SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Healtheon/WebMD Corporation
(Name of Issuer)
Common Stock, Par Value $0.0001 Per Share
(Title of Class of Securities)
422209106
(CUSIP Number)
Charles Mele, Esq.
Medical Manager Corporation
669 River Drive
Elmwood Park, New Jersey 07407-1361
Telephone: (201) 703-3400
(Name, Address and Telephone Number
of Person Authorized to Receive Notices)
February 13, 2000
(Date of Event which requires Filing of this Statement)
- --------------------------------------------------------------------------------
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss. 240.13d-1(e), ss. 240.13d-1(f) or ss. 240.13d-1(g),
check the following box |_|.
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss. 240.13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
2
SCHEDULE 13D
CUSIP No. 422209106
- --------------------------------------------------------------------------------
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Medical Manager Corporation
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) |_|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
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4 Source of Funds (See Instructions) OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e).
|_|
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6 Citizenship or Place of Organization Delaware
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NUMBER OF 7 Sole Voting Power
SHARES 0
BENEFICIALLY ----------------------------------------------
OWNED BY 8 Shared Voting Power
EACH 30,283,065 shares
REPORTING ----------------------------------------------
PERSON 9 Sole Dispositive Power
WITH 0
----------------------------------------------
10 Shared Dispositive Power
0
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
30,283,065 shares
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) |_|
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
16.8%
- --------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions)
CO
- --------------------------------------------------------------------------------
<PAGE>
3
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1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
CareInsite, Inc.
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) |_|
(b) |_|
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds (See Instructions) OO
- --------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e).
|_|
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization Delaware
- --------------------------------------------------------------------------------
NUMBER OF 7 Sole Voting Power
SHARES 0
BENEFICIALLY ----------------------------------------------
OWNED BY 8 Shared Voting Power
EACH 30,283,065 shares
REPORTING ----------------------------------------------
PERSON 9 Sole Dispositive Power
WITH 0
----------------------------------------------
10 Shared Dispositive Power
0
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
30,283,065 shares
- --------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions) |_|
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
16.8%
- --------------------------------------------------------------------------------
14 Type of Reporting Person (See Instructions)
CO
- --------------------------------------------------------------------------------
<PAGE>
4
Item 1. Security and Issuer
The class of equity securities to which this Schedule 13D relates is
the common stock, par value $0.0001 per share (the "Common Stock"), of
Healtheon/WebMD Corporation, a Delaware corporation (the "Issuer"). The
principal executive offices of the Issuer are located at 400 The Lenox Building,
3399 Peachtree Road, Atlanta, Georgia 30326.
Item 2. Identity and Background
The persons listed in numbers 1 and 2 are the persons filing this
joint statement.
1. a. Medical Manager Corporation is a Delaware corporation
("Medical Manager").
b. The address of the principal office of Medical Manager is 669
River Drive Center 2, Elmwood Park, New Jersey 07407-1361.
c. Medical Manager Corporation operates three lines of business.
Medical Manager Health Systems is a leading provider of
physician practice management systems. Porex Corporation is a
leader in the development, manufacturing and distribution of
porous and solid plastic products. CareInsite, Inc., provides
innovative healthcare network and clinical communications
services.
d. During the last five years, Medical Manager has not been
convicted in any criminal proceeding.
e. During the last five years, Medical Manager has not been a
party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such
proceeding is or was subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
2. a. CareInsite, Inc. is a Delaware corporation ("CareInsite").
b. The address of the principal office of CareInsite is 669 River
Drive Center 2, Elmwood Park, New Jersey 07407-1361.
c. CareInsite is an indirect majority owned subsidiary of Medical
Manager. The principal business of CareInsite is providing
innovative healthcare network and clinical communications
services.
d. During the last five years, CareInsite has not been convicted
in any criminal proceeding.
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e. During the last five years, CareInsite has not been a party to
a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding is
or was subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any
violation with respect to such laws.
Medical Manager and CareInsite are referred to collectively in this
Schedule 13D as the "Reporting Persons". The name and present principal
occupation or employment, as well as the name and address of any corporation or
other organization in which such occupation or employment is conducted, of each
of the directors and executive officers of the Reporting Persons are set forth
on Exhibit A attached hereto, which Exhibit is incorporated herein by reference.
The business address of each of the directors and executive officers of the
Reporting Persons is 669 River Drive Center 2, Elmwood Park, NJ 07407 and all of
the directors and executive officers of the Reporting Persons are citizens of
the United States. On February 17, 1999, Roger H. Licht, a director of Medical
Manager, reached a settlement regarding an action by the Securities and Exchange
Commission pursuant to which Mr. Licht agreed, without admitting or denying any
of the allegations in the Securities and Exchange Commission's action, to the
permanent injunction prohibiting him from any future violations of the federal
securities laws. Except for the foregoing, during the last five years, to the
knowledge of the Reporting Persons, no person named on Exhibit A with respect to
that particular company has been (i) convicted in any criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding is or was subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
The response to Item 4 is incorporated by reference herein.
Item 4. Purpose of Transaction
On February 13, 2000, the Issuer and Medical Manager entered into an
Agreement and Plan of Merger (the "MMC Merger Agreement"), providing for the
acquisition of Medical Manager by the Issuer through the merger of Medical
Manager with and into the Issuer, with the Issuer as the surviving corporation
(the "MMC Merger"). Also on February 13, 2000, the Issuer, Avicenna Systems
Corporation, a Massachusetts corporation ("ASC"), and CareInsite entered into an
Agreement and Plan of Merger (the "CareInsite Merger Agreement"; together with
the MMC Merger Agreement, the "Merger Agreements"), providing for the
acquisition of CareInsite by the Issuer through the merger of CareInsite with
and into ASC, with ASC as the surviving corporation (the "CareInsite Merger").
ASC is a wholly owned subsidiary of Medical Manager. The Merger Agreements are
included as Exhibits D and E to this Schedule 13D.
<PAGE>
6
This Statement relates to a voting agreement entered into in
connection with the Merger Agreements by certain stockholders of the Issuer (the
"Stockholders") to and for the benefit of Medical Manager and CareInsite (the
"Voting Agreement"). Pursuant to the Voting Agreement, the Stockholders have
agreed to vote their shares of Common Stock, and have granted to Medical Manager
and CareInsite an irrevocable proxy to vote such shares, (a) in favor of
adopting the MMC Merger Agreement, approving the MMC Merger, issuing additional
shares of Common Stock in the MMC Merger and pursuant to the CareInsite Merger
Agreement, and approving the other transactions contemplated by the Merger
Agreements, (b) against any action or agreement that would result in a breach of
any covenant, representation or warranty or any other obligation or agreement of
Issuer under the Merger Agreements or which would result in any of the
conditions to the Merger Agreements not being fulfilled, and (c) in favor of any
other matter necessary to the consummation of the transactions contemplated by
the Merger Agreements and considered and voted upon by the stockholders of the
Issuer. A copy of the Voting Agreement is filed herewith as Exhibit B to this
Schedule 13D and is incorporated herein by reference. The Reporting Persons
acquired the right to direct the voting of the shares of Common Stock to ensure
that, unless the Merger Agreements have been terminated in accordance with their
terms, such shares are voted in favor of the transactions contemplated by the
Merger Agreements and not in favor of any other competing transactions.
