\n
\nA Defined Terms
\n1.4(a)(1) Services and License Agreement
\n1.4(a)(2) Registration Rights Agreement Amendment
\n1.4(a)(3) Stockholders’ Agreement Amendment
\n1.4(a)(4) Standstill Agreement Amendment
\n1.4(a)(5) Terms of Transition Services Agreement
\n1.4(a)(6) UHC Compliance Certificate
\n1.4(a)(7) UHC Secretary’s Certificate
\n1.4(a)(8) Company Compliance Certificate
\n1.4(a)(9) Company Secretary’s Certificate
\n1.4(b)(2) Third Amended and Restated Articles of Incorporation
\n1.4(b)(3) ActaMed Compliance Certificate
\n1.4((b)(4) ActaMed Secretary’s Certificate
\n1.4(b)(5) SubCorp Compliance Certificate
\n1.4(b)(6) SubCorp Secretary’s Certificate<\/p>\nSCHEDULES<\/p>\n
4.6 EDI Financial Statements
\n4.9 Changes
\n4.13(a) Company Personal Property
\n4.14 Company Intellectual Property
\n4.19 Company Environmental Conditions
\n4.20 Company Litigation
\n4.21(a) Company Contracts
\n4.27 Interested Party Transactions
\n5.4(a) ActaMed Financial Statements
\n5.4(b) Undisclosed Liabilities
\n5.5 Consent Requirements
\n5.6 ActaMed Derivative Securities
\n5.12 ActaMed Litigation
\n5.13 ActaMed Liens
\n5.14 ActaMed Intellectual Property
\n5.20 ActaMed Insurance Policies
\n5.21 ActaMed Contracts
\n5.22 Description of 1993 IRS Audit
\n5.24 ActaMed Labor Practices
\n5.25 ActaMed Conflicts
\n6.5 Hired Employees<\/p>\n
<\/s><\/c><\/caption>\n<\/table>\n
-vi-<\/p>\n
AGREEMENT AND PLAN OF MERGER<\/p>\n
THIS AGREEMENT AND PLAN OF MERGER (this “AGREEMENT”), dated as of March
\n1, 1996, is made and entered into by and among ACTAMED CORPORATION, a Georgia
\ncorporation (“ACTAMED”), EDI ACQUISITION, INC., a Georgia corporation
\n(“SUBCORP”), UNITED HEALTHCARE CORPORATION, a Minnesota corporation (“UHC”)
\nand UHC GREEN ACQUISITION, INC., a Nevada corporation (the “COMPANY”).<\/p>\n
PREAMBLE<\/p>\n
The Boards of Directors of ActaMed, SubCorp and the Company, and UHC are
\nof the opinion that the transactions described in this Agreement are in the
\nbest interests of the parties and their respective shareholders. UHC is the
\nsole shareholder of the Company and ActaMed is the sole shareholder of
\nSubCorp. The assets dedicated to the EDI Services Group of UHC (“EDI”) were
\ntransferred to the Company. This Agreement provides for the acquisition of
\nthe Company by ActaMed pursuant to the merger of SubCorp with and into the
\nCompany. At the effective time of such merger, the outstanding shares of the
\ncapital stock of the Company shall be converted into the right to receive
\npreferred stock of ActaMed. As a result, UHC shall become a shareholder of
\nActaMed and the Company shall continue to conduct its business and operations
\nas a wholly-owned subsidiary of ActaMed. The transactions described in this
\nAgreement are subject to the approval of the Federal Trade Commission and the
\nUnited States Department of Justice, and the satisfaction of several other
\nconditions described in this Agreement.<\/p>\n
Capitalized terms used in this Agreement are defined in EXHIBIT A to
\nthis Agreement.<\/p>\n
AGREEMENT<\/p>\n
In consideration of the mutual representations, warranties and covenants
\ncontained herein, the parties hereto agree as follows:<\/p>\n
ARTICLE 1
\n TRANSACTIONS AND TERMS OF MERGER<\/p>\n
1.1 MERGER. At the Effective Time, SubCorp shall be merged with and
\ninto the Company in the Merger. The Company shall be the Surviving
\nCorporation of the Merger and shall be governed by the laws of the State of
\nNevada. The Merger shall be consummated pursuant to the terms and subject to
\nthe conditions of this Agreement, which has been approved and adopted by the
\nrespective Boards of Directors (or authorized committees thereof) of ActaMed,
\nSubCorp and the Company, and by UHC.<\/p>\n
-vii-<\/p>\n
1.2 TIME AND PLACE OF CLOSING. The Closing of the transactions
\ncontemplated by this Agreement will take place at 9:00 a.m., Atlanta, Georgia
\nlocal time, three business days after satisfaction of the conditions set
\nforth in Articles 7 and 8, or on such other day or at such other time as the
\nparties hereto may mutually agree. Notwithstanding the foregoing, if the
\nClosing does not occur on the first day of a month, then solely for financial
\naccounting and reporting purposes and filing of income tax returns in
\nconnection with the Company, the parties hereto agree that the transactions
\ncontemplated herein shall be deemed to have closed on as of the first day of
\nthe month in which the Closing occurs; provided that the parties hereto agree
\nthat for all other purposes, including, without limitation, risk of loss, the
\nClosing shall occur, and shall be deemed to have occurred, on the actual date
\nof the Closing. Executed counterparts of the documents required for the
\nClosing shall be exchanged by mail prior to the Closing Date, and the parties
\nshall inspect and approve such executed documents prior to the Closing Date.
\nPrior to the Closing Date any documents so exchanged shall not be deemed to
\nhave been delivered, but shall be held in escrow for inspection and approval
\npending the Closing. On the Closing Date the parties shall confirm to each
\nother in writing that the documents are satisfactory, the documents shall be
\ndeemed to be delivered, the Closing shall occur and the Merger shall be
\neffected.<\/p>\n
1.3 EFFECTIVE TIME. The Merger and other transactions contemplated by
\nthis Agreement shall become effective at the later of: (a) the date and the
\ntime that a Certificate of Merger reflecting the Merger is filed with the
\nSecretary of State of the State of Georgia or (b) the date and the time that
\narticles of merger reflecting the Merger are filed with the Secretary of
\nState of the State of Nevada.<\/p>\n
1.4 ITEMS TO BE DELIVERED AT CLOSING. At the Closing, the parties
\nshall exchange the following documents in connection with the Merger.<\/p>\n
(a) UHC and the Company shall deliver to ActaMed and SubCorp the
\nfollowing:<\/p>\n
(1) a Services and License Agreement, executed by UHC as
\nattached hereto as EXHIBIT 1.4(a)(1);<\/p>\n
(2) a Second Amendment to the Registration Rights Agreement,
\nexecuted by UHC and substantially in the form of EXHIBIT 1.4(a)(2);<\/p>\n
(3) a Second Amendment to the ActaMed Stockholders’
\nAgreement, executed by UHC and substantially in the form of EXHIBIT 1.4(a)(3);<\/p>\n
(4) an Amendment to the Standstill Agreement, executed by
\nUHC, UHC Management Company, Inc. and HLM Partners VII, L.P. and
\nsubstantially in the form of EXHIBIT 1.4(a)(4);<\/p>\n
-viii-<\/p>\n
(5) a Transition Services Agreement, to be negotiated in good
\nfaith by ActaMed and UHC and to be executed by UHC on substantially the terms
\nset forth on EXHIBIT 1.4(a)(5);<\/p>\n
(6) a compliance certificate executed by an appropriate
\nofficer of UHC and substantially in the form of EXHIBIT 1.4(a)(6);<\/p>\n
(7) a Secretary’s certificate executed by the Secretary of
\nUHC and substantially in the form of EXHIBIT 1.4(a)(7);<\/p>\n
(8) a compliance certificate executed by the President of the
\nCompany and substantially in the form of EXHIBIT 1.4(a)(8);<\/p>\n
(9) a Secretary’s certificate executed by the Secretary of
\nthe Company and substantially in the form of EXHIBIT 1.4(a)(9);<\/p>\n
(10) an opinion of Kevin H. Roche to be negotiated in good
\nfaith by ActaMed, UHC and Mr. Roche;<\/p>\n
(11) the written consents of other persons obtained pursuant
\nto SECTION 6.8;<\/p>\n
(12) the resignation of each officer and director of the
\nCompany;<\/p>\n
(13) all of the books and records of the Company and the
\nCompany Business including, but not limited to, (a) all corporate and other
\nrecords of the Company and each of its predecessors, including the minute
\nbooks, stock books, stock registers, books of account, leases and contracts,
\ndeeds, title documents, customer lists, financial statements, (b) employee
\nrecords and (c) such other documents or certificates as shall be reasonably
\nrequested by ActaMed and SubCorp;<\/p>\n
(14) the good standing and other certificates referred to in
\nSECTION 6.9 hereof; and<\/p>\n
(15) all other documents reasonably requested by ActaMed or
\nSubCorp.<\/p>\n
(b) ActaMed and the SubCorp shall deliver to UHC and the Company
\nthe following:<\/p>\n
(1) executed counterpart originals of the Services and
\nLicense Agreement, the Registration Rights Agreement Amendment, the
\nStockholders’ Agreement Amendment, the Standstill Agreement Amendment, the
\nTransition Services Agreement and the Sublease Agreement;<\/p>\n
-ix-<\/p>\n
(2) a certified copy of the Third Amended and Restated
\nArticles of Incorporation of ActaMed, filed in the office of the Secretary of
\nState of Georgia and substantially in the form of EXHIBIT 1.4(b)(2);<\/p>\n
(3) a compliance certificate executed by the President of
\nActaMed and substantially in the form of EXHIBIT 1.4(b)(3);<\/p>\n
(4) a Secretary’s certificate executed by the Secretary of
\nActaMed and substantially in the form of EXHIBIT 1.4(b)(4);<\/p>\n
(5) a compliance certificate executed by the President of
\nSubCorp and substantially in the form of EXHIBIT 1.4(b)(5);<\/p>\n
(6) a Secretary’s certificate executed by the Secretary of
\nSubCorp and substantially in the form of EXHIBIT 1.4(b)(6);<\/p>\n
(7) an opinion of Alston & Bird to be negotiated in good
\nfaith by UHC, ActaMed and Alston & Bird; and<\/p>\n
(8) all other documents reasonably requested by UHC or the
\nCompany.<\/p>\n
ARTICLE 2
\n THE SURVIVING CORPORATION<\/p>\n
2.1 ARTICLES OF INCORPORATION. The Articles of Incorporation of the
\nCompany as in effect immediately prior to the Effective Time shall be the
\nArticles of Incorporation of the Surviving Corporation after the Effective
\nTime, and thereafter may be amended in accordance with its terms as provided
\nby law and this Agreement.<\/p>\n
2.2 BYLAWS. The Bylaws of SubCorp as in effect immediately prior to
\nthe Effective Time shall be the Bylaws of the Surviving Corporation, and
\nthereafter may be amended in accordance with their terms and as provided by
\nlaws and this Agreement.<\/p>\n
2.3 DIRECTORS AND OFFICERS. The directors of SubCorp in office
\nimmediately prior to the Effective Time shall be the directors of the
\nSurviving Corporation, and the officers of SubCorp in office immediately
\nprior to the Effective Time shall be the officers of the Surviving
\nCorporation, in each case until their respective successors are duly elected
\nand qualified.<\/p>\n
-x-<\/p>\n
ARTICLE 3
\n MANNER OF CONVERTING SHARES<\/p>\n
3.1 CONVERSION OF SHARES. Subject to the provisions of this ARTICLE
\n3, at the Effective Time, by virtue of the Merger and without any action on
\nthe part of UHC:<\/p>\n
(a) All of the Company Common Stock issued and outstanding
\nimmediately prior to the Effective Time shall be deemed canceled and cease to
\nbe outstanding and shall be converted into the right to receive at the
\nEffective Time as consideration from ActaMed for the Merger 10,344,828 shares
\nof Series C Preferred Stock of ActaMed. If, after the date of this Agreement
\nand before the Effective Time, ActaMed shall take any action that would have
\ncaused conversion of the Preferred Shares had they been outstanding, then the
\nCompany Common Stock shall be exchanged for the number of shares of the
\nActaMed Common Stock that would have been issued upon the conversion of the
\nPreferred Shares. If, after the date of this Agreement and before the
\nEffective Time, ActaMed shall take any action that would have caused an
\nadjustment to the Series C Conversion Price (as defined in the Restated
\nArticles) had the Preferred Stock been outstanding, then the Series C
\nConversion Price shall be so adjusted.<\/p>\n
(b) Any and all shares of Company Common Stock held as treasury
\nshares by the Company shall be canceled and retired at the Effective Time,
\nand no consideration shall be issued in exchange therefor.<\/p>\n
(c) Each share of the common stock of the SubCorp issued and
\noutstanding immediately prior to the Effective Time shall remain issued and
\noutstanding from and after the Effective Time and shall be unaffected by the
\nMerger.<\/p>\n
3.2 EXCHANGE PROCEDURES. At the Closing, UHC shall deliver to ActaMed
\nthe certificates held by it that formerly represented Company Common Stock,
\nand shall promptly upon surrender thereof receive in exchange therefor the
\nconsideration provided in SECTION 3.1 of this Agreement. The certificates so
\nsurrendered shall be duly endorsed as ActaMed may require. Until surrendered
\nfor exchange in accordance with the provisions of this SECTION 3.2, each
\ncertificate for Company Common Stock shall from and after the Effective Time
\nrepresent for all purposes only the right to receive the consideration
\nprovided in SECTION 3.1 of this Agreement in exchange therefor.<\/p>\n
ARTICLE 4
\n REPRESENTATIONS AND WARRANTIES OF UHC AND THE COMPANY <\/p>\n
UHC and the Company jointly and severally represent and warrant to
\nActaMed and SubCorp as follows:<\/p>\n
4.1 OWNERSHIP OF SHARES; OPERATIONS. UHC is the owner of all right,
\ntitle and interest (legal and beneficial) in and to all of the Shares, free
\nand clear of any and all <\/p>\n
-xi-<\/p>\n
Liens of any nature whatsoever, and UHC holds no other interest in the
\nCompany or the Company Business. Except as pursuant to this Agreement, no
\nperson or entity has any agreement or option or any right or privilege
\n(whether pre-emptive or contractual) capable of becoming an agreement or
\noption for the purchase of any of the Shares. Substantially all of the
\nassets required for the operation of the Company Business have been
\ntransferred to the Company on _____________, 199_ and the Company did not
\nhave any operations prior to such date.<\/p>\n
4.2 CAPACITY AND VALIDITY. UHC and the Company each have the full
\npower, authority and capacity necessary to enter into and perform its
\nobligations under this Agreement and the other UHC Documents and to
\nconsummate the transactions contemplated hereby and thereby. This Agreement
\nand all other UHC Documents have been or will be duly executed and delivered
\nby UHC and the Company, and constitute or will constitute the legal, valid
\nand binding obligations of UHC and the Company, enforceable in accordance
\nwith their respective terms. Neither the execution, delivery and performance
\nof this Agreement or any other UHC Document, nor the consummation of the
\ntransactions contemplated hereby or thereby, will violate any provisions of
\nthe articles of incorporation or bylaws of UHC or the Company, or any
\nRegulation or Court Order to which UHC or the Company is subject. <\/p>\n
4.3 ORGANIZATION, STANDING AND FOREIGN QUALIFICATION. UHC is a
\ncorporation duly incorporated, validly existing and in good standing under
\nthe laws of Minnesota. The Company is a corporation duly incorporated,
\nvalidly existing, and in good standing under the laws of the State of Nevada,
\nand has the power and authority to carry on its business in the places as it
\nhas been and is now being conducted and to own and lease the properties and
\nassets which it now owns or leases. The Company is duly qualified and\/or
\nlicensed to transact business and is in good standing as a foreign
\ncorporation in the State of Minnesota, and the character of the property
\nowned or leased by the Company and the nature of the business conducted by it
\ndo not require such qualification and\/or licensing in any other jurisdiction.
