0000950144-01-507969.txt : 20011026 0000950144-01-507969.hdr.sgml : 20011026 ACCESSION NUMBER: 0000950144-01-507969 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20011019 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WEBMD CORP /NEW/ CENTRAL INDEX KEY: 0001009575 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 943236644 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-57697 FILM NUMBER: 1762483 BUSINESS ADDRESS: STREET 1: RIVER DRIVE CENTER 2 STREET 2: 669 RIVER DR CITY: ELMWOOD PARK STATE: NJ ZIP: 07407 BUSINESS PHONE: 4088765000 MAIL ADDRESS: STREET 1: RIVER DRIVE CENTER 2 STREET 2: 669 RIVER DR CITY: ELMWOOD PARK STATE: NJ ZIP: 07407 FORMER COMPANY: FORMER CONFORMED NAME: HEALTHEON CORP DATE OF NAME CHANGE: 19980729 FORMER COMPANY: FORMER CONFORMED NAME: HEALTHSCAPE CORP DATE OF NAME CHANGE: 19970404 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: QUINTILES TRANSNATIONAL CORP CENTRAL INDEX KEY: 0000919623 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH [8731] IRS NUMBER: 561714315 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 4709 CREEKSTONE DR STREET 2: RIVERBIRCH BLDG STE 200 CITY: DURHAM STATE: NC ZIP: 27703-8411 BUSINESS PHONE: 9199982000 MAIL ADDRESS: STREET 1: 4709 CREEKSTONE DR STREET 2: STE 300 CITY: DURHAM STATE: NC ZIP: 27703-8411 SC 13D/A 1 g72195sc13da.txt WEBMD CORPORATION/QUINTILES TRANSNATIONAL CORP UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D/A Under the Securities Exchange Act of 1934 (Amendment No. 3) WEBMD CORPORATION ----------------- (Name of Issuer) (f/k/a Healtheon/WebMD Corporation) COMMON STOCK, $.0001 PAR VALUE ------------------------------ (Title of Class of Securities) 422209106 -------------- (CUSIP Number) Gerald F. Roach, Esq. Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. 2500 First Union Capitol Center 150 Fayetteville Street Mall Raleigh, North Carolina 27601 (919) 821-1220 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) OCTOBER 12, 2001 ------------------------------------------------------- (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 that is the subject of this Schedule 13D, and is filing this schedule because of ss. 240.13d-1(e), 240.13d-1(f) or 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 the disclosures provided in a prior cover page. The information required in 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). (Continued on following page(s)) CUSIP No. 422209106 Page 2 of 5 ------------------------------------------------------------------------------------------------------------------- 1) NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only). Quintiles Transnational Corp. I.R.S. Employer Identification No.: 56-1714315 ------------------------------------------------------------------------------------------------------------------- 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 North Carolina ------------------------------------------------------------------------------------------------------------------- 7) SOLE VOTING POWER NUMBER OF -0- SHARES ---------------------------------------------------------------------------------------- BENEFICIALLY 8) SHARED VOTING POWER OWNED BY -0- EACH ---------------------------------------------------------------------------------------- REPORTING 9) SOLE DISPOSITIVE POWER PERSON -0- WITH: ---------------------------------------------------------------------------------------- 10) SHARED DISPOSITIVE POWER -0- ------------------------------------------------------------------------------------------------------------------- 11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -0- ------------------------------------------------------------------------------------------------------------------- 12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] ------------------------------------------------------------------------------------------------------------------- 13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 0%(1) ------------------------------------------------------------------------------------------------------------------- 14) TYPE OF REPORTING PERSON (See Instructions) CO ----------------------- (1) Calculated based on (i) 359,708,024 shares of Common Stock, par value $0.0001 per share ("Common Stock"), of WebMD Corporation (f/k/a Healtheon/WebMD Corporation, the "Issuer") outstanding on July 27, 2001, as reported on the Issuer's Quarterly Report on Form 10-Q filed on August 14, 2001. CUSIP No. 422209106 Page 3 of 5 This Amendment No. 3 amends and supplements the Schedule 13D filed by Quintiles Transnational Corp. with the Securities and Exchange Commission on June 5, 2000, as amended on June 30, 2000 and March 1, 2001, respectively, with respect to the Issuer's Common Stock. ITEM 4. PURPOSE OF THE TRANSACTION Item 4 shall be amended to add the following information: Effective at the end of the day on October 8, 2001, Dr. Gillings resigned from the Issuer's board of directors. On October 12, 2001, Quintiles and the Issuer entered into a settlement agreement (the "Settlement Agreement"), which resolved all disputes between the two companies that were the subject of litigation. A copy of the Settlement Agreement is filed as Exhibit E to this Schedule 13D and is incorporated into this Schedule 13D by reference. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER Item 5 shall be deleted in its entirety and replaced with the following. Based on information contained in the most recent publicly available filings of the Issuer with the Securities and Exchange Commission, Quintiles is deemed to beneficially own the number of shares and the percentage of outstanding shares of Common Stock listed on lines 11 and 13, respectively, of Page 2 of this Schedule 13D/A. In addition, the number of shares of Common Stock as to which Quintiles has sole or shared voting power and sole or shared dispositive power, is listed on lines 7-10 of Page 2 of this Schedule 13D/A. On October 12, 2001, Quintiles ceased being a beneficial owner of more than five percent (5%) of the Issuer's Common Stock. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER Item 6 shall be deleted in its entirety and replaced with the following. On October 12, 2001, Quintiles and the Issuer announced the settlement of the litigation between the companies and the resolution of their disputes. Under the terms of the settlement, the companies agreed to terminate all of their business agreements, including their Data Rights and Internet Product Development and Marketing agreements, and the Issuer agreed to purchase from Quintiles for $185 million in cash all 35 million shares of Issuer Common Stock held by Quintiles. As part of the financial terms, Quintiles will also have the right to receive a contingent payment (payable at Issuer's option in cash and/or stock) in the event that, on or before June 30, 2004, Issuer is acquired at a price per Issuer share greater than $4.00 or Envoy Corporation, a subsidiary of Issuer ("Envoy"), is sold at an aggregate price of greater than $500 million. Issuer has no obligation to pursue either of these transactions under this arrangement and has indicated that it has no intention of doing so. In the case of the execution of a definitive agreement related to an acquisition of Issuer before June 30, 2003, the contingent payment to Quintiles will equal the amount by which the CUSIP No. 422209106 Page 4 of 5 price paid exceeds $4.00 per share, multiplied by 35 million. If an acquisition is agreed to after June 30, 2003, and closes before June 30, 2004, the contingent payment will be 80% of that amount. In the case of the execution of a definitive agreement related to a sale of Envoy before June 30, 2003, the contingent payment to Quintiles will equal 10% of the amount by which the sale price exceeds $500 million. If a sale is agreed to after June 30, 2003, and closes before June 30, 2004, the contingent payment will be 80% of that amount. The foregoing is not a complete description of all the terms and conditions of the Settlement Agreement and is qualified in its entirety by reference to Exhibit E to this Schedule 13D which is incorporated into this Schedule 13D by reference. Except as described in this Schedule 13D, as amended, there are no contracts, 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 the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantors of profit, division of profit or loss or the giving or withholding of proxies. