TERMINATION AGREEMENT
TERMINATION AGREEMENT, dated August 9, 1998, by and among United
HealthCare Inc., a Minnesota corporation ("Parent"), UH-1 Inc., a Delaware
corporation and a wholly owned subsidiary of Parent ("Sub"), Humana Inc., a
Delaware corporation ("Company"), and David A. Jones ("Jones") (each a
"Party" and collectively the "Parties").
WHEREAS, Parent, Sub and Company are parties to an Agreement and Plan of
Merger, dated as of May 27, 1998 (the "Merger Agreement"); and
WHEREAS, Parent and Company are parties to a Stock Option Agreement,
dated as of May 27, 1998 (the "Stock Option Agreement"); and
WHEREAS, Parent and Jones are parties to a Stockholder Voting Agreement,
dated as of May 27, 1998 (the "Voting Agreement," and together with the
Merger Agreement and the Stock Option Agreement, the "Transaction
Agreements"); and
WHEREAS, the Merger Agreement provides that it may be terminated and the
merger contemplated by the Merger Agreement (the "Merger") abandoned at any
time prior to the Effective Time (as defined in the Merger Agreement) by
mutual written consent of Company and Parent by action of their respective
Boards of Directors; and
WHEREAS, the Boards of Directors of Company and Parent respectively have
determined that the Merger and the other transactions contemplated by the
Transaction Agreements are no longer in the best interests of their
respective companies and shareholders; and
WHEREAS, the Voting Agreement provides that it terminates on the date
the Merger Agreement is terminated; and
WHEREAS, the Parent and Company desire to terminate the Stock Option
Agreement;
NOW THEREFORE, in consideration of the premises and the covenants set
forth below and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties, intending to be
legally bound, agree as follows:
1. The Merger Agreement is hereby terminated as of the date hereof
pursuant to Section 8.1 of the Merger Agreement with the effects set forth in
Section 8.5(a) of the Merger Agreement, as modified by this Termination
Agreement.
The Voting Agreement is hereby terminated pursuant to Section 14 of the
Voting Agreement. The Stock Option Agreement is hereby terminated by
agreement of Company and Parent.
2. Notwithstanding any provision of the Transaction Agreements to
the contrary, the Parties agree that all expenses incurred to date in
connection with the Transaction Agreements (including, without limitation,
all costs and fees associated with state regulatory filings, costs of
responding to requests for additional information under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976 and the fees and expenses of its outside
counsel, financial advisors, accountants and experts), shall remain the
obligation of the party incurring such expense, except that expenses incurred
in connection with the filing fee for the S-4 Registration Statement and
printing and mailing the Prospectus/Proxy Statement and the S-4 Registration
Statement shall be shared equally by Parent and Company.
3. Each of the Company, Parent and Sub hereby agrees to take all
necessary steps to further the terminations effected by this Agreement,
including without limitation, (i) withdrawing from any proceedings before any
regulatory authorities; (ii) withdrawing all Form A applications, (iii)
notifying on a timely basis in accordance with all applicable laws and
regulations their respective shareholders of the termination of the
Transaction Agreements, and (iv) seeking termination of the effectiveness of
the S-4 Registration Statement.
4. Each of the Company, Parent and Sub represents to each of the
other Parties to this Agreement that the execution and delivery of this
Termination Agreement has been duly authorized by their respective Boards of
Directors and that this Termination Agreement constitutes a valid and binding
obligation of it, enforceable against it in accordance with its terms. Jones
represents to the other Parties to this Agreement that he has the legal
capacity to enter into this Termination Agreement, which constitutes a valid
and binding obligation of Jones, enforceable against him in accordance with
its terms.
5. This Termination Agreement (a) constitutes the entire agreement
of the Parties and supersedes all prior agreements and understandings,
written or oral, between the Parties with respect to the subject matter
hereof; (b) is not intended to confer upon any other person any right or
remedies hereunder; (c) shall be binding upon and inure to the benefit of the
Parties and their successors and assigns (whether by operation of law or
otherwise), PROVIDED that no assignment shall relieve a party of any of its
obligations hereunder; and (d) shall not be amended except by means of a
writing executed by each of the Parties.