\n Copies of the articles of incorporation and all amendments thereto of the
\nCompany (certified by the Secretary of State of the State of Nevada), the
\nbylaws of the Company (certified by the Secretary of the Company) and copies
\nof the corporate minutes of the Company, which have been made available to
\nActaMed and SubCorp for review, are true and complete copies of such
\ndocuments and accurately reflect all proceedings of the shareholders and
\ndirectors of the Company (and all committees thereof). The stock record
\nbooks of the Company, which have been made available to ActaMed and SubCorp
\nfor review, contain true, complete and adequate records of the stock
\nownership of the Company and the transfer of the shares of its capital stock.<\/p>\n
4.4 CAPITAL STOCK. The authorized capital stock of the Company
\nconsists of 1,000 shares of Common Stock, $.01 par value per share, all of
\nwhich are issued and outstanding. All of the issued and outstanding Shares
\nare duly and validly issued and outstanding, are fully paid and
\nnonassessable, and were issued pursuant to a valid exemption from
\nregistration under the Securities Act and all applicable state securities <\/p>\n
-xii-<\/p>\n
laws. There are no outstanding warrants, options, rights, calls or other
\ncommitments of any nature relating to the Company Common Stock or any other
\ncapital stock of the Company, and there are no outstanding securities of the
\nCompany convertible into or exchangeable for shares of Company Common Stock
\nor any other capital stock of the Company. There are no shares of capital
\nstock held in the treasury of the Company.<\/p>\n
4.5 SUBSIDIARIES AND INVESTMENTS. The Company has not in the past and
\ndoes not currently own, directly or indirectly, any capital stock or other
\nequity, ownership or proprietary interest in any corporation, partnership,
\nassociation, trust, joint venture or other entity.<\/p>\n
4.6 EDI FINANCIAL STATEMENTS.<\/p>\n
(a) SCHEDULE 4.6 contains audited balance sheets of EDI as of
\nDecember 31, 1994, and December 31, 1995, and audited statements of
\noperations and statements of cash flows for the three years ending December
\n31, 1995, together with the notes thereto and the reports thereon of Deloitte
\n& Touche, LLP.<\/p>\n
(b) The EDI Financial Statements (1) are in accordance with the
\nbooks and records of the UHC Group, which have been properly maintained and
\nare complete and correct in all material respects; (2) present fairly the
\nfinancial condition, assets and liabilities (whether accrued, absolute,
\ncontingent or otherwise) of the Company Business as of the respective dates
\nindicated and the results of operations for the respective periods indicated;
\n(3) have been prepared in accordance with GAAP consistently applied
\nthroughout the periods involved, and (4) reflect adequate reserves for all
\nknown Liabilities and reasonably anticipated losses. <\/p>\n
(c) The EDI Financial Statements contain no untrue statements of
\nany material fact nor do they omit to state any material fact required to be
\nstated to make the EDI Financial Statements not misleading. No member of the
\nUHC Group has received any advice or notification from its independent
\ncertified public accountants that the UHC Group has used any improper
\naccounting practice that would have the effect of not reflecting or
\nincorrectly reflecting in the EDI Financial Statements any properties,
\nassets, liabilities, revenues or expenses. The EDI Financial Statements do
\nnot contain any items of special or nonrecurring income, or other income not
\nearned in the ordinary course of business, individually or in the aggregate
\nin excess of $5,000.<\/p>\n
(d) The Company owns all of the assets reflected in the EDI
\nFinancial Statements and the EDI Financial Statements reflect all of the
\nassets currently used by EDI in connection with the Company Business. <\/p>\n
4.7 ABSENCE OF UNDISCLOSED LIABILITIES. The Company has no
\nLiabilities that are not reflected on the EDI Financial Statements, other
\nthan Liabilities for the performance by the Company after the Closing Date of
\nthe contracts assigned to the Company as set forth on the Schedules hereto. <\/p>\n
-xiii-<\/p>\n
4.8 NO LIABILITIES AS GUARANTOR. The Company is not directly or
\nindirectly liable, by guaranty, indemnity, or otherwise, upon or with respect
\nto, or obligated, by discount or repurchase agreement or in any other way, to
\nprovide funds in respect to, or obligated to guarantee or assume any debt,
\ndividend or other obligation of any person, corporation, association,
\npartnership or other entity.<\/p>\n
4.9 ABSENCE OF CHANGES. Except as disclosed on SCHEDULE 4.9, and
\nexcept as contemplated by this Agreement, since December 31, 1995, the
\nbusiness and operations of the Company have been carried on only in the
\nordinary course, and there has not been any transaction or occurrence,
\nwhether or not in the ordinary course, in which the Company (and, with
\nrespect to (e), (f), (h), (i) and (n), any other member of the UHC Group in
\nconnection with the Hired Employees) has:<\/p>\n
(a) suffered or experienced any event or condition materially and
\nadversely affecting the business, operations, assets, properties or condition
\nof the Company, financial or otherwise;<\/p>\n
(b) declared, set aside or made, or agreed to declare, set aside
\nor make any payments or dividends or any distribution to shareholders, or
\npurchased, redeemed or otherwise acquired, directly or indirectly, or agreed
\nto purchase, redeem or acquire, any shares of capital stock or other
\nsecurities;<\/p>\n
(c) effected any changes in its capital structure, or issued, sold
\nor otherwise transferred any equity or other interest in itself or any other
\nsecurities, or granted or agreed to grant any options or rights to purchase
\nany securities;<\/p>\n
(d) suffered any damage, destruction or loss, whether or not
\ncovered by insurance, which materially and adversely affected the properties
\nor business of the Company, or suffered any extraordinary losses or waived
\nany rights of substantial value;<\/p>\n
(e) increased the rate of compensation payable or to become
\npayable by it to any of its officers, directors, employees or agents over the
\nrate being paid to them as of December 31, 1995, or agreed so to do, except
\ngeneral hourly rate increases and normal merit increases for employees other
\nthan officers;<\/p>\n
(f) hired, committed to hire, terminated or received the
\nresignation of any Hired Employee;<\/p>\n
(g) suffered any loss or termination, or threatened loss or
\ntermination, of any material customer or supplier;<\/p>\n
(h) through negotiation or otherwise, made any commitment or
\nincurred any Liability, whether or not enforceable, to any labor organization;<\/p>\n
-xiv-<\/p>\n
(i) directly or indirectly paid or entered into a Contract to pay
\nany severance or termination pay to any officer, director, employee or agent;<\/p>\n
(j) changed any of the accounting principles followed by it or the
\nmethods of applying such principles;<\/p>\n
(k) offered or extended more favorable prices, discounts or
\nadvertising, promotional, display or other allowances than were offered or
\nextended regularly as of the date of the most recently dated EDI Financial
\nStatements;<\/p>\n
(l) entered into any commitment or transaction not in the ordinary
\ncourse of business involving aggregate value in excess of $10,000 or made or
\napproved the making of any capital expenditure exceeding the amount of
\n$10,000 in any instance;<\/p>\n
(m) paid, discharged or satisfied any material liability other
\nthan the payment, discharge or satisfaction of liabilities in the ordinary
\ncourse of business; <\/p>\n
(n) except in the ordinary course of business and consistent with
\npast practice, canceled or compromised any debts or waived or permitted to
\nlapse any claims or rights or sold, transferred or otherwise disposed of any
\nof its properties or assets;<\/p>\n
(o) incurred any liabilities or obligations (absolute, accrued or
\ncontingent) in excess of $10,000, except for accounts payable incurred in the
\nordinary course of business;<\/p>\n
(p) mortgaged, pledged, subjected or agreed to subject, any of its
\nassets, tangible or intangible, to any Lien, except for Liens for current
\nproperty taxes not yet due and payable;<\/p>\n
(q) terminated or amended any material Contract, License or other
\ninstrument to which the Company is a party or suffered any loss or
\ntermination or threatened loss or termination of any existing business
\narrangement or material supplier, the termination or loss of which could
\nmaterially and adversely affect the Company;<\/p>\n
(r) paid or agreed to pay any service charge, interest charge,
\ninvestment charge, intercompany charge or similar fee to any member of the
\nUHC Group that is not reflected in the Transition Services Agreement or
\nentered into any other transactions other than in the ordinary course of
\nbusiness; <\/p>\n
(s) charged off any bad debts or increased its bad debt reserve; <\/p>\n
(t) experienced any significant development, quality assurance or
\nnetwork operations problems.<\/p>\n
4.10 INDEBTEDNESS. The Company has no indebtedness for money borrowed.<\/p>\n
-xv-<\/p>\n
4.11 TAX MATTERS.<\/p>\n
(a) The Company has filed all Tax returns and information returns
\nrequired to be filed, taking into account any extensions of the filing
\ndeadlines which have been validly granted to the Company, and such returns
\nare and will be true and correct in all material respects and properly
\nreflect the Tax liabilities of the Company for the periods, property or
\nevents covered thereby, and the Company has paid all Taxes (including
\npenalties and interest in respect thereof, if any) that are due, whether
\nshown on such returns or not.<\/p>\n
(b) Adequate provision has been made on the EDI Financial
\nStatements for all accrued Tax liabilities not required to be paid prior to
\nsuch date and for all current and deferred Taxes.<\/p>\n
(c) The UHC Group has withheld or collected from each of the Hired
\nEmployees the amount of all Taxes required to be withheld or collected
\ntherefrom and has paid the same to the proper tax depositories or collecting
\nauthorities.<\/p>\n
(d) All ad valorem property taxes imposed on the Company and each
\nof its predecessors or its Affiliates to which it has succeeded with respect
\nto, or which may become a Lien on, its assets have been paid in full.<\/p>\n
4.12 REAL PROPERTY. The Company neither owns nor leases (either as
\nlessee or lessor) any real property. <\/p>\n
4.13 PERSONAL PROPERTY.<\/p>\n
(a) SCHEDULE 4.13(a) contains a true, complete and correct list of
\nthe material equipment, machinery, or other tangible personal property owned
\nby the Company, other than inventories held for resale and personal property
\nof the Hired Employees. The Company has good and marketable title to all of
\nits equipment, machinery, and items of tangible personal property (whether or
\nnot disclosed in SCHEDULE 4.13(a)), free and clear of any and all Liens of
\nany kind or nature.<\/p>\n
(b) The Company does not lease any of the equipment, machinery or
\nother items of tangible personal property used or employed in the Company
\nBusiness. The Company does not lease any personal property as lessor.<\/p>\n
(c) The equipment, machinery, or other tangible personal property
\nowned or leased by the Company is in good operating condition and in a state
\nof reasonable maintenance and repair, and is considered adequate and usable
\nfor the continued operation of the business of the Company as the same is
\npresently conducted.<\/p>\n
-xvi-<\/p>\n
4.14 INTELLECTUAL PROPERTY. SCHEDULE 4.14 contains a list of
\nall material Intellectual Property owned by, registered in the name of, or
\nused in the Company Business by the UHC Group on the date hereof, or for
\nwhich application has been made. All licenses constituting Intellectual
\nProperty are in full force and effect and constitute legal, valid and binding
\nobligations of the respective parties thereto, and there have not been and
\nthere currently are not any Defaults thereunder by any party. The Company
\nowns all of such Intellectual Property free and clear of all assignments,
\nLicenses (or sublicenses), restrictions or Liens, except as set forth on
\nSCHEDULE 4.14. None of the Intellectual Property rights in the version and
\nform used on the Closing Date in the Company’s Business infringes upon or
\notherwise violates the rights of others, nor has any person asserted to UHC
\nGroup a claim of such infringement, and to the knowledge of UHC Group, no
\nperson is infringing upon or otherwise violating the Intellectual Property
\nrights of the Company. Except as set forth in SCHEDULE 4.14, the Company is
\nnot obligated to pay any royalties to any person or entity with respect to
\nany Intellectual Property. The Company does not believe it is or will be
\nnecessary to utilize any inventions of any of the employees engaged in the
\nCompany Business (or people the Company currently intends to hire) made prior
\nto their employment by any member of the UHC Group. To the best knowledge of
\nthe Company, no employee engaged in the Company Business is or has been in
\nviolation of any term of any employment contract, patent disclosure agreement
\nor any other contract or agreement relating to the Intellectual Property or
\nthe relationship of any such employee with such entity or any other party.<\/p>\n
4.15 ACCOUNTS AND NOTES RECEIVABLE. The accounts receivable and notes
\nreceivable of the Company as reflected in the most recently dated balance
\nsheet included in the EDI Financial Statements, to the extent uncollected on
\nthe date hereof, and the accounts receivable and notes receivable reflected
\non the books of the Company are: (a) valid and existing, (b) enforceable by
\nthe Company in accordance with the terms of the instruments or documents
\ncreating them, and (c) collectible within ninety (90) days in an amount not
\nless than the aggregate face amount thereof (net of reserves for doubtful and
\nuncollectible accounts) pursuant to the Company’s normal collection practices.<\/p>\n
4.16 THE PROPRIETARY SOFTWARE.<\/p>\n
(a) The proprietary computer software of the Company included in the
\n Intellectual Property (the “SOFTWARE”) performs in accordance with the
\n documentation and other written material used in connection with the
\n Software, is in machine-readable form, contains all current revisions of
\n such software, and includes all computer programs, materials, tapes, object
\n and source codes and other written materials related to the Software. The
\n Company has delivered to ActaMed complete and correct copies of all user
\n and technical documentation related to the Software.<\/p>\n
(b) Neither the UHC Group nor, to the best knowledge of the UHC
\n Group, any employee or agent thereof has developed or assisted in the<\/p>\n
-xvii-<\/p>\n
enhancement of the Software except for enhancements included in the
\n Software as delivered to ActaMed pursuant hereto.<\/p>\n
(c) No employee of UHC Group is, or is now expected to be, in default
\n under any term of any employment contract, agreement or arrangement
\n relating to the Software or noncompetition arrangement, or any other
\n Contract or any restrictive covenant relating to the Software or its
\n development or exploitation. The Software was developed entirely by the
\n employees of UHC Group during the time they were employees only of UHC
\n Group or by consultants who assigned in writing all of their rights in the
\n Software to UHC Group.<\/p>\n
(d) All right, title and interest in and to the Software is owned by
\n the Company, free and clear of all liens, claims, charges or encumbrances,
\n are fully transferable to the Purchaser, and no party other than the
\n Company has any interest in the Software, including without limitation, any
\n security interest, license, contingent interest or otherwise. UHC Group’s
\n development or sale of the Software did and does not violate any rights of
\n any other person or entity and UHC Group has not received any communication
\n alleging such a violation. UHC Group does not have any obligation to
\n compensate any Person for the development, use, sale or exploitation of the
\n Software nor has UHC Group granted to any other person or entity any
\n license, option or other right to develop, use, sell or exploit in any
\n manner the Software, whether requiring the payment of royalties or not.<\/p>\n
(e) UHC Group has kept secret and has not disclosed the source code
\n for the Software to any person or entity other than certain employees of
\n UHC Group. UHC Group has taken all appropriate measures to protect the
\n confidential and proprietary nature of the Software. There have been no
\n patents applied for and no copyrights registered for any part of the
\n Software. To the knowledge of UHC Group, there are no trademark rights of
\n any person or entity other than UHC Group in the name “ProviderLink”.<\/p>\n
(f) Except as set forth in SECTION 6.20, all copies of the Software
\n embodied in physical form are being delivered to ActaMed at or prior to the
\n Closing.<\/p>\n
4.17 INSURANCE. UHC has maintained all appropriate types of insurance,
\nrelative to its and the Company’s Business in order to protect UHC and the
\nCompany’s assets and employees.<\/p>\n
4.18 COMPLIANCE WITH LAWS.<\/p>\n
(a) The Company and, in the operation of the Company Business, the
\nUHC Group has complied in all material respects with all applicable laws,
\nRegulations and orders. The Company has obtained all material permits,
\nlicenses, orders, and <\/p>\n
-xviii-<\/p>\n
approvals of federal, state and local governmental and regulatory bodies that
\nare required for the ownership, maintenance and operation of the Company’s
\npremises and facilities and the operation of the Company Business; and no
\nmember of the UHC Group is aware of any pending threat of cancellation,
\nmodification or nonrenewal of any such permits, licenses, orders or
\napprovals, nor any basis for such cancellation, modification or nonrenewal.
\nThe Company is not presently in material violation or material Default of any
\nsuch permit, license, order or approval and the present uses of the Company’s
\nassets do not in any material respect violate any law, Regulation or order.
\nNo notice or warning from any governmental authority with respect to any
\nfailure or alleged failure of the Company to comply with any law, Regulation
\nor order has been issued or given, nor is any member of the UHC Group aware
\nthat any such notice or warning is proposed or threatened. With the
\nexception of the acceptance for filing of articles of merger by the
\nsecretaries of state of the States of Georgia and Nevada, respectively, and
\nas set forth in SECTION 6.18, no consent or approval of, prior filing with or
\nnotice to, or other action by, any governmental body or agency or any other
\nthird party is required in connection with the execution and delivery of this
\nAgreement or any assignment, agreement or other instrument to be executed and
\ndelivered pursuant to this Agreement by the Company or any of UHC or the
\nconsummation of the transactions provided for herein or therein.<\/p>\n
(b) There are no material capital expenditures that the Company
\nbelieves are reasonably likely to be required to be made in connection with
\nthe Company Business as now conducted in order to comply with any Regulations
\nor other governmental requirements applicable to the Company Business as it
\nis now conducted.<\/p>\n
4.19 ENVIRONMENTAL CONDITIONS. Except as set forth in SCHEDULE 4.19,
\nthere are no present or past Environmental Conditions in any way relating to
\nthe business, properties or assets of the Company. <\/p>\n
4.20 LITIGATION AND CLAIMS. There are no outstanding Court Orders or
\nquasi-judicial or administrative decisions to which the Company is subject,
\nand, except as disclosed on SCHEDULE 4.20, there is no Litigation pending or
\nto the best knowledge of the UHC Group threatened against or relating to the
\nCompany or its assets or businesses. The UHC Group has not been advised by
\nany attorney representing it that there are any “loss contingencies” (as
\ndefined in FASB 5), which would be required by FASB 5 to be disclosed or
\naccrued in financial statements of EDI, were such financial statements
\nprepared as of the date hereof. <\/p>\n
4.21 CONTRACTS AND COMMITMENTS; WARRANTIES.<\/p>\n
(a) SCHEDULE 4.21(a) contains a true, correct and complete list of
\nall Contracts to which the Company is a party or by which the Company
\nbenefits, except for the Contracts that (1) are terminable at will by the
\nCompany without any Liability, (2) are described in any other Schedule
\nhereto, or (3) do not and can not require payments in excess of $5,000 in the
\naggregate following the date hereof. <\/p>\n
-xix-<\/p>\n
(b) Each of the Contracts listed in SCHEDULE 4.21(a), or described
\nin this SECTION 4.21 but which is included in any other Schedule, is in full
\nforce and effect. No Default under any of the terms or conditions set forth
\nin any of the Contracts to which the Company is a party or any document or
\ninstrument related thereto has occurred or been asserted by any party which
\ncould result in monetary damages or termination of the Contract or require
\npayments to cure such Default. Except as reflected in such Schedules,
\nneither the execution, delivery and performance of this Agreement or any
\nother agreement or other instrument or document to be executed and delivered
\nby the Company or UHC pursuant to this Agreement, nor the consummation of the
\ntransactions contemplated hereby or thereby, will conflict with, result in a
\nbreach of, or constitute a Default under any Contract to which the Company or
\nUHC is a party or by which any of them is bound, affect the continuation,
\nvalidity and effectiveness of any of such Contracts, or any terms thereof, or
\nresult in the creation of any Lien upon any of the Shares or any of the
\nCompany’s assets or properties, or result in the acceleration of the maturity
\nof any payment date of any of the Company’s obligations, or increase or
\nadversely affect the obligations of the Company thereunder. True, correct
\nand complete copies of all written Contracts or a written description of all
\noral Contracts referred to in SCHEDULE 4.21(a) have been made available to
\nActaMed and SubCorp for review. <\/p>\n
(c) UHC Group has not given any warranties to any third parties with
\nrespect to the products or services offered by the Company Business.<\/p>\n
4.22 POWERS OF ATTORNEY. The Company has not given or granted any power
\nof attorney, whether limited or general, to any person, firm, corporation or
\notherwise that is continuing in effect.<\/p>\n
4.23 BENEFIT PLANS. The Company has not at any time sponsored,
\ncontributed to or been obligated to contribute to any Benefit Plan. Neither
\nthe Company nor UHC has at any time sponsored, contributed to or been
\nobligated to contribute to a “multiemployer pension plan” (as defined in
\nERISA Section 4001(a)(3) and 3(37)(A)) or to a “defined benefit plan” (as
\ndefined in ERISA Section 3(35)). Except as provided in SECTION 6.5(b) of
\nthis Agreement, the Company, ActaMed and ActaMed’s Affiliates shall have no
\nliability or obligation with respect to (i) employment related liabilities,
\nwhether contingent or otherwise, arising out of any Hired Employee’s or Hired
\nHold-Over Employee’s employment with UHC or its Affiliates or (ii) any
\nBenefit Plan sponsored, maintained or contributed to by UHC or its Affiliates.<\/p>\n
4.24 REMUNERATION. The Company has provided complete and accurate
\ninformation to ActaMed relating to the direct compensation (including wages,
\nsalaries and actual or anticipated bonuses) and benefits paid or provided in
\n1995, and the direct compensation and benefits (as described in the preceding
\nclause) to be paid in 1996, to all of the Hired Employees.<\/p>\n
4.25 UNION AND EMPLOYMENT AGREEMENTS. The Company does not have any
\nemployees or independent contractors. No member of the UHC Group is a party to
\nany <\/p>\n
– xx –<\/p>\n
union agreement that covered the Hired Employees or Hired Hold-Over
\nEmployees, nor does any such member have any written or oral agreement that
\nis not terminable by it at will with any of the Hired Employees or Hired
\nHold-Over Employees, relating to their employment by or performance of
\nservice for the Company Business or their compensation therefor. No union
\nattempts to organize such employees have been made, nor are any such attempts
\nnow threatened so far as is known to UHC or the Company.<\/p>\n
4.26 OFFICERS, DIRECTORS, AND BANK ACCOUNTS. The Company has provided
\ncomplete and accurate information to ActaMed relating to (a) the names of all
\ndirectors and officers of any member of the UHC Group who are Hired Employees
\nand (b) the name and location of each bank or other institution in which the
\nCompany has an account or safe deposit box, all account numbers and account
\nnames, and names of all persons authorized to draw thereon or to have access
\nthereto.<\/p>\n
4.27 INTERESTED PARTY TRANSACTIONS.<\/p>\n
(a) Except as set forth in SCHEDULE 4.27, the Company is not a
\nparty to any Contract, loan or other transaction with any of the following
\npersons, or in which any of the following persons have any direct or indirect
\ninterest (other than as a Hired Employee):<\/p>\n
(1) any director, officer, or employee of any member of the UHC
\nGroup; or<\/p>\n
(2) any of the spouses, parents, siblings, children, aunts,
\nuncles, nieces, nephews, in-laws or grandparents of any of the persons described
\nin clause (1).<\/p>\n
(b) Except as set forth on SCHEDULE 4.27, no member of the UHC Group
\nis a consultant, partner, principal, director or shareholder of any business
\nentity (other than the Company or a corporation whose shares are publicly traded
\nand in which such member of the UHC Group beneficially owns in the aggregate no
\nmore than a 5% equity interest) which is engaged in a business similar to the
\nCompany Business.<\/p>\n
4.28 BROKERS AND FINDERS. No third party is entitled to receive any
\ncommission, fees or similar consideration in connection with the transactions
\ncontemplated by this Agreement based on any arrangement or agreement made by
\nor on behalf of UHC or the Company.<\/p>\n
4.29 INVESTMENT REPRESENTATIONS; LEGEND ON SHARES. UHC hereby
\nacknowledges that the Preferred Shares (or Conversion Shares) delivered
\npursuant to the Merger will not be registered under the Securities Act, and
\nthe resale of such shares will therefore be subject to restrictions imposed
\nby federal and state securities laws. UHC represents to and agrees with
\nActaMed and SubCorp as follows with respect to the Preferred Shares (and
\nConversion Shares):<\/p>\n
– xxi –<\/p>\n
(a) It is acquiring the shares for its own account for investment
\npurposes only, and not with a view to the distribution, transfer, or assignment
\nof the same in whole or in part. <\/p>\n
(b) ActaMed and SubCorp have advised it, a reasonable time prior
\nto the execution of this Agreement, that the shares have not been registered
\nunder the Securities Act and, therefore, cannot be sold or otherwise disposed
\nof except in a transaction which is registered under the Securities Act or
\nexempted from registration.<\/p>\n
(c) It has been represented by counsel and advisers, each of whom
\nhas been previously selected by UHC, as UHC has found necessary to consult
\nconcerning this Agreement and the shares to be issued pursuant to this
\nAgreement. UHC, either alone or with its representative(s), has such
\nknowledge and experience in financial or business matters that it is capable
\nof evaluating the merits and risks of the prospective investment. <\/p>\n
(d) UHC and its counsel and other advisers have been provided with
\nthe information described in SECTION 4.30 and with such other information
\nconcerning ActaMed as they have deemed relevant with respect to UHC’s
\ninvestment decision relating to the shares being delivered to it. UHC has
\nhad a reasonable opportunity to ask questions and receive answers concerning
\nthe terms and conditions of the transactions contemplated by this Agreement,
\nto discuss ActaMed’s business, management and financial affairs with the
\nmanagement of ActaMed and SubCorp, and to obtain any additional information
\nwhich ActaMed or SubCorp possesses or can acquire without unreasonable effort
\nor expense that is necessary to verify the accuracy of the information
\nfurnished. UHC has received satisfactory responses from management of
\nActaMed and SubCorp to UHC’s inquiries.<\/p>\n
(e) UHC acknowledges that all certificates representing the shares
\ndelivered to UHC shall be stamped or otherwise imprinted with a legend
\nsubstantially in the following form (together with any other legend required
\nby state law), and that stop transfer orders will be given to ActaMed’s
\ntransfer agent:<\/p>\n
“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
\n OF 1933 OR ANY STATE SECURITIES ACTS AND MAY NOT BE TRANSFERRED OR
\n OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER THE
\n SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE SECURITIES ACTS OR
\n EXEMPTIONS FROM SUCH REGISTRATIONS ARE AVAILABLE.”<\/p>\n
4.30 COMPLIANCE WITH REGULATION D INFORMATION REQUIREMENTS. <\/p>\n
(a) ActaMed and SubCorp have provided to UHC, a reasonable time
\nprior to the execution of this Agreement: (1) ActaMed’s Financial Statements
\nfor the year <\/p>\n
– xxii –<\/p>\n
ended December 31, 1995; (2) a brief description of the Preferred Shares; and
\n(3) a brief description of the business of ActaMed. The contents of material
\nexhibits to such materials have been identified and such exhibits have been
\nmade available to UHC, upon its written request, a reasonable time prior to
\nthe execution of this Agreement.<\/p>\n
(b) ActaMed and SubCorp have made available to UHC a reasonable
\ntime prior to the execution of this Agreement the opportunity to ask
\nquestions and receive answers concerning the terms and conditions of the
\ntransactions contemplated by this Agreement and to obtain any additional
\ninformation which ActaMed or SubCorp possesses or can acquire without
\nunreasonable effort or expense that is necessary to verify the accuracy of
\nthe information furnished pursuant to paragraph (a) above.<\/p>\n
(c) ActaMed and SubCorp have advised UHC of the limitations on
\nresale of Preferred Shares (and Conversion Shares) imposed by Regulation D
\npromulgated under the Securities Act.<\/p>\n
4.31 SCHEDULES. All Schedules referenced in this ARTICLE 4 are true,
\ncorrect and complete as of the date of this Agreement, and will be true,
\ncorrect and complete as of the Closing. Matters disclosed on each such
\nSchedule shall be deemed disclosed only for purposes of the matters to be
\ndisclosed on such Schedule and shall not be deemed to be disclosed for any
\nother purpose unless expressly provided therein.<\/p>\n
ARTICLE 5
\n REPRESENTATIONS AND WARRANTIES OF ACTAMED AND SUBCORP <\/p>\n
ActaMed and SubCorp jointly and severally represent and warrant to UHC and
\nthe Company as follows:<\/p>\n
5.1 (a) ORGANIZATION AND GOOD STANDING. ActaMed and SubCorp are duly
\norganized and validly existing corporations in good standing under the laws of
\nthe States of Georgia and have full corporate power to carry on their
\nbusinesses, to own and operate their properties and assets, and to consummate
\nthe transactions contemplated by this Agreement.<\/p>\n
(b) QUALIFIED TO DO BUSINESS. ActaMed is currently engaged in the
\nActaMed Business. ActaMed is qualified to do business as a foreign corporation
\nin each jurisdiction in which the failure to be so qualified would have a
\nMaterial Adverse Effect.<\/p>\n
(c) INCORPORATION DOCUMENTS. ActaMed has delivered to UHC and the
\nCompany true, correct and complete copies of the Restated Articles and Bylaws of
\nActaMed, including all amendments thereto, as presently in effect. <\/p>\n
(d) POWER TO CONDUCT BUSINESS. ActaMed has all corporate power
\nand all governmental licenses, authorizations, consents and approvals
\nrequired to carry on <\/p>\n
– xxiii –<\/p>\n
the ActaMed Business as now conducted and as proposed to be conducted and to
\nown, operate and lease its properties and assets, except for those licenses,
\nauthorizations, consents and approvals the failure of which to have would not
\nhave a Material Adverse Effect.<\/p>\n
5.2 AUTHORIZATION OF AGREEMENT, NO BREACH. The execution and delivery
\nof this Agreement have been duly authorized by all necessary corporate action
\non the part of ActaMed and SubCorp, and no further corporate action of any
\nnature is required pursuant to the charter or bylaws of ActaMed or SubCorp.