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS Item 7 shall be deleted in its entirety and replaced with the following. Exhibit A Agreement and Plan of Merger, dated as of January 22, 2000, among Healtheon/WebMD Corporation, Pine Merger Corp., Envoy Corporation, Quintiles Transnational Corp. and QFinance, Inc. (incorporated by reference from Exhibit 2.01 of Quintiles' Current Report on Form 8-K, dated January 25, 2000, filed with the Securities and Exchange Commission). Exhibit B Voting Agreement, dated June 18, 2000, among Quintiles Transnational Corp. to and for the benefit of Medical Manager Corporation and CareInsite, Inc. (filed as an Exhibit to Amendment No. 1 to this Schedule 13D) Exhibit C Letter from Dennis B. Gillings to the Issuer dated February 25, 2001 (filed as an Exhibit to Amendment No. 2 to this Schedule 13D) Exhibit D Letter from Dennis B. Gillings to the Issuer dated March 1, 2001 (filed as an Exhibit to Amendment No. 2 to this Schedule 13D) Exhibit E Settlement Agreement, dated October 12, 2001, between Quintiles Transnational Corp. and WebMD Corporation. CUSIP No. 422209106 Page 5 of 5 SIGNATURE 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. Date: October 19, 2001 QUINTILES TRANSNATIONAL CORP. By: /s/ John S. Russell -------------------------------------- Name: John S. Russell Title: Executive Vice President and General Counsel EX-99.E 3 g72195ex99-e.txt SETTLEMENT AGREEMENT SETTLEMENT AGREEMENT This Settlement Agreement ("Agreement" or "Settlement Agreement") is made this 12th day of October 2001 by and among Quintiles Transnational Corp. ("Quintiles"), a corporation organized and existing under the laws of the State of North Carolina; WebMD Corporation ("WebMD"), a corporation organized and existing under the laws of the State of Delaware; and ENVOY Corporation ("ENVOY"), a corporation organized and existing under the laws of the State of Delaware. This Agreement shall become binding and take effect as of the date hereof (the "Effective Date"). BACKGROUND 1. On January 22, 2000, Quintiles and Healtheon/WebMD Corp. ("HWMD") entered into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which they agreed, inter alia, for Quintiles' wholly-owned subsidiary ENVOY to become a wholly-owned subsidiary of HWMD (the "Merger"). 2. The parties consummated the Merger on May 26, 2000. In connection therewith the parties entered into (a) a Data Rights Agreement (the "Data Rights Agreement") under which they agreed, inter alia, that HWMD would furnish certain data to Quintiles, (b) an Internet Product Development and Marketing Agreement (the "Internet Agreement") under which they agreed, inter alia, to engage in the collaborative development, marketing and commercialization of a portfolio of Internet-based products and services for the pharmaceutical industry, and (c) a Tax Sharing Agreement (the "Tax Sharing Agreement") under which they agreed, inter alia, to allocate certain tax burdens and benefits which occurred prior to the consummation of the Merger and certain other tax matters. Simultaneously, Quintiles issued HWMD a warrant to purchase ten million (10,000,000) shares of Quintiles Common Stock (the "Warrant"). Quintiles and HWMD amended the Data Rights Agreement through a Temporary Addendum to Data Rights Agreement (the "Temporary Addendum"), dated as of May 22, 2000. 3. On September 12, 2000, HWMD changed its name to WebMD Corporation. 4. On February 24, 2001, WebMD suspended its delivery of data under the Data Rights Agreement. 5. On or about February 25, 2001, Quintiles commenced a lawsuit against WebMD in the Superior Court of Wake County, North Carolina captioned Quintiles Transnational Corp. v. WebMD Corporation, Civil Action No. 01 CVS 2289, which lawsuit was subsequently removed by WebMD to the United States District Court for the Eastern District of North Carolina, Western Division, where it is captioned Quintiles Transnational Corp. v. WebMD Corporation, 5:01 CV 180 BO(3) (the "Litigation"). 6. Quintiles alleges in the Litigation, inter alia, that WebMD's suspension of the delivery of data on February 24, 2001 constituted a material breach of the Data Rights Agreement by WebMD. 7. On March 20, 2001, the United States District Court for the Eastern District of North Carolina entered in the Litigation a written order granting Quintiles' motion for a preliminary injunction requiring the uninterrupted and unaltered flow of data (the "Preliminary Injunction"). 8. On April 26, 2001 WebMD filed a Notice of Appeal with the United States Court of Appeals for the Fourth Circuit, appealing the District Court's March 20, 2001 order (the "Appeal"). 9. On October 9, 2001 Quintiles filed and served its Amended Complaint in the Litigation asserting various claims against WebMD, ENVOY, Martin J. Wygod, and W. Michael Long, and on that same date WebMD filed its Appeal Brief. 10. In addition to the matters in dispute in the Litigation, additional disputes have also arisen between Quintiles and WebMD concerning the parties' respective rights and obligations under the Data Rights Agreement, Internet Agreement and Tax Sharing Agreement. 11. Quintiles and WebMD have agreed to resolve and to compromise between them on a permanent and final basis all matters and issues in dispute regarding the Litigation, the Data Rights Agreement including the Temporary Addendum, the Internet Agreement, the Tax Sharing Agreement, the Warrant, and certain other matters, as set forth in this Agreement. TERMS NOW, THEREFORE, for and in consideration of the mutual promises set forth below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Quintiles and WebMD hereby agree as follows: 1. Definitions As used in this Agreement, the following terms shall have the meanings set forth below: (a) "Acquirer" means any person or entity, including a "group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, other than Quintiles, WebMD or one of their Affiliates. (b) "Affiliate" shall mean a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, Quintiles or WebMD, respectively, as defined and used under Rule 405 of Regulation C of the Securities Act of 1933, as amended. (c) "Closing" shall mean the date WebMD makes payment of the purchase price for, and Quintiles transfers its title, interest and ownership rights in, the Shares. (d) "ENVOY Liquidity Event" means the closing of a transaction pursuant to which WebMD sells or otherwise transfers to an Acquirer all or substantially all of the stock or assets of ENVOY in one or a series of related transactions including through sale, consolidation, merger, business combination or similar transaction, provided that there may be no more than one ENVOY Liquidity Event and provided further that there shall be no ENVOY Liquidity Event after or concurrent with a WebMD Liquidity Event. (e) "Liquidity Event" means either an ENVOY Liquidity Event or a WebMD Liquidity Event. (f) "WebMD Liquidity Event" means the closing of a transaction pursuant to which (i) WebMD consolidates with, merges into or engages in a business combination or similar transaction, or a series of related transactions, with an Acquirer with the effect that the persons who were the shareholders of WebMD immediately prior to the effective time of such merger, consolidation or other transaction hold, immediately following the consummation of such transaction, less than 50% of the combined voting power of the surviving or resulting corporation (or other entity) ordinarily (and apart from rights accruing 2 under special circumstances) having the right to vote in the election of directors; or (ii) all or substantially all of WebMD's assets or more than 50% of its common stock are sold or otherwise transferred to any Acquirer. (g) "WebMD Share Price" means the average of the volume weighted average trading price per share of common stock of WebMD for the three consecutive trading days up to and including the trading day that is two trading days before the date of the Liquidity Event. 