 3
NOTICE OF CLAIMS; DISPUTED LOSS
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3.1 Notice of Claim. If an Indemnitee incurs an Indemnifiable Loss, or
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should an Indemnitee negotiate a proposed settlement in satisfaction of a
potential Indemnifiable Loss, it shall promptly provide a Loss Notice to the
Representative and the Escrow Agent. If the Representative disputes the amount
sought under any such Loss Notice or otherwise disputes the right of the
Indemnitee to be indemnified hereunder, he shall provide the Indemnitee and the
Escrow Agent a Protest Notice within thirty (30) days of the date any such Loss
Notice is received by the Representative. If no Protest Notice is received by
the Indemnitee and the Escrow Agent within thirty (30) days from the date on
which any Loss Notice is received by the Representative, or if a Protest Notice
is received and the dispute is resolved in favor of the Indemnitee after
following the procedures set forth below, then the Escrow Agent shall cause to
be delivered to WebMD and WebMD shall promptly cancel and retire that number of
Escrow Shares as shall equal the number of Escrow Shares (rounded to the next
highest whole number) that, when multiplied by the Value Per Share, equals the
amount of Indemnifiable Loss sought by or awarded to the Indemnitee. If the
Indemnitee and the Escrow Agent receive a Protest Notice within such 30-day
period, the Escrow Agent shall not deliver any Escrow Shares until receipt by it
of written instructions (i) signed by the Representative and a duly authorized
officer of the Indemnitee; or (ii) signed by an arbitration panel that has
considered and resolved such dispute as provided in Section 3.2 below, which
sets forth (i) the number of Escrow Shares, and/or (ii) the amount of cash, if
any, to be delivered to the Indemnitee in accordance with this paragraph. After
delivery of any Escrow Shares to the Indemnitee in accordance with this
paragraph, the Escrow Agent shall be reissued a certificate in respect of any
remaining Escrow Shares.
3.2 Procedure With Respect to Disputed Indemnifiable Loss. A Disputed
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Loss Notice may be resolved by the agreement of the Representative and the
Indemnitee, in which case written notice of such agreement shall be promptly
provided to the Escrow Agent, together with a statement of the agreed upon
amount to be reimbursed to the Indemnitee. If the Representative and the
Indemnitee are unable to resolve a Disputed Loss Notice within sixty (60) days
of delivery of the Protest Notice to the Escrow Agent, then either of WebMD or
the Representative shall give written notice to the Escrow Agent of that fact
and such Disputed Loss Notice shall be submitted to arbitration in accordance
with the then-current commercial arbitration rules of the American Arbitration
Association ("AAA"). If a Disputed Loss Notice is to be arbitrated, the
Representative shall select one arbitrator, the Indemnitee shall select one
arbitrator, and the two arbitrators so chosen shall select a third. Any
decision of the arbitration panel shall require the vote of at least two (2) of
such arbitrators, shall be specified in a written notice delivered to WebMD, the
Representative and the Escrow Agent and shall be deemed conclusive and each
party shall be deemed to have waived any rights to appeal therefrom. In any
arbitration pursuant to this Section 3.2, an Indemnitee shall be deemed to be
the prevailing party if the arbitrators award the Indemnitee at least fifty
percent (50%) of the amount in dispute, plus any amounts not in dispute;
otherwise, the Shareholders shall be deemed to be the prevailing party. The
non-prevailing party to an arbitration shall pay its own expenses, the fees of
each arbitrator, the administrative costs of the arbitration (including the
administrative fee of AAA), and the expenses, including without limitation,
reasonable attorneys' fees and costs, incurred by the other party to the
arbitration. If resolution of a Disputed Loss Notice is not made within ninety
(90) days of the date of the Protest Notice as provided in this Section 3.2,
then the Escrow Agent may, in its sole discretion, either (i) continue to hold
the Escrow Shares undisbursed until such time as the disputing parties
agree in writing as to a proper disposition of such Escrow Shares, or (ii) if
such agreement is not forthcoming, the Escrow Agent shall be entitled to tender
into the registry or custody of any court of competent jurisdiction all money or
property in its hand under the terms of this Agreement, and, upon the advice of
counsel, may take such other legal action as may be appropriate or necessary,
whereupon the parties hereto agree Escrow Agent shall be discharged from all
further duties under this Agreement. The filing of any such legal proceedings
shall not deprive Escrow Agent of its compensation earned prior to such filing.