\nAll persons who have executed or will execute this Agreement, or any other
\nagreement or document called for by this Agreement, on behalf of ActaMed or
\nSubCorp have been duly authorized to do so by all necessary corporate action.
\nThis Agreement constitutes, and all of the ActaMed Documents to be executed
\nand delivered by ActaMed or SubCorp pursuant to this Agreement will
\nconstitute, legal, valid and binding obligations of ActaMed and SubCorp,
\nenforceable against ActaMed and SubCorp in accordance with their respective
\nterms, except as enforceability may be limited by applicable equitable
\nprinciples, or by bankruptcy, insolvency, reorganization, moratorium or
\nsimilar laws from time to time in effect affecting the enforcement of
\ncreditors’ rights generally. The execution, delivery and performance of this
\nAgreement and the other ActaMed Documents and the consummation of the
\ntransactions contemplated hereby and thereby will not (1) violate or result
\nin a breach of or Default or acceleration under the charter or bylaws of
\nActaMed or SubCorp or any material instrument or agreement to which ActaMed
\nor SubCorp is a party or is bound, (2) violate any Court Order,
\nquasi-judicial or administrative decision or award of any court, arbitrator,
\nmediator, tribunal, administrative agency or governmental body applicable to
\nor binding upon ActaMed or SubCorp or upon the securities, property or
\nbusiness of ActaMed or SubCorp, or (3) violate any Regulation of any
\nadministrative agency or governmental body relating to ActaMed or SubCorp, or
\nto the securities, property, or business of ActaMed or SubCorp.<\/p>\n
5.3 CORPORATE POWER. ActaMed and SubCorp have the requisite corporate
\npower to execute and deliver the ActaMed Documents to which either is a party.<\/p>\n
5.4 ACTAMED FINANCIAL STATEMENTS.<\/p>\n
(a) The Company has set forth as SCHEDULE 5.4(a) hereto the
\nbalance sheets of ActaMed at December 31, 1994 and December 31, 1995 and the
\nstatements of operations, statements of stockholders equity and statements of
\ncash flows of ActaMed for the years ended December 31, 1994 and December 31,
\n1995, which have been audited by Deloitte & Touche, LLP independent
\naccountants; and<\/p>\n
(b) The ActaMed Financial Statements have been prepared in accordance
\nwith GAAP applied on a consistent basis during the respective periods covered
\nthereby. The ActaMed Financial Statements are correct and complete and present
\nfairly in all material respects the financial position of ActaMed at the date of
\nthe balance sheet included therein and the results of operations and cash flows
\nof ActaMed <\/p>\n
– xxiv –<\/p>\n
for the respective periods covered by the statements of operations and cash
\nflows included therein. Except as set forth on SCHEDULE 5.4(b) hereto,
\nActaMed has no material obligations or liabilities of any nature whatsoever
\n(whether absolute, accrued, contingent or otherwise and whether due or not
\ndue) which are required to be disclosed in the ActaMed Financial Statements
\nin accordance with GAAP and which, either individually or in the aggregate,
\nwould have a Material Adverse Effect and which are not disclosed by the
\nActaMed Financial Statements.<\/p>\n
5.5 CONSENTS. No consent, approval or authorization of, or
\nqualification, designation, declaration or filing with, or notice to any
\ngovernmental authority on the part of ActaMed is required in connection with
\n(a) the valid execution and delivery of the ActaMed Documents and (b) the
\nissuance of the Preferred Shares (and the Conversion Shares, except (1) as
\nset forth on SCHEDULE 5.5, (2) the filing of the Restated Articles in the
\noffice of the Secretary of State of the State of Georgia, which filings will
\nbe accomplished on or prior to the Closing Date, (3) the filing of a Form D
\nwith the SEC and (4) the qualification (or taking such action as may be
\nnecessary to secure an exemption from qualification, if available) of the
\noffer and sale of the Preferred Shares (and the Conversion Shares) under any
\napplicable state securities laws, which qualification, if required, will be
\naccomplished in a timely manner prior to or promptly upon completion of the
\nClosing, as required by such laws.<\/p>\n
5.6 CAPITALIZATION. After giving effect to the issuance of the
\nPreferred Shares, the capital stock of ActaMed, as authorized by its Restated
\nArticles will consist of: (1) 50,000,000 shares of ActaMed Common Stock, no
\npar value per share, 9,321,250 of which are issued and outstanding,
\n10,344,828 of which will be reserved for issuance upon conversion of the
\nPreferred Shares, 8,800,880 of which will be reserved for issuance upon
\nconversion of issued and outstanding Series A Preferred Stock, 3,448,276 of
\nwhich will be reserved for issuance upon conversion of issued and outstanding
\nSeries B Preferred Stock, and 5,624,188 of which will be reserved for
\nissuance upon exercise of stock options granted or to be granted to officers,
\nkey employees, directors and consultants of ActaMed; (2) 8,800,880 shares of
\nSeries A Preferred Stock all of which are issued and outstanding, and (3)
\n3,448,276 shares of Series B Preferred Stock, all of which are issued and
\noutstanding, and 10,344,828 shares of the Preferred Shares, all of which will
\nbe issued and outstanding. As of the Closing Date none of such issued shares
\nwill be held in the treasury of ActaMed. Except as set forth above and on
\nSCHEDULE 5.6 hereto, as of the Closing Date ActaMed will not have outstanding
\nany stock or securities convertible into or exchangeable for any shares of
\nits capital stock and no person will have any right against ActaMed to
\nsubscribe for or to purchase, or any options for the purchase of, or any
\nagreements providing for the issuance of any capital stock or any stock or
\nsecurities convertible into capital stock of ActaMed. All of the outstanding
\nshares of capital stock of ActaMed are validly issued, fully paid and
\nnonassessable.<\/p>\n
5.7 VALIDITY AND RIGHTS OF THE PREFERRED SHARES. The Preferred Shares,
\nwhen issued to UHC pursuant to this Agreement, will be validly issued, fully
\npaid and nonassessable, will have the designations, preferences, limitations,
\nand relative rights set <\/p>\n
– xxv –<\/p>\n
forth in the Restated Articles and will be free and clear of all liens,
\nclaims and encumbrances. Any and all of the Conversion Shares, when
\nissuable, will be validly issued, fully paid and nonassessable.<\/p>\n
5.8 REGISTRATION RIGHTS. Except as set forth in the Registration
\nRights Agreement, as of the Closing Date ActaMed will not be under any
\nobligation to register under the Securities Act any of its then outstanding
\nsecurities or any of its securities which may thereafter be issued.<\/p>\n
5.9 OFFERING. Subject to the accuracy of representations and
\nwarranties by UHC and the Company in ARTICLE 4 hereof, the issuance of the
\nPreferred Shares (and the issuance of the Conversion Shares) constitute
\ntransactions exempt from the registration requirements of Section 5 of the
\nSecurities Act, and from the qualification requirements of any applicable
\nstate securities or “blue sky” laws.<\/p>\n
5.10 CHANGES. Since the date of the latest ActaMed Financial
\nStatements, there has not been any adverse change in the assets, liabilities,
\nfinancial condition or operations of the ActaMed Business from that reflected
\nin the ActaMed Financial Statements, other than changes in the ordinary
\ncourse of business, none of which individually or in the aggregate has had a
\nMaterial Adverse Effect, any adverse change in the prospects of the ActaMed
\nBusiness or any other event or condition (or events or conditions) of any
\ncharacter which, either individually or cumulatively, has had a Material
\nAdverse Effect.<\/p>\n
5.11 SUBSIDIARIES. Other than SubCorp, ActaMed has no Subsidiaries.
\nExcept as set forth in this Agreement, ActaMed does not own, or have the
\nright to acquire, any securities or other equity or ownership interest in any
\ncorporation, association or other business entity or person. <\/p>\n
5.12 PENDING LITIGATION, ETC. Other than as set forth in SCHEDULE 5.12
\nhereto, there are no actions at law, suits in equity or other proceedings or,
\nto the best knowledge of ActaMed, investigations in any court, tribunal or by
\nor before any other governmental or public authority or agency or any
\narbitrator or arbitration panel or any governmental or private third-party
\ninsurance agency, pending or, to the best knowledge of ActaMed, threatened
\nagainst or affecting ActaMed that:<\/p>\n
(a) either individually or in the aggregate, would have a Material
\nAdverse Effect; or<\/p>\n
(b) would question the validity or enforceability of this Agreement,
\nthe ActaMed Documents, or any of the transactions contemplated hereby and
\nthereby. ActaMed is not in default with respect to any Court Order.<\/p>\n
5.13 TITLE TO PROPERTIES. ActaMed has good and marketable title to its
\nproperties and assets and has good title to all its respective leasehold
\ninterests, in each case subject to no Lien, other than as set forth on
\nSCHEDULE 5.13 hereto. SCHEDULE 5.13 <\/p>\n
– xxvi –<\/p>\n
accurately lists with respect to the personal property owned by ActaMed (a)
\neach financing statement, deed, agreement or other instrument which has been
\nfiled, recorded or registered pursuant to any United States federal, state or
\nlocal law or regulation that names a business entity as debtor or lessee or
\nas the grantor or the transferor of the interest created thereby, and (b) as
\nto each such financing statement, deed, agreement or other instrument, the
\nnames of the debtor, lessee, grantor or transferor and the secured party,
\nlessor, grantee or transferee and the name of the jurisdiction in which such
\nfinancing statement, deed, agreement or other instrument has been filed,
\nrecorded or registered. ActaMed has not signed any agreement or instrument
\nauthorizing any secured party thereunder to file any such financing
\nstatement, deed, agreement or other instrument.<\/p>\n
5.14 INTELLECTUAL PROPERTY, ETC. ActaMed owns or possesses the rights
\nto use, free from burdensome restrictions or conflicts with the rights of
\nothers, all copyrights, trademarks, service marks, trade names, patents and
\nintellectual property licenses, and all rights with respect to the foregoing,
\nnecessary for the conduct of the ActaMed Business as now conducted and as
\nproposed to be conducted, and is in compliance in all material respects with
\nthe terms and conditions, if any, of all such copyrights, trademarks, service
\nmarks, trade names, patents and intellectual property licenses and the terms
\nand conditions of any agreements relating thereto. Except as set forth on
\nSCHEDULE 5.14, there are no outstanding options, licenses, or material
\nagreements of any kind relating to the foregoing, nor is ActaMed bound by or
\na party to any options, licenses or agreements of any kind with respect to
\nthe patents, trademarks, service marks, trade names, copyrights, trade
\nsecrets, licenses, information, proprietary rights and processes of any other
\nperson or entity. ActaMed has not received any communications alleging that
\nit has violated or, by conducting its business as proposed, would violate any
\nof the patents, trademarks, service marks, trade names, copyrights or trade
\nsecrets or other proprietary rights of any other person or entity. To
\nActaMed’s knowledge, none of its employees are obligated under any contract
\n(including licenses, covenants or commitments of any nature) or other
\nagreement, or subject to any judgment, decree or order of any court or
\nadministrative agency, that would interfere with the use of their best
\nefforts to promote the interests of ActaMed or that would conflict with
\nActaMed’s business as proposed to be conducted. Neither the execution nor
\ndelivery of this Agreement, nor the carrying on of ActaMed’s business by the
\nemployees of ActaMed, nor the conduct of ActaMed’s business as proposed,
\nwill, to ActaMed’s knowledge, conflict with or result in a breach of the
\nterms, conditions or provisions of, or constitute a default under, any
\ncontract, covenant or instrument under which any of such employees is now
\nobligated. ActaMed does not believe it is or will be necessary to utilize any
\ninventions of any of its employees (or people it currently intends to hire)
\nmade prior to their employment by ActaMed.<\/p>\n
5.15 COMPLIANCE WITH OTHER INSTRUMENTS. ActaMed is not in violation of or
\nin default in any material respect under any term of its organizational
\ndocuments, any term or provision of any mortgage, indenture, contract,
\nagreement, instrument, judgment or decree, and is not in violation in any
\nmaterial respect of any applicable order, statute, rule or regulation, and to
\nActaMed’s knowledge there is no state of facts which, with the <\/p>\n
– xxvii –<\/p>\n
passage of time or giving of notice or both, would constitute any such
\nviolation or default that would in the aggregate have a Material Adverse
\nEffect. The execution, delivery and performance of and compliance with the
\nActaMed Documents, the issuance of the Preferred Shares (and the Conversion
\nShares) and the consummation of any other transaction contemplated by the
\nActaMed Documents have not resulted and will not result in any such
\nviolation, or be in conflict with, or constitute a default under any of the
\nforegoing, or result in the creation of any Lien upon any of the properties
\nor assets of ActaMed.<\/p>\n
5.16 COMPLIANCE WITH LAW. ActaMed is in compliance with all statutes,
\nlaws and ordinances and all governmental rules and regulations to which it is
\nsubject, the violation of which, either individually or in the aggregate,
\nwould have a Material Adverse Effect. Neither the execution, delivery or
\nperformance of this Agreement or any of the other ActaMed Documents nor the
\nconsummation of the transactions contemplated by the ActaMed Documents will
\ncause ActaMed to be in violation of any law or ordinance, or any order, rule
\nor regulation, of any federal, state, municipal or other governmental or
\npublic authority or agency.<\/p>\n
5.17 EMPLOYEES. To the best knowledge of ActaMed, no employee of
\nActaMed is in violation of any term of any employment contract, patent
\ndisclosure agreement or any other contract or agreement relating to the
\nintellectual property of ActaMed or the relationship of any such employee
\nwith such entity or any other party.<\/p>\n
5.18 BENEFIT PLANS. Except as provided in this Agreement, applicable
\nlaw and the terms of any Benefit Plan sponsored, maintained or contributed to
\nby UHC or its Affiliates, neither UHC nor its Affiliates shall have any
\nliability or obligation with respect to (i) employment related liabilities,
\nwhether contingent or otherwise, arising out of any Hired Employee’s or Hired
\nHold-Over Employee’s employment with the Company, ActaMed or ActaMed’s
\nAffiliates or (ii) any Benefit Plan sponsored, maintained or contributed to
\nby ActaMed or its Affiliates.<\/p>\n
5.19 COMPLIANCE WITH ENVIRONMENTAL LAWS. (a) ActaMed is, and will
\ncontinue to be, in compliance with all applicable federal, state and local
\nenvironmental laws, regulations and ordinances governing the ActaMed Business
\nwith respect to all discharges into the ground and surface water, emissions
\ninto the ambient air and generation, accumulation, storage, treatment,
\nrecycling, transportation, labeling or disposal of waste materials or process
\nby-products, except violations which, either individually or in the
\naggregate, would not have a Material Adverse Effect. ActaMed is not liable
\nfor any material penalties, fines or forfeitures for failure to comply with
\nany of the foregoing. All licenses, permits or registrations required for
\nthe ActaMed Business as presently conducted and proposed to be conducted,
\nunder any federal, state, or local environmental laws, regulations or
\nordinances have been or will, in a timely manner, be obtained or made, other
\nthan such licenses, permits or registrations as to which the failure to
\nobtain or make, either individually or in the aggregate, will not have a
\nMaterial Adverse Effect, and ActaMed is in compliance therewith in all
\nmaterial respects.<\/p>\n
– xxviii –<\/p>\n
(b) No release, emission or discharge into the environment of
\nhazardous substances, as defined under the Comprehensive Environmental
\nResponse, Compensation, and Liability Act, as amended, or hazardous waste, as
\ndefined under the Resource Conservation and Recovery Act, or air pollutants
\nas defined under the Clean Air Act, or pollutants, as defined under the Clean
\nWater Act, by ActaMed has occurred or is presently occurring on or from any
\nproperty owned or leased by ActaMed in excess of federal, state or local
\npermitted releases or reportable quantities, or other concentrations,
\nstandards or limitations under the foregoing laws or any state or local law
\ngoverning the protection of health and the environment or under any other
\nfederal, state or local laws or regulations (then or now applicable, as the
\ncase may be) other than such releases, emissions or discharges, either
\nindividually or in the aggregate, would not have a Material Adverse Effect.<\/p>\n
(c) To its knowledge, ActaMed has never (1) owned, occupied or
\noperated a site or structure on or in which any hazardous substance was or is
\nstored, transported or disposed of in violation of any federal, state or
\nlocal environmental laws, regulations or ordinances at such time as such site
\nor structure was owned, occupied or operated by ActaMed or at any other time,
\nor (2) transported or arranged for the transportation of any hazardous
\nsubstance other than in full compliance with all applicable federal, state
\nand local environmental laws, regulations and ordinances governing the
\nActaMed Business or the storage, transportation or disposal of hazardous
\nsubstances except for such violations as, either individually or in the
\naggregate, would not have a Material Adverse Effect. ActaMed has never
\ncaused or been held legally responsible for any release or threatened release
\nof any hazardous substance, or received notification from any federal, state
\nor other governmental authority of any such release or threatened release, or
\nthat ActaMed may be required to pay any costs or expenses incurred or to be
\nincurred in connection with any efforts to mitigate the environmental impact
\nof any release or threatened release, of any hazardous substance from any
\nsite or structure owned, occupied or operated by ActaMed, except such
\nreleases or threatened releases as, either individually or in the aggregate,
\nwould not have a Material Adverse Effect.<\/p>\n
5.20 INSURANCE. The ActaMed Business has fire, casualty, liability, and
\nbusiness interruption insurance policies with recognized insurers, in such
\namounts and with such coverage as set forth on SCHEDULE 5.20.<\/p>\n
5.21 MATERIAL CONTRACTS AND AGREEMENTS. SCHEDULE 5.21 lists the
\nparties to, and subject matter of, all material Contracts of the ActaMed
\nBusiness, including without limitation, all employment or labor contracts,
\nleases or compensation plans. Except as set forth on SCHEDULE 5.21, all
\nmaterial Contracts set forth on such list are valid, binding, and in full
\nforce and effect, without any breach by ActaMed or, to the best of ActaMed’s
\nknowledge, any other party thereto.<\/p>\n
– xxix –<\/p>\n
5.22 TAXES. Except as set forth on SCHEDULE 5.22, all federal, state
\nand other tax returns of ActaMed required by law to be filed have been duly
\nfiled, except for such returns the failure of which to file would not have a
\nMaterial Adverse Effect, and all federal, state and other taxes, assessments,