2. Delivery of Data (a) Delivery of Data. WebMD will deliver and provide data to Quintiles, at no charge, at all times as of and after the Effective Date and through February 28, 2002 (the "Transition Period"), from the sources, in the manner and in the de-identified, encrypted format (such format being the "Access Specifications") as WebMD, ENVOY or any of WebMD's Affiliates (collectively, "WebMD Companies" and each a "WebMD Company") has been providing under the Data Rights Agreement and the Preliminary Injunction in the period immediately prior to the Effective Date, for use by Quintiles internally and in data products. The data to be delivered pursuant to this Agreement will be delivered free of any liability to make any royalty payment and will be delivered completely without charge or cost to Quintiles. The parties hereto agree that after February 28, 2002, Quintiles may continue to use the data previously provided, to the full extent provided by law, all without any liability to make any royalty payment to WebMD and all without any charge or cost to Quintiles. Nothing in this Section 2(a) is intended or shall be construed to relieve Quintiles of its obligations under the Indemnification and Contribution Arrangement (as defined below). (b) Suspension of Access to Data. Notwithstanding Section 2(a), if during the Transition Period any existing or future customer of a WebMD Company (a "WebMD Customer") requests in writing such WebMD Company to cease the flow of data transmitted to or received from such customer by such WebMD Company to Quintiles, WebMD may cease the flow of such data to Quintiles to the extent of such written request, provided that WebMD delivers prompt written notice to Quintiles of any such request and that WebMD continues or resumes providing such suspended data (as the case requires) as soon as possible (but not later than five (5) business days) after receiving authorization and instruction from such customer to do so on such customer's behalf. 3. Customer Contact During the Transition Period, the content of any communication by Quintiles with any WebMD Customer during the Transition Period must be approved by WebMD in writing, which approval will not be unreasonably withheld or delayed. In addition, Quintiles agrees to notify WebMD in advance of any such communication. During the Transition Period, any communication or action with WebMD Customers by Quintiles and WebMD must be consistent with each party's desire to maintain good relations with such customers and must not impair either party's relationship with such customers, provided that this Section 3 is neither intended to be nor shall be construed as creating an agreement not to solicit each other's customers (except as provided by this Section 3) or not to compete. No non-solicitation, except as provided by this Section 3, or non-competition rights or obligations are imposed on either party by this Agreement. 3 4. Post-Transition Period After the Transition Period, WebMD shall have no further obligation to provide data to Quintiles, nor shall WebMD initiate action with a court or governmental authority that is intended to restrict, prohibit, or otherwise impair Quintiles' use of data provided on or prior to February 28, 2002; provided, however, that nothing in this Section 4 or elsewhere in this Agreement shall be construed to prevent WebMD from (i) responding truthfully to inquiries from third parties; (ii) providing documents, information or testimony in response to subpoenas and other requests from governmental authorities or in connection with judicial or administrative proceedings; or (iii) raising any claim or defense in connection with enforcement or other actions initiated by governmental authorities or lawsuits filed by consumers, customers or other parties. 5. Purchase of WebMD Stock Owned by Quintiles WebMD agrees to purchase and Quintiles agrees to sell thirty-five million (35,000,000) shares of WebMD common stock, par value $.0001 per share, now held by Quintiles (the "Shares") for a purchase price of One Hundred Eighty-Five Million Dollars ($185,000,000) in immediately available funds. As soon as practicable following execution of this Agreement, not to exceed three (3) business days, Quintiles shall transfer its entire title, interest and ownership rights in the Shares to WebMD by delivery to WebMD or its designee of share certificate(s) evidencing the Shares and endorsed for transfer to WebMD, against (and contingent upon) payment of the purchase price therefor by WebMD by certified check, wire transfer or such other form of payment in same day funds as shall be mutually agreed upon by Quintiles and WebMD. Quintiles shall deliver to WebMD all certificates representing the Shares free and clear of any Encumbrances. WebMD hereby waives any applicable transfer restrictions contained in Section 8.13 of the Merger Agreement solely to permit the sale of Shares by Quintiles to WebMD. 6. Quintiles' Liquidity Event Recapture Rights (a) If (i) a Liquidity Event occurs on or before June 30, 2003 or (ii) on or before June 30, 2003, WebMD enters into a written definitive agreement with an Acquirer to consummate a Liquidity Event that closes on or before June 30, 2004, WebMD shall pay Quintiles (in the manner specified below) 100% of the Liquidity Event Price Difference (defined below) upon the closing of such Liquidity Event. If on or before June 30, 2004, but after June 30, 2003, WebMD enters into a written definitive agreement with an Acquirer to consummate a Liquidity Event that closes on or before June 30, 2004, WebMD shall pay Quintiles (in the manner specified below) 80% of the Liquidity Event Price Difference upon the closing of such Liquidity Event. (b) The Liquidity Event Price Difference will equal: (i) in the case of a WebMD Liquidity Event, (x) the amount by which the purchase price per WebMD common share applicable to such WebMD Liquidity Event exceeds Four Dollars ($4.00) per share times (y) thirty-five million (35,000,000); or (ii) in the case of an ENVOY Liquidity Event, 10% of the amount by which the sale price applicable to such Envoy Liquidity Event exceeds Five Hundred Million Dollars ($500,000,000). (c) If a WebMD Liquidity Event occurs, upon the closing of such WebMD Liquidity Event, WebMD will pay Quintiles the appropriate amount, as determined pursuant to Sections 6(a) and 6(b) above, at WebMD's option in cash or WebMD common stock. If WebMD pays Quintiles in WebMD 4 common stock, such common stock shall be delivered immediately prior to the closing of such WebMD Liquidity Event and shall be exchanged as part of such WebMD Liquidity Event for the same consideration received by other WebMD shareholders upon the occurrence of the WebMD Liquidity Event and such consideration will have the same degree of transferability and in all respects be the same as that received by other non-Affiliate shareholders of WebMD, provided that WebMD's obligation to pay the Liquidity Event Price Difference for such WebMD Liquidity Event shall be satisfied if WebMD pays Quintiles the lesser of (i) the number of shares of WebMD common stock otherwise payable under this Section 6 and (ii) 35,000,000 shares of WebMD common stock. (d) If an ENVOY Liquidity Event occurs, upon the closing of such ENVOY Liquidity Event, WebMD will pay