Item 5. Interest in Securities of the Issuer
As a result of the Voting Agreement, the Reporting Persons may be
deemed to each be the beneficial owner of 30,283,065 shares of Common Stock for
purposes of Rule 13d-1(a) promulgated under the Securities Exchange Act of 1934,
as amended, which represents approximately 16.8% of the shares of Common Stock
outstanding (based on the number of shares of Common Stock outstanding on
February 7, 2000).
The Stockholders retain the right to receive, or the power to direct
the receipt of dividends from, or the proceeds from the sale of, the Common
Stock of the Issuer.
To the knowledge of the Reporting Persons, neither the Reporting
Persons nor any other person referred to in Exhibit A hereto beneficially owns
or has acquired or disposed of any shares of Common Stock during the past 60
days.
Item 6. Contracts, Arrangements, Understanding of Relationships with Respect
to Securities of the Issuer
The responses to Item 4 and Item 5 are incorporated by reference.
On February 13, 2000, the Issuer, Medical Manager Health Systems, a
wholly-owned subsidiary of Medical Manager ("MMHS"), and CareInsite entered into
a business agreement (the "Health Systems Agreement") which requires, as
soon as practicable after the consummation of Healtheon/WebMD's previously
announced acquisition (the "Envoy Transaction") of Envoy Corporation ("Envoy"),
but in any event no later than five business days after such consummation, the
parties to extend the term of the Envoy Services Networked Partner Agreement
between MMHS and Envoy, dated as of August 29, 1997, and amended June 29, 1998.
In addition, as soon as practicable after the consummation of the Envoy
<PAGE>
7
Transaction, but in any event no later than five days after such consummation,
the Issuer agreed to cause Envoy to enter into an interchange agreement
(the "Interchange Agreement") with CareInsite. Under the terms of the Health
Systems Agreement, the Issuer is required to pay $50,000,000 to each of MMHS and
CareInsite, payable in $12,500,000 installments on each of June 30, 2000,
September 30, 2000, December 31, 2000 and March 31, 2001. At the election of the
Issuer, such payments may be in cash or in Common Stock. A copy of the Health
Systems Agreement, including a form of the Interchange Agreement which is
attached as Annex A thereto, is filed herewith as Exhibit C to this Schedule 13D
and is incorporated herein by reference.
Except as described herein, there are no contracts, arrangements,
understandings or relationships (legal or otherwise) among the persons named in
Item 2 and between such persons and any person with respect to any Securities of
the Issuer, including but not limited to transfer or voting of any of the
securities, finder's fees, joint ventures, loan or option arrangements, put or
calls, guarantors of profit, division of profit or loss or the giving or
withholding of proxies.
<PAGE>
8
Item 7. Material to be Filed as Exhibits
Exhibit A - Directors and Officers of the Reporting Persons.
Exhibit B - Voting Agreement entered into by various stockholders of
Healtheon/WebMD Corporation in favor of Medical Manager and
CareInsite, dated February 13, 2000.
Exhibit C - Agreement among Healtheon/WebMD, CareInsite and Medical Manager
Health Systems, dated February 13, 2000.
Exhibit D - Joint Filing Agreement between the Reporting Persons pursuant to
Rule 13d-1(k)(l)(iii).
Exhibit E - Agreement and Plan of Merger between
Healtheon/WebMD Corporation and Medical Manager
Corporation, dated February 13, 2000.*
Exhibit F - Agreement and Plan of Merger among Healtheon/WebMD Corporation,
Avicenna Systems Corporation and CareInsite, Inc., dated February
13, 2000.**
* Incorporated by reference to Exhibit 2.1 of Medical Manager's Form 8-K
filed with the Commission on February 16, 2000.
** Incorporated by reference to Exhibit 2.2 of Medical Manager's Form 8-K
filed with the Commission on February 16, 2000.
<PAGE>
9
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 17, 2000
MEDICAL MANAGER CORPORATION
By: /S/ ANTHONY VUOLO
-----------------------------------
Name: Anthony Vuolo
Title: Senior Vice President, Business
Development
<PAGE>
10
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 17, 2000
CAREINSITE, INC.
By: /S/ DAVID C. AMBURGEY
--------------------------------------
Name: David C. Amburgey
Title: Senior Vice President and General
Counsel
<PAGE>
11
Exhibit A
Directors and Executive Officers of Medical Manager Corporation
<TABLE>
<CAPTION>
Name Principal Occupation
<S> <C>
1. Kim A. Davis Senior Vice President - Chief Executive Officer and President of
Porex Corporation
2. Thomas R. Ferguson (Director) Partner - Ferguson, Case, Orr, Paterson & Cunningham, a law
firm, Ventura, California
3. Dr. Mervyn L. Goldstein (Director) Physician in private practice, New York, New York
4. Ray E. Hannah (Director) Vice Chairman - Porex Corporation
5. Courtney Jones (Director) Former Chief Financial Officer of Merrill Lynch & Co., Inc.;
Treasurer of General Motors Corporation
6. John H. Kang (Director) Co-Chief Executive Officer
7. Ray Kurzweil (Director) President and Chief Executive Officer of
Medical Learning Company, Inc.
8. Kirk G. Layman Senior Vice President - Finance and Chief Accounting Officer
9. Roger H. Licht (Director) Partner - Licht & Licht, a law firm, Beverly Hills,
California
10. James R. Love Executive Vice President - Finance and
Administration and Chief Financial Officer
11. James V. Manning (Director) Chairman of the Board of Group One Software, Inc. and Former
President and Chief Executive Officer of Synetic, Inc.
12. Bernard A. Marden (Director) Private Investor
13. David M. Margulies, M.D. Executive Vice President - Chief Scientist
14. Charles A. Mele (Director) Executive Vice President - General Counsel
15. Chris Peifer (Director) President of Tice Financial Services, Inc., Tampa, Florida
16. Marvin P. Rich (Director) Chief Executive Officer of CareInsite, Inc.
17. Herman Sarkowsky (Director) Chairman of the Board and Chief Executive Officer of
Sarkowsky Investment Corporation, Seattle, Washington
18. Michael A. Singer (Director) Vice Chairman of the Board of Directors and Co-Chief
Executive Officer
19. Paul C. Suthern (Director) President and Chief Executive Officer of CareInsite, Inc.
20. Anthony Vuolo Senior Vice President - Business Development and Treasurer
</TABLE>
<PAGE>
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<TABLE>
<CAPTION>
<S> <C>
21. Albert M. Weis (Director) President of A.M. Weis & Co., Inc., and Chairman of the Board
of the New York Board of Trade, New York, New York
22. Martin J. Wygod (Director) Chairman of the Board of Directors
</TABLE>
<PAGE>
13
Directors and Executive Officers of CareInsite, Inc.
