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EXHIBIT 2.01
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AGREEMENT AND PLAN OF MERGER
AMONG
HEALTHEON/WEBMD CORPORATION,
PINE MERGER CORP.,
ENVOY CORPORATION,
QUINTILES TRANSNATIONAL CORP.,
AND
QFINANCE, INC.
DATED AS OF JANUARY 22, 2000
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TABLE OF CONTENTS
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER...................................2
1.1 Merger................................................................2
1.2 Time and Place of Closing.............................................2
1.3 Effective Time........................................................2
ARTICLE 2 - TERMS OF MERGER....................................................2
2.1 Charter...............................................................2
2.2 Bylaws............................................................... 2
2.3 Directors and Officers................................................2
2.4 Tax-Free Reorganization...............................................3
ARTICLE 3 - MANNER OF CONVERTING SHARES........................................3
3.1 Conversion of Shares..................................................3
3.2 Anti-Dilution Provisions..............................................4
3.3 Shares Held by Envoy..................................................4
3.4 Treatment of Options..................................................4
ARTICLE 4 - EXCHANGE OF SHARES.................................................4
4.1 Exchange Procedures...................................................4
4.2 Rights of Former Stockholders.........................................5
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF ENVOY, QUINTILES AND
QFINANCE...........................................................5
5.1 Organization, Standing, and Power.....................................5
5.2 Authorization of Agreement; No Breach.................................6
5.3 Capital Stock.........................................................7
5.4 Envoy Subsidiaries....................................................7
5.5 SEC Filings; Financial Statements.....................................8
5.6 Absence of Undisclosed Liabilities....................................9
5.7 Absence of Changes....................................................9
5.8 Tax Matters..........................................................10
5.9 Intellectual Property................................................11
5.10 Insurance............................................................13
5.11 Compliance with Laws.................................................13
5.12 Orders and Litigation................................................13
5.13 Environmental Matters................................................14
5.14 Contracts and Commitments............................................14
5.15 Powers of Attorney...................................................15
5.16 Benefit Plans........................................................15
5.17 Remuneration.........................................................17
5.18 Governmental Approvals; Required Consents............................17
5.19 Accounts Receivable..................................................17
5.20 Tax Treatment........................................................18
5.21 Affiliate Transactions...............................................18
5.22 Envoy Disclosure Letter..............................................18
5.23 Customers; Payors....................................................18
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF HEALTHEON/WEBMD AND
MERGER CORP.......................................................18
6.1 Organization, Standing, and Power....................................18
6.2 Authorization of Agreement; No Breach................................19
6.3 Capital Stock........................................................20
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6.4 Healtheon/WebMD SEC Filings; Financial Statements....................20
6.5 Absence of Undisclosed Liabilities...................................21
6.6 Absence of Certain Changes or Events.................................21
6.7 Compliance with Laws.................................................21
6.8 Governmental Approvals; Required Consents............................22
6.9 Healtheon/WebMD Common Stock.........................................22
6.10 Interim Operations of Merger Corp....................................22
6.11 Tax Treatment........................................................22
6.12 Orders and Litigation................................................22
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION..........................23
7.1 Conduct of Envoy Business............................................23
7.2 Conduct of Healtheon/WebMD Business..................................25
7.3 Adverse Changes in Condition.........................................25
ARTICLE 8 - ADDITIONAL AGREEMENTS.............................................26
8.1 Applications.........................................................26
8.2 Filings with State Offices...........................................26
8.3 Agreement as to Efforts to Consummate................................27
8.4 Investigation and Confidentiality....................................27
8.5 Access to Information................................................27
8.6 No Shop..............................................................28
8.7 Tax Treatment........................................................28
8.8 Employee Benefits....................................................29
8.9 Blue Sky Laws........................................................30
8.10 Non-solicitation of Employees........................................30
8.11 Press Releases.......................................................30
8.12 Directors and Officers Indemnification...............................31
8.13 Envoy Affiliates; Restrictive Legend; Restrictions on Transfer.......31
8.14 Healtheon/WebMD Options..............................................32
8.15 Standstill...........................................................33
8.16 Certain Other Matters................................................34
8.17 Execution of Certain Agreements......................................34
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE.................34
9.1 Conditions to Obligations of Each Party..............................34
9.2 Conditions to Obligations of Healtheon/WebMD and Merger Corp.........35
9.3 Conditions to Obligations of Envoy, Quintiles and QFinance...........36
ARTICLE 10 - TERMINATION......................................................37
10.1 Termination..........................................................37
10.2 Effect of Termination................................................39
ARTICLE 11 - MISCELLANEOUS....................................................39
11.1 Definitions..........................................................39
11.2 Brokers and Finders; Expenses........................................46
11.3 Entire Agreement.....................................................46
11.4 Amendments...........................................................46
11.5 Waivers..............................................................47
11.6 Assignment...........................................................47
11.7 Notices..............................................................47
11.8 Governing Law........................................................48
11.9 Counterparts.........................................................48
11.10 Captions.............................................................48
11.11 Interpretations......................................................48
11.12 Enforcement of Agreement.............................................49
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11.13 Severability.........................................................49
11.14 Facsimile Signatures.................................................49
11.15 Nonsurvival of Representations and Warranties........................49
EXHIBITS
Exhibit 8.17(a) - Form of Tax Sharing Agreement
Exhibit 8.17(b) - Form of Data Rights Agreement
Exhibit 8.17(c) - Form of Internet Product Development and Marketing Agreement
Exhibit 8.17(d) - Form of Quintiles Warrant
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of January 22, 2000, by and among HEALTHEON/WEBMD CORPORATION
("Healtheon/WebMD"), a Delaware corporation having its principal office located
in Atlanta, Georgia; PINE MERGER CORP. ("Merger Corp"), a Delaware corporation
having its principal office located in Atlanta, Georgia; ENVOY CORPORATION
("Envoy"), a Tennessee corporation having its principal office located in
Nashville, Tennessee, QUINTILES TRANSNATIONAL CORP. ("Quintiles"), a North
Carolina corporation having its principal office located in Durham, North
Carolina, and QFINANCE, INC. ("QFinance"), a Delaware corporation having its
principal office located in Wilmington, Delaware.
PREAMBLE:
The Boards of Directors of Healtheon/WebMD, Merger Corp, a wholly owned
subsidiary of Healtheon/WebMD, Quintiles, QFinance, a wholly owned subsidiary of
Quintiles, and Envoy, a corporation wholly owned by Quintiles and QFinance, are
of the opinion that the Transactions described herein are in the best interests
of the parties and their respective stockholders. This Agreement provides for
the acquisition of Envoy by Healtheon/WebMD pursuant to the merger of Envoy with
and into Merger Corp. At the Effective Time of such merger, the outstanding
shares of the capital stock of Envoy shall be converted into the right to
receive a combination of shares of Healtheon/WebMD Common Stock and cash. As a
result, Quintiles shall become a stockholder of Healtheon/WebMD and Merger Corp
shall conduct the business and operations of Envoy as a wholly owned subsidiary
of Healtheon/WebMD. The transactions described in this Agreement are subject to
the satisfaction of certain conditions described in this Agreement. Quintiles
and QFinance, as the only stockholders of Envoy, have approved this Agreement
and the Merger in accordance with the Tennessee Business Corporation Act (the
"TBCA") and Envoy's organizational documents. It is the intention of the parties
to this Agreement that the Merger shall qualify as a "reorganization" within the
meaning of Section 368(a) of the Internal Revenue Code for federal income tax
purposes.
Certain terms used in this Agreement are defined in Section 11 of this
Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants and agreements set forth herein, the
parties agree as follows:
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ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 Merger. Subject to the terms and conditions of this Agreement, at
the Effective Time, Envoy shall be merged with and into Merger Corp in
accordance with the applicable provisions of the TBCA and the GCLSD (the
"Merger"). Merger Corp shall be the surviving corporation (the "Surviving
Corporation") resulting from the Merger and shall continue its operations as a
wholly owned Subsidiary of Healtheon/WebMD and shall be subject to the Laws of
the State of Delaware, including without limitation Section 259 of the GCLSD.
The Merger shall be consummated pursuant to the terms of this Agreement, which
have been approved and adopted by (i) the respective Boards of Directors of
Healtheon/WebMD, Merger Corp and Envoy and (ii) the Board of Directors of
Quintiles, in its capacity as a stockholder of Envoy, and the Board of Directors
of QFinance, in its capacity as a stockholder of Envoy.
1.2 Time and Place of Closing. The closing of the transactions
contemplated herein (the "Closing") will take place at the time and date on
which the last of the conditions specified in Article 9 has been satisfied or
waived (the "Closing Date"). The place of Closing shall be at the offices of
Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx, L.L.P., Bank of America Corporate Center,
Suite 2600, 100 North Xxxxx Street, Charlotte, North Carolina, or such other
place as may be mutually agreed upon by the Parties.
1.3 Effective Time. Subject to the provisions of this Agreement, the
Surviving Corporation shall file the Articles of Merger executed in accordance
with the relevant provisions of the TBCA and the Certificate of Merger executed
in accordance with the relevant provisions of the GCLSD and the Parties shall
make all other filings or recordings required under the TBCA and the GCLSD on
the Closing Date or as promptly as practicable thereafter. The Merger and other
transactions contemplated by this Agreement shall become effective at 4:30 p.m.
Eastern Standard Time on the date the Articles of Merger reflecting the Merger
becomes effective with the Secretary of State of the State of Tennessee (the
"Effective Time").
ARTICLE 2
TERMS OF MERGER
2.1 Charter. The Charter of Merger Corp as in effect immediately prior
to the Effective Time shall be amended at the Effective Time so that Article 1
of such Charter reads in its entirety as follows: "The name of the corporation
is Envoy Corporation (the "Corporation")"; and as so amended, such Charter shall
be the Charter of the Surviving Corporation until otherwise amended or repealed
in accordance with the GCLSD.
2.2 Bylaws. The Bylaws of Merger Corp in effect immediately prior to
the Effective Time shall be the Bylaws of the Surviving Corporation until
otherwise amended or repealed.
2.3 Directors and Officers. The directors of Merger Corp in office
immediately prior to the Effective Time, together with such additional persons
as may thereafter be elected, shall serve as the directors of the Surviving
Corporation from and after the Effective Time in
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accordance with the Bylaws of the Surviving Corporation. The officers of Merger
Corp in office immediately prior to the Effective Time, together with such
additional persons as may thereafter be elected, shall serve as the officers of
the Surviving Corporation from and after the Effective Time in accordance with
the Bylaws of the Surviving Corporation.
2.4 Tax-Free Reorganization. The parties intend to adopt this Agreement
as a plan of reorganization under Section 368(a) of the Internal Revenue Code.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 Conversion of Shares. Subject to the provisions of this Article 3,
at the Effective Time, by virtue of the Merger and without any action on the
part of the Parties or the stockholders of any of the Parties, the shares of the
constituent corporations of the Merger shall be converted as follows:
(a) Each share of Merger Corp Common Stock issued and
outstanding at the Effective Time shall be converted into and become one (1)
fully paid and nonassessable share of Surviving Corporation Common Stock.
(b) The Envoy Common Stock issued and outstanding at the
Effective Time shall cease to be outstanding and shall be converted into and
exchanged for the right to receive (i) 35,000,000 shares of Healtheon/WebMD
Common Stock (the "Stock Consideration") and (ii) $400,000,000 (the "Cash
Consideration"), payable in immediately available funds, subject to adjustment
to the Stock Consideration and the Cash Consideration as provided in Section
3.1(c) below.
(c) Healtheon/WebMD shall have the right to increase the Cash
Consideration to be received in the Merger at the Effective Time by up to an
additional $100,000,000 upon prior written notice to Quintiles and in the event
that Quintiles fails within 5 days after receipt of such notice to notify
Healtheon/WebMD in writing that Quintiles and QFinance desire to receive only
the $400,000,000 Cash Consideration contemplated by Section 3.1(b) hereof and
not the additional $100,000,000 in cash (the "Hold Notice"). In such event, the
Stock Consideration to be received at the Effective Time shall be decreased to
an amount determined in accordance with the following formula:
Stock Consideration = ($1,800,000,000 - Cash Consideration
to be paid at the Effective Time) / 40
Healtheon/WebMD shall not have the right to increase the Cash Consideration to
be received by Quintiles and QFinance at the Effective Time in the event
Quintiles delivers the Hold Notice to Healtheon/WebMD.
(d) Quintiles shall have the right to receive 60% of the Total
Consideration and QFinance shall have the right to receive 40% of the Total
Consideration, based on their relative ownership of Envoy Common Stock. QFinance
shall be entitled to determine the
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combination of Cash Consideration and Stock Consideration that constitutes its
40% of the Total Consideration.
3.2 Anti-Dilution Provisions. In the event the number of shares of
Healtheon/WebMD Common Stock issued and outstanding prior to the Effective Time
changes as a result of a stock split, stock dividend, subdivision,
reclassification, recapitalization, combination of shares or similar
recapitalization with respect to such stock or if Healtheon/WebMD declares a
Material dividend or distribution in cash or property other than stock (an
"Anti-Dilution Event") and the record date therefor (in the case of a dividend)
or the effective date thereof (in the case of a stock split or similar
recapitalization for which a record date is not established) shall be prior to
the Effective Time, the number of shares of Healtheon/WebMD Common Stock to be
received pursuant to Section 3.1 shall be correspondingly adjusted to reflect
such Anti-Dilution Event.
3.3 Shares Held by Envoy. Each share of Envoy Common Stock held in
treasury by Envoy shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
3.4 Treatment of Options. As soon as practicable following the date of
this Agreement, Quintiles' Board of Directors (or, if appropriate, any committee
administering the Option Plans (as defined below)) shall adopt such resolutions
or take such other actions as may be required to effect the following: (i) cause
all options to purchase shares of Quintiles Common Stock (collectively, the
"Options") granted under the stock option plans of Envoy listed in Section 3.4
of the Envoy Disclosure Letter (the "Envoy Option Plans") that are outstanding
immediately prior to the Effective Time and all other obligations with respect
thereto to be assumed by Quintiles, (ii) prior to the Effective Time vest in
full all of the Options and any options granted by Quintiles to officers,
directors, employees and consultants of Envoy (the "Quintiles Options") pursuant
to the stock option plans of Quintiles listed in Section 3.4 of the Envoy
Disclosure Letter (the "Quintiles Option Plans," and together with the Envoy
Option Plans, the "Option Plans") and (iii) allow the holders of the Options and
the Quintiles Options up to 3 years from the Effective Time to exercise the
Options and the Quintiles Options. With the consent of Healtheon/WebMD, in lieu
of the benefits provided in clauses (i) through (iii) above, Quintiles shall
provide officers, directors and employees of Envoy an aggregate benefit valued
at $50,000,000 to be allocated prior to the Effective Time among the officers,
directors and employees of Envoy in a manner satisfactory to Healtheon/WebMD.
ARTICLE 4
EXCHANGE OF SHARES
4.1 Exchange Procedures. On the date the Effective Time occurs, each of
Quintiles and QFinance shall surrender the certificate or certificates
representing the Envoy Common Stock and shall upon surrender thereof receive in
exchange therefor pursuant to Section 3.1(d) (i) the Cash Consideration, to be
transferred by wire transfer of immediately available funds to an account or
accounts designated by Quintiles and QFinance and (ii) the Stock Consideration,
to be represented by the issuance of one or more certificates for
Healtheon/WebMD Common Stock,
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which shall bear the legend set forth in Section 8.13 hereof. The certificate or
certificates of Envoy Common Stock so surrendered shall, at Healtheon/WebMD's
option, be duly endorsed to Healtheon/WebMD or be accompanied by stock powers
duly endorsed in blank.