6. This Termination Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall be effective when one or more counterparts have been signed by each of
the Parties and
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delivered to the other Parties, IT BEING UNDERSTOOD that all parties need not
sign the same counterpart.
7. The terms of the Confidentiality Agreement, dated May 4, 1998, by and
between Company and Parent remain in full force and effect.
8. GOVERNING LAW; SUBMISSION TO JURISDICTION; SELECTION OF FORUM; WAIVER
OF JURY TRIAL. THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL
RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE
WITH THE LAW OF THE STATE OF DELAWARE WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF. EACH PARTY HERETO AGREES THAT IT SHALL BRING ANY ACTION
OR PROCEEDING IN RESPECT OF ANY CLAIM ARISING OUT OF OR RELATED TO THIS
TERMINATION AGREEMENT OR THE TRANSACTION AGREEMENTS, OR IN RESPECT OF THE
TRANSACTIONS CONTEMPLATED THEREBY, WHETHER IN TORT OR CONTRACT OR AT LAW OR
IN EQUITY, EXCLUSIVELY IN THE COURTS OF THE STATE OF DELAWARE OR NEW YORK OR
IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF
DELAWARE OR THE SOUTHERN DISTRICT OF NEW YORK (THE "CHOSEN COURTS"). SOLELY
IN CONNECTION WITH SUCH ACTIONS, PROCEEDINGS AND CLAIMS, THE PARTIES
IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE CHOSEN COURTS, AND AGREE NOT TO
ASSERT AS A DEFENSE IN ANY SUCH ACTION, SUIT OR PROCEEDING THAT SUCH PARTY IS
NOT SUBJECT TO THE JURISDICTION OF THE CHOSEN COURTS, THAT SUCH ACTION,
PROCEEDING OR CLAIM MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN THE CHOSEN
COURTS, THAT VENUE IS NOT APPROPRIATE IN THE CHOSEN COURTS OR THAT THIS
AGREEMENT MAY NOT BE ENFORCED IN THE CHOSEN COURTS. EACH OF THE PARTIES
AGREES THAT SERVICE OF PROCESS OR OTHER PAPERS UPON SUCH PARTY IN ANY SUCH
ACTION OR PROCEEDING SHALL BE EFFECTIVE IF NOTICE IS GIVEN IN ACCORDANCE WITH
THE PROVISIONS ON NOTICE CONTAINED IN THE TRANSACTION AGREEMENTS.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY
ARISE UNDER THIS TERMINATION AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS TERMINATION AGREEMENT OR THE TRANSACTION AGREEMENTS, OR THE
TRANSACTIONS CONTEMPLATED BY THOSE AGREEMENTS. EACH PARTY CERTIFIES AND
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ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH
PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER,
(iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN
INDUCED TO ENTER INTO THIS TERMINATION AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.
9. The provisions of this Termination Agreement shall be deemed
severable, and if any part of any provision is held by a court of competent
jurisdiction to be illegal, void or invalid under applicable law, such
provision may be changed to the extent necessary to make that provision, as
so changed, legal and binding. If any provision of this Termination Agreement
is held by a court of competent jurisdiction to be illegal, void or invalid
in its entirety, the remaining provisions hereof shall not in any way be
affected or impaired but shall remain binding in accordance with their terms.
10. It is expressly understood and agreed that nothing in this
Termination Agreement shall constitute or be construed as, or be deemed to
be, evidence or an admission or concession on the part of any Party of any
liability or wrongdoing whatsoever or any representation by any Party of any
merit as or lack of merit to any claim asserted by any Party.
IN WITNESS WHEREOF, the undersigned have caused this Termination
Agreement to be signed as of the date first written above.
UNITED HEALTHCARE CORPORATION
By: /s/ David Lubben
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UH-1 INC.
By: /s/ David Lubben
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DAVID A. JONES HUMANA INC.
/s/ David A. Jones By: /s/ Gregory H. Wolf
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