<TABLE>
<CAPTION>
Name Principal Occupation
<S> <C>
1. Mark J. Adler, M.D. (Director) Chief Executive Officer of Oncology Medical Center of San
Diego, San Diego, California
2. David C. Amburgey Senior Vice President, General Counsel and Secretary
3. Richard C. Cohan Executive Vice President - Operations
4. Robert C. Dieterle Executive Vice President, Chief Operating Officer
5. Roger C. Holstein (Director) Executive Vice President, Sales and Marketing
6. James R. Love (Director) Executive Vice President, Chief Financial Officer
7. James V. Manning (Director) Director of Medical Manager Corporation
8. David M. Margulies, M.D. (Director) Executive Vice President, Chief Scientist
9. Charles A. Mele (Director) Executive Vice President, General Counsel of Medical Manager
Corporation
10. Lawrence A. Rader (Director) General Partner of the Rader Fund
11. Marvin P. Rich (Director) Chief Executive Officer
12. Michael A. Singer (Director) Vice Chairman of the Board of Directors and Co-Chief Executive
Officer of Medical Manager Corporation
13. Joseph E. Smith (Director) Former President of Parke-Davis Pharmaceuticals
14. Paul C. Suthern (Director) Vice Chairman of the Board of Directors
15. Martin J. Wygod (Director) Chairman of the Board of Directors
16. Steven L. Zatz Senior Vice President, Medical Director
</TABLE>
<PAGE>
Exhibit B
VOTING AGREEMENT
By
STOCKHOLDERS OF
HEALTHEON/WEBMD CORPORATION
MEDICAL MANAGER CORPORATION
and
CAREINSITE, INC.
Dated as of February 13, 2000
<PAGE>
1
VOTING AGREEMENT
VOTING AGREEMENT, dated as of February 13, 2000 (this "Agreement"), by
the parties identified on Schedule A hereto (each, a "Stockholder" and
collectively, the "Stockholders") to and for the benefit of Medical Manager
Corporation, a Delaware corporation (the "Company"), and CareInsite, Inc., a
Delaware corporation ("CareInsite").
WHEREAS, as of the date hereof, each Stockholder owns of record and
beneficially, is the beneficial owner, or has the power to vote or direct the
voting of the number of shares of common stock (the "Parent Common Stock"), par
value $0.0001 per share, of Healtheon/WebMD Corporation, a Delaware corporation
("Parent"), set forth opposite such Stockholder's name on Schedule A hereto
(such shares, together with any shares of Parent Common Stock acquired by the
Stockholders prior to the termination of this Agreement, being referred to
herein as the "Shares");
WHEREAS, concurrently with the execution of this Agreement, Parent and
the Company are entering into an Agreement and Plan of Merger, dated as of the
date hereof (the "Merger Agreement"; capitalized terms used and not otherwise
defined herein shall have the respective meanings assigned to them in the Merger
Agreement), pursuant to which, upon the terms and subject to the conditions
thereof, the Company will be merged with and into Parent (the "Merger"); and
WHEREAS, concurrently with the execution of this Agreement, Parent,
Avicenna Systems Corporation ("Avicenna") and CareInsite are entering into an
Agreement and Plan of Merger, dated the date hereof (the "CareInsite Merger
Agreement"); and
WHEREAS, as a condition to the willingness of Parent and the Company to
enter into the Merger Agreement, and Parent and CareInsite to enter into the
CareInsite Merger Agreement, the Company and CareInsite have requested the
Stockholders to agree, and, in order to induce the Company to enter into the
Merger Agreement and CareInsite to enter into the CareInsite Merger Agreement,
the Stockholders are willing to agree, to vote in favor of adopting the Merger
Agreement, approving the Merger and issuing additional shares of Parent Common
Stock in the Merger and pursuant to the CareInsite Merger Agreement (the "Parent
Proposals"), upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements contained herein, and intending to be legally
bound hereby, the parties hereby agree as follows:
Section 1. Voting of Shares. Until the termination of this Agreement in
accordance with the terms hereof, each Stockholder hereby agrees that, at the
Parent Stockholders' Meeting or any other meeting of the stockholders of Parent,
however called, and in any action by written consent of the stockholders of
Parent, such Stockholder will vote all of its
<PAGE>
2
respective Shares (a) in favor of the Parent Proposals and the other
transactions contemplated by the Merger Agreement and by the CareInsite Merger
Agreement, (b) against any action or agreement that would result in a breach of
any covenant, representation or warranty or any other obligation or agreement of
Parent under the Merger Agreement, the CareInsite Merger Agreement or which
would result in any of the conditions to the Merger Agreement or the CareInsite
Merger Agreement not being fulfilled, and (c) in favor of any other matter
necessary to the consummation of the transactions contemplated by the Merger
Agreement or the CareInsite Merger Agreement and considered and voted upon by
the stockholders of the Parent. Each Stockholder acknowledges receipt and review
of a copy of the Merger Agreement.
Section 2. Proxy. Each Stockholder, by this Agreement, does hereby
constitute and appoint the Company and CareInsite or either one of them, or any
nominee of either of them, with full power of substitution, as the Stockholder's
irrevocable proxy and attorney-in-fact to vote its Shares as indicated in
Section 1. Each Stockholder intends this proxy to be irrevocable and coupled
with an interest and will take such further action and execute such other
instruments as may be necessary to effectuate the intent of this proxy and
hereby revokes any proxy previously granted by him with respect to its Shares.
Section 3. Transfer of Shares. Each Stockholder represents and warrants
that it has no present intention of taking action to, prior to the termination
of this Agreement in accordance with the terms hereof, and shall not, directly
or indirectly, (a) sell, assign, transfer (including by operation of Law),
pledge, encumber or otherwise dispose of any of its Shares, (b) deposit any of
its Shares into a voting trust or enter into a voting agreement or arrangement
with respect to its Shares or grant any proxy or power of attorney with respect
thereto which is inconsistent with this Agreement, or (c) enter into any
contract, option or other arrangement or undertaking with respect to the direct
or indirect sale, assignment, transfer (including by operation of Law) or other
disposition of any Shares, except in each case with the prior written consent of
the Company and CareInsite, which shall not be unreasonably withheld or delayed
if the percentage of outstanding voting common stock (on both an actual
outstanding and fully diluted, fully converted basis) entitled to vote on the
Parent Proposals covered by voting agreements substantially similar to this
Agreement is not reduced as a result of such sale, assignment, transfer or other
disposition.
Section 4. Representations and Warranties of Stockholder. Each
Stockholder hereby represents and warrants to the Company and CareInsite,
severally and not jointly, with respect to itself and its ownership of its
Shares as follows:
(a) Such Stockholder has all legal capacity to execute
and deliver this Agreement and to consummate the transactions
contemplated hereby.
(b) Such Stockholder is the record or beneficial owner
of its Shares and such Shares are owned free and clear of any liens,
claims, charges, encumbrances or voting
<PAGE>
3
agreements and commitments of every kind, other than this Agreement.
Other than with respect to rights to purchase Parent Common Stock
granted under Parent's stock option plans, agreements and arrangements
or pursuant to warrants outstanding on the date hereof, such
Stockholder does not own or hold any rights to acquire any additional
Parent Common Stock or other securities of Parent or any interest
therein or any voting rights with respect to any additional Parent
Common Stock or any other securities of Parent.
(c) This Agreement has been duly executed and delivered
by such Stockholder.
(d) This Agreement constitutes the valid and binding
agreement of such Stockholder, enforceable against such Stockholder in
accordance with its terms except as such enforceability may be limited
by bankruptcy, insolvency or other similar requirements of Law
affecting the enforcement of creditor's rights generally and by general
principles of equity.
Section 5. Termination. This Agreement shall terminate upon the
earliest to occur of (i) the Effective Time (as defined in the Merger Agreement)
or (ii) the termination of the Merger Agreement in accordance with the terms
thereof; provided that the provisions of Sections 6 through 14 (inclusive) of
this Agreement shall survive any termination of this Agreement; and provided
further that no such termination shall relieve any party of liability for a
willful breach hereof prior to termination.