\nfees and other federal governmental charges upon ActaMed or any of the
\nproperties, incomes or assets of ActaMed that are due and payable have been
\npaid. No extensions of the time for the assessment of deficiencies have been
\ngranted to ActaMed in connection with any federal tax, assessment, fee or
\nother federal governmental charge. There are no Liens, on any properties or
\nassets of the ActaMed Business imposed or arising as a result of the
\ndelinquent payment or the non-payment of any tax, assessment, fee or other
\ngovernmental charge that, either individually or in the aggregate, would have
\na Material Adverse Effect. ActaMed:<\/p>\n
(a) has not assumed and is not liable for any federal, state or
\nother income tax liability of any other person, including any predecessor
\ncorporation, as a result of any purchase of assets or other business
\nacquisition transaction; and<\/p>\n
(b) has not indemnified any other person or otherwise agreed to
\npay on behalf of any other person tax liability growing out of or which may
\nbe asserted on the basis of any tax treatment adopted with respect to all or
\nany aspect of such a business acquisition transaction.<\/p>\n
The charges, accruals and reserves, if any, on the books of ActaMed in
\nrespect of federal, state and local corporate franchise and income taxes for
\nall fiscal periods to date are adequate in accordance with GAAP, and ActaMed
\nknows of no additional unpaid assessments for such periods or other
\ngovernmental charges payable by ActaMed in connection with the execution and
\ndelivery of this Agreement, the ActaMed Documents or the issuance of the
\nPreferred Shares by ActaMed, other than stock transfer taxes, recording fees
\nand filing fees in connection with state securities or “blue sky” filings.<\/p>\n
5.23 INVESTMENT COMPANY. ActaMed is not an “investment company”, or an
\n“affiliated person” of an “investment company”, or a company “controlled” by
\nan “investment company” as such terms are defined in the Investment Company
\nAct of 1940, as amended, and ActaMed is not an “investment adviser” or an
\n“affiliated person” of an “investment adviser” as such terms are defined in
\nthe Investment Advisers Act of 1940, as amended.<\/p>\n
5.24 LABOR RELATIONS. ActaMed is not engaged in any unfair labor
\npractices which, either individually or in the aggregate, would have a
\nMaterial Adverse Effect. Except as set forth on SCHEDULE 5.24, there is:<\/p>\n
(a) no unfair labor practice complaint pending or, to the best of
\nActaMed’s knowledge, threatened against ActaMed before the National Labor
\nRelations Board or any court or labor board, and no grievance or arbitration
\nproceedings arising out of or under collective bargaining agreements is so
\npending or, to the best of ActaMed’s knowledge, threatened,<\/p>\n
– xxx –<\/p>\n
(b) no strike, lock-out, labor dispute, slowdown or work stoppage
\npending or, to the best of ActaMed’s knowledge, threatened against ActaMed, and<\/p>\n
(c) no union representation or certification question existing or
\npending with respect to the employees of ActaMed, and, to the best knowledge
\nof ActaMed, no union organization activity taking place, other than such
\nactions or proceedings as, either individually or in the aggregate, would not
\nhave a Material Adverse Effect.<\/p>\n
5.25 NO CONFLICT OF INTEREST. Except as set forth in SCHEDULE 5.25,
\nActaMed is not indebted, directly or indirectly, to any Substantial Holder,
\nor, to ActaMed’s knowledge, to any Affiliate of a Substantial Holder, in any
\namount whatsoever. To the best knowledge of ActaMed, and except as set forth
\non SCHEDULE 5.25, no Substantial Holders, or any of their Affiliates, are
\nindebted to any firm or corporation with which ActaMed is affiliated or with
\nwhich ActaMed has a business relationship, or any firm or corporation which
\ncompetes with ActaMed. Except as contemplated by the ActaMed Documents, no
\nSubstantial Holder, or, to ActaMed’s knowledge, any Affiliate of a
\nSubstantial Holder, is directly or indirectly interested in any contract with
\nActaMed or any of its Subsidiaries.<\/p>\n
5.26 BROKERS OR FINDERS. No broker, agent, finder or consultant or
\nother person has been retained by or on behalf of ActaMed or SubCorp (other
\nthan legal or accounting advisors), or is may be entitled to be paid based
\nupon any agreements or understandings made by ActaMed or SubCorp in
\nconnection with the transactions contemplated hereby.<\/p>\n
5.27 FULL DISCLOSURE. This Agreement, the other ActaMed Documents, and
\nany report or financial statement referred to in SECTION 5.4 hereof and any
\ncertificate, report, statement or other writing furnished to UHC or the
\nCompany by or on behalf of ActaMed in connection with the negotiation of this
\nAgreement and the other ActaMed Documents and the sale of the Preferred
\nShares, taken as a whole, do not contain any untrue statement of a material
\nfact or omit to state a material fact with respect to which disclosure has
\nbeen requested and which is necessary to make the statements contained herein
\nor therein not misleading.<\/p>\n
ARTICLE 6
\n RELATED AGREEMENTS OF THE PARTIES<\/p>\n
6.1 CONDUCT OF BUSINESS. Prior to the Closing Date, except with the
\nprior written consent of ActaMed and SubCorp and except as necessary to
\neffect the transactions contemplated in this Agreement, the Company shall and
\nUHC shall cause the Company to:<\/p>\n
– xxxi –<\/p>\n
(a) conduct the Company Business in substantially the same manner
\nas presently being conducted, and refrain from entering into any transaction
\nor Contract other than in the ordinary course of business, and not make any
\nchange in its methods of management, marketing, or operations other than in
\nthe ordinary course of business;<\/p>\n
(b) consult with ActaMed and SubCorp prior to undertaking any new
\nbusiness opportunity not in the ordinary course of business and not undertake
\nsuch new business opportunity without the prior written consent of ActaMed
\nand SubCorp, which consent will not be unreasonably withheld;<\/p>\n
(c) confer on a regular and reasonable basis with one or more
\ndesignated representatives of ActaMed and SubCorp to report material
\noperational matters and to report the general status of ongoing operations;<\/p>\n
(d) notify ActaMed and SubCorp of any change in the normal course
\nof the Company Business or in the operation of its properties, and of any
\ngovernmental complaints, investigations or hearings (or communications
\nindicating that the same may be contemplated), adjudicatory proceedings,
\nbudget meetings or submissions involving any material property of the
\nCompany, and keep ActaMed and SubCorp fully informed of such events and
\npermit its representatives prompt access to all materials prepared in
\nconnection therewith; and<\/p>\n
(e) not take any action, or omit to take any action, which would
\ncause the representations and warranties contained in ARTICLE 4 hereof,
\nincluding but not limited to the representations and warranties in SECTION
\n4.9 of this Agreement, to be untrue or incorrect at any time through and
\nincluding the Closing Date.<\/p>\n
6.2 ACCESS TO PROPERTIES. At all times prior to the Closing Date,
\nemployees, attorneys, accountants, agents and other authorized and designated
\nrepresentatives of ActaMed and SubCorp will be allowed reasonable access to
\nthe properties, books and records of the Company and other members of the UHC
\nGroup relating to the Company Business, including without limitation, deeds,
\ntitle documents, leases, customer lists, insurance policies, minute books,
\nshare certificate books, share registers, accounts, Tax returns, financial
\nstatements and all other data that, in the reasonable opinion of ActaMed and
\nSubCorp, are required for ActaMed and SubCorp to make such investigation as
\nthey may desire of the Hired Employees and the properties and business of the
\nCompany and the Company Business. ActaMed and SubCorp shall also be allowed
\nreasonable access to consult with the officers, employees, accountants,
\ncounsel and agents of the members of the UHC Group in connection with such
\ninvestigation. No investigation by ActaMed and SubCorp shall diminish or
\notherwise affect any of the representations, warranties, covenants or
\nagreements of the Company or UHC under this Agreement.<\/p>\n
6.3 RELATIONSHIP WITH EMPLOYEES AND CUSTOMERS. At all times prior to
\nthe Closing Date, UHC shall cause each member of the UHC Group to use its
\nbest efforts (without making any commitments other than in the ordinary
\ncourse of business), to <\/p>\n
– xxxii –<\/p>\n
(a) preserve the Company Business organization intact, (b) keep the Hired
\nEmployees available to the Company Business, (c) preserve the present
\nrelationships of the Company Business with its suppliers and customers and
\nothers having business relationships, and (d) take all steps reasonably
\nnecessary to maintain the intangible assets and Intellectual Property of the
\nCompany. Prior to the Closing and for two (2) years thereafter, no member of
\nthe UHC Group shall, directly or indirectly, on its own behalf or on behalf
\nof others, solicit, divert or take away, or attempt to solicit, divert or
\ntake away, any of the Hired Employees. <\/p>\n
6.4 HIRED EMPLOYEES. Immediately after the Closing, the Company will
\noffer employment (to commence on the Closing Date) to all of the Hired
\nEmployees; provided, however, that, if any Hold-Over Employee presents a
\nmedical release from his or her attending physician which allows such
\nemployee to return to work within nine months after the beginning of his or
\nher leave of absence, then the Company will offer employment (to commence
\nimmediately) to such Hold-Over Employee on the day he or she returns to work
\n(“HIRED HOLD-OVER EMPLOYEE”), and if any Hold-Over Employee does not have a
\nmedical release to return to work within such nine-month period, then the
\nCompany will not be obligated to offer employment to him or her. UHC shall
\ncause each member of the UHC Group to terminate the employment of each of the
\nHired Employees effective as of the Closing Date; provided, however, that no
\nmember of the UHC Group shall terminate the employment of any Hired Hold-Over
\nEmployee until such employee presents a medical release from his or her
\nattending physician and will continue to provide each Hired Hold-Over
\nEmployee with benefits in accordance with UHC’s standard policies and
\nprocedures until the earlier of (a) the day such employee has a medical
\nrelease to return to work, or (b) nine (9) months after the beginning of such
\nemployee’s leave of absence. <\/p>\n
6.5 EMPLOYEE BENEFITS. <\/p>\n
(a) The Company has never been a participating employer in any
\nBenefit Plan sponsored, maintained or contributed to by UHC or its
\nAffiliates. Except as provided in SECTION 6.5(B) below, no portion of the
\nassets of any Benefit Plan heretofore sponsored or maintained by any member
\nof the UHC Group for the Hired Employees or Hired Hold-Over Employees (and no
\namount attributable to any such Benefit Plan) shall be transferred to the
\nCompany, and the Company shall not be required to sponsor or maintain any
\nsuch Benefit Plan after the Closing Date. The amounts payable to the Hired
\nEmployees or Hired Hold-Over Employees on account of all benefit arrangements
\n(including, but not limited to, all accrued, but unpaid, sick leave but
\nexcluding the UHC 401(k) Plan) shall be either maintained in such Benefit
\nPlan or paid to the Hired Employees and Hired Hold-Over Employees, in each
\ncase in accordance with the applicable Benefit Plan documents, except that
\nsuch amounts shall be determined with reference to the date of the event by
\nreason of which such amounts become payable, without regard to conditions
\nsubsequent.<\/p>\n
– xxxiii –<\/p>\n
(b) Certain Hired Employees and Hired Hold-Over Employees will
\nhave account balances under the UHC 401(k) Plan as of the Closing Date. UHC
\nwarrants that the UHC 401(k) Plan that will make the transfer described below
\nis “qualified” within the meaning of Section 401(k) of the Internal Revenue
\nCode, has received a favorable determination letter from the Internal Revenue
\nService dated August, 1995 and no event has occurred and no condition exists
\nthat could reasonably be expected to result in the revocation of any such
\ndetermination letter. The vested and nonvested account balances under the
\nUHC 401(k) Plan for those Hired Employees and Hired Hold-Over Employees will
\nbe transferred to the ActaMed 401(k) Plan as soon as administratively
\nfeasible after the Closing Date but (i) for Hired Employees, no later than 60
\ndays after the second “valuation date” (as defined in the UHC 401(k) Plan)
\nfollowing the Closing Date and (ii) for Hired Hold-Over Employees, no later
\nthan 60 days after the second “valuation date” following the Hired Hold-Over
\nEmployee’s initial hire date with the Company. The account balances to be
\ntransferred will include cash and any outstanding participant loans. The
\namount transferred will be calculated in accordance with normally accepted
\npractices by record keepers and ERISA trustees. ActaMed warrants that the
\nActaMed 401(k) Plan that will receive the transfer is “qualified” within the
\nmeaning of Section 401(k) of the Internal Revenue Code, has adopted a
\nstandardized prototype plan (as defined in Section 3.08 of Rev. Proc. 89-9,
\n1989-1 CB 780) with an IRS opinion letter dated November 8, 1993 and no event
\nhas occurred and no condition exists that could reasonably be expected to
\nresult in the ActaMed 401(k) Plan losing its status as a qualified,
\nstandardized prototype plan. The ActaMed 401(k) Plan will be amended to
\naddress the transfer of accounts from the UHC 401(k) Plan including the
\npreservation of all Section 411(d)(6) optional forms of benefits available to
\nthe Hired Employees or Hired Hold-Over Employees under the UHC 401(k) Plan,
\ndistribution rules under Section 401(k) of the Internal Revenue Code, past
\nservice credit and participation in the ActaMed 401(k) Plan by such Hired
\nEmployees and Hired Hold-Over Employees. United HealthCare Corporation will
\nassume no liability for the payment of account balances that are transferred
\nfollowing the date of transfer and ActaMed will assume no liability for the
\npayment of account balances that are not transferred. However, as provided
\nin SECTION 5.18 of this Agreement, ActaMed and its Affiliates shall continue
\nto be liable to UHC and its Affiliates for any other loss suffered by UHC and
\nits Affiliates arising out of the ActaMed 401(k) Plan. Similarly, as
\nprovided in SECTION 4.23 of this Agreement, UHC and its Affiliates shall
\ncontinue to be liable to ActaMed and its Affiliates for any other loss
\nsuffered by ActaMed and its Affiliates arising out of the UHC 401(k) Plan.<\/p>\n
(c) The Company, ActaMed and ActaMed’s Affiliates shall not be
\nliable for any claim for insurance, reimbursement or other benefits payable
\nby reason of any event which occurs prior to the Closing Date.
\nNotwithstanding the foregoing, prior employment of Hired Employees by the UHC
\nGroup shall be counted for purposes of eligibility for a medical and dental
\nplan which shall be provided by ActaMed to such Hired Employees without any
\nlimitations based upon pre-existing conditions effective (i) for Hired
\nEmployees and their dependents, as of the first day of the month following
\nthe Closing Date and (ii) for Hired Hold-Over Employees and their dependents,
\nas of the
\n – xxxiv –<\/p>\n
later of the Hired Hold-Over Employee’s initial date of employment with the
\nCompany or the first day of the month following the Closing Date.<\/p>\n
6.6 OTHER OFFERS AND EXCLUSIVE DEALING. Unless and until this
\nAgreement is terminated prior to Closing pursuant to ARTICLE 10, UHC shall
\nnot, acting in any capacity, directly or indirectly, through any officer,
\ndirector, employee, agent or otherwise of the UHC or any member of the UHC
\nGroup, (a) solicit, initiate or encourage submission of proposals or offers
\nfrom any person, corporation or other entity relating to any purchase of the
\nShares, or any merger, sale of substantial assets or similar transaction
\ninvolving the Company or the Company Business, (b) participate in any
\ndiscussions or negotiations regarding, or, except as required by a legal or
\njudicial process, furnish to any other person, corporation or other entity
\nany information with respect to, or otherwise cooperate in any way with, or
\nassist or participate in, facilitate or encourage, any effort or attempt by
\nany other person, corporation or other entity to purchase the Shares, or
\nengage in a merger, purchase of substantial assets or similar transaction
\ninvolving the Company or the Company Business, or (c) approve or undertake
\nany such transaction. UHC shall promptly communicate to ActaMed and SubCorp
\nthe terms of any such proposal or offer upon knowledge or receipt of such
\nproposal or offer.<\/p>\n
6.7 CERTAIN TAX MATTERS. UHC shall cause all Tax returns of the
\nCompany required to be filed on or before the Closing Date, taking into
\naccount any extensions of the filing deadlines granted to the Company that
\nhad not yet been filed prior to the date hereof (including those relating to
\nperiods after the Closing Date), to be prepared by the Company but not to be
\nfiled without prior examination by or on behalf of ActaMed and SubCorp.<\/p>\n
6.8 CONSENTS AND APPROVALS. The Company and UHC agree to use their
\nbest efforts to obtain the waiver, consent and approval of all persons whose
\nwaiver, consent or approval (a) is required in order to consummate the
\ntransactions contemplated by this Agreement, or (b) is required by any
\nContract, Court Order or License to which the Company or UHC is a party or
\nsubject on the Closing Date, and (1) which would prohibit, or require the
\nwaiver, consent or approval of such transactions, or (2) under which such
\ntransactions would, without such waiver, consent or approval, constitute a
\nDefault under the provisions thereof, result in the acceleration of any
\nobligation thereunder, or give rise to a right of any party thereto to
\nterminate its obligations thereunder. All written waivers, consents and
\napprovals obtained by UHC and the Company shall be produced at the Closing in
\nform and content reasonably satisfactory to ActaMed and SubCorp.<\/p>\n
6.9 QUALIFICATION AND CORPORATE EXISTENCE. The Company shall deliver to
\nActaMed and SubCorp (a) a certificate of the Secretary of State of the State of
\nNevada, dated as of a date no more than ten (10) business days prior to the
\nClosing Date, stating that the Company is a corporation in good standing under
\nthe laws of such state and has paid all applicable franchise or other fees and
\ntaxes due to such state and (b) certificates of the appropriate officials of the
\nState of Minnesota, all dated as of a date no more than <\/p>\n
– xxxv –<\/p>\n
ten (10) business days prior to the Closing Date, stating that the Company is
\nduly qualified and in good standing to transact business as a foreign
\ncorporation as stated in SECTION 4.3 of this Agreement in such state and has
\npaid all applicable franchise or other fees and taxes due to each such state.<\/p>\n
6.10 PUBLIC ANNOUNCEMENTS. Each party hereto agrees that neither it,
\nnor or any of its representatives, shall make any public announcement with
\nrespect to this Agreement or the transactions contemplated hereby without the
\nprior consent of the other parties hereto unless required by law or judicial
\nprocess, in which case notification shall be given to the other parties
\nhereto prior to such disclosure.<\/p>\n
6.11 CONFIDENTIALITY.<\/p>\n
(a) Each party hereto agrees not to use, copy or disclose the
\ntrade secrets of any other party, except as permitted by this Agreement.