ARTICLE 4
DUTIES; TERM; EXPIRATION; LIMITS
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4.1 Rights and Obligations of the Parties. The Escrow Agent shall be
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entitled to such rights and shall perform such duties of the escrow agent as set
forth herein (collectively, the "Duties"), in accordance with the terms and
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conditions of this Agreement. WebMD, Merger Corp. and the Representative shall
be entitled to their respective rights and shall perform their respective duties
and obligations as set forth herein and in Article 12 of the Merger Agreement,
in accordance with the terms hereof and thereof. Except as to the Duties of the
Escrow Agent, in the event that the terms of this Agreement conflict in any way
with the provisions of Article 12 of the Merger Agreement, Article 12 of the
Merger Agreement shall control.
4.2 Escrow Term - General Indemnity. The term of escrow for the Escrow
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Shares shall commence on the Closing Date of the Merger and shall terminate upon
the occurrence of (i) the publication by WebMD of audited consolidated financial
statements covering an accounting period after the Closing Date for those items
that would be expected to be encountered in the audit process or (ii) one (1)
year after the Closing Date for all other items. WebMD shall give prompt
written notice to the Escrow Agent of the Closing Date. WebMD and the
Representative shall also provide written notice to the Escrow Agent upon
expiration of the escrow for the Escrow Shares.
4.3 Expiration of Term - No Claim Pending. If at the expiration of the
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escrow term provided in Section 4.2 above, either (i) no Loss Notice has been
received with respect to an Indemnifiable Loss; or (ii) any Loss Notice that has
been received has been resolved in accordance with this Agreement; or (iii) no
litigation or claim is pending for which an Indemnitee may be entitled to
indemnification hereunder, the Escrow Agent shall deliver to the transfer agent
for WebMD Series B Preferred Stock for issuance to each Shareholder, a
certificate representing the number of shares of WebMD Series B Preferred Stock
equal to the aggregate number of the Escrow Shares subject to the escrow which
term is expiring and then remaining in escrow times the Percentage Interest for
such Shareholder, and deliver to each Shareholder, any cash or other assets
distributed as a dividend or other distribution with respect to the Escrow
Shares and held by the Escrow Agent at the expiration of the escrow term times
the Percentage Interest for such Shareholder. The Representative and WebMD
shall provide written notice to the Escrow Agent which sets forth the number of
Escrow Shares to be delivered as provided in the foregoing sentence. WebMD
shall notify Escrow Agent of the name and address of the transfer agent and
provide instructions regarding the legends, if any, that should be placed on the
certificates for such shares. Any such delivery of WebMD Series B Preferred
Stock shall be of full shares and any fractional portions shall be rounded to
the nearest whole number by the Escrow Agent so that the number of shares
remaining in escrow to be delivered will be fully allocated among such
Shareholders.
4.4 Expiration of Term - Claim Pending. If at the expiration of the
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escrow term provided in Section 4.2 above, any claim is pending for which a Loss
Notice has been delivered to the Escrow Agent prior to such expiration and for
which an Indemnitee would be entitled to indemnification if such claim were
resolved adversely to them, then the Escrow Agent shall retain in such escrow
that number of shares of WebMD Series B Preferred Stock as shall equal the
number of Escrow Shares (rounded to the next highest whole number) that, when
multiplied by the Value Per Share, equals any amount set forth by such
Indemnitee in the Loss Notice with respect to such claims (the "Retained
Shares"). The number of Escrow Shares, less the number of Retained Shares,
shall then be distributed to the Shareholders as set forth in Section 4.3 above.
Upon the resolution of any claim for which shares were retained in escrow at the
expiration of the term of this Agreement and receipt of written notice from
WebMD and the Representative to such effect (with a copy to Escrow Agent), the
Escrow Agent shall cancel the appropriate number of Retained Shares (if any) and
shall distribute any remaining Retained Shares to the Shareholders as set forth
in Section 4.3 above.
4.5 Effect of Final Delivery. Notwithstanding the expiration of the term
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of the escrow, this Agreement shall continue in full force and effect until the
Escrow Agent has delivered all of the Escrow Shares pursuant to the terms
hereof. After all of such shares have been so delivered, all rights, duties and
obligations of the respective parties hereunder shall terminate. If any cash is
held in escrow at the expiration of the term of the escrow, such cash shall be
distributed pro rata with the Escrow Shares as provided in Sections 4.3 and 4.4
above.