Section 6. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
Section 7. Notices. (a) All notices and other communications given or
made pursuant to this Agreement shall be in writing and shall be sent by an
overnight courier service that provides proof of receipt, mailed by registered
or certified mail (postage prepaid, return receipt requested) or telecopied to
the parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
if to the Company:
Medical Manager Corporation
669 River Drive
Elmwood Park, New Jersey 07407-1361
Telephone: (201) 703-3400
Facsimile: (201) 703-3401
Attention: General Counsel
<PAGE>
4
with a copy to:
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Telephone: (212) 848-4000
Facsimile: (212) 848-7179
Attention: Creighton O'M. Condon, Esq.
if to CareInsite:
CareInsite, Inc.
669 River Drive
Elmwood Park, New Jersey 07407-1361
Telephone: (201) 703-3400
Facsimile: (201) 703-3401
Attention: General Counsel
with a copy to:
Davis, Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telephone: (212) 450-4000
Facsimile: (212) 450-4800
Attention: John Bick, Esq.
if to the Stockholders:
At the address set forth opposite such Stockholder's
name on Schedule A
with a copy to:
Nelson Mullins Riley & Scarborough, L.L.P.
Bank of America Corporate Center
Suite 2600
100 N. Tryon Street
Charlotte, North Carolina 28202
Telephone: (704) 417-3200
Facsimile: (704) 377-4814
Attention: H. Bryan Ives III
C. Mark Kelly
<PAGE>
5
(b) Notices of changes of address shall be effective only upon receipt.
Section 8. Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
Section 9. Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter hereof.
Section 10. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of Law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated by this Agreement
be consummated as originally contemplated to the fullest extent possible.
Section 11. Assignment; Binding Effect; Benefit. (a) Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of Law or otherwise)
without the prior written consent of the other parties.
(b) This Agreement shall be binding upon and inure solely to the
benefit of the parties hereto and their respective successors and permitted
assigns, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
Section 12. Governing Law; Forum. (a) This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware
applicable to contracts executed in and to be performed in that state.
(b) Each of the parties hereto irrevocably agrees that all legal
actions or proceedings with respect to this Agreement shall be brought and
determined in the courts of the State of Delaware or in the United States
District Court for the State of Delaware, and each of the parties hereto hereby
irrevocably submits with regard to any such action or proceeding for itself and
in respect to its property, generally and unconditionally, to the jurisdiction
of the aforesaid courts. Each of the parties hereto hereby irrevocably waives,
and agrees not to assert, by way of motion, as a defense, counterclaim or
otherwise, in any action or proceeding with respect to this Agreement, (i) any
claim that it is not personally subject to the jurisdiction of the above-named
courts for any reason other than the failure to serve process in accordance with
applicable Law,
<PAGE>
6
(ii) that it or its property is exempt or immune from jurisdiction of any such
court or from any legal process commenced in such courts and (iii) to the
fullest extent permitted by applicable Law, that (A) the suit, action or
proceeding in any such court is brought in an inconvenient forum, (B) the venue
of such suit, action or proceeding is improper and (C) this Agreement, or the
subject matter hereof, may not be enforced in or by such courts.
Section 13. Counterparts. This Agreement may be executed and delivered
in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed and delivered shall be deemed to be an
original but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
<PAGE>
Section 14. WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND
CAREINSITE AND EACH STOCKHOLDER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE
COMPANY, CAREINSITE AND THE STOCKHOLDERS IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as of the date first written above.
-----------------------------
Agreed and Acknowledged:
MEDICAL MANAGER
CORPORATION
/S/ KIRK LAYMAN
- -------------------------------------------
By: Kirk Layman
Its: Senior Vice President - Finance and
Chief Accounting Officer
CAREINSITE, INC.
/S/ JAMES R. LOVE
- -------------------------------------------
By: James R. Love
Its: Executive Vice President and
Chief Financial Officer
<PAGE>
Section 14. WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND
CAREINSITE AND EACH STOCKHOLDER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE
COMPANY, CAREINSITE AND THE STOCKHOLDERS IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE AND ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as of the date first written above.
/S/ JEFFREY ARNOLD
---------------------
Agreed and Acknowledged:
MEDICAL MANAGER
CORPORATION
- -------------------------------------------
By:
Its:
CAREINSITE, INC.
- -------------------------------------------
By:
Its:
<PAGE>
SCHEDULE A
STOCKHOLDERS
- --------------------------------------------------------------------------------
Number of Shares of
Parent Common Stock
Owned of
Name of Stockholder Address Record and Beneficially
- --------------------------------------------------------------------------------
Microsoft Corporation One Microsoft Way 11,933,342
Redmond, WA 98052
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE A
STOCKHOLDERS
- --------------------------------------------------------------------------------
Number of Shares of
Parent Common Stock
Owned of
Name of Stockholder Address Record and Beneficially
- --------------------------------------------------------------------------------
/S/ JAMES H. CLARK 11,846,265
James H. Clark
- --------------------------------------------------------------------------------
<PAGE>
Exhibit C
Agreement among Healtheon/WebMD, CareInsite and
Medical Manager Health Systems
This Agreement (this "Agreement") among Healtheon/WebMD Corporation
("Healtheon/WebMD"), CareInsite, Inc. ("CareInsite"), and Medical Manager Health
Systems Inc. (formerly Medical Manager Corporation) ("Medical Manager") is
entered into with reference to the following facts:
A. Healtheon/WebMD has agreed to acquire the outstanding shares of
Envoy Corporation ("Envoy") pursuant to an Agreement and Plan of Merger (the
"Agreement and Plan of Merger") among Healtheon/WebMD Corporation, Pine Merger
Corp., Envoy Corporation, Quintiles Transnational Corporation, and QFinance,
Inc., dated as of January 22, 2000 (the "Envoy Merger");
B. Healtheon/WebMD has agreed to acquire the outstanding shares of, and
to merge with, Medical Manager Corporation ("MMC") pursuant to an Agreement and
Plan of Merger (the "Medical Manager Agreement and Plan of Merger") between
Healtheon/WebMD and MMC, dated as of February 13, 2000;
C. Healtheon/WebMD has agreed to acquire the outstanding shares of
CareInsite pursuant to an Agreement and Plan of Merger (the "CareInsite
Agreement and Plan of Merger") among Healtheon/WebMD, Avicenna Systems
Corporation and CareInsite, dated as of February 13, 2000;
D. Envoy and Medical Manager previously entered into a certain
Envoy Services Networked Partner Agreement for Medical Manager Corporation,
dated as of August 29, 1997, and amended by an Addendum, dated as of June 29,
1998, pursuant to which Envoy makes certain services available to Medical
Manager (the "Networked Partner Agreement");
E. Healtheon/WebMD and Medical Manager mutually desire that the term of
the Networked Partner Agreement be modified as described below and extended for
a period of three years from its current expiration date of September 1, 2000;
F. Healtheon/WebMD, CareInsite and Medical Manager mutually desire that
CareInsite and Envoy should enter into an agreement concerning the interchange
of administrative claims (the "Interchange Agreement");
G. As an inducement for Medical Manager and CareInsite to enter into
this Agreement, for MMC to enter into the Medical Manager Agreement and Plan of
Merger, and for CareInsite to enter into the CareInsite Agreement and Plan of
Merger and the Interchange Agreement, and in recognition of the benefits to
Healtheon/WebMD under this Agreement, including, without limitation, the
extension of the term of the Networked Partner Agreement
<PAGE>
2
the limitations on Medical Manager's right to terminate the Networked Partner
Agreement, Healtheon/WebMD has agreed to make certain payments to Medical
Manager and CareInsite; and
H. Healtheon/WebMD understands that, in reliance upon this Agreement
and the services to be provided by Healtheon/WebMD hereunder, Medical Manager
and CareInsite have determined not to acquire other clearinghouse entities.