Quintiles the appropriate amount, as determined pursuant to Sections 6(a) and 6(b) above, at WebMD's option in cash or the consideration received by WebMD in such ENVOY Liquidity Event or WebMD common stock (which is freely transferable or subject to an effective resale registration statement). If WebMD pays Quintiles in the consideration received by WebMD, such consideration shall have the same degree of transferability and in all respects be the same as that received by WebMD. If WebMD pays Quintiles in WebMD common stock, WebMD's obligation to pay the Liquidity Event Price Difference for such Envoy Liquidity Event shall be satisfied if WebMD pays Quintiles the lesser of (i) the number of shares of WebMD common stock otherwise payable under this Section 6 and (ii) 35,000,000 shares of WebMD common stock. (e) If the WebMD Liquidity Event is the first Liquidity Event to occur following the date hereof or if a WebMD Liquidity Event occurs concurrent with an ENVOY Liquidity Event, Quintiles will be entitled to the appropriate amount, as determined pursuant to Sections 6(a) and 6(b) above, only with respect to the WebMD Liquidity Event. If an ENVOY Liquidity Event occurs prior to any WebMD Liquidity Event, the amount of any Liquidity Event Price Difference otherwise payable by WebMD pursuant to Sections 6(a) and 6(b) above to Quintiles in respect of a subsequent WebMD Liquidity Event shall be reduced by the prior amount of any Liquidity Event Price Difference paid by WebMD to Quintiles in respect of the ENVOY Liquidity Event (except that such reduction shall be appropriately adjusted to the extent WebMD has made a special distribution to its shareholders of the consideration received in the ENVOY Liquidity Event). For the avoidance of doubt, this Section is intended to prevent double payment to the extent of any amount actually paid by WebMD to Quintiles in respect of an ENVOY Liquidity Event. (f) Quintiles' rights to receive any and all payments under this section will terminate following the occurrence of any WebMD Liquidity Event (except with respect to such WebMD Liquidity Event) whether or not such WebMD Liquidity Event gives rise to the payment of a Liquidity Event Price Difference under this Agreement. For the avoidance of doubt, a Liquidity Event shall not include any action by WebMD or its Affiliates designed to create an artificial Liquidity Event avoiding or seeking to avoid the observance or performance of any of WebMD's obligations regarding the Liquidity Event recapture rights of Quintiles set forth in this Agreement, including but not limited to, by means of amendment of WebMD's or an Affiliate's articles of incorporation, reorganization, transfer of capital stock or assets, consolidation, dissolution, issue or sale of securities or any other similar action. (g) If, at any time after the date hereof, WebMD shall (i) pay a dividend or make a distribution on its common stock in additional shares of common stock, (ii) subdivide its outstanding shares of common stock into a larger number of shares of common stock, or (iii) combine its outstanding shares of common stock into a smaller number of shares of common stock, the Liquidity Event Price Difference (including the price per share and the number of shares referred to in Sections 6(b), (c) and (d)) shall be adjusted appropriately, The adjustments required by this Section 6(g) shall be made whenever and as often as any specified event requiring an adjustment shall occur, so that a calculation of 5 a Liquidity Event Price Difference made immediately before and immediately after the event or the record date therefor, as, applicable, requiring adjustment would be the same. (h) The following provisions shall apply: For purposes of Section 6(b)(i), the "purchase price per WebMD common share" in a WebMD Liquidity Event shall be (A) the cash amount per share paid by the Acquirer acquiring such shares (or otherwise received by holders of WebMD common stock), in the event of an acquisition of WebMD common stock for cash; (B) an amount equal to the WebMD Share Price, in the event of an acquisition of WebMD common stock for securities or cash and securities of an Acquirer; or (C) in the case of an acquisition of all or substantially all of the assets of WebMD, the fair market value, as determined in good faith by the board of directors of WebMD (and subject to the dispute resolution set forth below) on the day before the date of the WebMD Liquidity Event, of the consideration paid by the Acquirer acquiring all or substantially all of the assets of WebMD divided by the total number of outstanding shares of common stock of WebMD on a fully diluted basis (using the Treasury method for any unexercised options). For purposes of Section 6(b)(ii) the "sale price" in an ENVOY Liquidity Event shall be the fair market value, as determined in good faith by the board of directors of WebMD (and subject to the dispute resolution set forth below) on the day before the ENVOY Liquidity Event, of the consideration paid by the Acquirer acquiring all or substantially all of the assets of ENVOY. If WebMD elects to pay the Liquidity Event Price Difference in the form of the consideration received in an ENVOY Liquidity Event, the value of such consideration shall be the fair market value of such consideration as determined pursuant to the immediately preceding sentence. In the event Quintiles disputes the determination of the fair market value made by the board of directors of WebMD upon the occurrence of a Liquidity Event, then WebMD and Quintiles shall jointly appoint a nationally recognized accounting firm to determine such fair market value and such determination shall be final and binding upon the parties. In the event the parties cannot agree on the appointment of such accounting firm within ten (10) days of the commencement of the dispute, the parties agree that such appointment shall be referred to the American Arbitration Association for determination. If WebMD elects to pay the Liquidity Event Price Difference in the form of WebMD common stock, the value of each such share of common stock shall be the WebMD Share Price. 7. Entry of Voluntary Dismissal with Prejudice Quintiles and WebMD shall cause their respective attorneys of record to sign and to present to the U.S. District Court for the Eastern District of North Carolina for entry of a conditional voluntary dismissal with prejudice in the form attached hereto as Exhibit 1 (the "Voluntary Dismissal"). Such Voluntary Dismissal shall be entered as soon as practicable after the Closing. Immediately upon approval and entry of the Voluntary Dismissal by the Court, the parties shall cause their respective attorneys of record to sign and file with the U.S. Court of Appeals for the 4th Circuit a motion voluntarily dismissing the Appeal with prejudice, with each side to bear its own costs and attorneys' fees, all in the form as attached hereto as Exhibit 4. Notwithstanding the entry of the Voluntary Dismissal, this Agreement and all terms and conditions hereof shall survive and be enforceable against the parties. In the event the Court declines to enter the Voluntary Dismissal in the form proposed, Quintiles and WebMD agree to retract the proposed Voluntary Dismissal, in which case WebMD and the other defendants shall not serve an Answer or otherwise respond to Quintiles' Amended Complaint, Quintiles shall not seek an entry of default or default judgment, the parties shall not engage in discovery, the parties shall cooperate in placing the Litigation and Appeal in abeyance during the Transition Period, and the parties shall, immediately after 6 the expiration of the Transition Period, execute and file a stipulation of dismissal with prejudice of both the Litigation and Appeal wherein the parties shall each bear their own respective costs and attorneys' fees. In the event of a delay by the Court in entering the Voluntary Dismissal, WebMD shall consent to such motion or motions by Quintiles for extension(s) of time to file and serve Quintiles' responsive brief in the Appeal as Quintiles may reasonably require. 