4.2 Rights of Former Stockholders. At the Effective Time, the stock
transfer books of Envoy shall be closed and no transfer of Envoy Common Stock by
any such former holder shall thereafter be made or recognized. Until surrendered
for exchange in accordance with the provisions of Section 4.1 of this Agreement,
each certificate theretofore representing shares of Envoy Common Stock (other
than shares to be canceled pursuant to Section 3.3 of this Agreement) shall from
and after the Effective Time represent for all purposes only the right to
receive the consideration provided in Section 3.1 of this Agreement in exchange
therefor. Neither Quintiles nor QFinance will be entitled to vote or give its
consent after the Effective Time at any meeting or action by written consent of
Healtheon/WebMD stockholders until it has exchanged its certificates
representing Envoy Common Stock for certificates representing Healtheon/WebMD
Common Stock in accordance with the provisions of this Agreement. If a dividend
or other distribution is declared by Healtheon/WebMD on the Healtheon/WebMD
Common Stock, the record date for which is at or after the Effective Time, the
declaration shall include dividends or other distributions on all shares of
Healtheon/WebMD Common Stock issuable pursuant to this Agreement, but no
dividend or other distribution payable to the holders of record of
Healtheon/WebMD Common Stock as of any time subsequent to the Effective Time
shall be delivered to Quintiles or QFinance until it surrenders such
certificates for exchange as provided in Section 4.1 of this Agreement. However,
upon surrender of such certificates, the Healtheon/WebMD Common Stock
certificate (together with all such undelivered dividends or other distributions
without interest) shall be promptly delivered and paid with respect to each
share represented by such certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF ENVOY, QUINTILES AND QFINANCE
Subject to the exceptions set forth in the disclosure letter
referencing specific representations delivered to Healtheon/WebMD on the date of
this Agreement (the "Envoy Disclosure Letter"), as of the date hereof and as of
the Closing Date, Envoy, Quintiles and QFinance, jointly and severally,
represent and warrant to Healtheon/WebMD and Merger Corp as follows:
5.1 Organization, Standing, and Power. Envoy is a corporation duly
organized, validly existing, and in good standing under the Laws of the State of
Tennessee, and has the corporate power and authority to carry on its business as
it has been and is now being conducted. Envoy is duly qualified or licensed to
transact business as a foreign corporation and is in good standing in all
jurisdictions where the character of its Assets or the nature or conduct of its
business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed would not
have, in the aggregate, a Material Adverse Effect on Envoy. Copies of the
Charter and all amendments thereto of Envoy and the bylaws, as amended, of Envoy
and copies of all resolutions adopted and action taken by the stockholders or
Board of Directors and all committees thereof of Envoy, which have been made
available to
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Healtheon/WebMD for review, are true and complete in all Material respects and
accurately reflect all proceedings of the stockholders and Board of Directors
(and all committees thereof) of Envoy. The stock record books of Envoy, which
have been made available to Healtheon/WebMD for review, contain true and
complete records of the stock ownership of Envoy and all prior issuances and
transfers of the shares of its capital stock.
5.2 Authorization of Agreement; No Breach. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary
corporate action of Envoy. This Agreement and the Merger have been duly
authorized by all necessary corporate action of Quintiles and QFinance, in their
capacity as the sole stockholders of Envoy, in accordance with the TBCA.
Attached to Section 5.2 of the Envoy Disclosure Letter are certified copies of
the resolutions which have been duly adopted by Envoy's Board of Directors and
the Board of Directors of Quintiles and QFinance, as the sole stockholders of
Envoy, evidencing the taking of all corporate action necessary to authorize the
execution, delivery and performance of this Agreement, and the consummation of
the transactions contemplated hereby. This Agreement constitutes, and all
agreements and other instruments and documents to be executed and delivered by
Envoy, Quintiles and QFinance pursuant to this Agreement will constitute, legal,
valid and binding obligations of Envoy, Quintiles and QFinance enforceable
against each of them in accordance with their respective terms, except to the
extent such enforceability is subject to (i) Laws of general application
relating to bankruptcy, insolvency, moratorium and the relief of debtors, (ii)
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) limitations on the enforceability of indemnification
provisions under applicable federal and state securities Laws. The execution,
delivery and performance of this Agreement and the agreements and other
documents and instruments to be executed and delivered by each of Envoy,
Quintiles and QFinance pursuant to this Agreement and the consummation of the
transactions contemplated hereby and thereby will not, subject to obtaining the
Consents identified or contemplated herein (including without limitation all
filings or Consents under the HSR Act, N.C. Gen. Stat. Section 78A-30, the
Securities Laws and state securities Laws), (i) violate or result in a breach of
or Default under the Charter or bylaws of Envoy or Quintiles; (ii) violate any
Law, Order, administrative decision or award of any court, arbitrator, mediator,
tribunal or Regulatory Authority applicable to or binding upon Envoy, Quintiles
or upon Assets or business of Envoy or Quintiles; (iii) conflict with or
constitute a Default under any Material Contract to which Envoy or Quintiles is
a party or by which Envoy or Quintiles is bound; or (iv) create a Material Lien
upon the Assets or business of Envoy, other than, in the case of clauses (ii),
(iii) and (iv) above, any such violation, conflict, Default, or Lien that, if
occurring, could not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect on Envoy. Envoy has taken all steps necessary
to exempt the transactions contemplated by this Agreement irrevocably from any
applicable "fair price," "moratorium," "control share acquisition," "interested
shareholder" or other anti-takeover Law (however styled), including without
limitation the Tennessee Investor Protection Act, the Tennessee Business
Combination Act, the Tennessee Control Share Acquisition Act and the Tennessee
Authorized Corporate Protection Act, and from any applicable Organizational
Document or Contract to which Envoy is a party containing any change of control,
"anti-takeover" or similar provision.
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5.3 Capital Stock.
(a) As of the date hereof, the authorized capital stock of
Envoy consists of 1,000 shares of Envoy Common Stock, of which 100 shares are
issued and outstanding and none of which are held as treasury shares and all of
which are owned by Quintiles. Envoy has no other capital stock authorized,
issued or outstanding. All of the issued and outstanding shares of Envoy Common
Stock are duly and validly issued and outstanding, are fully paid and
non-assessable, and were issued pursuant to a valid exemption from registration
under the 1933 Act and all applicable state securities Laws. Quintiles owns 60
shares of Envoy Common Stock free and clear of any Lien and QFinance owns 40
shares of Envoy Common Stock free and clear of any Lien.
(b) Section 5.3(b) of the Envoy Disclosure Letter lists the
names of all employees, directors, consultants or independent contractors of
Envoy who own Options or Quintiles Options, together with the number of shares
of Quintiles Common Stock subject to such options or rights and the exercise
prices applicable to such options.
(c) Except for the Options and as set forth in Sections 3.4
and 5.3 of the Envoy Disclosure Letter, there are no outstanding warrants,
options, rights (including outstanding rights to demand registration or to sell
in connection with a registration by Envoy under the 1933 Act), calls or other
commitments of any nature relating to the Envoy Common Stock, or to Quintiles
Common Stock or the equity of other Persons that were granted or issued with
respect to services rendered to Envoy, and there are no outstanding securities
of Envoy convertible into or exchangeable for shares of Envoy Common Stock or
any other capital stock ("Envoy Equity Rights"). All of such Envoy Equity Rights
were issued or granted in Material compliance with all applicable Securities
Laws and state securities Laws pursuant to a valid exemption from registration
under the 1933 Act and all applicable state securities Laws.
(d) There are no voting agreements or voting trusts between or
among any Person or Persons relating to Envoy or the Envoy Common Stock. Envoy
is not obligated to issue or repurchase any shares of Envoy Common Stock for any
purpose and no Person has entered into any Contract (whether preemptive or
contractual) for the purchase (whether from Envoy or Quintiles), subscription or
issuance of any unissued shares or other securities of Envoy, whether now or in
the future.
(e) Neither Envoy nor Healtheon/WebMD nor any of their
Affiliates will have any obligations under any Investors' Rights Agreement (as
defined in Section 9.2(i)) after the Effective Time and any such agreements will
have no further force and effect after the Effective Time.
5.4 Envoy Subsidiaries. Section 5.4 of the Envoy Disclosure Letter sets
forth a list of all Subsidiaries of Envoy. Each Subsidiary of the Envoy is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization. Each Subsidiary of
Envoy has the corporate power and authority to carry on its business as it is
now being conducted. Each Subsidiary of Envoy is duly qualified as a foreign
corporation authorized to do business, and is in good standing, in each
jurisdiction where the
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character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified or in good standing would not, individually or in the aggregate, have
a Material Adverse Effect on Envoy. All of the outstanding shares of capital
stock or other equity interests in each of Envoy's Subsidiaries have been
validly issued, are fully paid and nonassessable, and are owned by Envoy or
another Subsidiary of Envoy free and clear of all Liens, and none are subject to
preemptive rights. Neither Envoy nor any of its Subsidiaries has any equity or
similar interest in any other Person (other than Envoy's investments in its
Subsidiaries). Unless otherwise indicated, references to "Envoy" throughout this
Agreement shall mean Envoy and its Subsidiaries taken as a whole.
5.5 SEC Filings; Financial Statements.
(a) Envoy has filed various reports, schedules, forms,
statements and other documents (which are publicly available) with the SEC
pursuant to applicable Securities Laws from January 1, 1997 to the date of this
Agreement (the "Envoy SEC Documents"), and the Envoy SEC Documents constitute
all of the documents required to have been filed by Envoy pursuant to such Laws
for such period. As of their respective dates, or if amended, as of the date of
the last such amendment, the Envoy SEC Documents complied in all Material
respects, with the requirements of the 1933 Act or the 1934 Act, as the case may
be, and none of the Envoy SEC Documents contained when filed any untrue
statement of a Material fact or omitted, or will omit, to state any Material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, or are to be made, not
misleading. Except to the extent information contained in any Envoy SEC Document
has been revised or superseded by a later filed Envoy SEC Document, none of the
Envoy SEC Documents (including any and all financial statements included
therein) contains any untrue statement of a Material fact or omits to state a
Material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The consolidated financial statements of Envoy included in
the Envoy SEC Documents when filed fairly presented, and Envoy's unaudited
consolidated financial statements as of and for the twelve (12) month period
ended December 31, 1999 (the "Envoy Balance Sheet Date") which are included in
Section 5.5 of the Envoy Disclosure Letter (the "Envoy Financial Statements")
fairly present, the consolidated financial position of Envoy and its
consolidated Subsidiaries as at the respective dates thereof and the
consolidated results of their operations and their consolidated cash flows for
the respective periods then ended and have been prepared in conformity with GAAP
(except, in the case of unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved (except as may be
indicated therein or in the notes thereto). Since the Envoy Balance Sheet Date,
neither Envoy nor Quintiles has made any change in the accounting practices or
policies applied in the preparation of its financial statements, except as have
been required by GAAP.
(b) Quintiles has filed various reports, schedules,
forms, statements and other documents (which are publicly available) with the
SEC pursuant to applicable Securities Laws from January 1, 1999 to the date of
this Agreement relating to Envoy and its Subsidiaries (solely to the extent
related to Envoy and its Subsidiaries, the "Quintiles SEC Documents"), and the
Quintiles SEC Documents constitute all of the documents required to have been
filed by Quintiles with respect to Envoy and its Subsidiaries pursuant to such
Laws for such period. As
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of their respective dates, or if amended, as of the date of the last such
amendment, the Quintiles SEC Documents complied, and all documents required to
be filed by Quintiles with respect to Envoy and its Subsidiaries with the SEC
after the date hereof and prior to the Effective Time (the "Subsequent Quintiles
SEC Documents") will comply, in all Material respects, with the requirements of
the 1933 Act or the 1934 Act, as the case may be, and none of the Quintiles SEC
Documents contained when filed, and the Subsequent Quintiles SEC Documents will
not contain when filed, any untrue statement of a Material fact with respect to
Envoy and its Subsidiaries or omitted, or will omit, to state any Material fact
with respect to Envoy and its Subsidiaries required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, or are to be made, not misleading. Except to the extent
information contained in any Quintiles SEC Document has been revised or
superseded by a later filed Quintiles SEC Document, none of the Quintiles SEC
Documents (including any and all financial statements included therein) contains
any untrue statement of a Material fact with respect to Envoy and its
Subsidiaries or omits to state a Material fact with respect to Envoy and its
Subsidiaries required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
5.6 Absence of Undisclosed Liabilities. Except for Liabilities which
are accrued or reserved against on the balance sheet (or reflected in the notes
thereto) included in the Envoy Financial Statements, neither Envoy nor any of
its Subsidiaries has any Material (individually or in the aggregate)
Liabilities, other than Liabilities incurred in the ordinary course of the
business since the Envoy Balance Sheet Date or Liabilities arising under this
Agreement.
5.7 Absence of Changes. Except as set forth in the Quintiles SEC
Documents or in Section 5.7 of the Envoy Disclosure Letter, since the Envoy
Balance Sheet Date, Envoy and its Subsidiaries have conducted their respective
businesses and operations in the ordinary and usual course consistent with past
practice, except for such business and operations as have not resulted and could
not reasonably be expected to result in a Material Adverse Effect on Envoy, and
there has not occurred (i) any event, condition or occurrence having or that
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on Envoy; (ii) any damage, destruction or loss (whether
or not covered by insurance) having or which reasonably could be expected to
have, individually or in the aggregate, a Material Adverse Effect on Envoy;
(iii) any declaration, setting aside or payment of any dividend or distribution
of any kind by Envoy on any class of its capital stock or any repurchase for
value by Envoy of any of its capital stock; (iv) any split, combination or
reclassification of any Envoy Common Stock or any issuance or the authorization
of any issuance of any other securities in respect of, in lieu of or in
substitution for shares of Envoy Common Stock; (v) any Material increase in the
compensation payable or to become payable by the Envoy or any Subsidiary to any
of its directors, officers or key employees or the creation of or any Material
increase in any bonus, insurance, pension, severance or other employee benefit
plan, payment or arrangement made to, for or with any such director, officer or
key employee, other than in the ordinary course of business consistent with past
practice; (vi) any labor dispute, other than routine matters none of which has
had, or reasonably could be expected to have, a Material Adverse Effect on
Envoy; (vii) any entry by Envoy or any of its Subsidiaries into any commitment
or transaction (including, without limitation, any borrowing or capital
expenditure) Material (individually or in the aggregate) to Envoy or its
Subsidiaries other than in the ordinary course of business; (viii) any Material
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elections with respect to Taxes by Quintiles with respect to Envoy or its Assets
or by Envoy or any of its Subsidiaries or settlement or compromise by Quintiles,
Envoy or any of its Subsidiaries of any Material Tax liability or refund
affecting or with respect to Envoy; (ix) any change by Quintiles, Envoy or its
Subsidiaries in accounting methods, principles or practices utilized by or
affecting Envoy except as required by concurrent changes in GAAP; (x) any
Contract to take any action described in this Section 5.7; or (xi) any event
during the period from the Envoy Balance Sheet Date through the date of this
Agreement that, if taken during the period from the date of this Agreement
through the Effective Time, would constitute a breach of Section 7.1 hereof.
5.8 Tax Matters. (i) Envoy has filed all federal, and all Material
state, local, foreign and provincial tax returns, declarations, statements,
reports, schedules, bonus and information returns and any amendments to any of
the preceding ("Tax Returns") required to have been filed on or prior to the
date hereof, or appropriate extensions therefor have been properly obtained, and
such Tax Returns are in all Material respects true, correct and complete; (ii)
all Taxes shown to be due on such Tax Returns either (x) have been timely paid
or (y) extensions for payment have been properly obtained or such Taxes are
being timely and properly contested and, in either case, adequate reserves
pursuant to GAAP have been established on Envoy's consolidated financial
statements with respect thereto; (iii) Envoy and each of its Subsidiaries have
complied in all Material respects with all rules and regulations relating to the
withholding of Taxes; (iv) neither Envoy nor any of its Subsidiaries has waived
any statute of limitations in respect of its Taxes or Tax Returns; (v) all Tax
Returns of Envoy and its Subsidiaries covering periods through Envoy's fiscal
year ended December 31, 1994 relating to federal income Taxes have been examined
by the Internal Revenue Service ("IRS"), and Section 5.8 of the Envoy Disclosure
Letter sets forth all pending audits, examinations or claims by any taxing
authority of any Tax Returns; (vi) except as have been advanced in pending
audits or examinations listed in Section 5.8 of the Envoy Disclosure Letter, no
claims that have been communicated in writing to Envoy by a taxing authority in
connection with the examination of any federal or Material state Tax Returns of
Envoy and its Subsidiaries are currently pending; (vii) all deficiencies
asserted or assessments made as a result of any examination of such Tax Returns
by any taxing authority have been paid in full or are being timely and properly
contested and proper accruals pursuant to GAAP have been established on Envoy's
consolidated financial statements with respect thereto; (viii) except for the
potential liability for Taxes of the affiliated groups listed in Section 5.8 of
the Envoy Disclosure Letter, neither Envoy nor any of its Subsidiaries has any
liability for Taxes of any Person other than Envoy and its Subsidiaries (a)
under Treasury Regulations Section 1.1502-6 (or any similar provision of
applicable Law), (b) as a transferee or successor, or (c) by virtue of any
express or implied agreement or otherwise; (ix) neither Envoy nor any of its
Subsidiaries has been a member of any affiliated group within the meaning of
Section 1504(a) of the Internal Revenue Code other than (a) the affiliated group
of which Envoy is the common parent corporation and (b) the affiliated group of
which Quintiles is the common parent corporation; (x) none of the property owned
or used by Envoy or its Subsidiaries is subject to a tax benefit transfer lease
executed in accordance with Section 168(f)(8) of the Internal Revenue Code of
1954, as amended by the Economic Recovery Act of 1981; (xi) none of the property
owned by Envoy or its Subsidiaries is "tax exempt use property" within the
meaning of Section 168(h) of the Internal Revenue Code; (xii) none of Envoy or
its Subsidiaries has made any payments, is obligated to make any payments, or is
a party to any agreement that under any
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circumstances could obligate any of Envoy or its Subsidiaries to make any
payments that will not be deductible under either Section 162(m) or Section 280G
of the Internal Revenue Code (or cause Envoy or any of its Subsidiaries to incur
a payment to reimburse a person for a tax imposed under Internal Revenue Code
Section 4999); (xiii) except for the Tax Sharing Agreement between Envoy and
Quintiles, a copy of which is attached to Section 5.8 of the Envoy Disclosure
Letter, none of Envoy or its Subsidiaries is a party to any Tax allocation
agreement, any Tax sharing agreement, or any Tax indemnity agreement; and (xiv)
Envoy has no reason to believe that any conditions exist that could reasonably
be expected to prevent the Merger from qualifying as a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code.