\nEach party shall treat any other’s trade secrets with at least that degree of
\ncare it uses with respect to its own such trade secrets. Each party will
\ngive access to any other party’s trade secrets only to such of its personnel
\nas have a need to such access and to no other person whatsoever. The
\nrequirements herein contained with respect to non-disclosure and non-use and
\nprotection of each party’s trade secrets shall permanently survive
\ntermination of any other provisions of this Agreement. If any party is
\nordered by a court, administrative agency, or other governmental body of
\ncompetent jurisdiction to disclose trade secrets, or if it is served with or
\notherwise becomes aware of a motion or similar request that such an order be
\nissued, then such party will not be liable to the other party for disclosure
\nof trade secrets required by such order if the disclosing party complies with
\nthe following requirements: (1) if an already issued order calls for
\nimmediate disclosure, then the disclosing party shall immediately move for or
\notherwise request a stay of such order to permit the other party to respond;
\n(2) the disclosing party promptly notifies the other party of the motion or
\norder; and (3) the disclosing party not oppose a motion or similar request by
\nthe other party for an order protecting the trade secrets including joining
\nor agreeing to (or non-opposition to) a motion for leave to intervene by such
\nother party.<\/p>\n
(b) The term “TRADE SECRETS” means information related to a party
\n(1) which derives economic value, actual or potential, from not being
\ngenerally known to or readily ascertainable by other persons who can obtain
\neconomic value from its disclosure or use, and (2) which is the subject of
\nefforts by said party that are reasonable under the circumstances to maintain
\nits secrecy.<\/p>\n
6.12 COVENANT NOT TO COMPETE. UHC hereby acknowledges and agrees that
\nthe exclusivity and noncompetition provisions of the Services and License
\nAgreement are an important and substantial part of the consideration to
\nActaMed for the consummation of the transactions contemplated hereby, and the
\nparties hereby incorporate by reference those provisions of the Services and
\nLicense Agreement.<\/p>\n
– xxxvi –<\/p>\n
6.13 CLOSING CONDITIONS. ActaMed, SubCorp, the Company and UHC each
\nagree to use its best efforts to satisfy the closing conditions set forth in
\nARTICLES 1, 7 and 8 of this Agreement.<\/p>\n
6.14 EXPENSES. Except as otherwise provided herein and except that UHC
\nshall pay all of the expenses of the Company (including, but not limited to,
\nthe audit by Deloitte & Touche, LLP of the books and records of the Company
\nand the Company Business), the parties to this Agreement shall each bear its
\nrespective expenses incurred in connection with the preparation, execution
\nand performance of this Agreement and the transactions contemplated hereby,
\nincluding, without limitation, all fees and expenses of agents,
\nrepresentatives, counsel and accountants.<\/p>\n
6.15 REPAYMENT OF DEBTS TO COMPANY. On or before the Closing Date, all
\nloans and advances from the Company to any member of the UHC Group, whether
\nor not disclosed in SCHEDULE 4.27, shall be repaid to the Company in full and
\nthe Company shall have delivered to ActaMed and SubCorp appropriate
\ninstruments or writings to evidence the receipt of such repayments, and all
\nguaranties by the Company of loans obtained by any member of the UHC Group,
\nfrom third parties shall have been released. <\/p>\n
6.16 COMPLIANCE WITH REGULATION D. ActaMed shall file five copies of a
\nnotice on SEC Form D no later than fifteen (15) days after the execution of
\nthis Agreement.<\/p>\n
6.17 VOTING FOR MERGER. UHC agrees to vote for and approve the Merger
\nand the transactions contemplated by this Agreement and waives its
\ndissenter’s rights under the General Corporation Law of the State of Nevada.<\/p>\n
6.18 ANTITRUST NOTIFICATION. Each of the parties will promptly file
\nwith the United States Federal Trade Commission and the United States
\nDepartment of Justice the notification and report form required for the
\ntransactions contemplated hereby and any supplemental or additional
\ninformation which may reasonably be requested in connection therewith
\npursuant to the HSR Act and will comply in all material respects with the
\nrequirements of the HSR Act. UHC and ActaMed shall each pay fifty percent
\n(50%) of the applicable filing fees.<\/p>\n
6.19 REVIEW OF REGISTRATION STATEMENT. ActaMed shall give UHC the
\nopportunity to review and comment upon those portions of any Registration
\nStatement or amendment thereto prepared by ActaMed in connection with a
\nproposed initial public offering which describe UHC and ActaMed’s
\nrelationship therewith, prior to filing such Registration Statement or
\namendment thereto with the Securities and Exchange Commission, and shall
\ncooperate with UHC and use its reasonable efforts to accommodate the
\nreasonable comments of UHC. <\/p>\n
6.20 ESCROW OF SOFTWARE. On the Closing Date, the Company shall deliver
\nto one copy of the Software to Fort Knox (the “ESCROW AGENT”), which copy shall
\nserve as a <\/p>\n
– xxxvii –<\/p>\n
prototype of the Software delivered to ActaMed on the Closing Date and which
\ncopy shall be made available to UHC for the defense of any claims by ActaMed
\nor others regarding the functionality and performance of the Software.<\/p>\n
ARTICLE 7
\n CONDITIONS PRECEDENT TO OBLIGATIONS OF ACTAMED AND SUBCORP<\/p>\n
The obligations of ActaMed and SubCorp to consummate the transactions
\ncontemplated by this Agreement shall be subject to the satisfaction, on or
\nbefore the Closing Date, of each and every one of the following conditions,
\nall or any of which may be waived, in whole or in part, by ActaMed and
\nSubCorp for purposes of consummating such transactions, but without prejudice
\nto any other right or remedy which ActaMed and SubCorp may have hereunder as
\na result of any misrepresentation by, or breach of any agreement, covenant or
\nwarranty of, UHC or the Company contained in this Agreement or any schedule,
\ncertificate or instrument furnished or caused to be furnished by UHC or the
\nCompany hereunder.<\/p>\n
7.1 REPRESENTATIONS TRUE AND COVENANTS PERFORMED AT CLOSING. The
\nrepresentations and warranties made by UHC or the Company in the UHC
\nDocuments shall be true and correct in all material respects as of the
\nClosing Date, with the same force and effect as if such representations and
\nwarranties had been made on and as of the Closing Date.<\/p>\n
7.2 COVENANTS. All of the terms, covenants and conditions in the UHC
\nDocuments to be complied with or performed by UHC or the Company on or prior
\nto the Closing shall have been complied with and performed in all material
\nrespects.<\/p>\n
7.3 NO INJUNCTION, ETC. No action, proceeding, investigation,
\nRegulation or legislation shall have been instituted, threatened or proposed
\nbefore any court, governmental agency or legislative body to enjoin,
\nrestrain, prohibit, or obtain substantial damages in respect of, or which is
\nrelated to, or arises out of, this Agreement or the consummation of the
\ntransactions contemplated hereby, or which is related to or arises out of the
\nCompany Business, if such action, proceeding, investigation, regulation or
\nlegislation, in the reasonable judgment of ActaMed and SubCorp, would make it
\ninadvisable to consummate such transactions.<\/p>\n
7.4 APPROVAL OF LEGAL MATTERS. All actions, proceedings, instruments
\nand documents deemed necessary or appropriate by ActaMed and SubCorp or their
\ncounsel to effectuate this Agreement and the consummation of the transactions
\ncontemplated hereby, or incidental thereto, and all other related legal
\nmatters, shall have been approved by such counsel.<\/p>\n
– xxxviii –<\/p>\n
7.5 GOVERNMENTAL APPROVALS. All governmental and other consents and
\napprovals, if any, necessary to permit the consummation of the transactions
\ncontemplated by this Agreement shall have been received by ActaMed and SubCorp.<\/p>\n
7.6 NO MATERIAL ADVERSE CHANGE. There shall not have been any material
\nadverse change in the financial condition, operating results or assets of the
\nCompany or EDI between the date of the EDI Financial Statements and the Closing
\nDate, and UHC shall have delivered to ActaMed a certificate dated as of the
\nClosing Date certifying to such effect.<\/p>\n
ARTICLE 8
\n CONDITIONS PRECEDENT TO
\n THE OBLIGATIONS OF UHC AND THE COMPANY<\/p>\n
The obligations of UHC and the Company to consummate the transactions
\ncontemplated by this Agreement shall be subject to the satisfaction, on or
\nbefore the Closing Date, of each and every one of the following conditions,
\nall or any of which may be waived, in whole or in part, by UHC and the
\nCompany for purposes of consummating such transactions, but without prejudice
\nto any other right or remedy which they may have hereunder as a result of any
\nmisrepresentation by, or breach of any agreement, covenant or warranty of
\nActaMed or SubCorp contained in this Agreement, or any certificate or
\ninstrument furnished by it hereunder.<\/p>\n
8.1 REPRESENTATIONS TRUE AND COVENANTS PERFORMED AT CLOSING. The
\nrepresentations and warranties made by ActaMed or SubCorp in the ActaMed
\nDocuments shall be true and correct in all material respects as of the Closing
\nDate, with the same force and effect as if such representations and warranties
\nhad been made on and as of the Closing Date. <\/p>\n
8.2 COVENANTS. All of the terms, covenants and conditions in the ActaMed
\nDocuments to be complied with or performed by ActaMed or SubCorp on or prior to
\nthe Closing shall have been complied with and performed in all material
\nrespects.<\/p>\n
8.3 NO INJUNCTION, ETC. No action, proceeding, investigation, Regulation
\nor legislation shall have been instituted, threatened or proposed before any
\ncourt, governmental agency or legislative body to enjoin, restrain, prohibit, or
\nobtain substantial damages in respect of, or which is related to, or arises out
\nof, this Agreement or the consummation of the transactions contemplated hereby,
\nor which is related to or arises out of the business of ActaMed or SubCorp, if
\nsuch action, proceeding, investigation, Regulation or legislation, in the
\nreasonable judgment of UHC, would make it inadvisable to consummate such
\ntransactions.<\/p>\n
8.4 APPROVAL OF LEGAL MATTERS. All actions, proceedings, instruments and
\ndocuments deemed necessary or appropriate by UHC or their counsel to effectuate
\nthis <\/p>\n
-xxxix-<\/p>\n
Agreement and the consummation of the transactions contemplated hereby, or
\nincidental hereto, and all other related legal matters, shall have been approved
\nby such counsel.<\/p>\n
8.5 GOVERNMENTAL APPROVALS. All governmental and other consents and
\napprovals, if any, necessary to permit the consummation of the transactions
\ncontemplated by this Agreement shall have been received by UHC and the Company.<\/p>\n
8.6 NO MATERIAL ADVERSE CHANGE. There shall not have been any material
\nadverse change in the financial condition, operating results or assets of
\nActaMed between the date of the ActaMed Financial Statements and the Closing
\nDate, and ActaMed shall have delivered to UHC a certificate dated as of the
\nClosing Date certifying to such effect.<\/p>\n
ARTICLE 9
\n SURVIVAL OF REPRESENTATIONS AND
\n WARRANTIES AND INDEMNIFICATION<\/p>\n
9.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF UHC AND THE COMPANY.
\nActaMed, SubCorp, UHC and the Company acknowledge and agree that, as
\ncontemplated by SECTION 6.2, prior to the Closing Date, ActaMed and SubCorp
\nintend to perform such investigation of the Company as they may deem
\nappropriate; provided, however, no investigation by ActaMed and SubCorp shall
\ndiminish or otherwise affect any of the representations, warranties, covenants
\nor agreements made or to be performed by UHC or the Company pursuant to this
\nAgreement or ActaMed’s and SubCorp’s right to rely fully upon such
\nrepresentations, warranties, covenants and agreements. All such
\nrepresentations, warranties, covenants and agreements made or to be performed by
\nUHC or the Company pursuant to this Agreement shall survive the execution and
\ndelivery hereof and the Closing hereunder. The representations and warranties
\nshall thereafter terminate and expire (a) with respect to any General Claim with
\nrespect to which a Claims Notice has not been given, on the later of (i)
\neighteen months after the Closing Date or (ii) the first anniversary of the date
\non which such covenant is to be performed hereunder; and (b) with respect to any
\nTax Claim, on the later of (i) the ninetieth (90th) day after the date upon
\nwhich the Liability to which any such Tax Claim may relate is barred by all
\napplicable statutes of limitation and (ii) the ninetieth (90th) day after the
\ndate upon which any claim for refund or credit related to such Tax Claim is
\nbarred by all applicable statutes of limitation. With respect to any Ownership
\nClaim, Undisclosed Liability Claim or any type of claim not specifically
\naddressed above, such representations, warranties, covenants and agreements
\nshall survive without limit of time. <\/p>\n
9.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF ACTAMED AND SUBCORP.
\nExcept for the covenants and agreements contained in ARTICLES 12 and 13, which
\nshall survive termination of this Agreement in accordance with their respective
\nterms, all the representations, warranties, covenants and agreements, made or to
\nbe performed by ActaMed and SubCorp pursuant to this Agreement shall be
\nconsidered to have been relied upon by UHC and shall survive the delivery to UHC
\nof the Preferred <\/p>\n
-xl-<\/p>\n
Shares (and the Conversion Shares) and shall terminate and expire, with
\nrespect to any Claim for which a Claims Notice has not been given, on the
\nfirst anniversary of the Closing Date.<\/p>\n
9.3 OBLIGATION OF UHC TO INDEMNIFY. Subject to the limitations of
\nSECTIONS 9.1 and 9.8, UHC agrees to indemnify and hold harmless each ActaMed
\nIndemnitee against and in respect of:<\/p>\n
(a) all Losses, asserted against, imposed upon or incurred by any
\nActaMed Indemnitee by reason of or resulting from:<\/p>\n
(1) a breach of any representation or warranty of UHC or the
\nCompany contained in or made pursuant to this Agreement; or <\/p>\n
(2) any nonfulfillment of any covenant or agreement of UHC or
\nthe Company contained in or made pursuant to this Agreement;<\/p>\n
(b) any and all actions, suits, claims, proceedings, investigations,
\ndemands, assessments, audits, fines, judgments, costs and other expenses
\n(including, without limitation, reasonable legal fees and expenses) incident to
\nany Loss in connection with SECTION 9.3(a) or to the enforcement of this SECTION
\n9.3; <\/p>\n
(c) all Losses asserted against, imposed upon or incurred by any
\nActaMed Indemnitee by reason or resulting from:<\/p>\n
(1) any and all costs, judgments, claims, actions at law or in
\nequity, interest charges and reasonable attorneys’ fees with respect to any
\ncause of action or proceeding, by any participant or dependent or beneficiary of
\nany participant, arising out of or by reason of the sponsorship by any member of
\nthe UHC Group of any Benefit Plan prior to the Effective Time;<\/p>\n
(2) any Environmental Condition, and arising out of or in
\nconnection with any event or events which occurred prior to the Effective Time;
\nand<\/p>\n
(3) any Litigation pending or threatened as of the Closing Date,
\nor Litigation arising out of events which occurred prior to the Effective Time,
\nagainst or affecting the Company regardless of whether it is disclosed on
\nSCHEDULE 4.20 or any other Schedule attached to ARTICLE 4 hereto.<\/p>\n
9.4 OBLIGATION OF ACTAMED AND SUBCORP TO INDEMNIFY. Subject to the
\nlimitations of SECTIONS 9.1 and 9.8, ActaMed and SubCorp agree to indemnify and
\nhold harmless each UHC Indemnitee against and in respect of:<\/p>\n
(a) all Losses asserted against, imposed upon or incurred by any UHC
\nIndemnitee by reason of or resulting from:<\/p>\n
-xli-<\/p>\n
(1) a breach of any representation or warranty of ActaMed or
\nSubCorp contained in or made pursuant to this Agreement; or <\/p>\n
(2) any nonfulfillment of any covenant or agreement of the
\nActaMed or SubCorp contained in or made pursuant to this Agreement; and<\/p>\n
(b) any and all actions, suits, claims, proceedings, investigations,
\ndemands, assessments, audits, fines, judgments, costs and other expenses
\n(including, without limitation, reasonable legal fees and expenses) incident to
\nany Loss in connection with SECTION 9.4(a) or to the enforcement of this SECTION
\n9.4.<\/p>\n
9.5 CLAIMS NOTICE. A Claim shall be made by any Indemnitee by delivery
\nof a Claims Notice to any Indemnifying Party requesting indemnification and
\nspecifying the basis on which indemnification is sought and the amount of
\nasserted Losses and, in the case of a Third Party Claim, containing (by
\nattachment or otherwise) such other information as such Indemnitee shall have
\nconcerning such Third Party Claim. <\/p>\n
9.6 PROCEDURES INVOLVING NON-THIRD PARTY CLAIMS. If the Claim
\ninvolves a matter other than a Third Party Claim, the Indemnifying Party
\nshall have forty-five (45) days to object to such Claim by delivery of a
\nwritten notice of such objection to such Indemnitee specifying in reasonable
\ndetail the basis for such objection. If an objection is timely interposed by
\nthe Indemnifying Party, the Indemnifying Party and the Indemnitee shall
\ncooperate in the compromise of the Claim. Failure to object in a timely
\nmanner shall constitute a final and binding acceptance of the Claim by the
\nIndemnifying Party on behalf of all Indemnitors, and the Claim shall be paid
\nin accordance with SECTION 9.10 hereof.<\/p>\n
9.7 PROCEDURES INVOLVING THIRD PARTY CLAIMS. <\/p>\n
The obligations and liabilities of the parties hereunder with respect to a
\nThird Party Claim shall be subject to the following terms and conditions:<\/p>\n
(a) The Indemnitee shall give the Indemnifying Party written notice
\nof a Third Party Claim promptly after receipt by the Indemnitee of notice
\nthereof, and the Indemnifying Party may undertake the defense, compromise and
\nsettlement thereof by representatives of its own choosing reasonably acceptable
\nto the Indemnitee. The failure of the Indemnitee to notify the Indemnifying
\nParty of such claim shall not relieve the Indemnifying Party of any liability
\nthat they may have with respect to such claim except to the extent the
\nIndemnifying Party demonstrates that the defense of such claim is prejudiced by
\nsuch failure. The assumption of the defense, compromise and settlement of any
\nsuch Third Party Claim by the Indemnifying Party shall be an acknowledgment of
\nthe obligation of the Indemnifying Party to indemnify the Indemnitee with
\nrespect to such claim hereunder. If the Indemnitee desires to participate in,
\nbut not control, any such defense, compromise and settlement, it may do so at
\nits sole cost and expense. If, <\/p>\n
-xlii-<\/p>\n
however, the Indemnifying Party fails or refuses to undertake the defense of
\nsuch Third Party Claim within ten (10) days after written notice of such
\nclaim has been given to the Indemnifying Party by the Indemnitee, the
\nIndemnitee shall have the right to undertake the defense, compromise and
\nsettlement of such claim with counsel of its own choosing. In the
\ncircumstances described in the preceding sentence, the Indemnitee shall,
\npromptly upon its assumption of the defense of such claim, make a Claim as
\nspecified in SECTION 9.5 which shall be deemed a Claim that is not a Third
\nParty Claim for the purposes of the procedures set forth herein.<\/p>\n
(b) If, in the reasonable opinion of the Indemnitee, any Third
\nParty Claim or the litigation or resolution thereof involves an issue or
\nmatter which could have a material adverse effect on the business,
\noperations, assets, properties or prospects of the Indemnitee (including,
\nwithout limitation, the administration of the tax returns and
\nresponsibilities under the tax laws of the Indemnitee), the Indemnitee shall
\nhave the right to control the defense, compromise and settlement of such
\nThird Party Claim undertaken by the Indemnifying Party, and the reasonable
\ncosts and expenses of the Indemnitee in connection therewith shall be
\nincluded as part of the indemnification obligations of the Indemnifying Party
\nhereunder. If the Indemnitee shall elect to exercise such right, the
\nIndemnifying Party shall have the right to participate in, but not control,
\nthe defense, compromise and settlement of such Third Party Claim at its sole
\ncost and expense.<\/p>\n
(c) No settlement of a Third Party Claim involving the asserted
\nliability of the Indemnifying Party under this Article shall be made without the
\nprior written consent by or on behalf of the Indemnifying Party, which consent
\nshall not be unreasonably withheld or delayed. If the Indemnifying Party
\nassumes the defense of such a Third Party Claim, (1) no compromise or settlement
\nthereof may be effected by the Indemnifying Party without the Indemnitee’s
\nconsent unless (A) there is no finding or admission of any violation of law or
\nany violation of the rights of any person and no effect on any other claim that
\nmay be made against the Indemnitee (B) the sole relief provided is monetary
\ndamages that are paid in full by the Indemnifying Party and (C) the compromise
\nor settlement includes, as an unconditional term thereof, the giving by the
\nclaimant or the plaintiff to the Indemnitee of a release, in form and substance
\nsatisfactory to the Indemnitee, from all liability in respect of such Third
\nParty Claim, and (2) the Indemnitee shall have no liability with respect to any
\ncompromise or settlement thereof effected without its consent.<\/p>\n
9.8 LIMITATIONS ON INDEMNIFICATION. <\/p>\n
(a) No party to this Agreement shall be entitled to indemnification
\nunder this Agreement to the extent that such party’s Losses are increased or
\nextended by the willful misconduct, violation of law or bad faith of such party.<\/p>\n
(b) No Indemnifying Party shall be required to indemnify an
\nIndemnitee with respect to any Loss arising out of or with respect to a General
\nClaim unless the amount of such Loss, when aggregated with all other such
\nLosses, shall exceed <\/p>\n
-xliii-<\/p>\n
the Threshold Amount (as defined below), at which time Claims may be asserted
\nto the extent that all Losses or Asserted Liabilities are in excess of the
\nThreshold Amount; provided, however, that the Threshold Amount shall not
\napply to any Loss: (A) which results from or arises out of an Ownership
\nClaim, Tax Claim or Undisclosed Liability Claim, (B) which results from or
\narises out of fraud or intentional misrepresentation or an intentional breach
\nof a representation, warranty, covenant or agreement in this Agreement; or
\n(C) which results from or arises out of any Litigation incident to any of the
\nmatters referred to in the foregoing clauses (A) and (B). The Threshold
\nAmount shall be One Hundred Thousand Dollars ($100,000). Notwithstanding the
\nforegoing, for any breach of SECTION 4.13, UHC shall indemnify each ActaMed
\nIndemnitee for any individual Loss in excess of $10,000 per item of tangible
\npersonal property and any aggregate Loss exceeding $50,000 for items of
\ntangible personal property.<\/p>\n
(c) In no event shall the aggregate liability of the Indemnifying
\nParty for any General Claim under this ARTICLE 9 exceed $10 million.<\/p>\n
9.9 NO RELEASE FOR FRAUD. Nothing contained in this Agreement shall
\nrelieve or limit the liability of any party or any officer or director of such
\nparty from any Liability arising out of or resulting from common law fraud or
\nintentional misrepresentation in connection with the transactions contemplated
\nby this Agreement or in connection with the delivery of any of the Transaction
\nDocuments. Each party shall have a right to indemnification for any Loss
\nincurred as the result of any common law fraud or intentional misrepresentation
\nby any other party or any officer or director of such other party without regard
\nto the Threshold Amount, the maximum liability or any period of limitation.<\/p>\n
9.10 PAYMENT.<\/p>\n
(a) If any party is required to make any payment under this
\nARTICLE 9, such party shall promptly pay the Indemnified Party the amount so
\ndetermined. If there is a dispute as to the amount or manner of determination
\nof any indemnity obligation owed under this ARTICLE 9, the Indemnifying Party
\nshall nevertheless pay when due such portion, if any, of the obligation as shall
\nnot be subject to dispute. The difference, if any, between the amount of the
\nobligation ultimately determined as properly payable under this ARTICLE 9 and
\nthe portion, if any, theretofore paid shall bear interest as provided in
\nSECTION 9.10(c).<\/p>\n
(b) Any items as to which an Indemnified Party is entitled to payment
\nunder this ARTICLE 9 may be paid by set-off against amounts payable to the
\nIndemnifying Party to the extent that such amounts are sufficient to pay such
\nitems.<\/p>\n
(c) If all or part of any indemnification obligation under this
\nAgreement is not paid when due, then the Indemnifying Party shall pay the
\nIndemnified Party interest on the unpaid principal amount of the obligation from
\nthe date the amount <\/p>\n
-xliv-<\/p>\n
became due until payment in full, at the per annum rate of interest announced
\nfrom time to time by NationsBank South, N.A., to be its “prime rate.”<\/p>\n
9.11 EXCLUSIVE REMEDY. Except for equitable remedies and any action for
\ncommon law fraud, the remedies provided in this ARTICLE 9 constitute the sole
\nand exclusive remedies for recovery against the Indemnifying Party based upon
\nthis Agreement.<\/p>\n
9.12 ARBITRATION. All disputes arising under this ARTICLE 9 (other than
\nclaims in equity) shall be resolved by arbitration in accordance with the
\nCommercial Arbitration Rules of the American Arbitration Association.