8. Termination of Agreements Effective upon Closing, the parties agree as follows: (a) without further action the Data Rights Agreement will terminate and be of no further force or effect. (b) without further action the Temporary Addendum will terminate and be of no further force or effect. (c) without further action the Internet Agreement will terminate and be of no further force or effect. (d) without further action the Tax Sharing Agreement will terminate and be of no further force or effect. The parties hereby acknowledge and agree that Quintiles intends to claim all available federal, state and local income tax deductions for compensation expenses incurred with respect to the exercise of Quintiles stock options by any current or former employee of (or service provider to) ENVOY or any of its subsidiaries, and WebMD covenants not to file any tax returns or take any reporting positions inconsistent with this Section 8(d). (e) without further action the Warrant will terminate and be of no further force or effect. Following Closing, except as otherwise provided herein and notwithstanding any provisions to the contrary contained in any of the agreements so terminated (including without limitation survival provisions), there will be no outstanding obligations, including without limitation any payment obligations, on the part of either Quintiles or WebMD under any of the agreements so terminated. 9. Transfer of Software (a) Upon Closing, WebMD will deliver the Software, as defined in the Temporary Addendum (including without limitation the MD-5 hashing program), in source code together with installation instructions, Initialization Vector documentation (as defined in the Temporary Addendum) and all other related documentation that ENVOY has prepared to Perot Systems Corporation, 12404 Park Central Drive, Dallas, Texas 75251, Attention: Mr. Paul Lake (the "Trusted Third Party"). WebMD will reasonably cooperate with Quintiles and the Trusted Third Party in connection with the delivery of the Software, installation on the Trusted Third Party's server and verification that the Software is successfully functioning after such installation. (b) Quintiles and the Trusted Third Party have executed an agreement, dated October 5, 2001, whereby the Trusted Third Party has agreed not to deliver the Software to Quintiles and not to re-identify any de-identified data. (c) WebMD will retain a copy of the Software as provided under the Software License Agreement, dated as of May 26, 2000 by and between the parties (the "Software License") solely to continue to de-identify data between the date hereof and March 1, 2002. Notwithstanding Section 6.1 of 7 the Software License Agreement the license granted thereunder will extend until March 1, 2002. Section 6.2 of the Software License is further amended to require WebMD to (a) cease using the Software on March 1, 2002, and (b) certify to Quintiles within ten (10) days that (1) WebMD has, at the election of Quintiles, either delivered to the Trusted Third Party or destroyed all copies of the Software and (2) that the licensed copy has not been copied or used for any other purpose. 10. Indemnification Effective upon Closing, without any further action by either party, WebMD and Quintiles agree to abide by the terms of the Indemnification and Contribution Arrangement incorporated herein by reference and attached hereto as Exhibit 2 (the "Indemnification and Contribution Arrangement"). 11. Limitation of Liability Neither party will be liable to the other for indirect, incidental, consequential, punitive or special damages, including damages for lost profits, business interruption or loss of business information. This limitation will not apply (i) in the event WebMD willfully refuses to provide Quintiles with the data in accordance with the terms hereof, (ii) to the Indemnification and Contribution Arrangement, as described in Section 10 above, and (iii) to the confidentiality provisions relating to the protection of WebMD customer information. 12. General Mutual Release (a) Upon Closing and except as provided in Section 12(d), WebMD (for itself and its subsidiaries, and its and their respective successors and assigns, and any persons or entities controlling, controlled by or under common control with, WebMD) and each of ENVOY, Martin J. Wygod and W. Michael Long (the "WebMD Releasors") hereby release and forever discharge Quintiles and Quintiles' directors, officers, shareholders, present and former parent corporations, present and former subsidiary corporations, present and former sister corporations, present and former affiliated entities, principals, employees, insurers, subrogors, subrogees, predecessors, successors, assigns, agents, attorneys, and any persons controlling, controlled by or under common control with, Quintiles (hereinafter the "Quintiles Released Parties"), from (i) any and all actions, causes of actions, suits, debts, dues, sums of money, accounts, costs, contracts, agreements, controversies, liens, damages, judgments, claims and demands whatsoever whether in law or in equity, whether known or unknown, which the WebMD Releasors ever had or now have against the Quintiles Released Parties, or any one or group of the Quintiles Released Parties, for any reason whatsoever and (ii) any and all actions, causes of actions, suits, debts, dues, sums of money, accounts, costs, contracts, agreements, controversies, liens, damages, judgments, claims and demands whatsoever whether in law or in equity, whether known or unknown, which the WebMD Releasors ever had, now have or may in the future have against the Quintiles Released Parties, or any one or group of the Quintiles Released Parties arising from or relating to: (1) The Litigation (or matters which could have been alleged in the Litigation); (2) The Appeal (or matters which could have been alleged in the Appeal); (3) The Data Rights Agreement and the Temporary Addendum, including but not limited to any representation or warranty thereunder; any party's performance or non-performance of any obligation thereunder; the transmittal of data thereunder by WebMD to Quintiles; and any amount due and payable or alleged to be due and payable thereunder by any party; 8 (4) The Internet Agreement, including but not limited to any representation or warranty thereunder; any party's performance or non-performance any obligation thereunder; and any amount due and payable or alleged to be due and payable thereunder by any party; (5) The Tax Sharing Agreement; (6) The Warrant; (7) Any claim arising in whole or in part from, or relating in any way to, the acquisition, purchase, ownership, sale or disposition of WebMD, ENVOY or Quintiles securities. The release set forth in this Section 12 is agreed to by the WebMD Releasors with full knowledge and understanding on the part of the WebMD Releasors that there may be more serious consequences, damages, or injuries than alleged or perceived in the Litigation or the Appeal. (b) Upon Closing and except as provided in Section 12(d), Quintiles (for itself and its subsidiaries, and its and their respective successors and assigns, and any persons or entities controlling, controlled by or under common control with, Quintiles) and Dennis B. Gillings (the "Quintiles Releasors") hereby release and forever discharge WebMD and WebMD's directors, officers, shareholders, present and former parent corporations, present and former subsidiary corporations, present and former sister corporations, present and former affiliated entities, principals, employees, insurers, subrogors, subrogees, predecessors, successors, assigns, agents, attorneys, and any persons controlling, controlled by or under common control with, WebMD (including, but