Now, therefore, Healtheon/WebMD, CareInsite and Medical Manager agree as
follows:
1.0 As soon as practicable after the date of the consummation of the Envoy
Merger, but in any event no later than five (5) business days after the
consummation of the Envoy Merger, Healtheon/WebMD shall cause Envoy to enter
into an amendment to the Networked Partner Agreement as follows:
(a) the definition of Vendor Products in Section 1.15 shall be amended
by adding, at the end, "or other computer software programs for
physician office automation acquired by Vendor."
(b) notwithstanding any other provision of this Agreement, prior to
April 1, 2002, Envoy's obligations under Sections 5.9 and 5.10 of
this Agreement shall apply to all ENVOY Products and ENVOY
Services (including without limitation ENVOY Products and ENVOY
Services delivered through Healtheon/WebMD Services and WebMD
Practice). After April 1, 2002, Envoy's obligations under Sections
5.9 and 5.10 of this Agreement shall be limited to ENVOY Products
and ENVOY Services sold on a standalone basis and not bundled with
WebMD Practice.
(c) the second and third sentences of Section 10.1 shall be deleted in
their entirety and replaced with the following: "EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH IN SECTIONS 3.15 AND 7.4, IN NO
EVENT SHALL ENVOY BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL OR
SPECIAL DAMAGES EXCEPT IN THE EVENT OF A WRONGFUL TERMINATION BY
ENVOY OR A WILLFUL FAILURE BY ENVOY TO PERFORM ITS OBLIGATIONS
UNDER THIS AGREEMENT. ANY CLAIM NOT PRESENTED WITHIN ONE YEAR FROM
THE DISCOVERY OF THE CLAIM SHALL BE DEEMED WAIVED. EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH IN SECTIONS 3.15 AND 7.4, AND EXCEPT
IN THE EVENT OF A WRONGFUL TERMINATION BY ENVOY OR A WILLFUL
FAILURE BY ENVOY TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT,
ENVOY'S LIABILITY TO VENDOR AND VENDOR'S CUSTOMERS UNDER THIS
AGREEMENT OR WITH RESPECT TO SERVICES PERFORMED OR MATERIALS
FURNISHED HEREUNDER (WHETHER UNDER CONTRACT,
<PAGE>
3
TORT, OR ANY OTHER THEORY OF LAW) SHALL IN NO EVENT EXCEED THE
TOTAL AMOUNT OF FEES PAID TO ENVOY HEREUNDER DURING THE NINE-MONTH
PERIOD PRECEDING SUCH CLAIM."
(d) the term of the agreement shall be amended by deleting the words
in Section 11.1 "for a period of three (3) years following the
Effective Date" and substituting the words "until September 1,
2003."
(e) the first sentence of Section 11.2 shall be deleted in its
entirety and replaced with the following: "Except as expressly
provided in this Section 11.2 or in the event Vendor has failed to
make timely payment pursuant to this Agreement and such failure is
not cured within 60 days after receipt of written notice from
ENVOY of such failure to pay, ENVOY shall have no right to
terminate this Agreement. Vendor shall have the right to terminate
this Agreement at any time upon 60 days prior written notice given
after the date which is one year after the date that the Networked
Partner Agreement is amended."
(f) the last sentence of Section 11.3 shall be deleted in its entirety
and replaced with the following: "Upon the cure by Vendor of its
failure to satisfy such obligations ENVOY shall resume the use by
Vendor of such terminated ENVOY Service and/or ENVOY Product."
(g) a new Section 12.12 shall be added as follows: "The parties hereto
agree that irreparable damage would occur in the event any
provision of this Agreement was not performed in accordance with
the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any other
remedy at law or in equity."
(h) the third sentence of Section 12.6 shall be deleted in its
entirety.
(i) Section 12.10 shall be deleted in its entirety and replaced with
the following: "This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Delaware applicable
to contracts executed in and to be performed in that state,
without giving effect to its conflict of laws rules. Each of the
parties hereto agrees that all legal actions or proceedings with
respect to this Agreement shall be brought and determined in the
courts of the State of Delaware, and each of the parties hereto
hereby submits with regard to any such action or proceeding for
itself and in respect to its property, generally and
unconditionally, to the jurisdiction of the aforesaid courts."
2.0 In addition, as soon as practicable after the consummation of the Envoy
Merger but in any event no later than five (5) days after the consummation of
the Envoy Merger,
<PAGE>
4
Healtheon/WEBMD shall cause Envoy to enter into an Interchange Agreement with
CareInsite, Inc. in the form attached hereto as Annex A.
2.1 On each of June 30, 2000, September 30, 2000, December 31, 2000 and
March 31, 2001, Healtheon/WebMD shall pay to CareInsite $12,500,000 and to
Medical Manager $12,500,000; provided that any previous payments made to
CareInsite and Medical Manager shall be repaid to Healtheon/WebMD in the event
Healtheon/WebMD is no longer required to make payments to CareInsite and Medical
Manager under clauses (b) or (c) of the last sentence of this Section 2.1. Such
payments shall be payable at the election of Healtheon/WebMD (i) in cash by wire
transfer in immediately available funds to an account designated by CareInsite
and Medical Manager or (ii) in shares of common stock, par value $0.0001 per
share, of Healtheon/WebMD ("Healtheon/WebMD Common Stock"); provided, however,
that in the event Healtheon/WebMD elects to pay in stock and Medical Manager or
CareInsite shall be restricted in any way from receiving from Healtheon/WebMD,
or Healtheon/WebMD shall be restricted in any way from paying to Medical Manager
or CareInsite, Healtheon/WebMD Common Stock, then Medical Manager or CareInsite,
as applicable, shall have the right to designate an alternative recipient of
such stock. Healtheon/WebMD agrees that all shares of Healtheon/WebMD Common
Stock paid to Medical Manager or CareInsite pursuant to this Section 2.1 shall
be duly authorized, validly issued, fully paid, nonassessable and free of any
liens or other encumbrances. For the purpose of this Section 2.1, the value of
any Healtheon/WebMD Common Stock used for payment shall be based on the average
of the closing prices per share of Healtheon/WebMD Common Stock for the ten
trading days immediately preceding payment. Notwithstanding the foregoing,
Healtheon/WebMD shall no longer be required to make payments pursuant to this
Section 2.1 at any time after (a) either Medical Manager or CareInsite shall
acquire or enter into an agreement to acquire any material clearinghouse entity
or substantially all of the assets thereof, (b) termination of the Medical
Manager Agreement and Plan of Merger by Healtheon/WebMD pursuant to Sections
8.01(b) (but only if at the time of termination under such Section 8.01(b) there
exists a breach of such Agreement which would have resulted in the conditions to
closing set forth in Sections 7.02(a) or 7.02(b) thereof failing to be
satisfied), 8.01(d)(i), 8.01(d)(ii) or 8.01(f) (but not if at the time of
termination under such Section 8.01(d)(i) or Section 8.01(f) there exists a
breach of such Agreement which would have resulted in the conditions to closing
set forth in Sections 7.03(a) or 7.03(b) thereof failing to be satisfied), or
(c) termination of the CareInsite Agreement and Plan of Merger by
Healtheon/WebMD pursuant to Sections 8.01(b) (but only if at the time of
termination under such Section 8.01(b) there exists a breach of such Agreement
which would have resulted in the conditions to closing set forth in Sections
7.02(a) or 7.02(b) thereof failing to be satisfied) or 8.01(e) (but not if at
the time of termination under such Section 8.01(e) there exists a breach of such
Agreement which would have resulted in the conditions to closing set forth in
Sections 7.03(a) or 7.03(b) thereof failing to be satisfied).