ARTICLE 4
ESCROW STOCK CERTIFICATES
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The Escrow Agent may at any time request the transfer agent for WebMD
Series B Preferred Stock to issue new certificates representing the Escrow
Shares in such denominations as may be necessary or appropriate in carrying out
the Escrow Agent's obligations under this Agreement.
ARTICLE 5
DIVIDENDS; VOTING RIGHTS
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5.1 Cash Dividends; Voting Rights. The Escrow Agent shall distribute
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promptly any and all cash dividends or other cash income with respect to the
Escrow Shares to the Shareholders at their addresses of record provided to the
Escrow Agent by WebMD and in accordance with their Percentage Interest in the
Escrow Fund (which amounts shall also be allocable to the Shareholders for tax
reporting purposes); provided, however, that Escrow Agent shall not be required
to distribute such amounts to any of the Shareholders who have not provided tax
identification numbers in the form (including any necessary certifications or
representations thereto) reasonably requested by Escrow Agent. By written
notice signed by the Representative, the Representative shall have the right to
direct the Escrow Agent as to the exercise of any voting rights with respect to
such Escrow Shares held by the Escrow Agent on behalf of the Shareholders, and
the Escrow Agent shall comply with such directions if received from the
Representative at least five (5) days prior to the date of the meeting at which
such vote is to be taken, which meeting date shall be set forth in such
directions from the Representative.
5.2 Stock Splits; Stock Dividends. In the event of any stock split, stock
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dividend, recapitalization or similar transaction with respect to WebMD Series B
Preferred Stock that becomes effective during the term of this Agreement
(including any conversion into WebMD Common Stock), the additional shares so
issued with respect to the Escrow Shares shall be added to the Escrow Shares and
any other references herein to a specific number of shares of WebMD Series B
Preferred Stock and the Value Per Share shall be adjusted accordingly.
ARTICLE 6
THE ESCROW AGENT
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6.1 Liability. In performing any of its duties under this Agreement , or
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upon the claimed failure to perform its duties hereunder , Escrow Agent shall
not be liable to anyone for any damages, losses or expenses which they may incur
as a result of the Escrow Agent so acting, or failing to act; provided, however,
that Escrow Agent shall be liable for damages arising out of its willful
misconduct or gross negligence under this Agreement. WebMD agrees that in the
event any controversy arises under or in connection with this Agreement or the
Escrow Shares, or the Escrow Agent is made a party to or intervenes in any
litigation pertaining to this Agreement or the Escrow Shares, to pay to the
Escrow Agent reasonable compensation for its extraordinary services and to
reimburse the Escrow Agent for all cost and expenses associated with such
controversy or litigation, including, but not limited to, legal fees and
expenses. Accordingly, the Escrow Agent shall not incur any such liability with
respect to (i) any action taken or omitted to be taken in good faith upon advice
of its counsel or counsel for WebMD or the Representative given with respect to
any questions relating to the duties and responsibilities of the Escrow Agent
hereunder; or (ii) any action taken or omitted to be taken in reliance upon any
document, including any written notice or instructions provided for in this
Agreement, not only as to its due execution and to the validity and
effectiveness of its provisions, but also as to the truth and accuracy of any
information contained therein, which the Escrow Agent shall in good faith
believe to be genuine, to have been signed or presented by the purported proper
person or persons and to conform with the provisions of this Agreement. Written
instructions provided to Escrow Agent hereunder by WebMD and/or the
Representative shall be signed by the "Authorized Representative" as identified
on Schedule 2 attached hereto. The limitation of liability provisions of this
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Section 6.1 shall survive the termination of this Agreement and the resignation
or removal of the Escrow Agent.
6.2 Resignation. The Escrow Agent may resign at any time from its
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obligations under this Agreement by providing written notice to the parties
hereto. Such resignation shall be effective not later than thirty (30) days
after such written notice has been given. The Escrow Agent shall have no
responsibility for the appointment of a successor escrow agent. If a successor
escrow agent is not selected within thirty (30) days of the resignation of
Escrow Agent, the Escrow Agent shall have the right to institute a Xxxx of
Interpleader or other appropriate judicial proceeding in any court of competent
jurisdiction, and shall be entitled to tender into the registry or custody of
any court of competent jurisdiction all money or property in its hand under the
terms of this Agreement, whereupon the parties hereto agree Escrow Agent shall
be discharged from all further duties under this Agreement. The filing of any
such legal proceedings shall not deprive Escrow Agent of its compensation earned
prior to such filing. The Escrow Agent may be removed for cause by WebMD or the
Representative. The removal of the Escrow Agent shall not deprive the Escrow
Agent of its compensation earned prior to such removal.