not limited to, ENVOY, Martin J. Wygod and W. Michael Long) (hereinafter the "WebMD Released Parties"), from (i) any and all actions, causes of actions, suits, debts, dues, sums of money, accounts, costs, contracts, agreements, controversies, liens, damages, judgments, claims and demands whatsoever whether in law or in equity, whether known or unknown, which the Quintiles Releasors ever had or now have against the WebMD Released Parties, or any one or group of the WebMD Released Parties, for any reason whatsoever and (ii) any and all actions, causes of actions, suits, debts, dues, sums of money, accounts, costs, contracts, agreements, controversies, liens, damages, judgments, claims and demands whatsoever whether in law or in equity, whether known or unknown, which the Quintiles Releasors ever had, now have or may in the future have against the WebMD Released Parties, or any one or group of the WebMD Released Parties arising from or relating to: (1) The Litigation (or matters which could have been alleged in the Litigation); (2) The Appeal (or matters which could have been alleged in the Appeal); (3) The Data Rights Agreement and the Temporary Addendum, including but not limited to any representation or warranty thereunder; any party's performance or non-performance of any obligation thereunder; the transmittal of data thereunder by WebMD to Quintiles; and any amount due and payable or alleged to be due and payable thereunder by any party; (4) The Internet Agreement, including but not limited to any representation or warranty thereunder; any party's performance or non-performance any obligation thereunder; and any amount due and payable or alleged to be due and payable thereunder by any party; (5) The Tax Sharing Agreement; (6) The Warrant; 9 (7) Any claim arising in whole or in part from, or relating in any way to, the acquisition, purchase, ownership, sale or disposition of WebMD, ENVOY or Quintiles securities. The release set forth in this Section 12 is agreed to by the Quintiles Releasors with full knowledge and understanding on the part of the Quintiles Releasors that there may be more serious consequences, damages, or injuries than alleged or perceived in the Litigation or the Appeal. (c) The parties hereto acknowledge that the claims released herein encompass any and all claims that each party does not know or suspect to exist in its favor at the time of the release that, if known, might have affected that party's decision to enter into this Settlement Agreement and the mutual releases contained in this Section 12. As to any and all claims released herein, each party shall be deemed to have expressly waived and relinquished, to the fullest extent permitted by law, the provisions, rights and benefits of California Civil Code Section 1542, which provides: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. Each party shall be deemed to waive any and all provisions, rights and benefits conferred by any law or any state or territory of the United States, or principle of common law, that is similar, comparable or equivalent to Section 1542 of the California Civil Code. Each party may hereafter discover facts relating to the claims released herein in addition to or different from those which such persons believed to be true on the date of the execution of this Settlement Agreement. The claims released herein shall, nonetheless, be deemed to be fully, finally and forever settled and released upon the execution of this Settlement Agreement, without regard to the subsequent discovery or existence of such additional or different facts. (d) Nothing contained in this Section 12 shall release, acquit, discharge, waive, relinquish, diminish, or modify: (1) Any obligation, covenant, representation or warranty by Quintiles or WebMD in this Agreement (including any exhibits or attachment hereto) or any instrument required to be executed pursuant to this Agreement; (2) Any term or provision of the Voluntary Dismissal entered in the Litigation by the Court; (3) WebMD's obligations to indemnify officers and directors as set forth in Section 8.12 of the Merger Agreement, except with respect to those matters that are subject to Quintiles' indemnification obligations described under the Indemnification and Contribution Arrangement; (4) Quintiles' indemnification obligation in connection with the ENVOY class action litigation, as provided in Section 8.16 of the Merger Agreement and in Schedule 8.16 of the ENVOY Disclosure Letter delivered by Quintiles in connection with the Merger Agreement; or (5) WebMD's obligations to indemnify Dennis B. Gillings, pursuant to WebMD's Certificate of Incorporation, By-laws and the Indemnification Agreement between WebMD and Dennis B. Gillings, as a result of his having been a director of WebMD, except with respect to those matters that are subject to Quintiles' indemnification obligations described under the Indemnification and Contribution Arrangement. 10 13. Representations and Warranties by Quintiles Quintiles represents and warrants to WebMD as follows: (a) Quintiles has been represented in this matter by attorneys at law, whom it has selected; it has consulted its respective legal counsel as to the effects of this Agreement; it has received advice of its legal counsel as to the effects of this Agreement; and it has had full opportunity to seek any other advice it might consider to be desirable in connection with this matter. (b) Quintiles has fully investigated to its own satisfaction all facts surrounding the various claims, controversies, and disputes. (c) Quintiles has read this Agreement; it is entering into this Agreement freely and voluntarily; it has ascertained and weighed all facts and circumstances likely to influence its judgment herein; it has given due consideration to the provisions herein; it has been fully informed and has full knowledge of the terms, conditions, and effects of this Agreement; it thoroughly understands and consents to all provisions hereof; and it is fully satisfied with the terms of this Agreement. (d) No promise or agreement has been made by WebMD as a consideration for this Agreement except as herein recited, and the execution hereof has not been induced by any representation of WebMD except as herein recited. (e) Quintiles has all requisite power and authority to execute, deliver this Agreement and to perform the transactions contemplated herein; the execution, delivery and performance of his Agreement does not, and the consummation of the transactions contemplated herein will not, violate any provision of Quintiles' Articles of Incorporation or By-laws or any applicable law or regulation, or any agreement, mortgage, lease, instrument, order, judgment, or decree to which Quintiles or any of its Affiliates is a party or by which Quintiles or any of its Affiliates is bound. (f) Quintiles has duly and properly taken all action required by law, its Articles of Incorporation, its By-laws, or otherwise to authorize the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein; and when so executed, this Agreement constitutes Quintiles' legal, valid and binding obligation in accordance with the terms hereof. (g) There has been no assignment, transfer, conveyance or other disposition, in whole or in part, of any of the accounts, actions, agreements, bills, bonds, causes of action, claims, contracts, controversies, covenants, damages, debts, demands, doings, dues, executions, expense, indemnities, judgments, liabilities, omission, promises, reckonings, suits, sums, sums of money, trespasses, and variances, in law or in equity, released, relieved, waived, relinquished, and discharged by this Agreement. (h) This Agreement, when duly executed by Quintiles and WebMD, will constitute legal, valid and binding obligations of Quintiles enforceable against it in accordance with its terms. (i) Quintiles is the true and lawful beneficial and record owner of the