2.2 Medical Manager and CareInsite each agree that any shares of
Healtheon/WebMD acquired by it pursuant to this Agreement are being acquired for
investment only and not with a
<PAGE>
5
view to any public distribution thereof, and shall not offer to sell or
otherwise dispose of such shares so acquired by it in violation of any of the
registration requirements of the Securities Act of 1933, as amended.
2.3 This Agreement, the Interchange Agreement and the Networked Partner
Agreement, as amended, constitute the entire agreement and supercede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof.
2.4 The parties hereto agree that irreparable damage would occur in the
event any provision of this Agreement was not performed in accordance with the
terms hereof and that the parties shall be entitled to specific performance of
the terms hereof, in addition to any other remedy at law or in equity.
2.5 This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Delaware applicable to contracts executed in and to be
performed in that state, without giving effect to its conflict of laws rules.
Each of the parties hereto agrees that all legal actions or proceedings with
respect to this Agreement shall be brought and determined in the courts of the
State of Delaware, and each of the parties hereto hereby submits with regard to
any such action or proceeding for itself and in respect to its property,
generally and unconditionally, to the jurisdiction of the aforesaid courts.
<PAGE>
6
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
on its behalf by its duly authorized officers, as of February 13, 2000.
MEDICAL MANAGER HEALTH HEALTHEON/WEBMD CORPORATION
SYSTEMS, INC.
Signature: /s/ FRANK J. FAILLA JR. Signature: /s/ JACK DENNISON
----------------------------- --------------------------
Name: Frank J. Failla, Jr. Name: Jack Dennison
Title: Vice President Title: Executive Vice President
CAREINSITE, INC.
Signature: /s/ JAMES R. LOVE
-----------------------------
Name: James R. Love
Title: Executive Vice President and
Chief Financial Officer
<PAGE>
ANNEX A
AGREEMENT
This Agreement ("Agreement") is made effective this _________ day of February,
2000 by and between ENVOY Corporation (hereinafter referred to as "ENVOY") and
CareInsite, Inc. (herein referred to as "CAREINSITE").
WHEREAS, ENVOY provides management and administrative services to healthcare
providers that include electronic claim transmission capabilities to its
customers; and
WHEREAS, CAREINSITE provides management and administrative services to
healthcare providers that include electronic transactions capabilities to its
customers and connects these providers to certain payers; and
WHEREAS, subject to the terms and conditions of this Agreement, ENVOY and
CAREINSITE wish to allow certain electronic transactions originated by ENVOY
providers to be transmitted by CAREINSITE to certain payers with whom CAREINSITE
has a direct connection and an effective agreement to submit such transactions
(the "CAREINSITE Payers"); and
WHEREAS, subject to the terms and conditions of this Agreement, ENVOY and
CAREINSITE wish to allow certain electronic transactions originated by
CAREINSITE providers to be transmitted by ENVOY to certain payers with whom
ENVOY has a direct connection and an effective agreement to submit such
transactions (the "ENVOY Payers");
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto agree as follows:
1.0 ENVOY PROVIDER TRANSACTION OBLIGATIONS
1.1 ENVOY and CAREINSITE shall operate their systems and services so that all
administrative transactions (including claims, claim status, encounters,
eligibility, referral, authorization, remittance advice, and rosters) of ENVOY'S
provider customers directed to the CAREINSITE PAYERS may be, at ENVOY'S
election, routed and submitted electronically through the CAREINSITE services
pursuant to the license granted in Section 2.0 hereof. ENVOY may use all such
administrative transactions services offered by CAREINSITE, and ENVOY may, at
its option, participate in any pilots of new products. ENVOY shall enable
ENVOY'S provider customers to receive all reports furnished by CAREINSITE.
1.2 ENVOY will accept from CAREINSITE all transactions for ENVOY Exclusive
Payers.
<PAGE>
2
ENVOY Exclusive Payers are payers who have designated ENVOY as their exclusive
network gateway for administrative transactions, including without limitation,
Aetna US Healthcare.
1.3 ENVOY will send to CAREINSITE all transactions for CAREINSITE Exclusive
Payers. CAREINSITE Exclusive Payers are payers who have designated CareInsite as
their exclusive network gateway for administrative transactions, including,
without limitation, Horizon Blue Cross Blue Shield, Empire Blue Cross Blue
Shield, Group Health Incorporated and Heath Insurance Plan of Greater New York.
1.4 ENVOY will submit CAREINSITE batch transactions through the ENVOY services
in batch mode to payers within 24 hours of receipt by the ENVOY services
excluding Saturdays, Sundays and ENVOY holidays.
1.5 ENVOY shall furnish to each of ENVOY'S customers whose transactions are or
may be submitted through the CAREINSITE services by ENVOY hereunder the training
and support, including retraining and all necessary information, that may be
reasonably necessary or appropriate to enable assigned employees of ENVOY'S
provider customers to act to enable timely, complete and error-free
transmissions of transactions through the CAREINSITE Services in accordance with
the then applicable transaction specifications.
2.0 CAREINSITE GRANT OF LICENSE
CAREINSITE grants to ENVOY a non-transferable license, subject to the provisions
of Article 9 of this Agreement, for the term of this Agreement to sublicense to
ENVOY'S provider customers the use of the CAREINSITE services through ENVOY'S
system only in compliance with the applicable CAREINSITE specifications. The
license is limited to use of the CAREINSITE services only at and from provider
sites with which ENVOY and/or ENVOY'S customers have a direct contractual
relationship.
3.0 CAREINSITE PROVIDER TRANSACTION OBLIGATIONS
3.1 CAREINSITE and ENVOY shall operate their systems and services so that all
administrative transactions (including claims, claim status, encounters,
eligibility, referral, authorization, remittance advice, and rosters) of
CAREINSITE'S provider customers directed to the ENVOY PAYERS may be, at
CAREINSITE'S election, routed and submitted through the ENVOY services pursuant
to the license granted in Section 4.0 hereof. CAREINSITE may use all such
administrative services offered by ENVOY, and CAREINSITE may, at its option,
participate in any pilots of new products. CAREINSITE shall enable CAREINSITE'S
provider customers to receive all reports furnished by ENVOY.
3.2 CAREINSITE will accept from ENVOY all administrative transactions for
CAREINSITE Exclusive Payers.
<PAGE>
3
3.3 CAREINSITE will send to ENVOY all administrative transactions for ENVOY
Exclusive Payers.