5.9 Intellectual Property.
(a) Envoy or one of its Subsidiaries owns or has the
right to use all Intellectual Property Material to the operation of the business
of Envoy and its Subsidiaries as currently conducted or to products or services
currently under development by Envoy or any of its Subsidiaries (collectively,
"Material Intellectual Property"), and has the right to use, license, sublicense
or assign the same without Material liability to, or any requirement of consent
from, any other person or party. All Material Intellectual Property is either
owned by Envoy or its Subsidiaries free and clear of all Liens or is used
pursuant to a license agreement; each such license agreement is valid and
enforceable and in full force and effect; neither Envoy nor any of its
Subsidiaries is in Material Default thereunder; and to the Knowledge of Envoy
and Quintiles, no corresponding licensor is in Material Default thereunder. None
of the Material Intellectual Property infringes or otherwise conflicts with any
Intellectual Property or other right of any Person; there is no pending or, to
the Knowledge of Envoy and Quintiles, threatened (in writing) litigation,
adversarial proceeding, administrative action or other challenge or claim
relating to any Material Intellectual Property; there is no outstanding Order
relating to any Material Intellectual Property; to the Knowledge of Envoy and
Quintiles, there is currently no infringement by any Person of any Material
Intellectual Property; and the Material Intellectual Property owned, used or
possessed by Envoy or its Subsidiaries is sufficient and adequate to conduct the
business of Envoy and its Subsidiaries to the full extent as such business is
currently conducted.
(b) Envoy and each of its Subsidiaries has taken
reasonable steps to protect, maintain and safeguard its respective Material
Intellectual Property, including any Material Intellectual Property for which
improper or unauthorized disclosure would impair its value or validity
Materially, and has executed and required appropriate nondisclosure agreements
and made appropriate filings and registrations in connection with the foregoing.
(c) Envoy or one of its Subsidiaries is the sole and
exclusive owner of all Owned Software (as defined in Section 5.9(f) below) that
is required to conduct the businesses of Envoy and its Subsidiaries to the
extent such businesses are currently conducted, including, without limitation,
the products and services currently under development by Envoy or any of its
Subsidiaries. A true and complete list of all Material Owned Software of Envoy
or any of its Subsidiaries has heretofore been made available to
Healtheon/WebMD. All of the Owned Software of Envoy and any of its Subsidiaries
is Year 2000 Compliant (as defined in Section
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5.9(f) below). A true and complete list of all Material Third Party Software (as
defined in Section 5.9(f) below) used by Envoy or any of its Subsidiaries has
heretofore been made available to Healtheon/WebMD. To Envoy's Knowledge, all
Material Third Party Software currently used by Envoy or any of its Subsidiaries
is Year 2000 Compliant.
(d) Envoy or one of its Subsidiaries is the sole and
exclusive owner of all Owned Databases (as defined in Section 5.9(f) below) that
are required to conduct the businesses of Envoy and its Subsidiaries to the
extent such businesses are currently conducted, including, without limitation,
the products and services currently under development by Envoy or any of its
Subsidiaries. A true and complete list of all Material Owned Databases of Envoy
or any of its Subsidiaries has heretofore been made available to
Healtheon/WebMD. All of the Owned Databases of Envoy or any of its Subsidiaries
are Year 2000 Compliant. A true and complete list of all Material Third Party
Databases (as defined in Section 5.9(f) below) used by Envoy or any of its
Subsidiaries has heretofore been made available to Healtheon/WebMD. To Envoy's
Knowledge, all Material Third Party Databases currently used by Envoy or any of
its Subsidiaries are Year 2000 Compliant.
(e) No Material confidential or trade secret information
of Envoy or any of its Subsidiaries has been provided to any Person except
subject to written confidentiality agreements, except for any such disclosure
which has not resulted and could not reasonably be expected to result in a
Material Adverse Effect on Envoy.
(f) As used in this Section 5.9:
(i) "Databases" means and includes all compilations
of data and all related documentation and written narratives of all procedures
used in connection with the collection, processing and distribution of data
contained therein, together with information that describes the attributes of
certain data and such data's relationship to other data, including, without
limitation, (A) whether the data must be numerical, alphabetic, or alphanumeric,
(B) range or type limitations of the data, (C) one-to-one, one-to-many, or
many-to-many relationships with other data, (D) file layouts, and (E) data
formats.
(ii) "Owned Databases" means all Databases other than
Third Party Databases.
(iii) "Owned Software" means all Software other than
Third Party Software.
(iv) "Software" means and includes all computer
programs, whether in source code, object code or other form (including without
limitation any embedded in or otherwise constituting part of a computer hardware
device), algorithms, edit controls, methodologies, applications, flow charts and
any and all systems documentation (including, but not limited to, data entry and
data processing procedures, report generation and quality control procedures),
logic and designs for all programs, and file layouts and written narratives of
all procedures used in the coding or maintenance of the foregoing.
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(v) "Third Party Databases" means Databases licensed
or leased to Envoy or any of its Subsidiaries by third parties.
(vi) "Third Party Software" means Software licensed
or leased to Envoy or its Subsidiaries by third parties, including commonly
available "shrink wrap" software copyrighted by third parties.
(vii) "Year 2000 Compliant" means, when used with
respect to any Software or Database, that such Software or Database will accept,
receive, input, calculate, compare, sort, store, extract, sequence, and
otherwise process data inputs and date values, and return and display date
values, in a correct and accurate manner, without interruption or abnormal end
of process, regardless of the dates used, whether before, on, or after January
1, 2000, for any date value or values in the twentieth or twenty-first
centuries.
5.10 Insurance. A complete and accurate list of all insurance policies
held by Envoy and now in force (including, without limitation, property damage,
public liability, communications liability, workers' compensation, fidelity
bonds, errors and omissions, theft, forgery and other coverage) is set forth in
Section 5.10 of the Envoy Disclosure Letter, and true and correct copies of all
insurance policies have been made available to Healtheon/WebMD. There is no
Material claim by Envoy or any of its Subsidiaries pending under any insurance
policies of Envoy or any of its Subsidiaries as to which coverage has been
questioned, denied or disputed by the underwriters of such policies.
5.11 Compliance with Laws. (i) Each of Envoy and its Subsidiaries
holds, and is in compliance with the terms of, all Permits necessary for the
conduct or operation of their businesses as currently conducted (the "Envoy
Permits"), except for failures to hold or to comply with the Envoy Permits which
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect on Envoy; (ii) with respect to the Envoy Permits, no
action or proceeding is pending or, to the Knowledge of Envoy, threatened in
writing, and no fact exists or event has occurred that is expected, individually
or in the aggregate, to have a Material Adverse Effect on Envoy; (iii) the
business of Envoy and its Subsidiaries has been and is being conducted in
compliance with all applicable Laws, including without limitation all Laws
concerning privacy and/or data protection, except for violations or failures to
so comply that could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect on Envoy; (iv) no investigation or
review by any Regulatory Authority with respect to Envoy or its Subsidiaries is
pending or, to the Knowledge of Envoy, threatened in writing, other than, in
each case, those which could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect on Envoy; and (v) neither Envoy nor
any of its Subsidiaries has received any written communication in the past two
years from a Regulatory Authority that alleges that Envoy or any of its
Subsidiaries is not in compliance in any Material respect with any applicable
Law.
5.12 Orders and Litigation. Except as set forth in the Quintiles SEC
Documents, there are no outstanding Orders against Envoy or any of its
Subsidiaries, any of their Assets or business, or, to the Knowledge of Envoy and
Quintiles, any of Envoy's or its Subsidiaries' current or former directors or
officers (during the period served as such) or any other person
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whom Envoy or any of its Subsidiaries has agreed to indemnify, as such. Except
as set forth in the Quintiles SEC Documents, there is no Material Litigation
pending or, to the Knowledge of Envoy and Quintiles, threatened in writing
against Envoy or any of its Subsidiaries, any of their Assets or business, or,
to the Knowledge Envoy and Quintiles, any of the Envoy's or its Subsidiaries'
current or former directors or officers or any other person whom Envoy or any of
its Subsidiaries has agreed to indemnify; nor is there any reasonable basis for
any such Litigation that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect on Envoy.
5.13 Environmental Matters.
(a) No Person (including any Regulatory Authority) has
asserted against Envoy or any of its Subsidiaries any written requests, claims
or demands for damages, costs, expenses or causes of action arising out of
Hazardous Materials in connection with or related to any past or present
facilities, or Assets owned, leased or operated by Envoy or any of its
Subsidiaries currently or in the past (collectively, the "Envoy Facilities"), or
(ii) any actual or alleged injury to human health or the environment by reason
of the current condition or operation of the Envoy Facilities, or past
conditions and operations or activities on the Envoy Facilities.
(b) Neither Envoy nor any Subsidiary is subject to any
pending, or to the Knowledge of Envoy, threatened (in writing) Litigation
relating to or arising from the generation, emission, disposal, discharge,
release or threatened release, treatment, or storage of any Hazardous Material
associated with the Envoy Facilities or Envoy's or any of its Subsidiaries'
operations.
(c) Envoy and its Subsidiaries hold, and are in Material
compliance with, all Permits required under applicable Law to operate all Envoy
Facilities, except when the failure to hold such Permits would not result in a
Material Adverse Effect on Envoy.
(d) There is no environmental condition, situation or
incident on, at or concerning any Envoy Facility or Envoy's or any of its
Subsidiaries' operations that has resulted in or could reasonably be expected to
result in a Material Adverse Effect on Envoy.
5.14 Contracts and Commitments. Except for agreements listed as
exhibits to any Envoy SEC Document deposited for filing and filed with the SEC
in 1998 and on Section 5.14 of the Envoy Disclosure Letter, none of Envoy or any
of its Subsidiaries is a party to any: (a) employment agreement; (b) collective
bargaining agreement; (c) Contract relating to the borrowing of money in excess
of $5,000,000 by Envoy or any Subsidiary or the guaranty of any obligation for
the borrowing of money by Envoy or any Subsidiary; (d) Contract which purports
to limit in any Material respect the manner in which, or the localities in
which, Envoy or any of its Subsidiaries is entitled to conduct all or any
Material portion of the business of Envoy or any of its Subsidiaries; (e)
Contract with Quintiles or any Affiliate of Quintiles (other than Envoy or any
of its Subsidiaries); (f) Contract that requires the Consent of, or terminates
or becomes terminable by, any Person other than Envoy or any of its Subsidiaries
as a result of the transactions contemplated by this Agreement; or (g) Contract
of any sort, other than in the ordinary course of business, which (i) is not
terminable by Envoy or a Subsidiary, as applicable,
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on ninety (90) or fewer days' notice at any time without penalty and
contemplates the receipt, payment or rendering by or to Envoy or a subsidiary of
more than $1,000,000 in cash or fair market value of Assets or securities, (ii)
contemplates any joint venture, partnership or similar arrangement extending
beyond six (6) months or involving equity or investments of more than $500,000,
or (iii) is otherwise Material to Envoy and its Subsidiaries taken as a whole.
There is not, under any of the aforesaid obligations, any Default by Envoy or
any of its Subsidiaries except for Defaults or other events which, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect on Envoy.
5.15 Powers of Attorney. Neither Envoy nor any of its Subsidiaries has
given or granted any power of attorney, whether limited or general, to any
Person that is continuing in effect other than to employees or officers of
Envoy.
5.16 Benefit Plans.
(a) Section 5.16 of the Envoy Disclosure Letter sets
forth the name of each Envoy Plan (as defined below) and of each bonus, deferred
compensation (together with a list of participants therein), incentive
compensation, profit sharing, salary continuation (together with a list of
participants therein), employee benefit, fringe benefit, stock purchase, stock
option, employment, severance, termination, golden parachute, consulting or
supplemental retirement plan or agreement relating to Envoy and its Subsidiaries
or to their employees or independent contractors (collectively, the "Benefit
Plans"), true copies of which have heretofore been made available to
Healtheon/WebMD. Envoy has also delivered to Healtheon/WebMD true, complete and
correct copies of (1) each Benefit Plan (or, in the case of any unwritten
Benefit Plans, descriptions thereof), (2) the two most recent annual reports on
Form 5500 (including all schedules and attachments thereto) filed with the IRS
with respect to each Benefit Plan (if any such report was required by applicable
Law), (3) the most recent summary plan description (or similar document) for
each Benefit Plan for which such a summary plan description is required by
applicable Law or was otherwise provided to plan participants or beneficiaries
and (4) each trust agreement and insurance or annuity contract or other funding
or financing arrangement relating to any Benefit Plan. Each Envoy Plan and
Benefit Plan has been administered in all Material respects in accordance with
its terms and complies in all Material respects with ERISA, the Internal Revenue
Code and all other applicable Laws. All contributions to, and payments from, the
Benefit Plans that may have been required to be made in accordance with the
terms of the Benefit Plans, any applicable collective bargaining agreement and,
when applicable, Section 302 of ERISA or Section 412 of the Internal Revenue
Code, have been timely made. All such contributions to, and payments from, the
Benefit Plans, except those payments to be made from a trust qualified under
Section 401(a) of the Internal Revenue Code, for any period ending before the
Effective Time that are not yet, but will be, required to be made, will be
properly accrued and reflected in the balance sheet included in the Envoy
Financial Statements. No "reportable event" (within the meaning of Section 4043
of ERISA) has occurred with respect to any Envoy Plan for which the 30-day
notice requirement has not been waived (other than with respect to the
transactions contemplated by this Agreement); neither Envoy nor any of its ERISA
Affiliates has withdrawn from any Envoy Plan under Section 4063 of ERISA or
Envoy Multiemployer Plan (as defined below) under Section 4203 or 4205 of ERISA
or has taken, or is currently considering taking, any action to do so; and no
action has been taken, or is currently being considered, to
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terminate any Envoy Plan subject to Title IV of ERISA. No Envoy Plan, nor any
trust created thereunder, has incurred any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived. As of the most recent
valuation date for each Envoy Plan that is a "defined benefit plan" (as defined
in Section 3(35) of ERISA (hereinafter a "Defined Benefit Plan")), there was not
any amount of "unfunded benefit liabilities" (as defined in Section 4001(a)(18)
of ERISA) under such Defined Benefit Plan, and Envoy is not aware of any facts
or circumstances that would Materially change the funded status of any such
Defined Benefit Plan. Envoy has furnished to Healtheon/WebMD the most recent
actuarial report or valuation with respect to each Defined Benefit Plan. The
information supplied to the plan actuary by Envoy and any ERISA Affiliate (as
defined below) for use in preparing those reports or valuations was complete and
accurate in all Material respects and Envoy has no reason to believe that the
conclusions expressed in those reports or valuations are incorrect. Neither
Envoy nor any ERISA Affiliate has (a) engaged in a transaction described in
Section 4069 of ERISA that could subject Envoy to liability at any time after
the date hereof or (b) acted in a manner that could, or failed to act so as to,
result in Material fines, penalties, taxes or related charges under (x) Section
502(c)(i)(1) of ERISA, (y) Section 4071 of ERISA or (z) Chapter 43 of the
Internal Revenue Code. There are no Material (individually or in the aggregate)
actions, suits or claims pending or, to the Knowledge of Envoy, threatened in
writing (other than routine claims for benefits) with respect to any Envoy Plan
or Benefit Plan. Neither Envoy nor any of its ERISA Affiliates has incurred or
could reasonably be expected to incur any Material liability under or pursuant
to Title IV of ERISA that has not been satisfied in full. To the Knowledge of
Envoy, no Material non-exempt prohibited transactions described in Section 406
of ERISA or Section 4975 of the Internal Revenue Code have occurred. All Envoy
Plans that are intended to be qualified under Section 401(a) of the Internal
Revenue Code have received a favorable determination letter as to such
qualification from the IRS, and no event has occurred, either by reason of any
action or failure to act, which could be expected to cause the loss of any such
qualification, and Envoy is not aware of any reason why any Envoy Plan and
Benefit Plan is not so qualified in operation. Envoy has delivered to
Healtheon/WebMD (i) a copy of the most recent determination letter received with
respect to each Envoy Plan for which such a letter has been issued, as well as a
copy of any pending application for a determination letter and (ii) a list of
all Envoy Plan amendments as to which a favorable determination letter has not
yet been received. None of Envoy, any of its ERISA Affiliates or, to the
Knowledge of Envoy, any trustee, administrator or other fiduciary of any Benefit
Plan or any agent of any of the foregoing has engaged in any transaction or
acted in a manner that could, or has failed to act so as to, subject Envoy, any
such ERISA Affiliate or any trustee, administrator or other fiduciary to any
Material liability for breach of fiduciary duty under ERISA or any other
applicable law. Neither Envoy nor any of its ERISA Affiliates knows or has been
notified by any Envoy Multiemployer Plan that such Envoy Multiemployer Plan is
currently in reorganization or insolvency under and within the meaning of
Section 4241 or 4245 of ERISA or that such Envoy Multiemployer Plan intends to
terminate or has been terminated under Section 4041A of ERISA. As used herein:
(i) "Envoy Plan" means a "pension plan" (as defined in Section 3(2) of ERISA,
other than a Envoy Multiemployer Plan) or a "welfare plan" (as defined in
Section 3(l) of ERISA) established or maintained by Envoy or any Person that,
together with Envoy, is treated as a single employer under Section 414(b), (c),
(m) or (o) of the Internal Revenue Code (each, an "ERISA Affiliate") or to which
Envoy or any of its ERISA Affiliates has contributed in the last six years or
otherwise may have any liability; and (ii) "Envoy Multiemployer Plan" means a
"multiemployer plan" (as defined in Section
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4001(a)(3) of ERISA) to which Envoy or any of its ERISA Affiliates is or has
been obligated to contribute or otherwise may have any liability.