Shares and has good and marketable title thereto, free and clear of mortgages, pledges, liens, charges, security interests or other encumbrances (each, an "Encumbrance"). Quintiles has full right and power and authority to sell, transfer and deliver the Shares. Upon delivery of the purchase price as contemplated in Section 5 of this Agreement, Quintiles will transfer to WebMD valid and marketable title thereto, including all voting and other rights to the Shares, free and clear of all Encumbrances. The Shares constitute all of Quintiles' and its subsidiaries' shares of any class of stock, capital interest, ownership rights or securities of or in 11 WebMD, and after sale of the Shares, neither Quintiles nor any of its subsidiaries will have any interest in WebMD. There are no outstanding options, warrants, stock rights, agreements, contracts, puts, calls, commitments, pre-emptive rights, or demands of any character to which Quintiles or any of its subsidiaries is a party or under which Quintiles or its subsidiaries have any rights relating to any capital stock or other securities of WebMD, and, except for the restrictions contained in Section 8.13 of the Merger Agreement which have been waived by this Agreement, there are no agreements to which Quintiles is a party that restrict the transfer of shares or voting of the capital stock of WebMD held by Quintiles. Neither Quintiles nor any of its subsidiaries has granted to any person any proxies, powers of attorney, or similar rights or powers with respect to Shares. (j) Quintiles represents and warrants to WebMD that the Software will not be used to "re-identify" data, unless pursuant to U.S. Federal government instruction consistent with law where prior written notice (including a complete explanation of the government instruction and reasons for it) is provided to WebMD. (k) Quintiles has had access to such information from WebMD regarding the sale of the Shares as it has requested. (l) Quintiles has knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of the sale of the Shares. 14. Representations and Warranties and Covenants by WebMD WebMD represents and warrants and covenants to Quintiles as follows: (a) WebMD has been represented in this matter by attorneys at law, whom it has selected; it has consulted its respective legal counsel as to the effects of this Agreement; it has received advice of its legal counsel as to the effects of this Agreement; and it has had full opportunity to seek any other advice it might consider to be desirable in connection with this matter. (b) WebMD has fully investigated to its own satisfaction all facts surrounding the various claims, controversies, and disputes. (c) WebMD has read this Agreement; it is entering into this Agreement freely and voluntarily; it has ascertained and weighed all facts and circumstances likely to influence its judgment herein; it has given due consideration to the provisions herein; it has been fully informed and has full knowledge of the terms, conditions, and effects of this Agreement; it thoroughly understands and consents to all provisions hereof; and it is fully satisfied with the terms of this Agreement. (d) No promise or agreement has been made by Quintiles as a consideration for this Agreement except as herein recited, and the execution hereof has not been induced by any representation by Quintiles except as herein recited. (e) WebMD has all requisite power and authority to execute, deliver this Agreement and to perform the transactions contemplated herein; the execution, delivery and performance of his Agreement does not, and the consummation of the transactions contemplated herein will not, violate any provision of WebMD's Articles of Incorporation or By-laws or any applicable law or regulation, or any agreement, mortgage, lease, instrument, order, judgment, or decree to which WebMD or any of its Affiliates is a party or by which WebMD or any of its Affiliates is bound. 12 (f) WebMD has duly and properly taken all action required by law, its Articles of Incorporation, its By-laws, or otherwise to authorize the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated herein; and when so executed, this Agreement constitutes WebMD's legal, valid and binding obligation in accordance with the terms hereof. (g) There has been no assignment, transfer, conveyance or other disposition, in whole or in part, of any of the accounts, actions, agreements, bills, bonds, causes of action, claims, contracts, controversies, covenants, damages, debts, demands, doings, dues, executions, expense, indemnities, judgments, liabilities, omission, promises, reckonings, suits, sums, sums of money, trespasses, and variances, in law or in equity, released, relieved, waived, relinquished, and discharged by this Agreement. (h) This Agreement, when duly executed by Quintiles and WebMD, will constitute legal, valid and binding obligations of WebMD enforceable against it in accordance with its terms. (i) WebMD is an "accredited investor", as such term in defined in Regulation D promulgated under the Securities Act of 1933, as amended. (j) WebMD has had access to such information from Quintiles regarding the purchase of the Shares as it has requested. (k) WebMD has knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of the purchase of the Shares and is able to bear the economic risks of the purchase of the Shares, including without limitation, the risk of complete loss on its investment. (l) WebMD acquired its interest in the Shares for its own account for investment and not with a view to, or in connection with, any distribution of such interest. (m) WebMD has not acquired its interest in the Shares for another entity. 15. Irreparable Harm Quintiles and WebMD each acknowledge that its failure to abide by the provisions of this Agreement would cause immediate and irreparable harm to the other, for which legal remedies would be inadequate. Therefore, in addition to any legal or other relief to which either party may be entitled by virtue of the other party's failure to abide by these provisions, the injured party shall be entitled to equitable relief, including but not limited to preliminary and permanent injunctive relief and specific performance, for the other party's actual or threatened failure to abide by these provisions. 16. Cooperation and Confidentiality Quintiles and WebMD hereby agree to cooperate fully in good faith to execute any and all supplementary documents and to take all additional actions not inconsistent with the terms set forth in this Agreement that are necessary and appropriate to give full force and effect to the terms and intent of this Agreement. Quintiles will not attempt to re-identify, or authorize third parties to attempt to re-identify, any de-identified data received from any WebMD Company, and will not disclose any confidential information of any WebMD Customer to any third party except pursuant to a binding confidentiality agreement with such third party, unless pursuant to U.S. Federal government instruction consistent with law where prior written notice (including a complete explanation of the government instruction and reasons for it) is provided to WebMD. Furthermore, Quintiles will not use any confidential information regarding the business relationship between WebMD and a WebMD Customer that it received from a 13 WebMD Company, such as claims transaction volume for such customer, for the purpose of engaging in the claims clearinghouse business or disclose such information to a claims clearinghouse. 