3.4 CAREINSITE will submit ENVOY batch transactions through the CAREINSITE
services in batch mode to payers within 24 hours of receipt by the CAREINSITE
services excluding Saturdays, Sundays and CAREINSITE holidays.
3.5 CAREINSITE shall furnish to each of CAREINSITE'S customers whose
transactions are or may be submitted through the ENVOY services by CAREINSITE
hereunder the training and support, including retraining and all necessary
information, that may be reasonably necessary or appropriate to enable assigned
employees of CAREINSITE'S provider customers to act to enable timely, complete
and error-free transmissions of transactions through the ENVOY services in
accordance with the then applicable transaction specifications.
4.0 ENVOY GRANT OF LICENSE
ENVOY grants to CAREINSITE a non-transferable license, subject to the provisions
of Article 9 of this Agreement, for the term of this Agreement to sublicense to
CAREINSITE'S provider customers the use of the ENVOY Services through
CAREINSITE'S system only in compliance with the applicable ENVOY specifications.
The license is limited to use of the ENVOY services only at and from provider
sites with which CAREINSITE and/or CAREINSITE's customers have a direct
contractual relationship.
5.0 FEES & COMPENSATION
5.1 CAREINSITE will pay to ENVOY the transaction incentive payment(s) identified
on Exhibit A for each transaction that ENVOY passes to CAREINSITE for which
CAREINSITE collects a fee from a CAREINSITE Payer. ENVOY will pay CAREINSITE the
transaction incentive payment(s) identified on Exhibit A for each transaction
that CAREINSITE passes to ENVOY for which ENVOY collects a fee from an ENVOY
Payer. Notwithstanding the above, no transactions fee will be due for any claim
status inquiry or messaging.
5.2 For those transactions for which the party submitting to a payor does not
collect a payment from a payer, CAREINSITE will pay to ENVOY and ENVOY will pay
to CAREINSITE the applicable fees specified on Exhibit A to the Envoy Services
Networked Partner Agreement for Medical Manager Corporation dated as of August
29, 1997 and amended as of June 29, 1998, excluding the terms listed under
Financial Incentives on such Exhibit.
5.3 Invoices, reports and payments for the charges identified on Exhibit A
hereto will be submitted by CAREINSITE to ENVOY and by ENVOY to CAREINSITE on or
about the fifteenth day of each calendar month with respect to transactions
transmitted during the preceding month. Each invoice shall identify the
transaction types, volumes and applicable total
<PAGE>
4
charge represented by the amount invoiced.
5.4 If ENVOY or any other transaction clearinghouse service offered by
Healtheon/WebMD (including without limitation MedeAmerica and Actamed), directly
or indirectly, is providing a system of pricing (considered on an aggregate
basis) to any competitor of CAREINSITE or Medical Manager Health Systems Inc.
using the ENVOY services and providing substantially similar services and with
substantially equivalent transaction volume as CAREINSITE or Medical Manager
Health Systems Inc., or if ENVOY materially lowers its overall pricing system,
which has the effect of placing CAREINSITE or Medical Manager Health Systems
Inc. at a material competitive disadvantage in the marketplace, then, at
CAREINSITE's request, ENVOY agrees to negotiate in good faith an agreement with
CAREINSITE which provides comparable or more advantageous pricing than that
provided to any competitor of CAREINSITE or Medical Manager Health Systems Inc.
If CAREINSITE, or any other transaction clearinghouse service offered by
CAREINSITE, directly or indirectly, is providing a system of pricing (considered
on an aggregate basis) to any competitor of ENVOY using the CAREINSITE services
and providing substantially similar services and with substantially equivalent
transaction volume as ENVOY, or if CAREINSITE materially lowers its overall
pricing system, which has the effect of placing ENVOY at a material competitive
disadvantage in the marketplace, then at ENVOY's request, CAREINSITE agrees to
negotiate in good faith an agreement with ENVOY which provides comparable or
more advantageous pricing than that provided to any competitor of ENVOY.
6.0 CONFIDENTIALITY; RIGHTS IN DATA
6.1 CAREINSITE recognizes the confidential nature of all source code, software,
data, interface control documents, specifications and related information of
ENVOY to which CAREINSITE will have access pursuant to this Agreement, and ENVOY
recognizes the confidential nature of all source code, software, data, interface
control documents, specifications and related information of CAREINSITE to which
ENVOY will have access pursuant to this Agreement (collectively, "Confidential
Information"). Both parties agree that terms and conditions of this Agreement
are also Confidential Information.
6.2 Each Party acknowledges that Confidential Information may be disclosed to
the other Party during the course of this Agreement. Each Party agrees that it
will take reasonable steps, at least substantially equivalent to the steps it
takes to protect its own proprietary information, during the term of this
Agreement and following expiration or termination of this Agreement, to prevent
the duplication or disclosure of Confidential Information of the other Party,
other than by or to its employees or agents who must have access to such
Confidential Information to perform such Party's obligations hereunder, who will
each agree to comply with this section.
6.3 For the purposes of this Section 6, the following information shall not be
considered to be Confidential Information: information previously known to the
receiving party or any of its affiliates; information disclosed without
restriction to the third parties by providing party or its
<PAGE>
5
affiliates; information which is or becomes available to the general public by
any means other than unauthorized disclosure; information released for
disclosure by the providing party with its written consent; or information
developed or discovered independently of the Confidential Information.
6.4 Both ENVOY and CAREINSITE agree to use the systems and services provided in
accordance with applicable laws and regulations (including without limitation
any confidentiality requirements established by the Health Care Financing
Administration and any state health care authorities).
7.0 DISCLAIMER OF WARRANTY
ALL SERVICES UNDER THIS AGREEMENT ARE PROVIDED BY ENVOY AND BY CAREINSITE "AS
IS" AND "WITH ALL FAULTS." EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NO
PARTY MAKES ANY, AND EACH HEREBY SPECIFICALLY DISCLAIMS ANY, REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE SERVICES PROVIDED UNDER THIS
AGREEMENT, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR NON-INFRINGEMENT AND IMPLIED WARRANTIES ARISING FROM
COURSE OF DEALING OR COURSE OF PERFORMANCE.
8.0 LIMITED LIABILITY
Neither ENVOY nor CAREINSITE shall be responsible for any damages resulting from
failure to transmit transactions, delays in the processing of transactions or
resulting from the rejection of any claim or the non-payment of any claim.
IN NO EVENT SHALL ANY PARTY TO THIS AGREEMENT BE LIABLE OR RESPONSIBLE FOR ANY
DIRECT, INDIRECT, OR CONSEQUENTIAL DAMAGES OR LOST PROFITS RESULTING FROM THE
SERVICES PERFORMED BY IT OR OTHERWISE ARISING OUT OF OR RELATED TO THIS
AGREEMENT EXCEPT IN THE EVENT OF A WRONGFUL TERMINATION OR A WILLFUL FAILURE TO
PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT.
Except in the event of a wrongful termination or a willful failure to perform
its obligations under this agreement, CAREINSITE'S entire liability for any
reason under this Agreement shall not exceed the amount paid by ENVOY under this
Agreement.
<PAGE>
6
Except in the event of a wrongful termination or a willful failure to perform
its obligations under this agreement, ENVOY's entire liability for any reason
under this Agreement shall not exceed the amount paid by CAREINSITE under this
Agreement.