(b) Except as contemplated by this Agreement, the
consummation of the transactions contemplated by this Agreement will not, either
alone or in combination with any other event that is reasonably likely to occur,
(A) entitle any current or former director, officer or employee of Envoy or any
of its ERISA Affiliates to severance pay, golden parachute payments,
unemployment compensation or any other payment, except as expressly provided in
this Agreement, or (B) accelerate the time of payment or vesting, or increase
the amount of compensation due any such director, officer or employee.
(c) The list of welfare plans in Section 5.16 of the
Envoy Disclosure Letter discloses whether each welfare plan is (i) unfunded,
(ii) funded through a "welfare benefit fund", as such term is defined in Section
419(e) of the Internal Revenue Code, or other funding mechanism or (iii)
insured. Each such welfare plan may be amended or terminated without Material
liability to Envoy at any time after the Effective Time. Envoy and its ERISA
Affiliates comply in all Material respects with the applicable requirements of
Section 4980B(f) of the Internal Revenue Code with respect to each Benefit Plan
that is a group health plan, as such term is defined in Section 5000(b)(1) of
the Internal Revenue Code.
5.17 Remuneration. Section 5.17 of the Envoy Disclosure Letter sets
forth a complete and accurate schedule of the direct compensation (including
wages, salaries and actual or anticipated bonuses), plus a description of other
annual benefits not made available to the other employees generally, to be paid
in the current fiscal year to (i) all of the officers and directors of Envoy;
and (ii) all of the employees of Envoy who received or will be receiving in
excess of $100,000 (excluding commission and bonus compensation) during such
year. No unpaid salary, other than for the immediately preceding pay period and
other than pursuant to the existing deferred compensation plans of Envoy is now
payable to any of such officers, directors or employees.
5.18 Governmental Approvals; Required Consents. No filing or
registration with, or Consent of, any Governmental Entity or any other third
party is required by or with respect to Envoy or any of its Subsidiaries in
connection with the execution and delivery of this Agreement or is necessary for
the consummation of the transactions contemplated hereby (including, without
limitation, the Merger) except: (i) the filing of the application with the North
Carolina Secretary of State pursuant to N.C. Gen. Stat. Section 78A-30
requesting a hearing upon the terms and conditions of the Merger, (iii) the
filing of a notification under the HSR Act, (iv) the filing of Articles of
Merger with the Secretary of State of the State of Tennessee, (v) the filing of
Certificate of Merger with the Secretary of State of the State of Delaware, (vi)
the Consents, filings and notifications listed in Section 5.18 of the Envoy
Disclosure Letter and (vii) such other Consents, registrations and filings the
failure of which to obtain or make could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect on Envoy.
5.19 Accounts Receivable. All accounts receivable of Envoy and its
Subsidiaries, whether or not reflected in the Envoy Financial Statements
represent in all Material respects sales made in the ordinary course of
business, and the reserves shown on the Envoy Financial
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Statements have been established in accordance with GAAP, consistently applied,
and are considered by management of Envoy and Quintiles to be adequate.
5.20 Tax Treatment. Neither Envoy nor, to the Knowledge of Envoy or
Quintiles, any Affiliate of Envoy or Quintiles has taken any action or has any
Knowledge of any fact or circumstance that is reasonably likely to prevent the
transactions contemplated hereby, including the Merger, from qualifying as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code.
5.21 Affiliate Transactions Except as set forth in Sections 5.8 and
5.14 of the Envoy Disclosure Letter, there are no Material Contracts or other
Material transactions between Envoy or any of its Subsidiaries, on the one hand,
and any (i) officer or director of Envoy or of any of its Subsidiaries, (ii)
Quintiles and any of its other Subsidiaries, including QFinance or (iii)
Affiliate of any such officer, director or Quintiles and any of its other
Subsidiaries, on the other hand.
5.22 Envoy Disclosure Letter. Matters disclosed on each Section of the
Envoy Disclosure Letter shall be deemed disclosed only for purposes of the
matters to be disclosed in such Section, except in the case of specific
cross-references to other Sections of the Envoy Disclosure Letter which will be
deemed to be disclosures relating to such specific cross-referenced Sections.
5.23 Customers; Payors. Section 5.23 of the Envoy Disclosure Letter
lists (i) Envoy's top 20 customers by pharmacy xxxxxxxx and (ii) Envoy's top 20
payors (collectively, the "Customers"), by the revenues received by Envoy from
each such Customer during 1999 and the percentage of Envoy's revenues during
1999 for which each such Customer is responsible. Neither Envoy nor Quintiles
has Knowledge of any oral or written notice or other indication from any of the
Customers or Payors stating that such Customer or Payor intends to terminate its
business relationship with Envoy or Materially reduce the volume of business it
does with Envoy.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF HEALTHEON/WEBMD AND MERGER CORP
Subject to the exceptions set forth in the disclosure letter
referencing specific representations delivered to Envoy on or prior to the date
of this Agreement (the "Healtheon/WebMD Disclosure Letter"), as of the date
hereof and as of the Closing Date, Healtheon/WebMD and Merger Corp, jointly and
severally, represent and warrant to Envoy and Quintiles as follows:
6.1 Organization, Standing, and Power. (a) Healtheon/WebMD is a
corporation duly organized, validly existing, and in good standing under the
Laws of the State of Delaware, and has the power and authority to carry on its
business as it has been and is now being conducted. Healtheon/WebMD and each of
its Subsidiaries is duly qualified or licensed to transact business
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as a foreign corporation and is in good standing in all jurisdictions where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed would not have, individually or in the aggregate,
a Material Adverse Effect on Healtheon/WebMD. Copies of the Certificate of
Incorporation and all amendments thereto of Healtheon/WebMD and the bylaws, as
amended, of Healtheon/WebMD and copies of all resolutions adopted and action
taken by the stockholders or Board of Directors and all committees thereof of
Healtheon/WebMD, which have been made available to Envoy and Quintiles for
review, are true and complete in all Material respects and accurately reflect
all proceedings of the stockholders and Board of Directors (and all committees
thereof) of Healtheon/WebMD.
(b) Merger Corp is a corporation duly organized, validly
existing and in good standing under the Laws of the State of Delaware as a
wholly owned Subsidiary of Healtheon/WebMD.
6.2 Authorization of Agreement; No Breach. The execution, delivery and
performance of this Agreement has been duly authorized by all necessary
corporate action of Healtheon/WebMD. This Agreement constitutes, and all
agreements and other instruments and documents to be executed and delivered by
Healtheon/WebMD pursuant to this Agreement will constitute, legal, valid and
binding obligations of Healtheon/WebMD enforceable against it in accordance with
their respective terms, except to the extent such enforceability is subject to
(i) Laws of general application relating to bankruptcy, insolvency, moratorium
and the relief of debtors and (ii) the availability of specific performance,
injunctive relief or other equitable remedies. Merger Corp has the corporate
power and authority necessary to execute, deliver and perform its obligations
under this Agreement and to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated herein, including the Merger, have been duly and
validly authorized by all necessary corporate action in respect thereof on the
part of Merger Corp. This Agreement represents a legal, valid, and binding
obligation of Merger Corp, enforceable against Merger Corp in accordance with
its terms. Except in such case, individually or in the aggregate, that will not
result in a Material Adverse Effect on Healtheon/WebMD, the execution, delivery
and performance of this Agreement and the agreements and other documents and
instruments to be executed and delivered by Healtheon/WebMD pursuant to this
Agreement and the consummation of the transactions contemplated hereby and
thereby will not, subject to obtaining the Consents identified or contemplated
herein (including without limitation all filings or Consents under the HSR Act,
N.C. Gen. Stat. Section 78A-30, the Securities Law and state securities Laws and
the rules and regulations of the NASD), (i) violate or result in a breach of or
Default under the certificate of incorporation or bylaws of Healtheon/WebMD or
any of its Subsidiaries or any other Material Contract to which Healtheon/WebMD
or any of its Subsidiaries is a party or is bound; (ii) to the Knowledge of
Healtheon/WebMD and its Subsidiaries, violate any Law, Order, administrative
decision or award of any court, arbitrator, mediator, tribunal or Regulatory
Authority applicable to or binding upon Healtheon/WebMD or its Subsidiaries or
upon their respective securities, Assets or business; or (iii) create a Material
Lien upon the securities, Assets or business of Healtheon/WebMD or any of its
Subsidiaries.
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6.3 Capital Stock.
(a) As of November 11, 1999, the authorized capital stock
of Healtheon/WebMD consists of: (i) 600,000,000 shares of Healtheon/WebMD Common
Stock, of which 146,204,261 shares (plus any shares issued upon exercise of
Healtheon/WebMD Options and Warrants (as defined in Section 6.3(b) since
November 11, 1999) are issued and outstanding and (ii) 5,000,000 shares of
Preferred Stock, $0.0001 par value per share, none of which shares are issued
and outstanding. All of the outstanding shares of Healtheon/WebMD Common Stock
have been duly authorized and validly issued, and are fully paid and
nonassessable, and were issued in Material compliance with the 1933 Act and
applicable state securities Laws.
(b) The authorized capital stock of Merger Corp consists
of 1,000 shares of Merger Corp Common Stock, of which 100 shares are validly
issued and outstanding, fully paid and nonassessable and is owned by
Healtheon/WebMD free and clear of any Lien.
(c) As of November 11, 1999, an aggregate of 63,595,222
shares of Healtheon/WebMD Common Stock (less any shares of Common Stock subject
to Healtheon/WebMD Options and Warrants that have been exercised since November
11, 1999) are subject to issuance pursuant to outstanding options to purchase
Healtheon/WebMD Common Stock under Healtheon/WebMD's stock option plans and
outstanding warrants to purchase Healtheon/WebMD Common Stock. (Stock options
granted by Healtheon/WebMD pursuant to its stock option plans and warrants are
referred to in this Agreement as "Healtheon/WebMD Options and Warrants".) All
Healtheon/WebMD Options and Warrants were issued or granted in Material
compliance with the 1933 Act and applicable state securities Laws pursuant to a
valid exemption from registration under the 1933 Act and all applicable state
securities Laws.
(d) Except as set forth above, in the Healtheon/WebMD SEC
Documents and in Section 6.3(d) of the Healtheon/WebMD Disclosure Letter, as of
the date of this Agreement, there are no subscriptions, options, warrants,
equity securities, partnership interests or similar ownership interests, calls,
rights (including preemptive rights), commitments or agreements of any character
to which Healtheon/WebMD or any of its Subsidiaries is a party or by which it is
bound obligating Healtheon/WebMD or any of its Subsidiaries to issue, deliver or
sell, or cause to be issued, delivered or sold, or repurchase, redeem or
otherwise acquire, or cause the repurchase, redemption or acquisition of, any
shares of capital stock, partnership interests or similar ownership interests of
Healtheon/WebMD or any of its Subsidiaries or obligating Healtheon/WebMD or any
of its Subsidiaries to grant, extend, accelerate the vesting of or enter into
any such subscription, option, warrant, equity security, call, right, commitment
or agreement.
6.4 Healtheon/WebMD SEC Filings; Financial Statements. Healtheon/WebMD
has filed various reports, schedules, forms, statements and other documents
(which are publicly available) with the SEC pursuant to applicable Securities
Laws from January 1, 1999 to the date of this Agreement (the "Healtheon/WebMD
SEC Documents"), and the Healtheon/WebMD SEC Documents constitute all of the
documents required to have been filed by Healtheon/WebMD pursuant to such Laws
for such period. As of their respective dates, or if amended, as of the date
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of the last such amendment, the Healtheon/WebMD SEC Documents complied, and all
documents required to be filed by Healtheon/WebMD with the SEC after the date
hereof and prior to the Effective Time (the "Subsequent Healtheon/WebMD SEC
Documents") will comply, in all Material respects, with the requirements of the
1933 Act or the 1934 Act, as the case may be, and none of the Healtheon/WebMD
SEC Documents contained when filed, and the Subsequent Healtheon/WebMD SEC
Documents will not contain when filed, any untrue statement of a Material fact
or omitted, or will omit, to state any Material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, or are to be made, not misleading.
Except to the extent information contained in any Healtheon/WebMD SEC Document
has been revised or superseded by a later filed Healtheon/WebMD SEC Document,
none of the Healtheon/WebMD SEC Documents (including any and all financial
statements included therein) contains any untrue statement of a Material fact or
omits to state a Material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The consolidated financial statements of
Healtheon/WebMD included in the Healtheon/WebMD SEC Documents when filed fairly
presented, and those included in the Subsequent Healtheon/WebMD SEC Documents
when filed will fairly present, the consolidated financial position of
Healtheon/WebMD and its consolidated Subsidiaries as at the respective dates
thereof and the consolidated results of their operations and their consolidated
cash flows for the respective periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments and to any other
adjustments described therein) and have been prepared in conformity with GAAP
(except, in the case of unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis during the periods involved (except as may be
indicated therein or in the notes thereto).
6.5 Absence of Undisclosed Liabilities. Except as disclosed on the
Healtheon/WebMD SEC Documents or in Section 6.5 of the Healtheon/WebMD
Disclosure Letter, Healtheon/WebMD does not have any Material (individually or
in the aggregate) Liabilities, other than Liabilities incurred in the ordinary
course of business since September 30, 1999 or Liabilities arising under this
Agreement.
6.6 Absence of Certain Changes or Events. Except as disclosed in
Section 6.6 of the Healtheon/WebMD Disclosure Letter, since September 30, 1999,
there has not occurred (i) any events, changes or occurrences (other than events
or condition affecting the economy generally) which have had, or are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Healtheon/WebMD, (ii) any declaration, setting aside or payment of any dividend
or distribution of any kind by Healtheon/WebMD or Merger Corp on any class of
its capital stock or (iii) any change in Healtheon/WebMD's accounting methods,
principles or practices utilized by or affecting Healtheon/WebMD except as
required by concurrent changes in GAAP.
6.7 Compliance with Laws. The business of Healtheon/WebMD and Merger
Corp has been and is being conducted in compliance with all applicable Laws,
except for violations or failures to so comply that could not reasonably be
expected, individually or in the aggregate, to have Material Adverse Effect on
Healtheon/WebMD; and no investigation or review by any Governmental Entity with
respect to Healtheon/WebMD or Merger Corp is pending or, to the
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Knowledge of Healtheon/WebMD, threatened in writing, other than, in each case,
those which could not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect on Healtheon/WebMD.
6.8 Governmental Approvals; Required Consents. No filing or
registration with, or Consent of, any Governmental Entity or any other third
party is required by or with respect to Healtheon/WebMD or Merger Corp in
connection with the execution and delivery of this Agreement or is necessary for
the consummation of the transactions contemplated hereby (including, without
limitation, the Merger) except: (i) the filing of the application with the North
Carolina Secretary of State pursuant to N.C. Gen. Stat. Section 78A-30
requesting a hearing upon the terms and conditions of the Merger, (iii) the
filing of a notification under the HSR Act, (iv) the filing of Articles of
Merger with the Secretary of State of the State of Tennessee, (v) the filing of
Certificate of Merger with the Secretary of State of the State of Delaware, (vi)
the Consents, filings and notifications listed in Section 6.8 of the
Healtheon/WebMD Disclosure Letter, and (vi) such other Consents, registrations
and filings the failure of which to obtain or make could not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect on
Healtheon/WebMD.