17. Compliance with Emergency Requests In the event that the U.S. government seeks to obtain certain data products from Quintiles to assist it in confronting a national emergency, the parties agree to work together in good faith for WebMD to provide Quintiles data for use in such data products, consistent with legal requirements. If Quintiles seeks compensation for providing such data products to the U.S. government, the parties agree to share the operating income generated from their sale as follows: 70% to Quintiles and 30% to WebMD. If the parties do not work together in this area, then no payments shall be due WebMD in such area. The parties acknowledge that this Section 17 is an expression of intent and neither party is bound by this Section 17 or obligated in any way with respect to it. 18. Public Announcement Quintiles and WebMD hereby agree to issue the joint press release attached hereto as Exhibit 3 as soon as practicable following the execution of this Agreement. 19. Binding Effect The warranties and representations contained in this Agreement and the documents referenced herein shall survive the Closing anticipated herein. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. Nothing herein shall be construed to limit Quintiles' right to transfer or assign to others for lawful use the data it receives hereunder or under the Data Rights Agreement. The individual Released Parties identified in Section 12 above and the Indemnified Parties identified in the Indemnification and Contribution Arrangement shall be intended third party beneficiaries with respect to the rights and obligations contained in the mutual release (in the case of such Released Parties) and Indemnification and Contribution Arrangement (in the case of such Indemnified Parties) and shall be entitled to rely upon and enforce the terms and conditions of that provision. 20. Applicable Law This Agreement shall be governed by and shall be construed and interpreted according to the laws of the State of Delaware, without reference to any conflicts of law principles that would operate to make the internal laws of any other jurisdiction applicable and the parties consent to the exclusive jurisdiction and venue of the state and federal courts of Delaware to adjudicate any claims pursuant to this Agreement; provided however, that the Indemnification and Contribution Arrangement shall be governed by and shall be construed and interpreted according to the laws of the State of New York, without reference to any conflicts of law principles that would operate to make the internal laws of any other jurisdiction applicable and the parties consent to the exclusive jurisdiction and venue of the state and federal courts of New York to adjudicate any claims pursuant to the Indemnification and Contribution Arrangement. 14 21. Entire Agreement This Agreement, together with the exhibits and attachments hereto, constitutes the entire understanding among and between the parties hereto concerning the subject matter set forth herein, and this Agreement supersedes any and all prior understandings, written or oral, and any and all contemporaneous oral understandings, pertaining to the subject matter set forth herein. The terms of this Agreement are contractual and not a mere recital. 22. Modification This Agreement shall not be altered, amended, modified or rescinded except by an instrument in writing signed by each of the parties. 23. Severability If, after the date hereof, any provision of this Agreement, is for any reason found or held to be illegal, invalid or unenforceable under present or future laws, such provision shall be fully severable and such finding and/or holding shall not affect the legality, validity or enforceability of the remaining portions of this Agreement. In lieu of any such illegal, invalid or unenforceable provision, a substitute or similar provision that is legal, valid and enforceable shall be supplied by agreement of the parties, to the extent possible. 24. Descriptive Headings The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 25. Drafting Each party acknowledges that it has participated in the negotiation and drafting of this Agreement, and agrees that this Agreement shall be construed without regard to the identity(s) of those who drafted the various provisions, that each and every provision of this Agreement shall be construed as though all of the parties participated equally in the drafting of them, and that any rule of construction that a document is to be construed against, interpreted less favorably toward, or applied to the disadvantage of any party hereto by reason of such person having or being deemed to have structured, dictated, or drafted such provision shall not apply to this Agreement. 26. Counterparts This Agreement may be executed in two (2) counterpart copies, each of which shall be deemed an original for all purposes. In making proof of this Agreement, it shall not be necessary to produce or account in any way for the other counterpart copy. IN WITNESS WHEREOF, Quintiles and WebMD have executed this Agreement, by and through their duly authorized representatives, each intending to be legally bound. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 15 QUINTILES TRANSNATIONAL CORP. By: /s/ Dennis Gillings (Signature) -------------------------- Name: Dennis Gillings (Printed/Typed) ------------------------ Title: Chairman ----------------------- ATTEST: /s/ John Russell (CORPORATE SEAL) ------------------------------ Secretary STATE OF NORTH CAROLINA COUNTY OF DURHAM I, a Notary Public, in and for said county and state, do hereby certify that John S. Russell, Secretary of QUINTILES TRANSNATIONAL CORP., personally appeared before me this day and acknowledged that by authority duly given and as the act of the corporation, the foregoing was signed in its name by its Secretary, sealed with its corporate seal and attested by its (Assistant) Secretary. Witness my hand and seal this 12th day of October, 2001. (signature illegible) ------------------------------- Notary Public (NOTARIAL SEAL) My commission expires: 7/13/02 ------- 16 WEBMD CORPORATION By: /s/ Anthony Vuolo (Signature) -------------------------- Name: Anthony Vuolo (Printed/Typed) ------------------------ Title: Exec. VP & CFO ----------------------- ATTEST: /s/ Lewis Leicher (CORPORATE SEAL) ------------------------------ (Assistant) Secretary STATE OF NEW JERSEY COUNTY BERGEN I, a Notary Public, in and for said county and state, do hereby certify that Lewis Leicher, (Assistant) Secretary of WEBMD CORPORATION, personally appeared before me this day and acknowledged that by authority duly given and as the act of the corporation, the foregoing was signed in its name by its Exec. VP & CFO, sealed with its corporate seal and attested by its (Assistant) Secretary. Witness my hand and seal this 12th day of October, 2001. /s/ Michelle Rea ------------------------------- Notary Public (NOTARIAL SEAL) My commission expires: October 5, 2003 --------------- 17 ENVOY CORPORATION By: /s/ Anthony Vuolo (Signature) -------------------------- Name: Anthony Vuolo (Printed/Typed) ------------------------ Title: Exec. VP & CFO ----------------------- ATTEST: /s/ Charles A. Mele (CORPORATE SEAL) ------------------------------ (Assistant) Secretary STATE OF NEW JERSEY COUNTY BERGEN I, a Notary Public, in and for said county and state, do hereby certify that Charles A. Mele, (Assistant) Secretary of ENVOY CORPORATION, personally appeared before me this day and acknowledged that by authority duly given and as the act of the corporation, the foregoing was signed in its name by its Exec. VP & CFO, sealed with its corporate seal and attested by its (Assistant) Secretary. Witness my hand and seal this 12th day of October, 2001. /s/ Michelle Rea ------------------------------- Notary Public (NOTARIAL SEAL) My commission expires: October 5, 2003 --------------- 18 Each of the undersigned hereby agrees to be bound by the provisions of Sections 7 and 12 they relate to such: Undersigned: /s/ Martin J. Wygod /s/ W. Michael Long --------------------------------------- ------------------------------------ Martin J. Wygod, Individually W. Michael Long, Individually /s/ Dennis B. Gillings --------------------------------------- Dennis B. Gillings, Ph.D., Individually