9.0 TERM AND TERMINATION
9.1 Except as otherwise expressly set forth in this Agreement, the initial term
of this Agreement shall commence on the Effective Date and shall continue until
September 1, 2003. This Agreement shall then automatically continue in effect
until terminated by either party upon six months' written notice.
9.2 Either party may immediately terminate this Agreement upon learning that the
other party has ceased to do business in the ordinary course, become insolvent,
has elected to wind up or dissolve its operation, is wound up or dissolved,
files a voluntary petition in bankruptcy, or is adjudicated as bankrupt.
9.3 Termination for cause pursuant to this Section 9 shall not operate as a
waiver of any rights or remedies available to the terminating party pursuant to
this Agreement or applicable law.
9.4 This Agreement shall terminate upon immediate notice from one party to the
other after the consummation of a merger between CareInsite and Healtheon/WebMD.
9.5 Except as expressly provided in this Article 9 or in the event a party has
failed to make timely payment pursuant to this Agreement and such failure is not
cured within 60 days after receipt of written notice from the other party of
such failure to pay, neither party shall have a right to terminate this
Agreement.
10.0 GENERAL PROVISIONS
10.1 NOTICES: All notices pertaining to this Agreement shall be in writing and
unless otherwise changed by written notice, shall be sent by certified mail or
facsimile to the contacts listed below. Notice shall be effective when received
by the other party.
CAREINSITE, INC.
669 River Drive, River Center 2
Elmwood Park, New Jersey 07407
Attn: President
Facsimile Number: 201-703-3401
<PAGE>
7
with a copy to:
CAREINSITE, INC.
669 River Drive, River Center 2
Elmwood Park, New Jersey 07407
Attn: General Counsel
Facsimile Number: 201-703-3401
ENVOY CORPORATION
15 Century Blvd. Suite 600
Nashville, TN 37214
Attn: President
Facsimile Number: 615-231-4965
with a copy to:
ENVOY CORPORATION
15 Century Blvd. Suite 600
Nashville, TN 37214
Attn: General Counsel
Facsimile Number: 615-231-4965
10.2 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the Laws of the State of Delaware applicable to contracts
executed in and to be performed in that state, without giving effect to its
conflict of laws rules.
Each of the parties hereto irrevocably agrees that all legal actions or
proceedings with respect to this Agreement shall be brought and determined in
the courts of the State of Delaware or in the United States District Court for
the State of Delaware, and each of the parties hereto hereby irrevocably submits
with regard to any such action or proceeding for itself and in respect to its
property, generally and unconditionally, to the jurisdiction of the aforesaid
courts. Each of the parties hereto hereby irrevocably waives, and agrees not to
assert, by way of motion, as a defense, counterclaim or otherwise, in any action
or proceeding with respect to this Agreement, (i) any claim that it is not
personally subject to the jurisdiction of the above-named courts for any reason
other than the failure to serve process in accordance with applicable Law, (ii)
that it or its property is exempt or immune from jurisdiction of any such court
or from any legal process commenced in such courts and (iii) to the fullest
extent permitted by applicable law, that (A) the suit, action or proceeding in
any such court is brought in an inconvenient forum, (B) the venue of such suit,
action or proceeding is improper and (C) this Agreement, or the subject matter
hereof, may not be enforced in or by such courts.
<PAGE>
8
10.3 MODIFICATION: This Agreement may not be terminated or modified other than
by a writing signed by authorized officers of both parties.
10.4 NONASSIGNMENT. Neither party may assign or otherwise transfer this
Agreement or any of its rights or obligations under this Agreement without the
consent of the other, except that either party may assign this Agreement to any
parent or majority-owned subsidiary or in connection with any merger,
acquisition or sale of all or substantially all of its assets.
10.5 ENTIRE AGREEMENT. This Agreement (including any and all exhibits referred
to herein) contains the entire Agreement between the parties hereto, and
supersedes any prior written or oral agreement between the parties concerning
the subject matter hereof.
10.6 NO WAIVER. No failure on the part of either party to exercise and no delay
in exercising any right or remedy hereunder shall operate as a waiver thereof or
modify the terms of this Agreement. The exercise of any one remedy shall not be
deemed to waive or preclude the exercise of any other remedy.
10.7 SEVERABILITY. If any provision in this Agreement is held to be invalid,
void or unenforceable, the remaining provisions shall nevertheless continue in
full force provided that the essential terms of the transaction remain
unchanged.
10.8 COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
10.9 SPECIFIC PERFORMANCE. The parties hereto agree that irreparable damage
would occur in the event any provision of this Agreement was not performed in
accordance with the terms hereof and that the parties shall be entitled to
specific performance of the terms hereof, in addition to any other remedy at law
or in equity.
<PAGE>
9
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
on its behalf by its duly authorized officers, as of the day and year first
above written.
CAREINSITE, INC. ENVOY CORPORATION
Signature: Signature:
------------------------- -----------------------
Name: Name:
------------------------- -----------------------
Title: Title:
------------------------- -----------------------
Date: Date:
------------------------- -----------------------
<PAGE>
10
Exhibit A
Financial Incentives
ENVOY agrees to pay CAREINSITE and CAREINSITE agrees to pay ENVOY the following
financial incentives:
(a) For Batch Claim and Encounter Transactions*
Commencing on the Effective Date, 38% of the back end per transaction fees
received by a party from a "participating payer"** for all Batch claim and
encounter transactions submitted by a party's customers through such
party's system which are accepted by the other party's services.
(b) For Real Time Transactions*
Commencing on the Effective Date, 20% of the back end per transaction fees
received by a party from a "participating payer"** for all Real Time
transactions submitted by a party's customers through such party's system
which are accepted by the other party's services.
- ---------------
* For purposes of calculating financial incentives, only the "base per
transaction fee" (i.e., excluding above market, special premium based fees
designed to incentivize implementation of a party's services) paid to a
party by its "participating payers" will be considered back end per
transaction fees. As used herein, base per transaction fees shall include
any recurring type fees that are paid to a party by its "participating
payers" for transactions submitted by a submitting party and sent to the
receiving party's "participating payers".
** For purposes of calculating financial incentives, "participating payer"
shall mean a payer which pays a party per transaction fees to receive
transactions from a party's services.
<PAGE>
Exhibit D
JOINT FILING AGREEMENT
The undersigned hereby agree that the Statement on Schedule 13D, dated
March 17, 2000 ("Schedule 13D"), with respect to the shares of common stock,
par value $0.0001 per share of Healtheon/WebMD Corporation is, and any
amendments thereto executed by each of us shall be, filed on behalf of each of
us pursuant to and in accordance with the provisions of Rule 13d-1(k) under the
Securities and Exchange Act of 1934, as amended, and that this Agreement shall
be included as an Exhibit to the Schedule 13D and each such amendment. Each of
the undersigned agrees to be responsible for the timely filing of the Schedule
13D and any amendments thereto, and for the completeness and accuracy of the
information concerning itself contained therein. This Agreement may be executed
in any number of counterparts, all of which taken together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement dated
March 17, 2000.
MEDICAL MANAGER CORPORATION
By: /S/ ANTHONY VUOLO
-------------------------------------
Name: Anthony Vuolo
Title: Senior Vice President, Business
Development
CAREINSITE, INC.
By: /S/ DAVID C. AMBURGEY
-------------------------------------
Name: David C. Amburgey
Title: Senior Vice President and General
Counsel