6.3 Expenses of Escrow Agent. WebMD shall be liable for the fees and
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expenses of the Escrow Agent. Escrow Agent's fees and expenses are $2,500 per
year and Escrow Agent shall xxxx WebMD for the amount of such fees and expenses,
of which $2,500 will be due upon the execution of this Agreement. WebMD shall
pay the amount of Escrow Agent's fees and expenses to Escrow Agent.
6.4 Indemnification and Hold Harmless. WebMD hereby agrees to indemnify
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and hold the Escrow Agent and its directors, employees, officers, agents,
successors and assigns harmless from and against any and all losses, claims,
damages, liabilities and expenses, including without limitation, reasonable
costs of investigation and counsel fees and expenses which may be imposed on the
Escrow Agent or incurred by it in connection with its acceptance of this
appointment as the Escrow Agent hereunder or the performance of its duties
hereunder; provided, however, that Escrow Agent shall be liable for damages
arising out of its willful misconduct or gross negligence. Such indemnity
includes, without limitation, all losses, damages, liabilities and expenses
(including counsel fees and expenses) incurred in connection with any litigation
(whether at the trial or appellate levels) arising from this Agreement or
involving the subject matter hereof. The indemnification provisions contained
in this Section 6.4 are in addition to any other rights any of the indemnified
parties may have by law or otherwise and shall survive the termination of this
Agreement or the resignation or removal of the Escrow Agent.
ARTICLE 7
REPRESENTATIVE
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7.1 Power and Authority. The Representative shall have full power and
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authority to represent the Shareholders and their successors with respect to all
matters arising under this Agreement, and all action taken by the Representative
hereunder shall be binding upon such Shareholders and their successors as if
expressly ratified and confirmed in writing by each of them. Without limiting
the generality of the foregoing, the Representative shall have full power and
authority, on behalf of all the Shareholders and their successors, to interpret
all the terms and provisions of this Agreement, to dispute or fail to dispute
any claim of Indemnifiable Loss against the Escrow Shares made by an Indemnitee,
to negotiate and compromise any dispute which may arise under this Agreement, to
sign any releases or other documents with respect to any such dispute, and to
authorize delivery of Escrow Shares in satisfaction (partial or otherwise) of
any claim by an Indemnitee or any other payments to be made with respect
thereto. All determinations of the Representative shall be decided by a
majority thereof if there is more than one Representative.
7.2 Resignation; Successors. The Representative, or any successor
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hereafter appointed, may resign and shall be discharged of his duties hereunder
upon the appointment of a successor Representative as hereinafter provided. In
case of such resignation, or in the event of the death or inability to act of
the Representative, a successor shall be named from among the Sapient
Shareholders by a majority of the members of the Board of Directors of Sapient
who served on such board prior to the Merger, which successor shall give written
notice to the Escrow Agent and WebMD certifying that such person is the
successor to the Representative and specifying the name and address of such
successor Representative. Each such successor Representative shall have all the
power, authority, rights and privileges hereby conferred upon the original
Representative, and the term "Representative" as used herein shall be deemed to
include such successor Representative. Escrow Agent shall receive written
notice of any change of Representative.
7.3 Liability. In performing any of his duties under this Agreement, or
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upon the claimed failure to perform his duties hereunder, the Representative
shall not be liable to the Shareholders or anyone else for any damages, losses
or expenses which they may incur as a result of any act, or failure to act under
this Agreement; provided, however, that the Representative shall be liable for
damages arising out of actions or omissions that both (i) were taken or omitted
not in good faith and (ii) constituted willful default or gross negligence under
this Agreement. Accordingly, the Representative shall not incur any such
liability with respect to (i) any action taken or omitted to be taken in good
faith upon advice of his counsel given with respect to any questions relating to
the duties and responsibilities of the Representative hereunder; or (ii) any
action taken or omitted to be taken in reliance upon any document, including any
written notice or instructions provided for in this Agreement, not only as to
its due execution and to the validity and effectiveness of its provisions, but
also as to the truth and accuracy of any information contained therein, which
the Representative shall in good faith believe to be genuine, to have been
signed or presented by the purported proper person or persons and to conform
with the provisions of this Agreement. The limitation of liability provisions
of this Section 7.2 shall survive the termination of this Agreement and the
resignation of the Representative.