\nArbitration shall be by a single arbitrator experienced in the matters at issue
\nand selected by UHC and ActaMed in accordance with the Commercial Arbitration
\nRules of the American Arbitration Association. The arbitration shall be held in
\nsuch place in Atlanta, Georgia as may be specified by the arbitrator (or any
\nplace agreed to by UHC, ActaMed and the arbitrator). The decision of the
\narbitrator shall be final and binding as to any matters submitted under this
\nARTICLE 9; provided, however, if necessary, such decision and satisfaction
\nprocedure may be enforced by either UHC or ActaMed in any court of record having
\njurisdiction over the subject matter or over any of the parties to this
\nAgreement. All costs and expenses incurred in connection with any such
\narbitration proceeding (including reasonable attorneys’ fees) shall be borne by
\nthe party against which the decision is rendered, or, if no decision is
\nrendered, such costs and expenses shall be borne equally by the Indemnifying
\nParty as one party and the Indemnitees as the other party. If the arbitrator’s
\ndecision is a compromise, the determination of which party or parties bears the
\ncosts and expenses incurred in connection with any such arbitration proceeding
\nshall be made by the arbitrator on the basis of the arbitrator’s assessment of
\nthe relative merits of the parties’ positions.<\/p>\n
ARTICLE 10
\n TAX MATTERS<\/p>\n
10.1. TAX INDEMNITIES. <\/p>\n
(a) From and after the Closing Date, UHC shall indemnify ActaMed and
\nthe Company against all Taxes (i) imposed on the Company with respect to any
\ntaxable period or portion thereof that ends before or on (but includes) the
\nClosing Date (ii) imposed on UHC or any member of an affiliated group with which
\nUHC files a consolidated or combined income tax return (other than the Company)
\nwith respect to any taxable period. <\/p>\n
(b) From and after the Closing Date, ActaMed and Company shall
\nindemnify UHC against all Taxes imposed on the Company with respect to its
\nincome, business, property or operations for any taxable period or portion
\nthereof that begins after the Closing Date.<\/p>\n
-xlv<\/p>\n
(c) For purposes of Sections 10.01(a) and (b), in the case of
\nTaxes that are payable with respect to a taxable period that begins before
\nthe Closing Date and ends after the closing Date, the portion of any such Tax
\nthat is allocable to the portion of the period ending on the Closing Date
\nshall: (i) in the case of Taxes that are either (x) based upon or related to
\nincome or receipts of (y) imposed in connection with any sale, other transfer
\nor assignment or any deemed sale, transfer or assignment of property (real or
\npersonal, tangible or intangible), be deemed equal to the amount which would
\nbe payable if the taxable year ended on the Closing Date, and (ii) in the
\ncase of Taxes imposed on a periodic basis with respect to the assets of the
\nCompany or otherwise measured by the level of any item, be deemed to be the
\namount of such Taxes for the entire period (or, in the case of such Taxes
\ndetermined on an arrears basis, the amount of such Taxes for the immediately
\npreceding period) multiplied by a fraction the numerator of which is the
\nnumber of calendar days in the portion of such period ending on the Closing
\nDate and the denominator of which is the number of calendar days in the
\nentire period. For purposes of clause (i) above, any exemption, deduction,
\ncredit or other item that is calculated on an annual basis shall be allocated
\nto the period beginning before the Closing Date and, pursuant to clause (i)
\ntreated as ending on the Closing Date, based on the pro rata portion of such
\nitem determined by multiplying the total amount of such item times a
\nfraction, the numerator of which is the number of calendar days in the period
\nup to and including the Closing Date and the denominator of which is the
\ntotal number of calendar days in the entire period.<\/p>\n
10.2. RETURNS AND PAYMENTS.<\/p>\n
(a) From the date of this Agreement through and after the Closing
\nDate, UHC shall prepare and file or otherwise furnish to the appropriate party
\n(or cause to be prepared and filed or so furnished) in a timely manner all Tax
\nreturns, reports and forms (“RETURNS”) with respect to the Company for any
\ntaxable period ending on or before the Closing Date, and ActaMed shall do the
\nsame for any taxable period ending after the Closing Date. With respect to any
\nReturn required to be filed with respect to the Company after the Closing Date
\nand as to which an amount of Tax is allocable to UHC under Section 10.01(c),
\nActaMed shall provide UHC and its authorized representatives with a copy of such
\ncompleted Return and a statement (including all necessary supporting schedules
\nand information required to support such statement) that certifies and sets
\nforth the calculation of the amount of Tax shown on such Return that is
\nallocable to UHC pursuant to Section 10.01(c) at least 30 days prior to the due
\ndate (including any extension thereof) for the filing of such Return, and UHC
\nand its authorized representatives shall have the right to review such Return
\nand statement (including any supporting Schedules or other documents relevant
\nthereto) prior to the filing of such Return. UHC and ActaMed agree to consult
\nand to attempt in good faith to resolve any issues arising as a result of the
\nreview of such Return and statement by UHC or its authorized representatives.<\/p>\n
-xlvi-<\/p>\n
(b) UHC and ActaMed shall each pay or cause to be paid when due and
\npayable all Taxes that have not been paid as of the Closing Date that are
\nallocable to them pursuant to the provisions of Section 10.01.<\/p>\n
(c) Payment of any amounts due under this Article 10 shall be made
\n(i) with respect to agreed amounts, at least three calendar days before the
\npayment of any such Tax is due, provided that no such payment shall be due prior
\nto 10 business days following receipt of written notice that payment of such Tax
\nis due, or (ii) within 10 business days following either an agreement between
\nUHC and ActaMed that an amount is payable by UHC or ActaMed to the other or
\nwithin 10 business days of a “determination” as defined in section 1313(a) of
\nthe Internal Revenue Code.<\/p>\n
10.3 TAX AUDIT<\/p>\n
(a) After the Closing, ActaMed shall promptly notify UHC in writing
\nof the commencement of any Tax audit or administrative or judicial proceeding
\nand shall also separately notify UHC in writing of any demand or claim on
\nActaMed or the Company which, if determined adversely to the taxpayer or after
\nthe lapse of time would be grounds for indemnification by UHC under this Article
\n10. Such notice shall contain factual information (to the extent known to
\nActaMed or the Company) describing the asserted Tax liability in reasonable
\ndetail and shall include copies of any notice or other document received from
\nany taxing authority in respect of any such asserted Tax liability. If ActaMed
\nfails to give UHC prompt notice of an asserted Tax liability as required by this
\nSection 10.03, then (a) if UHC is precluded by the failure to give prompt notice
\nfrom contesting the asserted Tax liability in the appropriate administrative or
\njudicial forums, then UHC shall not have any obligation to indemnify ActaMed for
\nany loss or damage arising out of such asserted Tax liability, and (b) if UHC is
\nnot so precluded from contesting but such failure to give prompt notice results
\nin a detriment to UHC, then any amount which UHC is otherwise required to pay
\nActaMed pursuant to this Article 10 with respect to such liability shall be
\nreduced by the amount of such detriment.<\/p>\n
(b) UHC may elect to direct, through counsel of its own choosing and
\nat its own expense, any audit, or administrative or judicial proceeding
\ninvolving any asserted liability with respect to which indemnity may be sought
\nunder this Article 10 (any such audit or proceeding relating to an asserted Tax
\nliability are referred to herein collectively as a “CONTEST”). If UHC elects to
\ndirect the Contest of an asserted Tax liability, it shall within 30 calendar
\ndays of receipt of the notice of an asserted Tax liability notify ActaMed of its
\nintent to do so, and ActaMed shall cooperate in good faith and shall cause the
\nCompany or its successor to cooperate in good faith, at UHC’s expense, in each
\nphase of such Contest. If UHC elects not to direct the Contest, fails to notify
\nActaMed of its election as herein provided or contests its obligation to
\nindemnify under Section 10.01, ActaMed or the Company may pay, compromise or
\ncontest, at its own expense, such asserted liability. However, in such case,
\nneither ActaMed nor the Company (including any designated representative of
\neither) may settle or compromise any asserted liability over the objection of
\nUHC; PROVIDED, HOWEVER, that UHC’s consent <\/p>\n
-xlvii-<\/p>\n
to settlement or compromise shall not be unreasonably withheld. In any
\nevent, each of ActaMed (or the Company) and UHC may participate, at its own
\nexpense, in the Contest. If UHC chooses to direct the Contest, ActaMed shall
\npromptly empower and shall cause the Company or its successor promptly to
\nempower (by power of attorney and such other documentation as may be
\nappropriate) such representatives of UHC as it may designate to represent
\nActaMed or the Company or its successor in the Contest insofar as the Contest
\ninvolves an asserted Tax liability for which UHC would be liable under this
\nArticle 10.<\/p>\n
10.4. COOPERATION AND EXCHANGE OF INFORMATION. UHC and ActaMed will
\nprovide each other with such cooperation and information as either of them
\nreasonably may request of the other in filing any Tax return, amended return or
\nclaim for refund, determining a liability for Taxes or a right to a refund of
\nTaxes or participating in or conducting any audit or other proceeding in respect
\nof Taxes. Such cooperation and information shall include providing copies of
\nrelevant Tax returns or portions thereof, together with accompanying schedules
\nand related work papers and documents relating to rulings or other
\ndeterminations by taxing authorities, but in no event shall UHC or ActaMed be
\nrequired to disclose to the other any information relating to the operations of
\neither, as the case may be, other than information relating to the Company. The
\nSeller and ActaMed shall make its employees available on a mutually convenient
\nbasis to provide explanations of any documents or information provided
\nhereunder. UHC and ActaMed will retain all returns, schedules and work papers
\nand all material records or other documents relating to Tax matters of the
\nCompany for its taxable period first ending after the Closing Date and for all
\nprior taxable periods until the later of: (i) the expiration of the statute of
\nlimitations of the taxable periods to which such returns and other documents
\nrelate, without regard to extensions except to the extent notified by the other
\nparty in writing of such extensions for the respective Tax periods; or (ii)
\neight years following the due date (without extension) for such returns. After
\nsuch time, before ActaMed shall dispose of any of such books and records, at
\nleast 90 calendar days prior written notice to such effect shall be given by
\nActaMed to UHC, and UHC shall be given an opportunity, at its cost and expense,
\nto remove and retain all or any part of such books and records as UHC may
\nselect. Any information obtained under this Section 10.05 shall be kept
\nconfidential, except as may be otherwise necessary in connection with the filing
\nof returns or claims for refund or in conducting an audit or other proceeding.<\/p>\n
10.5. TAX SHARING AGREEMENTS. UHC shall cause any tax-sharing agreements
\nor arrangements with the Company to be terminated as of the Closing Date, with
\nno amounts payable thereunder after the Closing other than those amounts payable
\nthereunder in respect of current tax payable accounts.<\/p>\n
10.6. ARTICLE 9. The provisions of this Article 10 shall supersede the
\nprovisions of Article 9 with respect to the matters set forth herein, except to
\nthe extent explicitly referenced in this Article 10.<\/p>\n
ARTICLE 11<\/p>\n
-xlviii-<\/p>\n
TERMINATION<\/p>\n
11.1 METHOD OF TERMINATION. This Agreement and the transactions
\ncontemplated by it may be terminated at any time prior to the Closing Date:<\/p>\n
(a) by the mutual consent of UHC and ActaMed;<\/p>\n
(b) by UHC, if ActaMed and SubCorp shall (1) fail to perform in any
\nmaterial respect their agreements contained herein required to be performed by
\nany of them on or prior to the Closing Date, or (2) materially breach any of
\ntheir representations, warranties or covenants contained herein;<\/p>\n
(c) by ActaMed, if UHC or the Company shall (1) fail to perform in
\nany material respect their agreements contained herein required to be performed
\nby any of them on or prior to the Closing Date, or (2) materially breach any of
\ntheir representations, warranties or covenants contained herein;<\/p>\n
(d) by either UHC or ActaMed if there shall be any order, writ,
\ninjunction or decree of any court or governmental or regulatory agency binding
\non ActaMed, SubCorp, the Company or UHC, which prohibits or restrains ActaMed,
\nSubCorp, the Company and\/or UHC from consummating the Merger, provided that
\nActaMed, SubCorp, the Company and UHC shall have used their best efforts to have
\nany such order, writ, injunction or decree lifted and the same shall not have
\nbeen lifted within thirty (30) days after entry, by any such court or
\ngovernmental or regulatory agency;<\/p>\n
(e) pursuant to SECTION 11.4; or<\/p>\n
(f) without action of either party if the Closing has not occurred on
\nor before April 30, 1996.<\/p>\n
11.2 NOTICE OF TERMINATION. Notice of termination of this Agreement, as
\nprovided for in this ARTICLE 11, shall be given by the parties so terminating to
\nthe other parties hereto in accordance with SECTION 14.1 of this Agreement.<\/p>\n
11.3 EFFECT OF TERMINATION. If this Agreement terminates pursuant to
\nSECTION 11.1 (a), (d), (e) or (f), then this Agreement shall become void and of
\nno further force and effect, and each party shall pay the costs and expenses
\nincurred by it in connection with this Agreement as set forth in SECTION 6.14
\nand no party (nor any of its officers, directors, employees, agents,
\nrepresentatives or shareholders) shall be liable to any other party for any
\ncosts, expenses, damages (direct or indirect) or loss of anticipated profits.<\/p>\n
11.4 RISK OF LOSS. The Company and UHC assume all risk of condemnation,
\ndestruction, loss or damage due to fire or other casualty from the date of this
\nAgreement until the Closing. If the condemnation, destruction, loss, or damage
\nis such that the business of the Company is interrupted or curtailed or the
\nassets of the Company are <\/p>\n
-xlix<\/p>\n
materially affected, then ActaMed and SubCorp shall have the right to
\nterminate this Agreement. If ActaMed and SubCorp nonetheless elect to close,
\nthe Company and UHC shall remit all net condemnation proceeds or third party
\ninsurance proceeds to ActaMed and SubCorp and the number of shares of Series
\nC Preferred Stock to be delivered to UHC at the Closing shall be adjusted to
\nreflect such condemnation, destruction, loss, or damage to the extent that
\ninsurance or condemnation proceeds are not sufficient to cover such
\ndestruction, loss or damage. If ActaMed and SubCorp and UHC are unable to
\nagree upon the amount of such adjustment, the dispute shall be resolved
\njointly by the independent accounting firms then employed by ActaMed and
\nSubCorp and the Company, and if said accounting firms do not agree, they
\nshall appoint a nationally recognized accounting firm, whose determination of
\nthe dispute shall be final and binding.<\/p>\n
ARTICLE 12
\n ADDITIONAL COVENANTS OF ACTAMED<\/p>\n
ActaMed covenants and agrees that, except as provided in SECTION 12.1
\nbelow, until such time as ActaMed has consummated a Public Offering:<\/p>\n
12.1 SECURITIES LAW FILINGS. Upon consummation of a Public Offering and
\nfor so long as the UHC holds the Conversion Shares, ActaMed will timely file the
\nreports required to be filed by it under the Securities Act and the Exchange Act
\nand the rules and regulations adopted by the SEC thereunder, to the extent
\nrequired from time to time to enable the UHC to sell the Conversion Shares
\nwithout registration under the Securities Act within the limitation of the
\nexemptions provided by (a) Rule 144 under the Securities Act, as such rule may
\nbe amended from time to time, or (b) any similar rule or regulation hereafter
\nadopted by the SEC. Upon the request of any UHC, ActaMed will deliver a written
\nstatement as to whether it has complied with such requirements.<\/p>\n
12.2 TRANSACTIONS WITH SUBSTANTIAL HOLDERS. ActaMed shall not, directly
\nor indirectly, knowingly enter into any material transaction or agreement with
\nany of its Substantial Holders or any Affiliate or officer of ActaMed or a
\nSubstantial Holder, or a material transaction or agreement in which a
\nSubstantial Holder or Affiliate or officer of ActaMed or a Substantial Holder
\nhas a direct or indirect interest, unless such transaction or agreement is on
\nterms and conditions no less favorable to ActaMed or any of its Subsidiaries
\nthan could be obtained at the time in an arm’s length transaction with a third
\nperson that is not such a Substantial Holder or Affiliate or officer of ActaMed
\nor a Substantial Holder, and such transaction or agreement has been reviewed and
\napproved by a majority of those members of ActaMed’s Board of Directors who have
\nno such interest in the transaction. Except as provided in SECTION 14.4, this
\nSECTION 12.2 shall not be enforceable against ActaMed by any person or entity
\nnot a party to this Agreement.<\/p>\n
12.3 BUSINESS AND FINANCIAL COVENANTS. ActaMed covenants that:<\/p>\n
-l-<\/p>\n
(a) MERGER, ACQUISITIONS, SALE OF ASSETS. Without the prior written
\nconsent of the holders of a majority interest of the Series A Preferred Stock,
\nSeries B Preferred Stock and the Series C Preferred Stock, each voting
\nseparately as a class:<\/p>\n
(1) ActaMed shall not merge, effect a statutory share exchange,
\nor consolidate with any entity at a price per preferred share less than the
\nSeries C Conversion Price.<\/p>\n
(2) ActaMed shall not sell, assign, lease or otherwise dispose
\nof all or substantially all of its assets (whether now owned or hereafter
\nacquired) in a transaction that would result in a price per preferred share less
\nthan the Series C Conversion Price.<\/p>\n
(b) MERGER, ACQUISITIONS, SALE OF ASSETS. Without the prior written
\nconsent of the holders of a majority interest of the Series A Preferred Stock,
\nthe Series B Preferred Stock and the Series C Preferred Stock, voting as a
\nsingle class:<\/p>\n
(1) ActaMed shall not merge, effect a statutory share exchange,
\nor consolidate with any entity at a price per Preferred Share equal to or
\ngreater than the Series C Conversion Price.<\/p>\n
(2) ActaMed shall not sell, assign, lease or otherwise dispose
\nof all or substantially all of its assets (whether now owned or hereafter
\nacquired) in a transaction that would result in a price per preferred share
\nequal to or greater than the Series C Conversion Price.<\/p>\n
(3) The Company shall not permit any of its Subsidiaries to
\nmerge, effect a statutory share exchange, or consolidate with any entity other
\nthan ActaMed, or to sell, assign, lease or otherwise dispose of, all or
\nsubstantially all of its assets (whether now owned or hereafter acquired) except
\nto ActaMed.<\/p>\n
(4) Except for (A) up to 500,000 shares of ActaMed Common Stock
\nwhich may be issued pursuant to ActaMed’s 1996 Stock Option Plan approved by the
\nBoard of Directors, (B) up to 100,000 shares of ActaMed Common Stock which may
\nbe issued pursuant to ActaMed’s 1996 Directors Stock Option Plan approved by the
\nBoard of Directors, (C) up to 975,000 shares of ActaMed Common Stock which may
\nbe issued pursuant to ActaMed’s 1995 Stock Option Plan approved by the Board of
\nDirectors, (D) any remaining shares which may be issued under ActaMed’s 1994
\nStock Option Plan, 1993 Stock Option Plan and 1992 Stock Option Plan, (E) the
\nreissuance of any unvested options that terminate under such option plans,
\n(F) the issuance of shares of ActaMed Common Stock pursuant to additional stock
\noption plans that may be established from time to time by the Board of Directors
\nof ActaMed in its discretion, and (E) the conversion of the Series A Preferred
\nStock, the Series B Preferred Stock and the Series C Preferred Stock, ActaMed
\nwill not, and will not permit any of its Subsidiaries, to hereafter issue or
\nsell any shares of any securities convertible into, or any warrants, rights, <\/p>\n
-li-<\/p>\n
or options to purchase shares of, the capital stock of ActaMed or such
\nSubsidiary to any person or entity other than ActaMed, and ActaMed will not
\npledge any of the capital stock of any Subsidiary to any person or entity.<\/p>\n
(c) LOANS TO AND INVESTMENTS IN OTHERS. ActaMed shall not (except