6.9 Healtheon/WebMD Common Stock. The Stock Consideration to be issued
in accordance with the terms and provisions of this Agreement will, when so
issued, be duly authorized, validly issued, fully paid and non-assessable.
6.10 Interim Operations of Merger Corp. Merger Corp was formed solely
for the purpose of engaging in the transactions contemplated by this Agreement,
has engaged in no other business activities and has conducted its operations
only as contemplated hereby.
6.11 Tax Treatment. Neither Healtheon/WebMD nor, to the Knowledge of
Healtheon/WebMD, any Affiliate of Healtheon/WebMD has taken any action or has
any Knowledge of any fact or circumstance that is reasonably likely to prevent
the transactions contemplated hereby, including the Merger, from qualifying as a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code.
6.12 Orders and Litigation. Except as set forth in the Healtheon/WebMD
SEC Documents, there are no outstanding Orders against Healtheon/WebMD or any of
its Subsidiaries, any of their Assets or business, or, to the Knowledge of
Healtheon/WebMD, any of Healtheon/WebMD's or its Subsidiaries' current or former
directors or officers (during the period served as such) or any other person
whom Healtheon/WebMD or any of its Subsidiaries has agreed to indemnify, as
such. Except as set forth in the Healtheon/WebMD SEC Documents, there is no
Material Litigation pending or, to the Knowledge of Healtheon/WebMD, threatened
in writing against Healtheon/WebMD or any of its Subsidiaries, any of their
Assets or business, or, to the Knowledge Healtheon/WebMD, any of the
Healtheon/WebMD's or its Subsidiaries' current or former directors or officers
or any other person whom Healtheon/WebMD or any of its Subsidiaries has agreed
to indemnify, as such; nor is there any reasonable basis for any such Litigation
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect on Healtheon/WebMD.
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ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 Conduct of Envoy Business. Except as set forth in Section 7.1 of
the Envoy Disclosure Letter, prior to the Closing Date, except with the prior
written consent of Healtheon/WebMD or as expressly contemplated by this
Agreement, Envoy shall, and shall cause its Subsidiaries to, and Quintiles and
QFinance shall cause Envoy to:
(a) conduct its business in substantially the same manner as
presently being conducted and refrain from entering into any Material
transaction or Material Contract other than in the ordinary course of business
and consistent with past practices; and not make any Material change in its
methods of management, marketing, accounting, or operations;
(b) consult with Healtheon/WebMD prior to undertaking any
Material new business opportunity outside the ordinary course of business;
(c) confer at the request of Healtheon/WebMD with one or more
designated representatives of Healtheon/WebMD to report Material operational
matters and to report the general status of ongoing business operations;
(d) notify Healtheon/WebMD of any governmental complaints,
investigations or hearings (or communications indicating that the same may be
contemplated), adjudicatory proceedings or submissions involving any Material
property or other Material Assets;
(e) not enter into any new employment Contract or make any
commitment to employees (including any commitment to pay severance, retirement
or other benefits) except in the ordinary course of business and consistent with
past practice; provided, however, Envoy shall enter into confidentiality
agreements with respect to each new employee hired after the date hereof and
prior to the Closing Date;
(f) not increase the compensation (including fringe benefits)
payable or to become payable to any officer, director, employee, agent or
independent contractor of Envoy, except general hourly rate increases and normal
merit increases for employees other than (x) executive officers made in the
ordinary course of business and consistent with past practice and (y) for
increases committed to prior to the date of this Agreement and not in
contemplation thereof;
(g) except in the ordinary course of business and consistent
with past practices, not (i) create or incur any indebtedness (or, even if in
the ordinary course of business, not in excess of $500,000 in the aggregate), or
(ii) release or create any Liens of any nature whatsoever;
(h) except in the ordinary course of business and, even if in
the ordinary course of business, then not in an amount to exceed $200,000
individually or $1,000,000 in the
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aggregate, not make or commit to make any capital expenditure, or enter into any
lease of capital equipment as lessee or lessor;
(i) not enter into, terminate or Materially amend any Material
strategic alliance agreement or any other Material Contract relating to the
distribution, sale, license or marketing by third parties of Envoy's products or
services;
(j) not amend the Charter, Bylaws or other governing
instruments of Envoy, except as contemplated by this Agreement;
(k) not make any Material changes in its accounting methods or
practices or revalue its Assets, except for (i) those changes required by GAAP,
and (ii) changes in its tax accounting methods or practices that may be
necessitated by changes in applicable Tax Laws;
(l) not issue, sell, pledge, encumber, authorize the issuance
of, enter into any Contract to issue, sell, pledge, encumber, or authorize the
issuance of, or otherwise permit to become outstanding, any additional shares of
Envoy Common Stock, or any stock appreciation rights, or any option, warrant,
conversion, or other right to acquire any such stock, or any security
convertible into any such stock, or pay or declare or agree to pay or declare
any dividend or other distribution with respect to any Envoy Common Stock,
except for shares to be issued pursuant to this Agreement;
(m) not make any loan to any Person or increase the aggregate
amount of any loan currently outstanding to any Person, except for usual and
customary advances to employees made in the ordinary course of business;
(n) not sell any Material Asset or make any Material
commitment relating to its Assets other than in the ordinary course of business
or enter into or terminate any lease of real estate other than in the ordinary
course of business;
(o) not purchase or redeem, or agree to purchase or redeem,
any security of Envoy (including any share of Envoy Common Stock);
(p) not waive any stock repurchase rights, accelerate,
amend or change the period of exercisability of options or restricted stock,
reprice options granted under any employee, consultant, director, or other stock
plans or authorized cash payments in exchange for any options granted under any
of such plans;
(q) not grant any severance or termination pay to any
officer or employee except pursuant to written agreements outstanding or
policies existing on the date hereof or adopt any new severance plan;
(r) not transfer or license to any Person or otherwise
extend, amend or modify any rights to the Intellectual Property of Envoy, or
enter into any grants of future patent rights, other than in the ordinary course
of business consistent with past practice;
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(s) not acquire or agree to acquire or be acquired by
merging or consolidating with, or by purchasing any Person, interest in, portion
of or the capital or the Assets of, or by any other manner, any business or any
Person or division thereof, otherwise acquire or agree to acquire any Assets
which are Material, individually or in the aggregate, to the business of Envoy
or enter into any joint ventures, strategic partnerships or alliances;
(t) not Materially modify or amend, or terminate any
Material Contract (including a Envoy Stock Plan) or agreement to which Envoy is
a party or waive, release, or assign any Material rights or claims thereunder,
in any such case in a manner Materially adverse to Healtheon/WebMD;
(u) not modify, amend or terminate any Contract with Quintiles
or any of its Subsidiaries or Affiliates or enter into any Contract with
Quintiles or any of its Subsidiaries or Affiliates not otherwise listed in
Section 5.14 of the Envoy Disclosure Letter, or waive, release or assign any
rights or claims thereunder; and
(v) not make any agreement or commitment which will result in
or cause to occur a violation of any of the items contained in paragraphs (a)
through (u) above.
7.2 Conduct of Healtheon/WebMD Business. Except as set forth in Section
7.2 of the Healtheon/WebMD Disclosure Letter, prior to the Closing Date, except
with the prior written consent of Quintiles or as expressly contemplated by this
Agreement, Healtheon/WebMD shall not, and shall cause its Subsidiaries not to,
acquire or agree to acquire by merging or consolidating with, or by purchasing
any Person, interest in, portion of or the capital or the Assets of, or by any
other manner, any Transaction Business or any Person or division thereof engaged
in the Transaction Business. During the period prior to the Closing Date, a
representative of Quintiles shall be entitled to attend all regularly scheduled
and special meetings of the Board of Directors of Healtheon/WebMD.
Healtheon/WebMD shall give Quintiles prior notice of all meetings of the Board
of Directors of Healtheon/WebMD and shall provide to Quintiles' representative
all information, in each case as if the representative of Quintiles was a member
of the Board of Directors of Healtheon/WebMD. Quintiles shall pay all expenses
incurred by its representative in connection with his attendance at such
meetings.
7.3 Adverse Changes in Condition. Each Party agrees (i) to give written
notice promptly to the other Parties upon becoming aware of the occurrence or
impending occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Healtheon/WebMD, Merger Corp or Envoy,
respectively, or (ii) would cause or constitute a breach of any of its
representations, warranties, agreements or covenants contained herein, such that
the conditions set forth in Sections 9.2(a) and (b) or Sections 9.3(a) and (b)
with respect to such Party (as appropriate) would not be satisfied as of the
time of such breach or as of the time of such representation or warranty shall
have become untrue, and (2) to use its reasonable efforts to prevent or promptly
to remedy the same.
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ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 Applications.
(a) Healtheon/WebMD shall promptly prepare and file, and Envoy
and Quintiles shall cooperate in the preparation and, where appropriate, filing
of, applications with any Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement as
listed in Sections 5.18 and 6.8 of this Agreement. To the extent required by the
HSR Act, each of the Parties will promptly file with the United States Federal
Trade Commission and the United States Department of Justice the notification
and report form required for the transactions contemplated hereby and any
supplemental or additional information which may reasonably be requested in
connection therewith pursuant to the HSR Act and will comply in all Material
respects with the requirements of the HSR Act. The Parties shall deliver to each
other copies of all filings, correspondence and orders to and from all
Regulatory Authorities in connection with the transactions contemplated hereby.
Notwithstanding anything herein to the contrary, nothing in this Agreement shall
be deemed to require Healtheon/WebMD, Envoy, Quintiles or any Subsidiary or
Affiliate of any such Party to agree to any divestiture by itself or any of its
Affiliates of shares of capital stock or of any business or Assets, or the
imposition of any Material limitation the ability of any of them to conduct
their businesses or to own or exercise control of such Assets or stock.
(b) Each of the Parties shall, and shall cause their
Affiliates to, use commercially reasonable efforts to cause the issuance of the
Stock Consideration to be exempt from registration under applicable federal and
state securities Laws by filing an application with the Secretary of State of
North Carolina pursuant to N.C. Gen. Stat. Section 78A-30 requesting a hearing
upon the terms and conditions of the Merger to be held as soon as practicable
after the filing of such application and taking all actions necessary to comply
with the requirements set forth therein. Envoy and Quintiles shall furnish to
Healtheon/WebMD the information to be included in such application. None of the
Parties shall make at such hearing, or include in any information supplied with
such application or distributed at such hearing, any statement of a Material
fact or omit to state any Material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Healtheon/WebMD shall pay all fees,
disbursements and expenses in connection with such compliance including, without
limitation, all fees payable to the North Carolina Secretary of State and fees,
disbursements and expenses of counsel to Healtheon/WebMD, but excluding the
fees, disbursements and expenses of Envoy, Quintiles and QFinance and counsel to
Envoy, Quintiles and QFinance.
(c) Healtheon/WebMD shall use commercially reasonable efforts
to cause the Stock Consideration to be issued pursuant to this Agreement in the
Merger to be listed for trading on the Nasdaq National Market no later than the
Closing.
8.2 Filings with State Offices. Upon the terms and subject to the
conditions of this Agreement, the Articles of Merger shall be executed and filed
with the Secretary of State of the
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State of Tennessee in accordance with the TBCA in connection with the Closing
and the Certificate of Merger shall be executed and filed with the Secretary of
State of the State of Delaware in accordance with the GCLSD in connection with
the Closing.
8.3 Agreement as to Efforts to Consummate. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
practicable after the date of this Agreement, the transactions contemplated by
this Agreement, including using its reasonable efforts to lift or rescind any
Order adversely affecting its legal ability to consummate the transactions
contemplated herein and to cause to be satisfied the conditions referred to in
Article 9 of this Agreement; provided, that nothing herein shall preclude either
Party from exercising its rights under this Agreement. Each Party shall use, and
shall cause each of its Subsidiaries to use, its reasonable efforts to obtain
all Consents necessary or desirable for the consummation of the transactions
contemplated by this Agreement (including without limitation any Consents listed
in Sections 5.18 and 6.8 of this Agreement). In connection with and without
limiting the foregoing, Envoy and its Board of Directors shall, if any state
takeover statute or similar Law is or becomes applicable to the Merger, this
Agreement or any of the transactions contemplated by this Agreement, use
commercially reasonable efforts to ensure that the Merger and the other
transactions contemplated by this Agreement may be consummated as promptly as
practicable on the terms contemplated by this Agreement and otherwise to
minimize the effect of such Law on the Merger, this Agreement and the
transactions contemplated hereby.
8.4 Investigation and Confidentiality.
(a) Prior to the Effective Time, each Party shall advise the
other of all Material developments relevant to its business and to consummation
of the Merger and shall permit each other to make or cause to be made such
investigation of the business and properties of it and its Subsidiaries and of
their respective financial and legal conditions as the other reasonably request,
provided that such investigation shall be reasonably related to the transactions
contemplated hereby and shall not interfere unnecessarily with normal
operations. No investigation by a Party under this Section 8.4 shall affect the
representations and warranties of the other Parties.
(b) Each Party shall, and shall cause its advisers and agents
to, maintain the confidentiality of all confidential information furnished to it
by the other Parties concerning or related to any such other Parties or their
Subsidiaries and shall not use or disclose such information for any purpose
except in furtherance of the transactions contemplated by this Agreement. If
this Agreement is terminated prior to the Effective Time, each Party shall
promptly return or certify the destruction of all documents and copies thereof,
and all work papers containing confidential information received from the other
Parties.
8.5 Access to Information. Envoy and Quintiles shall afford
Healtheon/WebMD and its accountants, counsel and other representatives,
reasonable access during normal business hours and upon reasonable notice during
the period prior to the Effective Time to (i) all of
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Envoy's properties, books, contracts, commitments and records, (ii) all other
information concerning the business, properties and personnel (subject to
restrictions imposed by applicable Law) of Envoy as Healtheon/WebMD may
reasonably request and (iii) all officers and, as scheduled through officers,
key employees of Envoy. Quintiles and Envoy agree to provide to Healtheon/WebMD
and its accountants, counsel and other representatives copies of Envoy's
internal financial statements (including returns and supporting documentation)
promptly upon request. No information or Knowledge obtained in any investigation
pursuant to this Section 8.5 shall affect or be deemed to modify any
representation or warranty contained herein or the conditions to the obligations
of the Parties to consummate the Merger.
8.6 No Shop.
(a) From and after the date of this Agreement until the
Effective Time or termination of this Agreement pursuant to Article 10, Envoy,
Quintiles and QFinance will not, nor will they authorize or permit any Affiliate
or Representative retained by them to, directly or indirectly, (i) solicit,
initiate, encourage or induce the making, submission or announcement of any
Acquisition Proposal; (ii) participate in any discussions or negotiations
regarding, or furnish to any Person any non-public information with respect to,
or take any other action to facilitate any inquiries or the making of any
proposal that constitutes or may reasonably be expected to lead to, any
Acquisition Proposal; (iii) engage in discussions with any Person with respect
to any Acquisition Proposal, except as to the existence of this Section 8.6;
(iv) approve, endorse or recommend any Acquisition Proposal; or (v) enter into
any letter of intent or similar document or any Contract contemplating or
otherwise relating to any Acquisition Transaction. Envoy and Quintiles will
immediately cease any and all existing activities, discussions or negotiations
with any parties conducted heretofore with respect to any Acquisition Proposal.
Without limiting the foregoing, it is understood that any violation of the
restrictions set forth in the preceding two sentences by any officer, director
or employee of Quintiles, Envoy or any of their Subsidiaries or any investment
banker, attorney or other advisor or Representative of Quintiles or Envoy or any
of its Subsidiaries shall be deemed to be a breach of this Section 8.6 by
Quintiles, Envoy and QFinance.
(b) In addition to the obligations of Envoy, Quintiles
and QFinance set forth in Section 8.6(a) hereof, Envoy, Quintiles and QFinance
as promptly as practicable shall advise Healtheon/WebMD orally and in writing of
any request for non-public information or any inquiry with respect to Envoy
which any of them reasonably believes may pertain to an Acquisition Proposal or
to any Acquisition Transaction, the Material terms and conditions of such
request, Acquisition Proposal or inquiry, and the identity of the Person or
group making any such request, Acquisition Proposal or inquiry. Quintiles and
Envoy will keep Healtheon/WebMD informed as promptly as practicable in all
Material respects of the status and details (including Material amendments or
proposed Material amendments) of any such request, Acquisition Proposal or
inquiry.
8.7 Tax Treatment. Each of the Parties undertakes and agrees to use its
reasonable efforts to take no action which would cause the Merger not to qualify
for treatment as a "reorganization" within the meaning of Section 368(a) of the
Internal Revenue Code for federal income tax purposes.
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8.8 Employee Benefits.