7.4 Representative Expenses. WebMD shall pay Representative Expenses in
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amount up to $10,000.
ARTICLE 8
MISCELLANEOUS
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8.1 Transferability. The contingent right to receive Escrow Shares shall
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not be transferable by the Shareholders otherwise than by will or by the laws of
descent and distribution.
8.2 Notices. Each party shall keep each of the other parties hereto
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advised in writing of all transactions pursuant to this Agreement. Any notices
or other communications required or permitted under this Agreement shall be in
writing and shall be sufficiently given if sent by registered or certified mail,
postage prepaid, addressed as follows, or if sent by facsimile to the facsimile
numbers identified below:
If to WebMD or Merger Corp.:
WebMD, Inc.
400 The Lenox Building
0000 Xxxxxxxxx Xxxx, X.X.
Attn: Ms. L. Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Xxxxxx & Bird
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: J. Xxxxxxx Xxxxxx, Esq.
Tel: (000) 000-0000
Facsimile: (000) 000-0000
If to Representative:
Xxxxxxxx Xxxxxxx
c/o The Sprout Group
0000 Xxxx Xxxx Xxxx, Xxxx. 0 Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx
Tel: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx & Xxxxxxxxx, LLP
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
If to Escrow Agent:
SunTrust Bank, Atlanta
Corporate Trust Division
0000 Xxxxxxxx Xxxx
Xxxxxxxx 00, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
or such other person or address as shall be furnished in writing by any of the
parties and any such notice or communication shall be deemed to have been given
as of the date so mailed.
8.3 Construction. The validity, enforcement and construction of this
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Agreement shall be governed by the laws of the State of Georgia, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
8.4 Binding Effect. This Agreement shall be binding upon and inure to the
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benefit of the parties hereto and their respective heirs, legatees, assigns and
transferees, as the case may be. Escrow Agent shall be bound only by the terms
of this Agreement and shall not be bound by or incur liability with respect to
the Merger Agreement or any other agreement or understanding between WebMD and
the Shareholders. The Escrow Agent shall not be charged with notice or
knowledge of any such ancillary document, fact or information not specifically
set forth herein. The Escrow Agent shall undertake to perform only such duties
as are expressly set forth herein and no additional or implied duties or
obligations shall be read into this Agreement against the Escrow Agent.
8.5 Separability. If any provision or section of this Agreement is
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determined to be void or otherwise unenforceable, it shall not affect the
validity or enforceability of any other provisions of this Agreement which shall
remain enforceable in accordance with their terms.
8.6 Headings. The headings and subheadings contained in this Agreement
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are for reference only and for the benefit of the parties and shall not be
considered in the interpretation or construction of this Agreement.
8.7 Execution in Counterparts. This Agreement may be executed in any
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number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument
8.8 Amendments. This Agreement may be amended from time to time but only
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by written agreement signed by all of the parties hereto.
8.9 Third-Party Beneficiaries. Sapient, Merger Corp. and the former
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shareholders of Sapient are expressly intended to be third-party beneficiaries
of the indemnities and obligations of the Representative as if they were parties
to this Agreement.
[Remainder of Page Left Intentionally Blank]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
WEBMD, INC.