\nfor the advancement of money for expenses in the ordinary course of business)
\nmake, or permit any of its Subsidiaries to make, any loans or advances to any
\nperson or entity or have outstanding any investment in any entity, whether by
\nway of loan or advance to, or by the acquisition of the capital stock, assets or
\nobligations of or any interest in, any person or entity.<\/p>\n
(d) RESTRICTED PAYMENTS, REPURCHASE OF ACTAMED COMMON STOCK. Except
\nas expressly permitted herein or by the Restated Articles, neither ActaMed nor
\nany of its Subsidiaries shall declare or make any Restricted Payments. <\/p>\n
(e) ARTICLES OF INCORPORATION. Neither ActaMed nor any of its
\nSubsidiaries will amend or change its Articles of Incorporation or Bylaws, or
\nviolate or breach any of the provisions thereof.<\/p>\n
(f) Without the consent of a majority of the Board of Directors:<\/p>\n
(1) DEBT. ActaMed shall not create, incur or suffer to exist,
\nor permit any Subsidiary to create, incur or suffer to exist, any debt other
\nthan:<\/p>\n
(A) debt existing on the date hereof and included in the
\n ActaMed Financial Statements or incurred in the
\n ordinary course of business between the date of the
\n ActaMed Financial Statements and the date hereof, and
\n any renewals or replacements of such debt not exceeding
\n the principal amount of the debt being replaced or
\n renewed; and<\/p>\n
(B) debt not in excess of $1,000,000 in the aggregate in
\n any one calendar year.<\/p>\n
(2) LEASE OBLIGATIONS. ActaMed shall not create or suffer to
\nexist, or permit any Subsidiary to create or suffer to exist, any obligations
\nfor the payment of rent for any property under leases or agreements to lease,
\nother than obligations for (A) the payment of rent which, in the aggregate, do
\nnot exceed $1,000,000 annually and (B) payments under leases set forth on
\nSCHEDULE 5.21.<\/p>\n
(3) ACQUISITIONS. ActaMed shall not acquire, or permit any
\nSubsidiary to acquire, directly or indirectly, the assets of or equity interests
\nin any other business or entity, whether by purchase, merger consolidation or
\notherwise in excess of $1,000,000.<\/p>\n
-lii-<\/p>\n
(4) PUBLIC OFFERING. ActaMed shall not effect an initial public
\noffering of any equity securities, other than equity securities issued in a
\nmerger, less than $15,000,000 at a per share price of less than 2.5 times the
\nthen existing conversion price of the Series A Preferred Stock.<\/p>\n
12.4 CORPORATE EXISTENCE, BUSINESS, MAINTENANCE, INSURANCE. <\/p>\n
(a) ActaMed will at all times preserve and keep in full force and
\neffect its corporate existence and rights and franchises deemed material to its
\nbusiness and those of its Subsidiaries, except any Subsidiary of ActaMed may be
\nmerged into ActaMed or another Subsidiary.<\/p>\n
(b) ActaMed shall engage solely in the business of developing
\ninformation networks and businesses closely related thereto. ActaMed (and any
\nSubsidiary) will not purchase or acquire any property other than property useful
\nin and related to such business.<\/p>\n
(c) ActaMed will maintain or cause to be maintained in good repair,
\nworking order and condition all properties used or useful in the business of
\nActaMed and any Subsidiary and from time to time will make or cause to be made
\nall appropriate repairs, renewals and replacements thereof. ActaMed and any
\nSubsidiary will at all times comply in all material respects with the provisions
\nof all material leases to which it is a party or under which it occupies
\nproperty so as to prevent any loss or forfeiture thereof or thereunder.<\/p>\n
(d) ActaMed will maintain or cause to be maintained, with financially
\nsound and reputable insurers, appropriate insurance with respect to its
\nproperties and business and the properties and business of any Subsidiary
\nagainst loss or damage.<\/p>\n
12.5 PAYMENT OF TAXES, ETC.; ERISA. <\/p>\n
(a) ActaMed will pay, and will cause any of its Subsidiaries to pay,
\nall taxes, assessments and other governmental charges imposed upon it or any of
\nits properties or assets or in respect of any of its franchises, business,
\nincome or profits before any penalty or interest accrues thereon, and all claims
\n(including, without limitation, claims for labor, services, materials and
\nsupplies) for sums which have become due and payable and which by law have or
\nmight become a lien or charge upon any of its properties or assets, PROVIDED
\nthat no such charge or claim need be paid if being contested in good faith by
\nappropriate proceedings and if such reserve or other appropriate provisions, if
\nany, as shall be required by generally accepted accounting principles shall have
\nbeen made therefor.<\/p>\n
(b) ActaMed and any of its Subsidiaries will comply in all material
\nrespects with the ERISA.<\/p>\n
-liii-<\/p>\n
12.6 BOOKS AND RECORDS, COMPLIANCE. <\/p>\n
(a) ActaMed and any of its Subsidiaries will keep true records and
\nbooks of account in which full, true and correct entries will be made of all
\ndealings or transactions in relation to its business and affairs in accordance
\nwith GAAP applied on a consistent basis.<\/p>\n
(b) ActaMed and any of its Subsidiaries shall duly observe and
\nconform in all material respects to all valid requirements of governmental
\nauthorities relating to the conduct of its business or to its property or
\nassets.<\/p>\n
12.7 REPURCHASE OF PREFERRED SHARES. Except as provided in the Restated
\nArticles, ActaMed shall not, and shall not permit any of its Subsidiaries or any
\nAffiliate of ActaMed to, directly or indirectly, redeem or repurchase or make
\nany offer to redeem or repurchase any Preferred Shares, unless ActaMed, such
\nSubsidiary or such Affiliate has offered to repurchase Preferred Shares PRO
\nRATA, from all holders of outstanding Preferred Shares) upon the same terms.<\/p>\n
12.8 COMPENSATION. All awards of compensation, including, but not
\nlimited to, salary, bonus and awards of stock options made to executive officers
\nand\/or directors of ActaMed shall be determined by ActaMed in accordance with
\nthe terms of the Stockholders’ Agreement.<\/p>\n
ARTICLE 13
\n INFORMATIONAL COVENANTS OF ACTAMED <\/p>\n
ActaMed covenants and agrees that it shall deliver the following
\ninformation to UHC (including permitted transferees in accordance with SECTION
\n14.4, except as set forth in SECTION 13.6), for so long as UHC (or such
\ntransferees) shall hold at least 5% of the aggregate outstanding Preferred
\nShares and Conversion Shares (considered as a single class), or until such time
\nas ActaMed shall have consummated a Public Offering:<\/p>\n
13.1 AUDITED ANNUAL FINANCIAL STATEMENTS. As soon as practicable and, in
\nany case, within one hundred and twenty (120) days after the end of each fiscal
\nyear, financial statements of ActaMed, consisting of the balance sheet of
\nActaMed as of the end of such fiscal year and the statements of operations,
\nstatements of shareholders, equity and statements of cash flows of ActaMed for
\nsuch fiscal year, setting forth in each case, in comparative form, the figures
\nfor the preceding fiscal year, all in reasonable detail and fairly presented in
\naccordance with GAAP applied on a consistent basis throughout the periods
\nreflected therein, except as stated therein, and accompanied by an opinion
\nthereon of Deloitte & Touche, or other independent certified public accountants
\nselected by ActaMed of good and recognized national standing in the United
\nStates.<\/p>\n
-liv-<\/p>\n
13.2 QUARTERLY UNAUDITED FINANCIAL STATEMENTS. As soon as practicable
\nand, in any case, within forty-five (45) days after the end of each of the
\nfirst three fiscal quarters in each fiscal year, unaudited financial
\nstatements of ActaMed setting forth the balance sheet of ActaMed at the end
\nof each such fiscal quarter and the statements of operations and statements
\nof cash flows of ActaMed for each such fiscal quarter and for the year to
\ndate, and setting forth in comparative form figures as of the corresponding
\ndate and for the corresponding periods of the preceding fiscal year, all in
\nreasonable detail and certified by an accounting officer of ActaMed as
\ncomplete and correct, as having been prepared in accordance with GAAP
\nconsistently applied (except as otherwise disclosed therein) and as
\npresenting fairly, in all material respects, the financial position of
\nActaMed and any of its Subsidiaries and results of operations and cash flows
\nthereof subject, in each case, to customary exceptions for interim unaudited
\nfinancial statements.<\/p>\n
13.3 MONTHLY UNAUDITED FINANCIAL STATEMENTS. As soon as available,
\nbut in any event within thirty (30) days after the end of each calendar
\nmonth, copies of the unaudited balance sheet of ActaMed as at the end of such
\ncalendar month and the related unaudited statements of operations and cash
\nflows for such calendar month and the portion of the calendar year through
\nsuch calendar month, in each case setting forth in comparative form the
\nfigures for the corresponding periods of (a) the previous calendar year and
\n(b) the budget for the current year, prepared in reasonable detail and in
\naccordance with GAAP applied consistently throughout the periods reflected
\ntherein (except as otherwise disclosed therein) and certified by the chief
\nfinancial officer of ActaMed as presenting fairly the financial condition and
\nresults of operations of ActaMed and any of its Subsidiaries (subject to
\ncustomary exceptions for interim unaudited financial statements).<\/p>\n
13.4 MANAGEMENT’S ANALYSIS. All the financial statements delivered
\npursuant to SECTIONS 13.1 and 13.2 shall be accompanied by an informal
\nnarrative description of material business and financial trends and
\ndevelopments and significant transactions that have occurred in the
\nappropriate period or periods covered thereby.<\/p>\n
13.5 BUDGETS. As soon as practicable, but in any event within thirty
\n(30) days prior to the commencement of a fiscal year, an annual operating
\nbudget for such fiscal year, approved by the Board of Directors, including
\nmonthly income and cash flow projections and projected balance sheets as of
\nthe end of each quarter within such fiscal year. Extensions of such due date
\nshall not be unreasonably withheld.<\/p>\n
13.6 INSPECTION. Upon reasonable notice, ActaMed shall, and shall
\ncause any of its Subsidiaries to, permit UHC (so long as it owns 5% more of
\nthe outstanding capital stock of ActaMed) by its representatives, agents or
\nattorneys:<\/p>\n
(a) to examine all books of account, records, reports and other
\npapers of ActaMed or such Subsidiary except to the extent that such action
\nwould, in the reasonable opinion of counsel, constitute a waiver of the
\nattorney\/client privilege,<\/p>\n
-lv-<\/p>\n
(b) to make copies and take extracts from any thereof, except for
\ninformation which is confidential or proprietary,<\/p>\n
(c) to discuss the affairs, finances and accounts of ActaMed or such
\nSubsidiary with ActaMed’s or such Subsidiary’s officers and independent
\ncertified public accountants (and by this provision ActaMed hereby authorizes
\nsaid accountants to discuss with UHC and its representatives, agents or
\nattorneys the finances and accounts of ActaMed or such Subsidiary), and<\/p>\n
(d) to visit and inspect, at reasonable times and on reasonable
\nnotice during normal business hours, the properties of ActaMed and such
\nSubsidiary. Notwithstanding any provision herein to the contrary, the
\nprovisions of this SECTION 13.6 are in addition to any rights of UHC under
\nthe Georgia Business Corporation Code and shall in no way limit such rights.<\/p>\n
The expenses of UHC in connection with any such inspection shall be for
\nthe account of UHC. Notwithstanding the foregoing sentence, it is understood
\nand agreed by ActaMed that all reasonable expenses incurred by ActaMed or
\nsuch Subsidiary, any officers, employees or agents thereof or the independent
\ncertified public accountants therefor, shall be expenses payable by ActaMed
\nand shall not be expenses of UHC making the inspection.<\/p>\n
Notwithstanding anything to the contrary, no member of the UHC Group
\nshall be permitted access to any information of, or related to, any
\ncompetitor of UHC.<\/p>\n
13.7 OTHER INFORMATION. ActaMed shall deliver the following provided
\nthat in the reasonable opinion of counsel to ActaMed such disclosure will not
\nconstitute a waiver of the attorney\/client privilege, the breach of any
\nsecrecy covenant or the release of information regarding competitors of UHC:<\/p>\n
(a) promptly after the submission thereof to ActaMed, copies of
\nany detailed reports (including the auditors’ comment letter to management,
\nif any such letter is prepared) submitted to ActaMed by its independent
\nauditors in connection with each annual or interim audit of the accounts of
\nActaMed made by such accountants;<\/p>\n
(b) promptly, and in any event within ten (10) days after
\nobtaining knowledge thereof, notice of the institution of any suit, action or
\nproceeding (other than a proceeding of general application which is not
\ndirectly against ActaMed or one or more of the Subsidiaries), the happening
\nof any event or, to the best knowledge of ActaMed, the assertion or threat of
\nany claim against ActaMed or any of the Subsidiaries which, either
\nindividually or in the aggregate, would have a Material Adverse Effect;<\/p>\n
(c) promptly upon, and in any event within thirty (30) days after
\nobtaining knowledge thereof, notice of any breach of, default under or
\nfailure to comply with any material term under SECTIONS 12 or 13 of this
\nAgreement or any material adverse <\/p>\n
-lvi-<\/p>\n
change in ActaMed’s relationship with its major customers, suppliers,
\nemployees or other entity with which ActaMed has a business relationship;<\/p>\n
(d) with reasonable promptness, a notice of any default by ActaMed
\nor any of its Subsidiaries under any material agreement to which it is a
\nparty;<\/p>\n
(e) with reasonable promptness, copies of all written materials
\nfurnished to directors;<\/p>\n
(f) promptly (but in any event within ten (10) days) after the
\nfiling of any document or material with the SEC, a copy of such document or
\nmaterial;<\/p>\n
(g) promptly after the record date set by the Board of Directors
\nto determine the stockholders entitled to vote at ActaMed’s annual meeting of
\nstockholders (but in any event ten (10) days prior to such meeting), a list
\nof all stockholders of ActaMed and their respective holdings; and<\/p>\n
(h) promptly upon request therefor, such other data, filings and
\ninformation as any UHC may from time to time reasonably request.<\/p>\n
ARTICLE 14
\n GENERAL PROVISIONS<\/p>\n
14.1 NOTICES.<\/p>\n
(a) All notices, requests, demands and other communications
\nhereunder shall be in writing and shall be deemed to have been given if (1)
\ndelivered by hand or if mailed by United States registered or certified mail,
\nreturn receipt requested, first class postage prepaid, (2) sent by Federal
\nExpress or similar overnight courier service to the parties or their
\nassignees, or (3) sent by telecopy to the number set forth below and promptly
\nfollowed by a written copy sent by any other means specified herein,
\naddressed as follows:<\/p>\n
If to UHC or the Company:<\/p>\n
United Healthcare Corporation Inc.
\n 9900 Bren Road East
\n Minneapolis, Minnesota 55440-1459
\n Attention: Chief Information Officer
\n Telephone: (___)____________
\n Telecopy: (___)_____________<\/p>\n
If to ActaMed and\/or SubCorp:<\/p>\n
-lvii-<\/p>\n
ActaMed Corporation
\n Suite 600
\n 7000 Central Parkway
\n Atlanta, Georgia 30328
\n Attention: Chief Financial Officer
\n Telephone: (770) 551-1600
\n Telecopy: (770) 551-1815<\/p>\n
with a copy to:<\/p>\n
Alston & Bird
\n One Atlantic Center
\n 1201 West Peachtree Street
\n Atlanta, Georgia 30309-3424
\n Attention: J. Vaughan Curtis, Esq.
\n Telephone: (404) 881-7000
\n Telecopy Number: (404) 881-7777<\/p>\n
(b) If delivered personally, the date on which a notice, request,
\ninstruction or document is delivered shall be the date on which such delivery
\nis made and, if delivered by mail, telecopy, Federal Express or other
\novernight courier, the date on which such notice, request, instruction or
\ndocument is first received shall be the date of delivery.<\/p>\n
(c) Any party hereto may change its address specified for notices
\nherein by designating a new address by notice in accordance with this
\nSECTION 14.1.<\/p>\n
(d) Failure of any party to send a copy of any notice to counsel
\nfor the other party shall not affect in any way the validity of such notice
\nto other party.<\/p>\n
14.2 FURTHER ASSURANCES. Each party covenants that at any time, and
\nfrom time to time, after the Closing Date, it will execute such additional
\ninstruments and take such actions as may be reasonably requested by the other
\nparties to confirm or perfect or otherwise to carry out the intent and
\npurposes of this Agreement.<\/p>\n
14.3 WAIVER. Any failure on the part of any party hereto to comply
\nwith any of its obligations, agreements or conditions hereunder may be waived
\nby any other party to whom such compliance is owed. No waiver of any
\nprovision of this Agreement shall be deemed, or shall constitute, a waiver of
\nany other provision, whether or not similar, nor shall any waiver constitute
\na continuing waiver.<\/p>\n
14.4 ASSIGNMENT. This Agreement shall not be assignable by any of the
\nparties hereto without the written consent of the other parties hereto, and
\nno rights under this Agreement may be transferred, except that:<\/p>\n
-lviii-<\/p>\n
(a) the rights of ActaMed under this Agreement may be transferred
\nto any successor, by purchase of assets, merger or other corporate
\nreorganization;<\/p>\n
(b) the rights of UHC under this Agreement may be transferred
\nafter the Closing in connection with a transfer of Preferred Shares made in
\naccordance with the provisions of the Stockholders’ Agreement (other than a
\ntransfer pursuant to a registration statement under the Securities Act or a
\ntransfer pursuant to Rule 144 thereunder); and<\/p>\n
(c) all the rights of UHC may be transferred to an Affiliate of
\nUHC; PROVIDED, that any such transferee of UHC shall execute and deliver to
\nActaMed an instrument satisfactory to it agreeing to be bound by the
\nprovisions hereof and of the Stockholders’ Agreement and the Registration
\nRights Agreement. <\/p>\n
14.5 BINDING EFFECT. Subject to the limitations on transfer set forth
\nin SECTION 14.4, this Agreement shall be binding upon and inure to the
\nbenefit of the parties hereto and their respective heirs, legal
\nrepresentatives, executors, administrators, successors and assigns.<\/p>\n
14.6 KNOWLEDGE. The use of the terms “to ActaMed’s knowledge” or “to
\nthe best of ActaMed’s knowledge” shall mean the facts known to P.E. Sadler,
\nMichael K. Hoover, and Nancy J. Ham after reasonable inquiry.<\/p>\n
14.7 HEADINGS. The section and other headings in this Agreement are
\ninserted solely as a matter of convenience and for reference, and are not a
\npart of this Agreement.<\/p>\n
14.8 ENTIRE AGREEMENT. This Agreement and the Exhibits, Schedules,
\ncertificates and other documents delivered pursuant hereto or incorporated
\nherein by reference, contain and constitute the entire agreement among the
\nparties hereto and supersede and cancel any prior agreements,
\nrepresentations, warranties, or communications, whether oral or written,
\namong the parties hereto relating to the transactions contemplated hereby or
\nthe subject matter herein. This Agreement may be changed, waived, discharged
\nor terminated only by an agreement in writing signed by (A) ActaMed and (B)
\nUHC or, after the Closing Date, the holder(s) of a majority of the Preferred
\nShares and any Conversion Shares considered as a single class.<\/p>\n
14.9 GOVERNING LAW. Except as set forth in SECTION 6.12, this
\nAgreement shall be governed by and construed in accordance with the laws of
\nthe State of Georgia.<\/p>\n
14.10 COUNTERPARTS. This Agreement may be executed in one or more
\ncounterparts, each of which shall be deemed an original, but all of which
\ntogether shall constitute one and the same instrument.<\/p>\n
14.11 PRONOUNS. All pronouns used herein shall be deemed to refer to
\nthe masculine, feminine or neutral gender as the context requires.<\/p>\n
-lix-<\/p>\n
14.12 TIME OF ESSENCE. Time is of the essence in this Agreement.<\/p>\n
14.13 SCHEDULES AND EXHIBITS. All Schedules and Exhibits attached to
\nthis Agreement are by this reference made a part hereof.<\/p>\n
-lx-<\/p>\n
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER DATED MARCH 1, 1996 BY AND AMONG
\n ACTAMED CORPORATION, SUBCORP, INC., UHC GREEN ACQUISITION, INC. AND UNITED
\n HEALTHCARE CORPORATION]<\/p>\n
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
\nunder seal as of the day and year first above written.<\/p>\n
ACTAMED CORPORATION EDI ACQUISITION, INC.<\/p>\n
By : \/s\/ MICHAEL K. HOOVER By: \/s\/ MICHAEL K. HOOVER
\n ————————— —————————-
\n Name: Michael K. Hoover Name: Michael K. Hoover
\n ——————– ———————
\n Title: President Title: President
\n ——————- ——————–<\/p>\n
UNITED HEALTHCARE UHC GREEN ACQUISITION, INC.