(a) Following the Effective Time, Healtheon/WebMD shall
provide to officers and employees of Envoy employee benefits based on the
positions they hold with Healtheon/WebMD and/or its Subsidiaries after the
Effective Time under employee benefit plans on terms and conditions which are
substantially similar in the aggregate to those provided by Healtheon/WebMD and
its Subsidiaries to their similarly situated officers and employees after the
Effective Time. With respect to any benefits plans of Healtheon/WebMD or its
Subsidiaries in which the officers and employees of Envoy participate after the
Effective Time, Healtheon/WebMD shall, or shall cause the Surviving Corporation
to, use reasonable efforts to: (i) waive any limitations as to pre-existing
conditions, exclusions and waiting periods with respect to participation and
coverage requirements applicable to such officers and employees under any
welfare benefit plan in which such employees may be eligible to participate
after the Effective Time (provided, however, that no such waiver shall apply to
a pre-existing condition of any such officer or employee who was, as of the
Effective Time, excluded from participation in a Envoy or Quintiles benefit plan
by nature of such pre-existing condition), (ii) provide each such officer and
employee with credit for any co-payments and deductibles paid prior to the
Effective Time during the year in which the Effective Time occurs in satisfying
any applicable deductible or out-of-pocket requirements under any welfare
benefit plan in which such employees may be eligible to participate after the
Effective Time, and (iii) other than with respect to vesting credit with respect
to Healtheon/WebMD options granted to such officers and employees, recognize all
service of such officers and employees with Envoy for all purposes (including
without limitation purposes of eligibility to participate, vesting credit,
entitlement for benefits, and benefit accrual) in any benefit plan in which such
employees may be eligible to participate after the Effective Time, except to the
extent such treatment would result in duplicative accrual of benefits for the
same period of service.
(b) Not later than the day immediately prior to the
Effective Time (the "Termination Date"), Quintiles and Envoy shall cause (i) the
adoption of appropriate resolutions which terminate each retirement plan of
Envoy which qualifies or is intended to qualify under Section 401(a) of the
Internal Revenue Code (each, a "Envoy Retirement Plan"), effective as of the
Termination Date, (ii) the cessation of all employee salary deferral
contributions under each Envoy Retirement Plan, effective as of the Termination
Date, and (iii) the adoption of appropriate resolutions, contemporaneous with
the adoption of resolutions identified in clause (i) above, which reserve the
right to amend each Envoy Retirement Plan notwithstanding such applicable plan's
termination, and which amend each Envoy Retirement Plan to comply with all
applicable changes under the Internal Revenue Code which were effective or were
enacted on or before the Termination Date. The preceding sentence shall apply to
the Envoy Retirement Plans, as sponsored by Envoy or any other entity for the
eligible employees of Envoy, but shall not apply to the Quintiles Employee Stock
Ownership and 401(k) Plan (the "Quintiles Retirement Plan"). Not later than the
Termination Date, (i) Quintiles shall adopt appropriate resolutions that
terminate Envoy as of the Termination Date as a participating employer in the
Quintiles Retirement Plan, and (ii) Quintiles and Envoy shall cause the
cessation of all salary deferral contributions of the eligible Envoy employees
under the Quintiles Retirement Plan. Envoy shall make all contributions to the
Quintiles Retirement Plan that are payable through the Termination Date with
respect to the eligible Envoy employees who are Quintiles Retirement Plan
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participants and who are entitled to an allocation of such contributions under
such plan. Quintiles represents and warrants that all contributions to the
Quintiles Retirement Plan with respect to eligible Envoy employees which are
required to be made by the time set forth in Section 4.6 of the Quintiles
Retirement Plan with respect to the period ending December 31, 1999 have been
paid to the trust relating to the Quintiles Retirement Plan and that all such
contributions required to be made by such time in such Quintiles Retirement Plan
section with respect to the period ending on the date of this Agreement (other
than salary deferral contributions) do not exceed $40,000. Envoy shall be solely
responsible for the preparation and timely filing of all Treasury Forms 5500
which are required to be filed in connection with the Envoy Retirement Plans
(other than the Quintiles Retirement Plans) before, on or after the Closing
Date. Quintiles shall be solely responsible for filing all Treasury Forms 5500
which are required to be filed in connection with the participation of Envoy
employees in the Quintiles Retirement Plan. Nothing in this Agreement shall give
any employee of Envoy any third-party beneficiary or other rights under this
Agreement.
8.9 Blue Sky Laws. Healtheon/WebMD shall take such reasonable steps as
may be necessary to comply with the securities and blue sky laws of all
jurisdictions which are applicable to the issuance of the Stock Consideration in
connection with the Merger. Quintiles and QFinance shall use their reasonable
commercial efforts to assist Healtheon/WebMD as may be necessary to register, or
qualify for valid exemptions from, the issuance of the Stock Consideration in
the Merger under the securities and blue sky laws of all jurisdictions which are
applicable in connection with such issuance.
8.10 Non-solicitation of Employees. Until the Effective Time or, in the
event this Agreement is terminated without completion of the Merger, for a
period of one (1) year from the date hereof, none of the Parties will solicit
for employment any current employee of the other Parties or any Subsidiary of
the other Parties unless such employee has been terminated previously by his or
her employer nor make any offer to such employee without prior notice to his or
her employer; provided that in no event will a general solicitation for
employment (whether by general advertisement in any media or otherwise) be a
violation of this Section 8.10.
8.11 Press Releases. Prior to the Effective Time, Healtheon/WebMD,
Quintiles and Envoy shall consult with each other as to the form and substance
of any press release or other public disclosure related to this Agreement or any
other transaction contemplated hereby and no Party shall issue any press release
or make any other public disclosure without the prior approval of the other
Parties (which approval shall not be unreasonably withheld or delayed);
provided, that nothing in this Section 8.11 shall be deemed to prohibit any
Party from making any disclosure which its counsel deems necessary or advisable
in order to satisfy such Party's disclosure obligations imposed by Law.
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8.12 Directors and Officers Indemnification.
(a) Healtheon/WebMD and Envoy agree that all rights to
indemnification and exculpation now existing in favor of any employee, agent,
director or officer of Envoy and its Subsidiaries (the "Indemnified Parties"),
as provided in their respective Charters or Bylaws and their respective
Indemnification Agreements, shall survive the Merger and shall continue in full
force and effect for a period of four (4) years after the Effective Time;
provided that in the event any claim or claims are asserted or made within such
four (4) year period, all rights to indemnification in respect of any such claim
shall continue until final disposition of such claim. Healtheon/WebMD hereby
agrees, effective as of the Effective Time, to guarantee Envoy's indemnification
and exculpation obligations existing in favor of the Indemnified Parties, as
provided in Envoy's and its Subsidiaries' respective applicable Charters or
Bylaws and their respective Indemnification Agreements, for the period of time
set forth under this Section 8.12(a).
(b) Healtheon/WebMD agrees that from and after the
Effective Time, the Surviving Corporation shall cause the policies of director
and officer liability insurance maintained by the Envoy on the date hereof and
listed in Section 8.12 of the Envoy Disclosure Letter to be maintained in effect
for the period of time directors and officers are entitled to indemnification
under Section 8.12(a) above; provided that the Surviving Corporation may
substitute therefor policies of at least the same coverage containing terms and
conditions which are no less advantageous to the Indemnified Parties, provided
that such substitution shall not result in any gaps or lapses in coverage with
respect to matters occurring prior to the Effective Time; and provided, further,
that that the Surviving Corporation shall not be required to pay an annual
premium in excess of 150% of the last annual premium paid by Envoy prior to the
date hereof (the "Maximum Amount") (which premium is set forth in Section 8.12
of the Envoy Disclosure Letter), and if the Surviving Corporation is unable to
obtain the insurance required by this Section 8.12 for the Maximum Amount, it
shall obtain as much comparable insurance as possible for an annual premium
equal to the Maximum Amount.
(c) In the event Healtheon/WebMD merges or is acquired in a
transaction in which it is not the surviving corporation, or if Healtheon/WebMD
sells substantially all of its assets, Healtheon/WebMD will cause proper
provision to be made in such transaction so that Healtheon/WebMD's successor or
acquiror will assume the obligations set forth in Sections 8.12(a) and (b)
above. The parties agree that Envoy's directors and officers are the third party
beneficiaries of, and entitled to enforce, the provisions of this Section 8.12.
8.13 Envoy Affiliates; Restrictive Legend; Restrictions on Transfer.
(a) Healtheon/WebMD will give stop transfer instructions to
its transfer agent with respect to any Healtheon/WebMD Common Stock received
pursuant to the Merger by Quintiles and QFinance and there will be placed on the
certificates representing such Healtheon/WebMD Common Stock, or any substitution
therefor, a legend stating in substance:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED
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UNDER THE SECURITIES ACT OF 1933, AS AMENDED, APPLIES AND MAY ONLY BE
TRANSFERRED (A) IN CONFORMITY WITH RULE 145(d) UNDER SUCH ACT, OR (B)
IN ACCORDANCE WITH A WRITTEN OPINION OF COUNSEL, REASONABLY ACCEPTABLE
TO THE ISSUER IN FORM AND SUBSTANCE THAT SUCH TRANSFER IS EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED."
(b) In addition, each of Quintiles and QFinance hereby
expressly covenants and agrees that it shall not (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any shares of the
Stock Consideration (the "Subject Stock") or any securities convertible into or
exercisable or exchangeable for the Subject Stock (including, without
limitation, shares of the Subject Stock or securities convertible into or
exercisable or exchangeable for the Subject Stock which may be deemed to be
beneficially owned by such holder in accordance with the rules and regulations
of the SEC) or (ii) enter into any swap or other arrangement that transfers all
or a portion of the economic consequences associated with the ownership of any
Subject Stock (regardless of whether any of the transactions described in clause
(i) or clause (ii) is to be settled by the delivery of Subject Stock, or such
other securities, in cash or otherwise (each action described herein is referred
to as a "Transfer"). Notwithstanding any provision of this Section 8.13(b) to
the contrary and subject to compliance with the Securities Laws, Quintiles and
QFinance, in the aggregate, may Transfer (A) such Subject Stock to any Affiliate
of Quintiles, (B) up to an amount of Subject Stock (valued at the time of the
such Transfer) equal to the difference, if any, between $500,000,000 and the
Cash Consideration received in the Merger at the Effective Time provided that
Quintiles has not provided the Hold Notice to Healtheon/WebMD as contemplated by
Section 3.1(c) hereof, (C) 1 year after the Effective Time up to 1/3rd of the
Subject Stock, and (D) 18 months after the Effective Time up to 2/3rd of the
Subject Stock. The provisions of this Section 8.13(b) shall continue in full
force and effect until the 2nd anniversary of the Effective Time.
(c) Each of Quintiles and QFinance hereby expressly
covenants and agrees that it shall not offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, or otherwise transfer or
dispose of, directly or indirectly, any shares of Envoy Common Stock prior to
the Effective Time.
8.14 Healtheon/WebMD Options. As soon as practicable following the date
of this Agreement and conditioned upon the consummation of the Merger,
Healtheon/WebMD's Board of Directors (or, if appropriate, any committee
administering the Healtheon/WebMD option plans) shall adopt such resolutions or
take such other actions as may be required to effect the issuance to officers
and employees of Envoy options to purchase 3,500,000 shares of Healtheon/WebMD
Common Stock to be granted under the Healtheon/WebMD option plans with an
exercise price equal to $40 per share.
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8.15 Standstill.
(a) Healtheon/WebMD agrees that, for a period of 1 year
from the date of this Agreement, neither Healtheon/WebMD nor any of its
Affiliates will: (i) acquire, offer to acquire, or agree to acquire, directly or
indirectly, by purchase or otherwise, any voting securities or direct or
indirect rights to acquire any voting securities of Quintiles or any of its
Subsidiaries, or of any successor to or person in control of Quintiles, or any
assets of Quintiles or any of its Subsidiaries or divisions (other than the
transactions contemplated herein) or of any such successor or controlling
person; (ii) make, or in any way participate in, directly or indirectly, any
"solicitation" of "proxies" (as such terms are used in the rules of the
Securities and Exchange Commission) to vote, or seek to advise or influence any
person or entity with respect to the voting of, any voting securities of
Quintiles; (iii) deposit any voting securities of Quintiles or any of its
Subsidiaries in a voting trust or subject any voting securities of Quintiles or
any of its Subsidiaries to any arrangement or agreement with respect to the
voting of such voting securities; (iv) join a partnership, limited partnership,
syndicate or other group, or otherwise act in concert with any other person, for
the purpose of acquiring, holding, voting or disposing of voting securities of
Quintiles or any of its Subsidiaries; (v) make any public announcement with
respect to, or submit a proposal for, or offer of (with or without conditions)
any extraordinary transaction involving Quintiles or its securities or assets
(other than the transactions contemplated herein); or (vi) form, join or in any
way participate in a "group" (as defined in Section 13(d)(3) of the 0000 Xxx) in
connection with any of the foregoing. Healtheon/WebMD will promptly advise
Quintiles of any inquiry or proposal made to Healtheon/WebMD with respect to any
of the foregoing. Notwithstanding anything to the contrary stated herein,
Healtheon/WebMD shall not be prohibited by this Section 8.15(a) from contacting
the Chief Executive Officer, the Board of Directors of Quintiles or any member
of the Board of Directors of Quintiles to request a waiver of any of the
foregoing; provided, however, that the waiver of any of the foregoing must be
executed by an executive officer of Quintiles duly authorized by the Board of
Directors of Quintiles.
(b) Quintiles agrees that, for a period of 1 year from
the date of this Agreement, neither Quintiles nor any of its Affiliates will:
(i) acquire, offer to acquire, or agree to acquire, directly or indirectly, by
purchase or otherwise, any voting securities or direct or indirect rights to
acquire any voting securities of Healtheon/WebMD or any of its Subsidiaries, or
of any successor to or person in control of Healtheon/WebMD, or any assets of
Healtheon/WebMD or any of its Subsidiaries or divisions (other than the
transactions contemplated herein) or of any such successor or controlling
person; (ii) make, or in any way participate in, directly or indirectly, any
"solicitation" of "proxies" (as such terms are used in the rules of the
Securities and Exchange Commission) to vote, or seek to advise or influence any
person or entity with respect to the voting of, any voting securities of
Healtheon/WebMD; (iii) deposit any voting securities of Healtheon/WebMD or any
of its Subsidiaries in a voting trust or subject any voting securities of
Healtheon/WebMD or any of its Subsidiaries to any arrangement or agreement with
respect to the voting of such voting securities; (iv) join a partnership,
limited partnership, syndicate or other group, or otherwise act in concert with
any other person, for the purpose of acquiring, holding, voting or disposing of
voting securities of Healtheon/WebMD or any of its Subsidiaries; (v) make any
public announcement with respect to, or submit a proposal for, or offer of (with
or without conditions) any extraordinary transaction involving Healtheon/WebMD
or its securities or assets (other than the transactions contemplated herein);
or (vi) form, join or in any way participate in a "group" (as defined in Section
13(d)(3) of the
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1934 Act) in connection with any of the foregoing. Quintiles will promptly
advise Healtheon/WebMD of any inquiry or proposal made to Quintiles with respect
to any of the foregoing. Notwithstanding anything to the contrary stated herein,
Quintiles shall not be prohibited by this Section 8.15(b) from contacting the
Chief Executive Officer, the Board of Directors of Healtheon/WebMD or any member
of the Board of Directors of Healtheon/WebMD to request a waiver of any of the
foregoing; provided, however, that the waiver of any of the foregoing must be
executed by an executive officer of Healtheon/WebMD duly authorized by the Board
of Directors of Healtheon/WebMD.
8.16 Certain Other Matters. Immediately prior to the Effective Time,
Quintiles shall take all actions which are necessary to terminate all of the
Contracts between Quintiles or any of its Subsidiaries or Affiliates (other than
Envoy and its Subsidiaries) and Envoy and its Subsidiaries, including the
Contracts listed in Section 5.14 of the Envoy Disclosure Letter. In this regard,
Quintiles hereby waives any and all Liabilities it may have against Envoy and
its Subsidiaries arising from or out of any of the Contracts between Quintiles
or any of its Subsidiaries or Affiliates (other than Envoy and its Subsidiaries)
and Envoy and its Subsidiaries. In addition, Quintiles hereby agrees to
indemnify and hold harmless Envoy and its Subsidiaries from any and all
Liabilities arising out of the matters set forth in Section 8.16 of the Envoy
Disclosure Letter.
8.17 Execution of Certain Agreements. On or prior to the Effective
Time, Envoy and Quintiles shall enter into a Tax Sharing Agreement substantially
in the form attached hereto as Exhibit 8.17(a). Each of Quintiles, Envoy and
Healtheon/WebMD shall execute and deliver the Data Rights Agreement,
substantially in the form attached hereto as Exhibit 8.17(b) (the "Data Rights
Agreement"). Each of Quintiles and Healtheon/WebMD shall execute and deliver the
Internet Product Development and Marketing Agreement, substantially in the form
attached hereto as Exhibit 8.17(c) (the "Internet Product Development and
Marketing Agreement"). Quintiles shall execute and deliver the Quintiles
Warrant, substantially in the form attached hereto as Exhibit 8.17(d) (the
"Quintiles Warrant").