By: /s/ W. Xxxxxxx Xxxxxx
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Title: Executive Vice President
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"ESCROW AGENT"
SUNTRUST BANK, ATLANTA
By: /s/ Xxxxxxx Xxxxxxx
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"REPRESENTATIVE"
/s/ Xxxxxxxx Xxxxxxx
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Xxxxxxxx Xxxxxxx
SCHEDULE 1
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APPROXIMATE MAXIMUM
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NAME OF SHAREHOLDER PERCENTAGE INTEREST ESCROW SHARES
------------------- ------------------- -------------
Altschul Investment Group 0.507% 820
Asset Management Associates 1996 LP 28.708% 46,468
Xxxxxx, Xxx 0.077% 124
Xxxxxx, Xxxxxxx 0.030% 48
Xxxxxx, Xxxxxxxx 0.030% 48
Xxxxxxxxx, Xxxxx 0.001% 2
Xxxxxxx, Xxxxxx 0.014% 22
Xxxxx, Xxxxxxx 0.007% 12
Xxxxxx, Xxxxxx 0.077% 124
Xxxxxxxx, Xxxx 0.071% 115
Xxxxxxxx, Xxxxxxx 0.532% 861
Xxxxx, Xxxxx 0.138% 223
Xxxxxx, Xxxxx 0.016% 26
Xxxxxxx, Xxxx 0.197% 319
Xxxxxx, Xxxxx 1.105% 1,788
Xxxxxxx, Xxxxxxx 0.231% 374
Xxxxxxx, Xxxxx X. 0.035% 56
Xxxxxxx, Xxxx X. 0.345% 558
Xxxx, Xxx 0.095% 154
Xxxxxxxxx, Xxxxx 0.301% 487
Xxxxxxx, Xxxxxxx 0.118% 191
DLJ Capital Corporation 0.537% 869
DLJ First ESC LLC 2.684% 4,345
Xxxxxxxxx, Xxxxxx 0.003% 5
Xxxx, Xxxxxxxx 0.092% 149
Xxxxx, Xxxx X. Revocable Trust 1.011% 1,636
Xxxxxxxx, Xxxx 0.001% 1
Xxxxxxxx, Xxxx 0.124% 201
Xxxxx, Xxxxxxxx 0.012% 19
Hamid, Kamal 0.231% 374
Xxxx, Xxxxx and Xxxxx 0.138% 224
Xxxxxxxx, Xxxx 0.197% 319
Xxxxx, Xxxxx 0.006% 9
Xxxxxxxx, Xxxxxxx 0.006% 9
Xxxxxx, Xxxx 0.232% 375
Xxxxx, Xxxxx X. 1.417% 2,294
Xxxx, Xxxxxxx 0.270% 437
Xxxx, Xxxx 0.006% 9
Xxxx, Xxxxx X. 3.318% 5,370
Xxxx, Xxxxxx 0.006% 9
Xxxx, Xxxxx 0.006% 9
Xxxx, Xxxxxxxxx 0.030% 48
Xxxx, Xxxxxx 0.030% 48
Xxxx, Xxxxxxx 0.006% 9
Xxxxx, Xxxxx X. 0.059% 96
Xxxxx, Xxxxxxx X. 0.059% 96
Xxxxx, Xxxxxxx X. 0.059% 96
Xxxxx, Xxxxxxx X. 0.059% 96
Xxxxx, Xxxxxxx X. 2.949% 4,773
Xxxxx, The Xxxxxxx Xxxxx Living Trust 0.151% 245
Xxxxxxx, Xxxxx 0.006% 9
Xxxxxxxx, Xxxxxx X. 0.157% 254
Xxxxxxx, Xxxxxxx 0.231% 374
XxXxxx, Xxxxxx 0.394% 638
Xxxxxxx, Xxxxx 0.197% 319
MFL Limited Partnership 0.308% 498
Xxxxxx, Xxxxx 0.358% 580
Xxxxx, Xxxx (Xxxxxxxxx) 0.508% 823
New, Don 0.098% 159
Xxxx, Xxxxx 0.098% 159
Xxxx, Xxxxxxx 0.006% 9
Xxxxxxxx, Xxxxxxxxxx 3.269% 5,291
Oregon Growth Account (OR) 2.585% 4,184
Oregon Life Sciences 0.615% 995
(ORTDF)/Cascadia Pacific Mgmt 0.455% 737
Pacific Horizon Partners II, L.P. 0.059% 96
Xxxxxxx, Xxxxx 0.197% 319
Xxxxxxx, Xxxxxx 0.339% 549
Xxxxxx, Xxxxxxx 0.848% 1,372
Silicon Valley Bank 0.216% 350
Xxxxx, Xxxxx 0.276% 446
Xxxxxxxxxxxx, Xxxxxx 0.162% 262
Xxxxxxxxxxxx, Xxxx 0.116% 187
Sprout Capital VII LP 23.361% 37,813
Sprout CEO Fund, LP 0.271% 438
Synetic Inc. 18.037% 29,195
Xxx Xxxx, Xxxx 0.507% 820
SCHEDULE 2
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AUTHORIZED REPRESENTATIVES
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WebMD: Xxxxxx Xxxxxxxx or L. Xxxxx Xxxxxx, or any person designated in
writing in a notice delivered to Escrow Agent signed by either of
them.
Shareholders: Xxxxxxxx Xxxxxxx, Representative of the Shareholders