\nCORPORATION<\/p>\n
By : \/s\/ TRAVERS H. WILLS By: \/s\/ TRAVERS H. WILLS
\n ——————————— ——————————-
\n Name: Travers H. Wills Name: Travers H. Wills
\n ————————– —————————
\n Title: Chief Operating Officer Title: Chief Operating Officer
\n ————————– —————————<\/p>\n
-lxi-<\/p>\n
EXHIBIT A
\n DEFINED TERMS<\/p>\n
“ACTAMED” – ActaMed Corporation, a Georgia corporation.<\/p>\n
“ACTAMED BUSINESS” – The business of selling and developing information
\nsystems and related technology for the healthcare industry.<\/p>\n
“ACTAMED COMMON STOCK” – The $.01 par value common stock of ActaMed. <\/p>\n
“ACTAMED DOCUMENTS” – All of the Transaction Documents to which either
\nActaMed or SubCorp is a party.<\/p>\n
“ACTAMED FINANCIAL STATEMENTS” – The materials described in SECTION 5.4(a)
\nof this Agreement.<\/p>\n
“ACTAMED INDEMNITEE” – ActaMed and SubCorp and their respective
\ndirectors, officers, employees, affiliates and assigns.<\/p>\n
“AFFILIATE” – Any person, firm, corporation, partnership or association
\ncontrolling, controlled by or under common control with another person, firm,
\ncorporation, partnership or association.<\/p>\n
“AGREEMENT” – This Agreement and Plan of Merger, including the Exhibits
\nand Schedules delivered pursuant hereto.<\/p>\n
“BENEFIT PLAN” – An employee benefit plan or agreement of a person for
\nthe benefit of its shareholders, officers, directors, employees, or
\nindependent contractors, including, without limitation, (a) any affirmative
\naction plans or programs, (b) any current and deferred compensation,
\nseverance, vacation, stock purchase, stock option, bonus and incentive
\ncompensation benefits, (c) any “employee benefit plan” (as defined in ERISA
\nSection 3(3)) and (d) any medical, hospital, life, health, accident,
\ndisability, death and other fringe and welfare benefits, including any
\nsplit-dollar life insurance policies, all of which plans, programs,
\npractices, policies and other individual and group arrangements and
\nagreements, including any unwritten compensation, fringe benefit, payroll or
\nemployment practices, procedures or policies of any kind or description. <\/p>\n
“CLAIM” – Any claim for indemnification under ARTICLE 9, including but
\nnot limited to a General Claim, a Tax Claim or an Ownership Claim. <\/p>\n
“CLAIMS NOTICE” – A written notice of an indemnification claim delivered
\npursuant to SECTION 9.5 hereof.<\/p>\n
“CLOSING” – The closing referred to in SECTION 1.2 hereof.<\/p>\n
A-1<\/p>\n
“CLOSING DATE” – The date referred to in SECTION 1.2 hereof for the
\nclosing of the transactions contemplated by this Agreement.<\/p>\n
“CODE” – The Internal Revenue Code of 1986, as amended.<\/p>\n
“COMPANY” – UHC Green Acquisition, Inc., a Nevada corporation.<\/p>\n
“COMPANY BUSINESS” – The business of providing electronic data
\ninterchange products and services to the health care industry, excluding
\nEmployerLink and LaborLink, whether conducted by the Company or any other
\nmember of the UHC Group.<\/p>\n
“COMPANY COMMON STOCK” – The common stock, $.01 par value, of the Company.<\/p>\n
“CONTRACT” – Any written or oral contract, agreement, lease, plan,
\ninstrument or other document, commitment, arrangement, undertaking, practice
\nor authorization that is or may be binding on any person or its property
\nunder applicable law.<\/p>\n
“CONVERSION SHARES” – The shares of ActaMed Common Stock issued or
\nissuable upon the conversion of the Preferred Shares.<\/p>\n
“COURT ORDER” – Any judgment, decree, writ, injunction, order or ruling
\nof any federal, state or local court or governmental or regulatory body or
\nauthority that is binding on any person or its property under applicable law.<\/p>\n
“DEFAULT” – (a) a breach of or default under any Contract or License,
\n(b) the occurrence of an event that with the passage of time or the giving of
\nnotice or both would constitute a breach of or default under any Contract or
\nLicense, or (c) the occurrence of an event that with or without the passage
\nof time or the giving of notice or both would give rise to a right of
\ntermination, renegotiation or acceleration under any Contract or License.<\/p>\n
“EDI FINANCIAL STATEMENTS” – The materials described in SECTION 4.6(a)
\nof this Agreement.<\/p>\n
“EFFECTIVE TIME” – The date and time at which the Merger becomes
\neffective pursuant to SECTION 1.3 of this Agreement.<\/p>\n
“ENVIRONMENTAL CONDITION” – (a) The introduction into the environment of
\nany pollution, including without limitation any contaminant, irritant or
\npollutant or other toxic or hazardous substance (whether or not such
\npollution constituted at the time thereof a violation of any federal, state
\nor local law, ordinance or governmental rule or Regulation) as a result of
\nany spill, discharge, leak, emission, escape, injection, dumping or release
\nof <\/p>\n
A-2<\/p>\n
any kind whatsoever of any substance or exposure of any type in any work
\nplaces or to any medium, including without limitation air, land, surface
\nwaters or ground waters, or from any generation, transportation, treatment,
\ndischarge, storage or disposal of waste materials, raw materials, hazardous
\nmaterials, toxic materials or products of any kind or from the storage, use
\nor handling of any hazardous or toxic materials or other substances, as a
\nresult of which the Company has or may become liable to any person by any
\nreason of which any of the assets of the Company may suffer or be subjected
\nto any Lien, or (b) any noncompliance with any federal, state or local
\nenvironmental law, rule, Regulation or order as a result of or in connection
\nwith any of the foregoing.<\/p>\n
“ERISA” – The Employee Retirement Income Security Act of 1974, as amended.<\/p>\n
“EXCHANGE ACT” – The Securities Exchange Act of 1934, as amended.<\/p>\n
“FASB 5” – Statement of Financing Accounting Standards No. 5 issued by
\nthe Financial Accounting Standards Board in March 1975.<\/p>\n
“GAAP” – Generally accepted accounting principles.<\/p>\n
“GENERAL CLAIM” – Any claim other than a Tax Claim, Ownership Claim or
\nUndisclosed Liability Claim based upon, arising out of or otherwise in
\nrespect of: any inaccuracy in any representation or warranty or any breach of
\nany covenant or agreement made or to be performed by a party pursuant to this
\nAgreement.<\/p>\n
“HIRED EMPLOYEES” – The employees assigned to the Company Business and
\nidentified on SCHEDULE 6.5.<\/p>\n
“HIRED HOLD-OVER EMPLOYEE” – See SECTION 6.4 of this Agreement.<\/p>\n
“HSR ACT” – Section 7A of the Clayton Act, as added by Title II of the
\nHart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the
\nrules and regulations promulgated thereunder.<\/p>\n
“INDEMNITEE” – A party seeking indemnification under SECTIONS 9.3 or 9.4.<\/p>\n
“INDEMNIFYING PARTY” – The party obligated to provide indemnification
\npursuant to SECTIONS 9.3 or 9.4.<\/p>\n
“INTELLECTUAL PROPERTY” – Copyrights, trademarks, service marks, trade
\nnames, patents, applications therefor, technology rights and licenses,
\ncomputer software (including, without limitation, any source or object codes
\ntherefor or documentation relating thereto), trade secrets, franchises,
\nknow-how, inventions and intellectual property rights.<\/p>\n
A-3<\/p>\n
“IRS” – The Internal Revenue Service.<\/p>\n
“LIABILITY” – Any direct or indirect liability, indebtedness,
\nobligation, expense, claim, deficiency, guaranty or endorsement of or by any
\nperson (other than endorsements of notes, bills and checks presented to banks
\nfor collection or deposit in the ordinary course of business) of any type,
\nwhether accrued, absolute, contingent, matured, unmatured or other.<\/p>\n
“LICENSE” – Any license, franchise, notice, permit, easement, right,
\nauthorization or filing.<\/p>\n
“LIEN” – Any mortgage, lien, security interest, pledge, encumbrance,
\nrestriction on transferability, defect of title, charge or claim of any
\nnature whatsoever on any property or property interest.<\/p>\n
“LITIGATION” – Any lawsuit, action, claim, arbitration, administrative
\nor other proceeding, criminal prosecution or governmental investigation or
\ninquiry involving or affecting the Company or its business, assets or
\nContracts to which the Company is a party or by which it or its business,
\nassets or Contracts may be bound or affected.<\/p>\n
“LOSSES” – Any and all demands, claims, actions or causes of action,
\nassessments, losses, diminution in value, damages (including special and
\nconsequential damages), liabilities, costs, and expenses, including without
\nlimitation, interest, penalties, cost of investigation and defense, and
\nreasonable attorneys’ and other professional fees and expenses.<\/p>\n
“MATERIAL ADVERSE EFFECT” – With respect to ActaMed, a material adverse
\neffect on the ability of ActaMed to conduct the ActaMed Business or the
\nimpairment of ActaMed’s ability to perform its obligations under the ActaMed
\nDocuments.<\/p>\n
“MERGER” – The merger of SubCorp with and into the Company pursuant to
\nthis Agreement. <\/p>\n
“OWNERSHIP CLAIM” – Any claim arising out of or otherwise in respect of
\nany inaccuracy in the representations and warranties set forth in SECTIONS 4.1,
\n4.2, 4.3, 4.4 or 4.16 or 5.2 or 5.7 of this Agreement.<\/p>\n
“PUBLIC OFFERING” – A bona fide firm commitment underwritten offering of
\nActaMed Common Stock pursuant to a registration statement filed with and
\ndeclared effective by the SEC.<\/p>\n
“PREFERRED SHARES” – The shares of Series C Preferred Stock issued to
\nUHC pursuant to SECTION 3.1(a).<\/p>\n
A-4<\/p>\n
“REGISTRATION RIGHTS AGREEMENT” – The Registration Rights Agreement
\ndated May 3, 1994, by and among ActaMed and the signatures thereto, as
\namended.<\/p>\n
“REGISTRATION RIGHTS AGREEMENT AMENDMENT” – The agreement referenced in
\nSECTION 1.4(a)(2) hereof.<\/p>\n
“REGULATION” – Any statute, law, ordinance, regulation, order or rule of
\nany federal, state, local or other governmental agency or body or of any
\nother type of regulatory body, including, without limitation, those covering
\nenvironmental, energy, safety, health, transportation, bribery,
\nrecordkeeping, zoning, antidiscrimination, antitrust, wage and hour, and
\nprice and wage control matters.<\/p>\n
“RESTATED ARTICLES” Before the Closing, the Second Amended and Restated
\nArticles of Incorporated of ActaMed and, after the Closing, the Third Amended
\nand Restated Articles of Incorporation of ActaMed.<\/p>\n
“RESTRICTED PAYMENT” means (a) any payment or the incurrence of any
\nliability to make any payment in cash, property or other assets as a dividend
\nor other distribution in respect of any shares of capital stock of ActaMed or
\nany Subsidiary, excluding, however, any dividends payable to ActaMed by a
\nSubsidiary or dividends which may be payable solely in ActaMed Common Stock
\nof ActaMed or any Subsidiary and (b) except as otherwise permitted by the
\nTransaction Documents or a stock option agreement under the Stock Option
\nPlans, any payment or the incurrence of any liability to make any payment in
\ncash, property or other assets for the purposes of purchasing, retiring or
\nredeeming any shares of any class of capital stock of ActaMed or any
\nSubsidiary or any warrants, options or other rights to purchase any such
\nshares.<\/p>\n
“SCHEDULE” – Any of the disclosure schedules referred to in ARTICLES 4 or
\n5.<\/p>\n
“SEC” – The Securities and Exchange Commission.<\/p>\n
“SECURITIES ACT” – The Securities Act of 1933, as amended.<\/p>\n
“SERIES A PREFERRED STOCK” – The Series A Convertible Preferred Stock of
\nActaMed.<\/p>\n
“SERIES B PREFERRED STOCK” – The Series B Convertible Preferred Stock of
\nActaMed.<\/p>\n
“SERIES C PREFERRED STOCK” – The Series C Convertible Preferred Stock of
\nActaMed.<\/p>\n
“SERVICES AND LICENSE AGREEMENT” – The agreement referenced in SECTION
\n1.4(a)(1) hereof.<\/p>\n
A-5<\/p>\n
“SHAREHOLDERS’ AGREEMENT AMENDMENT” – The agreement referenced in
\nSECTION 1.4(a)(3) hereof.<\/p>\n
“SHARES” – The total of 1,000 shares of Company Common Stock
\nconstituting in the aggregate one hundred percent (100%) of the issued and
\noutstanding common stock of the Company.<\/p>\n
“STANDSTILL AGREEMENT AMENDMENT” – The agreement referenced in
\nSECTION 1.4(a)(4) hereof.<\/p>\n
“SUBCORP” – EDI Acquisition, Inc., a Georgia corporation.<\/p>\n
“SUBSIDIARY” – A corporation, limited liability company, partnership,
\nassociation, trust, joint venture or other entity in which ActaMed or the
\nCompany, as the case may be, has, directly or indirectly, an equity,
\nownership or proprietary interest of greater than ten percent (10%).<\/p>\n
“SUBSTANTIAL HOLDER” – An officer or employee of ActaMed or SubCorp who
\nis the beneficial owner of one percent (1%) or more of the outstanding voting
\npower or the outstanding equity (on a fully diluted basis) of ActaMed.<\/p>\n
“SURVIVING CORPORATION” – The Company, as the surviving corporation of
\nthe Merger, after the Merger. <\/p>\n
“TAX CLAIM” – Any claim based upon, arising out of or otherwise in
\nrespect of any inaccuracy in any representation or warranty or breach of any
\ncovenant or agreement made or to be performed by a party pursuant to this
\nAgreement related to any Taxes.<\/p>\n
“TAXES” – Any federal, state, county, local and other taxes, including
\nwithout limitation, income taxes, estimated taxes, excise taxes, sales taxes,
\nuse taxes, gross receipts taxes, franchise taxes, taxes on earnings and
\nprofits, employment and payroll related taxes, property taxes, real property
\ntransfer taxes, Federal Insurance Contributions Act taxes, taxes on value
\nadded and import duties, whether or not measured in whole or in part by net
\nincome, imposed by the United States or any political subdivision thereof or
\nby any jurisdiction other than the United States or any political subdivision
\nthereof.<\/p>\n
“THIRD PARTY CLAIM” – Any claim, suit or proceeding (including, without
\nlimitation, a binding arbitration or an audit by any taxing authority) that
\nis instituted against an Indemnitee by a person or entity other than an
\nIndemnitor and which, if prosecuted successfully, would result in a Loss for
\nwhich such Indemnitee is entitled to indemnification hereunder.<\/p>\n
A-6<\/p>\n
“TRANSACTION DOCUMENTS” – This Agreement and the documents exchanged by
\nthe parties at the Closing.<\/p>\n
“TRANSITION SERVICES AGREEMENT” – The agreement referenced in SECTION
\n1.4(a)(5) hereof.<\/p>\n
“UHC” – United Healthcare Corporation, a Minnesota corporation.<\/p>\n
“UHC DOCUMENTS” – All of the Transaction Documents to which either UHC
\nor the Company is a party.<\/p>\n
“UHC GROUP” – UHC and its Affiliates.<\/p>\n
“UHC INDEMNITEE” – UHC and its directors, officers, employees,
\naffiliates and assigns.<\/p>\n
“UNDISCLOSED LIABILITY CLAIM” – Any claim arising out of or otherwise in
\nrespect of any inaccuracy in the representations and warranties set forth in
\nSECTIONS 4.7, 4.8, 4.10, 4.20 or 4.23.<\/p>\n
A-7<\/p>\n
AMENDMENT TO
\n AGREEMENT AND PLAN OF MERGER<\/p>\n
THIS AMENDMENT (this “Amendment”) to the Agreement and Plan of Merger
\ndated March 1, 1996 (the “Plan of Merger”) is entered into this 4th day of
\nApril, 1996, by and among ActaMed Corporation, EDI Acquisition, Inc., United
\nHealthCare Corporation and EDI Services, Inc. (formerly UHC Green
\nAcquisition, Inc.). Capitalized terms used herein but not otherwise defined
\nshall have the meanings ascribed to them in the Plan of Merger.<\/p>\n
WHEREAS, the parties hereto desire to amend the Plan of Merger as set
\nforth herein.<\/p>\n
NOW, THEREFORE, in consideration of the mutual promises and covenants
\ncontained herein and for other good and valuable consideration, the receipt
\nand sufficiency of which are hereby acknowledged, the parties hereto agree as
\nfollows:<\/p>\n
1. SECTION 1.2. The second sentence of Section 1.2 of the Plan of
\nMerger is hereby deleted and is replaced in its entirety by the following
\nsentence:<\/p>\n
“Notwithstanding the foregoing, if the Closing does not occur on the
\n first day of a month, then solely for financial accounting and reporting
\n purposes, the parties hereto agree that the transactions contemplated
\n herein shall be deemed to have closed as of the first day of the month
\n in which the Closing occurs or the last day of the preceding month, as
\n appropriate; provided that the parties hereto agree that for all other
\n purposes, including, without limitation, risk of loss, the Closing shall
\n occur, and shall be deemed to have occurred on the actual date of the
\n Closing.”<\/p>\n
3. SECTION 3.3. The following Section 3.3 is hereby added to the Plan
\nof Merger:<\/p>\n
“3.3 BASIS OF ASSETS OF THE COMPANY. Actamed and UHC recognize and
\n agree that the prearranged transfer by UHC of the assets to the Company
\n in contemplation of and in connection with the sale of the stock of the
\n Company to Actamed is not a transaction described in Section 351 of the
\n Internal Revenue Code, that such transfer to the Company is taxable to
\n UHC as a taxable transfer of assets to the Company and the Company has a
\n fair market value basis in the assets received in the transfer from UHC
\n immediately prior to the time of the transaction contemplated hereby.
\n UHC and Actamed agree to report the foregoing transactions in a manner
\n consistent herewith. In addition, and in order to assure that Actamed
\n shall have a basis in the assets of the Company equal to the amount paid
\n pursuant to this Agreement, in lieu of the foregoing reporting and at
\n Actamed’s request, Actamed and UHC will make a timely election under
\n Section 338(h)(10) of the Internal Revenue Code and any corresponding
\n elections under state or local tax law. Actamed and UHC shall cooperate
\n in taking all actions necessary to report the transaction as described
\n above, or at Actamed’s request to effect the election, including the
\n execution and preparation of all forms, returns, elections and schedules
\n and other documents and instruments. Any allocation of basis among the
\n assets of the Company shall be initially prepared by UHC and consented
\n to by Actamed. Any such allocation shall, for tax purposes, be binding
\n on Actamed and UHC and no party shall take any position inconsistent
\n with such allocation. UHC and Actamed agree <\/p>\n
that any liability for Tax arising out of or in any way attributable to
\n the sale or deemed sale of assets by UHC shall be for the sole account
\n of the UHC.”<\/p>\n
2. SECTION 4.1. The last sentence of Section 4.1 of the Plan of Merger is
\nhereby deleted and is replaced in its entirety by the following sentence:<\/p>\n
“Substantially all of the assets required for the operation of the
\n Company Business were transferred to the Company on December 15, 1995,
\n and the Company did not have any operations prior to such date.”<\/p>\n
IN WITNESS WHEREOF, the undersigned parties have executed this Amendment as
\nof the day and year first above written.<\/p>\n
ACTAMED CORPORATION<\/p>\n
By: \/S\/ MICHAEL K. HOOVER
\n ——————————
\n Michael K. Hoover, President<\/p>\n
EDI ACQUISITION, INC.<\/p>\n
By: \/S\/ MICHAEL K. HOOVER
\n ——————————
\n Michael K. Hoover, President<\/p>\n
UNITED HEALTHCARE CORPORATION<\/p>\n
By: \/s\/ TRAVERS H. WILLS
\n ——————————
\n Title: Chief Operating Officer
\n —————————<\/p>\n
EDI SERVICES, INC.<\/p>\n
By: \/s\/ TRAVERS H. WILLS
\n ——————————
\n Title: Chief Operating Officer
\n —————————<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7750,9178],"corporate_contracts_industries":[9510,9440],"corporate_contracts_types":[9622,9626],"class_list":["post-43504","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-healtheon-corp","corporate_contracts_companies-unitedhealth-group-inc","corporate_contracts_industries-technology__programming","corporate_contracts_industries-health__plans","corporate_contracts_types-planning","corporate_contracts_types-planning__merger"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43504","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43504"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43504"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43504"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43504"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}