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 Conditions to Obligations of Each Party. The respective obligations
of each Party to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by the Parties pursuant to Section 11.5 of
this Agreement:
(a) Regulatory Approvals. All waiting periods, if any, under
the HSR Act relating to the transactions contemplated hereby will have expired
or terminated early.
(b) Legal Proceedings. No court or governmental or Regulatory
Authority of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any Law or Order (whether temporary, preliminary or
permanent) or taken any other action which prohibits, restricts or makes illegal
consummation of the transactions contemplated by this Agreement.
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(c) Tax Opinions. Each of Healtheon/WebMD and Envoy shall have
received the opinion of Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx, L.L.P. ("Xxxxxx
Xxxxxxx") and Smith, Anderson, Blount, Dorsett, Xxxxxxxx & Xxxxxxxx, L.L.P.
("Xxxxx Xxxxxxxx"), respectively, to the effect that the Merger will constitute
a tax-free reorganization within the meaning of 368(a) of the Internal Revenue
Code, which opinion shall be in form and substance reasonably satisfactory to
Healtheon/WebMD and Envoy, respectively; provided, however, that if counsel to
either Healtheon/WebMD or Envoy does not render such opinion, this condition
shall nonetheless be deemed to be satisfied with respect to such Party if
counsel to the other Party renders such opinion to such Party, which opinion
shall be in form and substance reasonably satisfactory to such Party. In
rendering such opinion, Xxxxxx Xxxxxxx and Xxxxx Xxxxxxxx shall be entitled rely
upon representations of the Parties hereto reasonably satisfactory in form and
substance to such counsel. The Parties to this Agreement agree to make
reasonable representations as required by Xxxxxx Xxxxxxx and Xxxxx Xxxxxxxx for
the purpose of rendering such opinion(s).
(d) Nasdaq. The Stock Consideration to be issued in connection
with the Merger shall be authorized for quotation on the Nasdaq Stock Market
subject to official notice of issuance.
(e) State Securities Permit. Healtheon/WebMD shall have
received all states securities permit or other authorizations or confirmations
as to the availability of an exemption from registration of the Stock
Consideration under the North Carolina Securities Act and Section 3(a)(10) of
the 1933 Act, and no proceedings shall be pending, or to the Knowledge of
Healtheon/WebMD, threatened in writing by any securities administration to
suspend the effectiveness of the issuance of the Stock Consideration in the
Merger.
(f) Data Rights Agreement. On or prior to the Closing Date,
the Data Rights Agreement shall have been executed and delivered by Quintiles,
Envoy and Healtheon/WebMD.
(g) Internet Product Development and Marketing Agreement. On
or prior to the Closing Date, the Internet Product Development and Marketing
Agreement shall have been executed and delivered by Quintiles and
Healtheon/WebMD.
9.2 Conditions to Obligations of Healtheon/WebMD and Merger Corp. The
obligations of Healtheon/WebMD and Merger Corp to perform this Agreement and
consummate the Merger and the other transactions contemplated hereby are subject
to the satisfaction of the following conditions, unless waived by
Healtheon/WebMD pursuant to Section 11.5 of this Agreement:
(a) Representations and Warranties. The representations and
warranties of Envoy, Quintiles and QFinance set forth or referred to in this
Agreement shall be true and correct in all Material respects (except that those
representations and warranties which are qualified as to Material, Materiality,
Material Adverse Effect or similar expressions, or are subject to the same or
similar type exceptions, shall be true and correct in all respects) as of the
date of this Agreement and as of the Effective Time with the same effect as
though all such representations
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and warranties had been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date shall
speak only as of such date).
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of Envoy, Quintiles and QFinance to be performed
and complied with pursuant to this Agreement and the other agreements
contemplated hereby prior to the Effective Time shall have been duly performed
and complied with in all Material respects.
(c) Certificates. Envoy shall have delivered to
Healtheon/WebMD a certificate, dated as of the Effective Time and signed on its
behalf by its president and its chief financial officer, to the effect that the
conditions of its obligations set forth in Section 9.2(a) and 9.2(b) of this
Agreement have been satisfied.
(d) Required Consents. The Consents set forth in Section
9.2(d) of the Envoy Disclosure Letter shall have been obtained or Quintiles
shall have agreed to indemnify the Surviving Corporation for a period of 1 year
following the Effective Time with respect to any Material Liability arising out
of any termination, loss, cancellation or failure to obtain the consent to the
transfer or assignment of any Contracts of Envoy or any of its Subsidiaries
listed in Section 9.2(d) of the Envoy Disclosure Letter.
(e) No Material Adverse Change. There shall not have been any
Material Adverse Change with respect to Envoy, between the date hereof and the
Closing Date, and Envoy shall have delivered to Healtheon/WebMD a certificate,
dated as of the Closing Date, signed by its president and chief financial
officer certifying to such effect.
(f) FIRPTA. Quintiles shall deliver to a Healtheon/WebMD a
properly executed statement that the shares of Envoy Common Stock do not
constitute "U.S. real property interests," as defined in Section 897(c) of the
Internal Revenue Code. Such statement shall be in a form reasonably acceptable
to Healtheon/WebMD and in accordance with the requirements of Treasury
Regulation Section 1.1445-2(c)(3). In addition, simultaneously with delivery of
such statement, Quintiles shall provide to Healtheon/WebMD, as agent for
Quintiles, a form of notice to the Internal Revenue Service in accordance with
the requirements of Treasury Regulation Section 1.897-2(h), along with written
authorization for Healtheon/WebMD to deliver such form of notice to the Internal
Revenue Service on behalf of Quintiles upon the Closing.
(g) Investors' Rights Agreement. Envoy shall obtain
written terminations and releases of the terms of the Registration Rights
Agreement dated February 27, 1998, as amended (the "Investors' Rights
Agreement").
(h) Quintiles Warrant. On or prior to the Closing Date, the
Quintiles Warrant shall have been executed and delivered by Quintiles to
Healtheon/WebMD.
9.3 Conditions to Obligations of Envoy, Quintiles and QFinance. The
obligations of Envoy, Quintiles and QFinance to perform this Agreement and
consummate the Merger and the other transactions contemplated hereby are subject
to the satisfaction of the following conditions, unless waived by Quintiles
pursuant to Section 11.5 of this Agreement:
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(a) Representations and Warranties. The representations and
warranties of Healtheon/WebMD and Merger Corp set forth or referred to in this
Agreement shall be true and correct in all Material respects (except that those
representations and warranties which are qualified as to Material, Materiality,
Material Adverse Effect or similar expressions, or are subject to the same or
similar type exceptions, shall be true and correct in all respects) as of the
date of this Agreement and as of the Effective Time with the same effect as
though all such representations and warranties had been made on and as of the
Effective Time (provided that representations and warranties which are confined
to a specified date shall speak only as of such date).
(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of Healtheon/WebMD and Merger Corp to be performed
and complied with pursuant to this Agreement and the other agreements
contemplated hereby prior to the Effective Time shall have been duly performed
and complied with.
(c) Certificates. Healtheon/WebMD shall have delivered to
Quintiles (i) a certificate, dated as of the Effective Time and signed on its
behalf by a duly authorized officer to the effect that the conditions of its
obligations set forth in Section 9.3(a) and 9.3(b) of this Agreement have been
satisfied, and (ii) certified copies of resolutions duly adopted by
Healtheon/WebMD's Board of Directors and Merger Corp's Board of Directors and
sole shareholder evidencing the taking of all corporate action necessary to
authorize the execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, all in such reasonable
detail as Quintiles and its counsel shall request.
(d) No Material Adverse Change. There shall not have been any
Material Adverse Change with respect to Healtheon/WebMD or its Subsidiaries
taken as a whole between the date hereof and the Closing Date, and
Healtheon/WebMD shall have delivered to Envoy a certificate, dated as of the
Closing Date, signed by its chief executive officer and chief financial officer
certifying to such effect.
ARTICLE 10
TERMINATION
10.1 Termination. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
stockholders of Healtheon/WebMD and Envoy, this Agreement may be terminated and
the Merger abandoned at any time prior to the Effective Time:
(a) By mutual consent of the Boards of Directors of
Healtheon/WebMD and Quintiles; or
(b) By Healtheon/WebMD (provided that Healtheon/WebMD is not
then in Material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event of a breach by Envoy of any
representation or warranty contained in this
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Agreement such that the conditions in Section 9.2(a) would not be satisfied as
of the time of such breach, provided that if such breach is curable through the
exercise of commercially reasonable efforts by Envoy, then the terminating party
or parties may not terminate this Agreement under this Section 10.1(b) prior to
the End Date provided Envoy and Quintiles continue to exercise commercially
reasonable efforts to cure such breach; or
(c) By Quintiles (provided that neither Envoy, Quintiles nor
QFinance is then in Material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement) in the event of a breach of any
representation or warranty contained in this Agreement such that the conditions
in Section 9.3(a) with respect to Healtheon/WebMD would not be satisfied as of
the time of such breach, provided that if such breach is curable through the
exercise of commercially reasonable efforts by Healtheon/WebMD, then the
terminating party may not terminate this Agreement under this Section 10.1(c)
prior to the End Date provided the breaching party continues to exercise
commercially reasonable efforts to cure such breach; or
(d) By Healtheon/WebMD (provided that Healtheon/WebMD is not
then in Material breach of any representation, warranty, covenant, or other
agreement contained in this Agreement) in the event of a breach of any covenant
or agreement contained in this Agreement such that the conditions in Section
9.2(b) with respect to Envoy, Quintiles and QFinance would not be satisfied as
of the time of such breach, provided that if such breach is curable through the
exercise of commercially reasonable efforts by Envoy and Quintiles, then the
terminating party or parties may not terminate this Agreement under this Section
10.1(d) prior to the End Date provided Envoy and Quintiles continue to exercise
commercially reasonable efforts to cure such breach; or
(e) By Quintiles (provided that neither Envoy, Quintiles nor
QFinance is then in Material breach of any representation, warranty, covenant,
or other agreement contained in this Agreement) in the event of a breach by
Healtheon/WebMD of any covenant or agreement contained in this Agreement such
that the conditions in Section 9.3(b) with respect to Healtheon/WebMD would not
be satisfied as of the time of such breach, provided that if such breach is
curable through the exercise of commercially reasonable efforts by
Healtheon/WebMD, then the terminating party may not terminate this Agreement
under this Section 10.1(e) prior to the End Date provided the breaching party
continues to exercise commercially reasonable efforts to cure such breach; or
(f) By (1) Healtheon/WebMD or (2) Envoy and Quintiles
(provided that the terminating Party or Parties is not then in Material breach
of any representation, warranty, covenant, or other agreement contained in this
Agreement) in the event any Regulatory Authority whose consent is required for
consummation of the Merger and the other transactions contemplated hereby shall
have an order, decree, or ruling or taking any other action, in any case having
the effect of permanently restraining, enjoining or otherwise prohibiting the
Merger, which order, decree, ruling or other action is final and nonappealable;
or
(g) By (1) Healtheon/WebMD or (2) Quintiles in the event that
the Merger shall not have been consummated by May 31, 2000 (the "End Date"), if
the failure to
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consummate the transactions contemplated hereby on or before such date is not
caused by any breach of this Agreement by the Party(ies) electing to terminate
pursuant to this Section 11.1(g).
10.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement shall become void and have no effect, except that (i) the provisions
of this Section 10.2, Article 11 and Sections 8.4(b), 8.10 and 8.11 of this
Agreement shall survive any such termination and abandonment, and (ii) a
termination pursuant to Sections 10.1(b), (c), (d), or (e) of this Agreement
shall not relieve a breaching Party from Liability for an uncured breach of a
representation, warranty, covenant, or agreement giving rise to such
termination.
ARTICLE 11
MISCELLANEOUS
11.1 Definitions.
(a) Except as otherwise provided herein, the capitalized terms
set forth below shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Acquisition Proposal" shall mean any proposal (other than an
offer or proposal by Healtheon/WebMD) relating to any Acquisition Transaction.
"Acquisition Transaction" shall mean any transaction or series
of related transactions involving: (A) any merger, consolidation, business
combination, stock sale or similar transaction involving Envoy or any of its
Subsidiaries; (B) any sale, lease (other than in the ordinary course of
business), exchange, transfer, license (other than in the ordinary course of
business), acquisition or disposition of more than 5% of the Assets of Envoy or
any of its Subsidiaries; or (C) any liquidation or dissolution of Envoy or any
of its Subsidiaries.
"Affiliate" of a Person shall mean: (i) any other Person
directly, or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such Person; (ii) any officer,
director, partner, employer, or direct or indirect beneficial owner of any 10%
or greater equity or voting interest of such Person; or (iii) any other Person
for which a Person described in clause (ii) acts in any such capacity.
"Agreement" shall mean this Agreement and Plan of Merger,
including the Exhibits and Disclosure Letters delivered pursuant hereto and
incorporated herein by reference.
"Articles of Merger" shall mean the Articles of Merger to be
executed as contemplated by the TBCA and filed with the Secretary of State of
the State of Tennessee relating to the Merger as contemplated by Section 1.1 of
this Agreement.
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"Assets" of a Person shall mean all of the assets, properties,
businesses and rights of such Person of every kind, nature, character and
description, whether real, personal or mixed, tangible or intangible, accrued or
contingent, or otherwise relating to or utilized in such Person's business,
directly or indirectly, in whole or in part, whether or not carried on the books
and records of such Person, and whether or not owned in the name of such Person
or any Affiliate of such Person and wherever located.
"Certificate of Merger" shall mean the Certificate of Merger
to be executed as contemplated by the GCLSD and filed with the Secretary of
State of the State of Delaware relating to the Merger as contemplated by Section
1.1 of this Agreement.
"Closing Date" shall mean the date on which the Closing
occurs.
"Consent" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person pursuant to
any Contract, Law, Order, or Permit.
"Contract" shall mean any written or oral agreement,
arrangement, commitment, contract, indenture, instrument, lease, obligation,
plan, restriction, understanding or undertaking of any kind or character, or
other document to which any Person is a party or by which such Person is bound
or affecting such Person's capital stock, Assets or business.
"Default" shall mean (i) any breach or violation of or default
under any Contract, Order or Permit, (ii) any occurrence of any event that with
the passage of time or the giving of notice or both would constitute a breach or
violation of or default under any Contract, Order or Permit, or (iii) any
occurrence of any event that with or without the passage of time or the giving
of notice would give rise to a right to terminate or revoke, change the current
terms of, or renegotiate, or to accelerate, increase, or impose any Liability
under, any Contract, Order or Permit.
"Environmental Laws" shall mean all Laws relating to pollution
or protection of human health or the environment (including ambient air, surface
water, ground water, land surface or subsurface strata) and which are
administered, interpreted or enforced by the United States Environmental
Protection Agency and state and local agencies with jurisdiction over, and
including common law in respect of, pollution or protection of the environment,
including the Comprehensive Environmental Response Compensation and Liability
Act, as amended, 42 U.S.C. 9601 et seq. ("CERCLA"), the Resource Conservation
and Recovery Act, as amended, 42 U.S.C. 6901 et seq. ("RCRA"), and other Laws
relating to emissions, discharges, releases or threatened releases of any
Hazardous Substance, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of any
Hazardous Substance.
"Envoy Common Stock" shall mean the Envoy Common Stock, no par
value per share.
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"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Exhibits" shall mean the Exhibits so marked, copies of which
are attached to this Agreement. Such Exhibits are hereby incorporated by
reference herein and made a part hereof, and may be referred to in this
Agreement and any other related instrument or document without being attached
hereto.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"GCLSD" shall mean the General Corporation Law of the State of
Delaware.
"Governmental Entity" shall mean any government or any agency,
bureau, board, directorate, commission, court, department, official, political
subdivision, tribunal, or other instrumentality of any government, whether
federal, state or local, domestic or foreign.
"Hazardous Material" shall mean the emission, disposal,
discharge or other release or threatened release of any hazardous substance,
pollutant or contaminant (in each case, as defined in or governed by any
applicable Law) or any other substance the release, disposal, treatment or
storage of which is regulated under applicable Law.
"Healtheon/WebMD Common Stock" shall mean the $0.0001 par
value Common Stock of Healtheon/WebMD.
"HSR Act" shall mean Section 7A of the Xxxxxxx Act, as added
by Title II of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.
"Intellectual Property" shall mean all rights, privileges and
priorities provided under applicable Law relating to intellectual property,
whether registered or unregistered, including without limitation all (i) (a)
inventions, discoveries, processes, formulae, designs, methods, techniques,
procedures, concepts, developments, technology, mask works, and confidential
information, new and useful improvements thereof and know-how relating thereto,
whether or not patented or eligible for patent protection; (b) copyrights and
copyrightable works, including computer applications, programs, Software,
Databases and related items; (c) trademarks, service marks, trade names, brand
names, product names, corporate names, logos and trade dress, the goodwill of
any business symbolized thereby, and all common-law rights relating thereto; and
(d) trade secrets, data and other confidential information; and (ii) all
registrations, applications, recordings, and licenses or other similar
agreements related to the foregoing
"Internal Revenue Code" shall mean the Internal Revenue Code
of 1986, as amended, and the rules and regulations promulgated thereunder.
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"Knowledge" shall mean with respect to any Party, with respect
to any matter in question, that any of the Chief Executive Officer, Chief
Financial Officer, General Counsel or Controller of such Party, has actual
knowledge of such matter.
"Law" shall mean any code, law, ordinance, regulation,
reporting or licensing requirement, rule, or statute applicable to a Person or
its Assets, Liabilities or business, including those promulgated, interpreted or
enforced by any Regulatory Authority.
"Liability" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost or expense
(including costs of investigation, collection and defense), claim, deficiency,
guaranty or endorsement of or by any Person (other than endorsements of notes,
bills, checks, and drafts presented for collection or deposit in the ordinary
course of business) of any type, whether accrued, absolute or contingent,
liquidated or unliquidated, matured or unmatured, or otherwise.
"Lien" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title retention
or other security arrangement, or any adverse right or interest, charge, or
claim of any nature whatsoever of, on, or with respect to any Asset, other than
(i) Liens for current property Taxes not yet due and payable, (ii) Liens
reflected on the Envoy Financial Statements, (iii) Liens which do not Materially
detract from the value or Materially interfere with the present use of the Asset
subject thereto or affected thereby; (iv) Liens which are licenses and related
restrictions.
"Litigation" shall mean any action, suit, arbitration, filed
cause of action, filed claim, filed complaint, criminal prosecution, demand
letter, governmental or other examination or investigation, hearing, inquiry,
administrative or other proceeding, or notice (written or oral) by any Person
alleging potential Liability or requesting information relating to or affecting
a Party, its business, its Assets (including Contracts related to it), or the
transactions contemplated by this Agreement.
"Material" for purposes of this Agreement shall be determined
in light of the facts and circumstances of the matter in question; provided that
any specific monetary amount stated in this Agreement shall determine
materiality in that instance.
"Material Adverse Change" on a Party shall mean an event,
change or occurrence which, individually or together with any other event,
change or occurrence, has a Material Adverse Effect on such Party.
"Material Adverse Effect" on a Party shall mean an event,
change or occurrence which, individually or together with any other event,
change or occurrence, has a Material adverse impact on (i) the financial
position, business, or results of operations of such Party and its Subsidiaries,
taken as a whole, or (ii) the ability of such Party to perform its obligations
under this Agreement or to consummate the Merger or the other transactions
contemplated by this Agreement; provided that "Material Adverse Effect" shall
not be deemed to include events,
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changes or occurrences (x) generally affecting the healthcare information
technology industry, or (y) generally affecting the overall U.S. economy.
"Merger Corp Common Stock" shall mean the $0.0001 par value
Common Stock of Merger Corp.
"Order" shall mean any administrative decision or award,
decree, injunction, judgment, order, quasi-judicial decision or award, ruling,
or writ of any federal, state, local or foreign or other court, arbitrator,
mediator, tribunal, administrative agency or Regulatory Authority.
"Party" shall mean either Healtheon/WebMD, Envoy, Quintiles,
QFinance or Merger Corp, and "Parties" shall mean all of Healtheon/WebMD, Envoy,
Quintiles, QFinance and Merger Corp.
"Permit" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, consent, easement, filing,
franchise, letter of good standing, license, notice, permit, qualification,
registration or right of or from any Governmental Entity (or any extension,
modification, amendment or waiver of any of these) to which any Person is a
party or that is or may be binding upon or inure to the benefit of any Person or
its securities, Assets or business, or any notice, statement, filing or other
communication to be filed with or delivered to any Governmental Entity.
"Person" shall mean a natural person or any legal, commercial
or Governmental Entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting in a
representative capacity.
"Regulatory Authorities" shall mean, collectively, the Federal
Trade Commission, the United States Department of Justice, and all foreign,
federal, state and local regulatory agencies and other Governmental Entities or
bodies having jurisdiction over the Parties and their respective Assets,
employees, businesses and/or Subsidiaries, including the NASD and the SEC.
"Representative" shall mean the accountants, lawyers and
financial advisors of any Party.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Laws" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of 1940,
as amended, the Trust Indenture Act of 1939, as amended, and the rules and
regulations of any Regulatory Authority promulgated thereunder.
"Subsidiaries" shall mean all those corporations,
partnerships, associations, or other entities of which the entity in question
owns or controls 50% or more of the outstanding equity securities either
directly or through an unbroken chain of entities as to each of which 50%
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or more of the outstanding equity securities is owned directly or indirectly by
its parent; provided, there shall not be included any such entity acquired
through foreclosure or any such entity the equity securities of which are owned
or controlled in a fiduciary capacity.
"Surviving Corporation" shall mean Merger Corp as the
surviving corporation resulting from the Merger.
"Surviving Corporation Common Stock" shall mean the Common
Stock of the Surviving Corporation in the Merger.
"Tax" or "Taxes" shall mean any and all federal, state, local
and foreign taxes, assessments and other governmental charges, duties,
impositions and liabilities relating to taxes, including taxes based upon or
measured by gross receipts, income, profits, sales, use and occupation, and
value added, ad valorem, transfer, franchise, withholding, payroll, recapture,
employment, excise and property taxes, together with all interest, penalties and
additions imposed with respect to such amounts; (ii) any liability for the
payment of any amounts of the type described in clause (i) as a result of being
a member of an affiliated, consolidated, combined or unitary group for any
period; and (iii) any liability for the payment of any amounts of the type
described in clause (i) or (ii) as a result of any express or implied obligation
to indemnify any other person or as a result of any obligations under any
agreements or arrangements with any other person or as a result of any
obligations under any agreements or arrangements with any other person with
respect to such amounts and including any liability for taxes of a predecessor
entity.
"Total Consideration" is an amount determined by adding (i)
the number of shares constituting the Stock Consideration to be received at the
Effective Time multiplied by the closing price of the Healtheon/WebMD Common
Stock on the last trading day prior to the Effective Time and (ii) the Cash
Consideration to be received at the Effective Time.
"Transaction Business" is a business engaged in the processing
or facilitating the processing of transactions of the following types:
reimbursement, indemnity or other payment claims by and among physicians,
hospitals, health maintenance organizations, governmental entities and other
providers, pharmacies and payors, as well as related transactions, including,
without limitation, eligibility, adjudication, refusals and formulary checks,
irrespective of the manner, mode, communications method or platform through
which such business is conducted from time to time which generated during the
last full fiscal year more than $100,000,000 in gross revenues from the
operations of the Transaction Business.
"Transactions" are the transactions contemplated by this
Agreement and the Exhibits attached hereto.
(b) In addition to the terms defined in Sections 5.9 and 5.16
above, the terms set forth below shall have the meanings ascribed thereto in the
referenced sections:
Anti-Dilution Event - Section 3.2
Cash Consideration - Section 3.1(b)
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Closing - Section 1.2
Closing Date - Section 1.2
Customers - Section 5.24
Data Rights Agreement - Section 8.17
Effective Time - Section 1.3
End Date - Section 10.1(g)
Envoy - Preamble
Envoy Balance Sheet Date - Section 5.5(a)
Envoy Disclosure Letter - Article 5
Envoy Equity Rights - Section 5.3(c)
Envoy Facilities - Section 5.13
Envoy Financial Statements - Section 5.5(a)
Envoy Option Plans - Section 3.4
Envoy Retirement Plan - Section 8.8(b)
Envoy SEC Documents - Section 5.5(a)
Healtheon/WebMD - Preamble
Healtheon/WebMD Disclosure Letter - Article 6
Healtheon/WebMD Options & Warrants - Section 6.3(c)
Healtheon/WebMD SEC Documents - Section 6.4
Hold Notice - Section 3.1(c)
Indemnified Parties - Section 8.12(a)
Internet Product Development and Marketing Agreement - Section 8.17
Investors' Rights Agreement - Section 9.2(k)
Material Intellectual Property - Section 5.9
Merger - Section 1.1
Maximum Amount - Section 8.12(b)
Merger Consideration - Section 3.1(b)
Xxxxxx Xxxxxxx - Section 9.1(c)
Option Plans - Section 3.4
Options - Section 3.4
Quintiles Warrant - Section 8.17
Xxxxx Xxxxxxxx - Section 9.1(c)
Stock Consideration - Section 3.1(b)
Subject Stock - Section 8.13(b)
Subsequent Quintiles SEC Documents - Section 5.5(b)
Subsequent Healtheon/WebMD SEC Documents - Section 6.4
Surviving Corporation - Section 1.1
Tax Returns - Section 5.8
TCBA - Preamble
Termination Date - Section 8.8(b)
Transfer - Section 8.13(b)
QFinance - Preamble
Quintiles - Preamble
Quintiles Option Plans - Section 3.4
Quintiles Options - Section 3.4
Quintiles Retirement Plan - Section 8.8(b)
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Quintiles SEC Documents - Section 5.5(b)
(c) Any singular term in this Agreement shall be deemed to
include the plural, and any plural term the singular. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed followed by the words "without limitation."
11.2 Brokers and Finders; Expenses. Except for Xxxxxx Xxxxxxx and Co.,
Inc., the investment banker for Healtheon/WebMD, and Xxxxxxxxx, Lufkin &
Xxxxxxxx Securities Corporation, the investment banker for Quintiles, each of
the Parties represents and warrants that neither it nor any of its officers,
directors, employees, or Affiliates has employed any broker or finder or
incurred any Liability for any financial advisory fees, investment bankers'
fees, brokerage fees, commissions, or finders' fees in connection with this
Agreement or the transactions contemplated hereby. In the event of a claim by
any broker or finder based upon his or its representing or being retained by or
allegedly representing or being retained by Healtheon/WebMD or Quintiles in
connection with the transactions contemplated hereby, each of Healtheon/WebMD or
Quintiles as the case may be, agrees to indemnify and hold the other Parties
harmless of and from any Liability in respect of any such claim. Quintiles
hereby represents and warrants to Healtheon/WebMD that copies of all of its
Contracts with and Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation have been
delivered to the other parties prior to execution of this Agreement. Except as
otherwise provided in this Agreement, Healtheon/WebMD shall pay all fees,
disbursements and expenses of Xxxxxx Xxxxxxx and Co., Inc. and Healtheon/WebMD's
accountants and counsel incurred in connection with this Agreement or the
transactions contemplated hereby, including the fees required to be paid by
Healtheon/WebMD by the Federal Trade Commission in connection with the filing
under the HSR Act. Except as otherwise provided in this Agreement, Quintiles
shall pay all fees, disbursements and expenses of Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation and the accountants and counsel of Envoy, Quintiles and
QFinance incurred in connection with this Agreement or the transactions
contemplated hereby, including the fees required to be paid by Quintiles and
QFinance by the Federal Trade Commission in connection with the filing under the
HSR Act.
11.3 Entire Agreement. Except as otherwise expressly provided herein,
this Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral. Nothing in this Agreement
expressed or implied, is intended to confer upon any Person, other than the
Parties or their respective successors, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement.
11.4 Amendments. To the extent permitted by Law, this Agreement may be
amended by a subsequent writing signed by each of the Parties upon the approval
of the Boards of Directors of each of the Parties, whether before or after any
stockholder approval of the issuance of the Stock Consideration has been
obtained; provided, that after any such approval by the holders of
Healtheon/WebMD Common Stock, there shall be made no amendment that pursuant to
the rules and regulations of Nasdaq requires further approval by such
stockholders without the further approval of such stockholders.
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11.5 Waivers.
(a) Prior to or at the Effective Time, Healtheon/WebMD, acting
through its Board of Directors, chief executive officer or other authorized
officers, shall have the right to waive any Default in the performance of any
term of this Agreement by Envoy, Quintiles or QFinance, to waive or extend the
time for the compliance or fulfillment by Envoy, Quintiles or QFinance of any
and all of their respective obligations under this Agreement, and to waive any
or all of the conditions precedent to the obligations of Healtheon/WebMD under
this Agreement, except any condition which, if not satisfied, would result in
the violation of any Law. No such waiver shall be effective unless in writing
signed by duly authorized officers of Healtheon/WebMD.
(b) Prior to or at the Effective Time, Quintiles, acting
through its Board of Directors, chief executive officer or other authorized
officer, shall have the right to waive any Default in the performance of any
term of this Agreement by Healtheon/WebMD, to waive or extend the time for the
compliance or fulfillment by Healtheon/WebMD of any and all of its obligations
under this Agreement, and to waive any or all of the conditions precedent to the
obligations of Envoy under this Agreement, except any condition which, if not
satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of Quintiles.
(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
11.6 Assignment. Except as expressly contemplated hereby, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any Party hereto (whether by operation of Law or otherwise) without
the prior written consent of the other Parties. This Agreement will be binding
upon, inure to the benefit of and be enforceable by the Parties and their
respective successors and assigns.
11.7 Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, by registered or certified mail, postage pre-paid, or by
courier or overnight carrier, to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so delivered:
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Envoy, Quintiles
and QFinance: Quintiles Transnational Corp.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx Xxxxxxxx 00000-0000
Telecopy Number: (000) 000-0000
Attention: Xxxx X. Xxxxxxx,
Senior Vice President, General Counsel
Copy to Counsel: Smith, Anderson, Blount, Dorsett, Xxxxxxxx
& Xxxxxxxx, L.L.P.
Xxxx Xxxxxx Xxx 0000
Xxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Telecopy Number: (000) 000-0000
Attention: Xxxxxx X. Xxxxx
Healtheon/WebMD: Healtheon/WebMD Corporation
400 The Lenox Building
0000 Xxxxxxxxx Xxxx XX
Xxxxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxxx Xxxxxxxx,
Executive Vice President, General Counsel
Copy to Counsel: Xxxxxx Xxxxxxx Xxxxx & Scarborough, L.L.P.
Bank of America Corporate Center
000 X. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: H. Xxxxx Xxxx III
C. Xxxx Xxxxx
11.8 Governing Law. This Agreement shall be governed by and construed
in accordance with the Laws of the State of North Carolina, without regard to
any applicable conflicts of Laws.
11.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
11.10 Captions. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
11.11 Interpretations. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against any party, whether under
any rule of construction or otherwise. No party to this Agreement shall be
considered the draftsman. The parties
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acknowledge and agree that this Agreement has been reviewed, negotiated and
accepted by all parties and their attorneys and shall be construed and
interpreted according to the ordinary meaning of the words used so as fairly to
accomplish the purposes and intentions of all parties hereto.
11.12 Enforcement of Agreement. The Parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, this being in addition to any other remedy to
which they are entitled at law or in equity.
11.13 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
11.14 Facsimile Signatures. Any signature page delivered by a facsimile
or telecopy machine will be binding to the same extent as an original signature
page. Any Party who delivers such a signature page agrees to later deliver an
original counterpart to any Party which requests it.
11.15 Nonsurvival of Representations and Warranties. None of the
representations and warranties of the Parties in this Agreement will survive the
Effective Time of the Merger. Nothing in this Section 11.15 shall limit any
covenant or agreement of the Parties which by its terms contemplates performance
after the Effective Time.
* * * * * * * * * *
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf by officers thereunto as of the day and year first above
written.
HEALTHEON/WEBMD CORPORATION
By: /s/ W. Xxxxxxx Xxxx
-----------------------------------------
W. Xxxxxxx Xxxx, Chairman of the Board
PINE MERGER CORP.
By: /s/ W. Xxxxxxx Xxxx
-----------------------------------------
W. Xxxxxxx Xxxx, Chairman of the Board
ENVOY CORPORATION
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President and Secretary
QUINTILES TRANSNATIONAL CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxxx, Ph.D.
Title: Chairman and Chief Executive Officer
QFINANCE, INC.
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxxx Xxxxxxx
Title: President
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LIST OF OMITTED EXHIBITS AND ATTACHMENTS
The following exhibits and attachments have been omitted from this filing:
Exhibit 8.17(a) Form of Tax Sharing Agreement
Exhibit 8.17(b) Form of Data Rights Agreement
Exhibit 8.17(c) Form of Internet Product Development and Marketing Agreement
Exhibit 8.17(d) Form of Quintiles Warrant
ENVOY Disclosure Letter
Healtheon/WebMD Disclosure Letter
Quintiles hereby agrees to furnish supplementally to the Commission a copy of
any omitted exhibit or attachment upon request.
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